Storm of ideologies follows Katrina

It has been interesting to read both left-wing and right-wing commentators in the days since Katrina flooded New Orleans. Virtually all of the comments have been directed at the plight of the poor who remained behind. Naturally enough, most of these poor people are blacks.

The right-wing commentators have been disgusted that blacks were roaming the flooded streets of the city, looting and inflicting violence. Why should people want to believe that blacks are victims of a racist system when they are obviously being the aggressor here? I even read posts where people lambasted the poor for not getting off their behinds and training themselves up to become more employable. If they weren't so lazy, they would have better jobs and be able to afford the cars needed to evacuate the city.

The left have also been arguing their standard line. The poor are poor because the entire system is geared against them. Put of out sight and out of mind, the poor in New Orleans were never at the forefront of anyone's mind until they started drowning by the thousands. Their deaths are the result of an economic and political system that does not care for people.

Those of you who know me will realise that I am more left-leaning in my politics and economics - which means, of course, that my own opinions lie pretty much with the left-wing commentators on this issue.

But I am not a formal part of the "left-wing blogosphere", which means that my postings are not going to be tiresome fusilades against incompetent Bush sycophants or arguing about how the Florida recount would've given Gore victory in 2000 and how yada yada yada. I hate overtly political posts that seem to be written by party hacks - from both sides of politics.

I have, however, discovered in my readings from various US newspapers that the tragedy has torn away some of the basic assumptions held by many Americans, and laid them bare for closer examination.

Many mainstream newspaper commentators naturally come from a left-wing bias, but in the past week these commentators have moved on from addressing the microcosm of the tragedy (the warnings, FEMA, the Superdome, etc) to addressing the macrocosm.

In short - the entire right-wing economic ideology is now being questioned.

What is this ideology? For those of you who don't know, it is essentially the tenets of Neoliberalism, or what in Australia is known as "Economic Rationalism". ie small government, tax cuts, welfare cuts and a continual shrinking of government influence in the market and in people's lives.

Quite a number of these commentators have pointed out that this ideology has been followed faithfully by every single Republican administration since 1981. Their argument is that in the 24 years that America has been subjected to neoliberal economic policy, why is it that the nation still has such massive problems?

By accident, the tragedy in New Orleans coincided with a Federal government report which showed that America's poverty rate has increased in the last four years. Apparently this rate has been declining for decades, but has, since George W. Bush became president, begun to rise. Considering the fact that America has experienced moderate economic growth and low unemployment over that time period, why is it that more people are poorer?

Moreover, other commentators have pointed out that, for all the hoo-hah that conservatives make over their "pro-life" stance, other statistics indicate that America's infant mortality rate has been bettered by Cuba. When the mortality rate is compared from city to city, there are some major US cities (like New York and Washington) that compare very unfavourably to places like Beijing.

So why, after 24 years of tax cuts, spending cuts and a "hands off" approach are things still so bad?

The answer now appears to be quite plain - the system does not work. Neoliberalism is now being seen as a failure. The fact that it has been adhered to for so long and given so much time to work - or in this case, not work - means that critics have been given a very powerful argument against it.

Typically, neoliberals and the right generally have used the Katrina experience to promote their politics. They point at Democratic politicians like Ray Nagin (the mayor of New Orleans) and Kathleen Blanco (Governor of Lousiana) as being the prime cause of failure. What is not needed, they argue, is increased statism - more government spending and influence in society/economy. They argue that the poverty in New Orleans was actually due to welfare dependence itself, and that by reducing or cutting welfare entirely, these lazy blacks would get off their collective behinds, learn how to look after themselves and have a bright future.

What this argument ignores, however, is the fact that welfare spending right across America has been slashed continually for 24 years. If poor people can be brought out of poverty by having little or no state-sponsored welfare, then surely this would have been reflected in real life since 1981. No matter how faithful you are to an ideology, no matter how philosophically correct it might seem, what is the point of holding to it if it doesn't work?

There is only one other historical parallel with this situation - except that it comes from the other side of the political fence. That parallel is Soviet Russia.

It was quite obvious by the mid-1970s that Communism in the Soviet Union was no longer able to compete economically with Western market economies. From 1945-1970, the Soviet Union was able to match every western nation in terms of economic output and continually improving social indicators (such as infant mortality rates, poverty rates, preventable disease rates and so on). During that time they also developed their own nuclear weapons and many conventional weapons equal to those in the west (eg. the AK-47 assault rifle and MiG-15 jet fighter). That the Soviets were also able to beat the US in launching the first satellite and the first man in space speaks volumes of their ingenuity and, to be honest, their threat to the West.

But by the 1970s, everything had begun to slow down. Despite all the theories and all the different programs initiated, Soviet economic growth had stagnated. Experts now understand that the entire collectivist system did not reward efficiency or productivity gains - gains that could not be made within a system that did not have any formal market structure. It wasn't until Mikhail Gorbachev begun his economic reforms in the mid-1980s that things began to change.

But during that period of stagnation, there were many theorists and economists within Soviet Russia that continued to argue for greater and greater adherence to communist economic ideology. The answer to their problems was not to depart from communism, but to enforce it even more strictly.

In the cold light of history, these people were dead wrong. The same can be said now for those neoliberals who advocate even more adherence to pure capitalism. If it's so good, why hasn't it worked for the last 24 years?

But for whatever reason, objective and scientifically constructed statistics which prove that America is lagging behind other nations are dismissed and even ignored totally. In almost every case, social indicators like infant mortality, poverty, preventable diseases, average educational attainment, murder and so on, America is embarrassingly behind more the more "socialist" nations that are found in Europe and other parts of the world.

There is no doubt that America rates better in issues like GDP and unemployment, but GDP is only high because the American rich are very rich. Moreover, it appears that the unemployed in Europe are better looked after and are generally happier with their lot than American low-wage earners.

You might think that I have too rosy a picture of Europe and a too negative view of America. I'll respond to that simply by saying that there is no way that Europe's system could be considered perfect - there is still much to be done in reducing unemployment levels and lifting GDP. As far as having too negative a view of America - maybe it's you that has a too rosy view of the US.

The fact is that the strict free-market capitalism that is promoted and adhered to by its ideologues in the US is as empty and as inefficient as the strict communism that was promoted by Soviet ideologues back in the 1970s. What is needed is a recognition that government and private enterprise can and should exist side-by-side in a truly free society. The market cannot produce from itself things like universal health care, law enforcement and public education - in the same way that the government cannot efficiently produce the raw materials, services and consumer goods that the market is so good at controlling.

What Hurricane Katrina has shown is the reality that is America - government inefficiency, hidden poverty and ideological stubbornness.


If you'd like to more about what I think about related topics, check out the following articles:

• Zero Unemployment Economic System - an attempt to harmonise the socialist dream of full employment with the harsh realities of the free market.
• Zero Inflation Monetary Policy - interest rates are currently too low for the market to operate properly.
• A Perfect Storm Approaches America - written in mid-August before Katrina even formed. It's actually an examination of America's economic weaknesses.
• The European Union - A Force for Peace? - an examination of the possible benefits the EU can make in encouraging world peace and prosperity.
• Reversing the Bush tax cuts - why tax cuts and budget deficits are bad for everyone.
• Democracy without Elections - An alternative form of democratic rule that allows intelligent, well meaning individuals the opportunity to run the country.

From the One Salient Overlord Department

© 2005 Neil McKenzie Cameron, http://one-salient-oversight.blogspot.com/





This work is licensed under a Creative Commons Attribution 2.5 License.