Its my Friday lay day blog and today it comes from a dark London (given the hour). At present, there is an event going on in Australia that sums up what is wrong with our conception of the economy. The right-wing News Limited press and the conservative Fairfax financial newspaper along with a management consulting firm that has had its snout in the privatisation trough around the world (and given my location – was one of the ‘approved suppliers’ of support services as the British government moves to privatise the National Health Service) have organised what they call the ‘National Reform Summit 2015’. It brings together big business, the co-opted trade union movement and welfare agencies, academics who propagate neo-liberal fiscal myths, and government officials who are intent on pushing more deregulation and reduced government involvement in the economy. On Wednesday, the Summit was told by a former Treasury head that unless there is major . It beggars belief that this stuff can pass muster. But it is no surprise, given that the right-wing media is organising the show and can make money by pumping out ridiculous headlines that it knows will scare but the content will not be understood by the average reader. So as the neo-liberal Groupthink is not challenged publicly at the Summit, the organisers have carefully screened the invited participants to sing from the same hymn sheet. The cartoon that follows says it all really.
These sort of Summits – and just the use of the high-sounding term Summit is designed to add gravitas that this event, in particular, has little to justify any claim to such – are the way that Groupthink sustains itself in the face of a contrary evidence base.
Remember that in 1972, social psychologist Irving Janis identified group behaviour with the terme ‘Groupthink’, which is a:
… mode of thinking people engage in when they are deeply involved in a cohesive in-group, when the members striving for unanimity override their motivation to realistically appraise alternative courses of action (Janis, 1982: 9).
[Reference: Janis, I.L. (1982) Groupthink: Psychological Studies of Policy Decisions and Fiascoes, Second Edition, New York, Houghton Mifflin].
It “requires each member to avoid raising controversial issues” (Janis, 1982: 12).
Groupthink drives a sort of ‘mob-rule’ that maintains discipline within the group or community of decision-makers.
These communities develop a dominant culture, which provides its members, with a sense of belonging and joint purpose but also renders them oblivious and hostile to new and superior ways of thinking.
The invited participants to this Summit included the already co-opted unions and welfare agencies. It is relatively easy to co-opt these types of organisations. The leaders are targetted and invited into the inner sanctum to share ‘cocktails’ and enjoy corporate boxes at leading sporting events etc.
The trade union leaders learn that life is good up there among the corporate CEO class and the latter disguise their contempt for the former as they clink champagne glasses and talk about ‘we’ rather than ‘them and us’. It is an age-old form of inducement to corruption.
But it then allows the conservative media phalanx that accompanies these ‘events’ to say that the participants represented a broad cross-section of society with the obvious implication that there is some grand consensus forthcoming – with some nuances of disagreement around the edges.
How could anyone disagree if the CEOs, the unions, and the welfare agencies all can sit around a table and nut our a national reform vision! That is Groupthink in action.
The reality is that the participants at these stage managed events are as representative of the collective aspirations and feelings of society as whatever the appropriate analogy is that indicates virtually total homogeneity and alignment with the corporate sector interests.
That is, not representative at all.
The UK Guardian article (August 27, 2015) – The vaguely Soviet overtones of the reform summit give us a right to be cynical – saw through the ploy.
We read:
Looked at from outside, it was a room full of appointees and invitees, all mouthing platitudes about “reforms” many of them they barely understand, and can have a barely credible claim to believe …
Even the bodies sound familiar. Let’s do a roll call. Representatives from trade union peaks like the ACTU: tick. Speakers from welfare associations and other quasi-NGOs completely dependent on state funding: tick. Professional ideologists like Nick Cater, Henry Ergas, and Adam Creighton: tick. Representatives from the think tanks who exist to study doctrine and develop the “line”, like the Centre for Independent Studies: tick. Add a few red flags and some bouquets and you’ve got something very familiar.
The author likened the event one of those old-fashioned Soviet-style “conferences of the intelligentsia and apparat” designed to work out the story that the people are told to maintain their compliance.
I don’t like that association particularly because it goes on to present the Soviet system as being all bad and the alternative – Capitalism – as being largely defensible.
But I agree with the conclusion that when these elites start talking about a ‘National Reform Agenda’ what we can expect is a further:
… surrendering of security and power, in our lives and work, to our bosses … “Reform” is the ancestor slogan, an encompassing archetype of 21st century thoughtlessness, a banner-phrase of nothing that has earned itself a place in the tyrannous history of garbage language. To be free, let’s stop believing in things we all know can’t be believed.
The whole Eurozone debacle has illustrated how loaded the term ‘reform’ is. The language invokes progress – a ‘reformation’ – a reforming of something old and outdated or ineffective into something that is modern and workable.
It is then combined with phrases such as ‘growth friendly austerity’ as if it is something that is not only possible but desirable because we like to be friends rather than enemies and we like growth because it suggests development.
There is, of course, no meaning to such a term. It is a total sham.
But when it is bound up in a ‘National Reform Agenda’ that talks about Australia having “an even more prosperous future shared by everyone” if only we follow “a comprehensive program of economic and social reform”, which is what the final agreed – Statement form the National Reform Summit – said it sounds like everyone is on the same page and there are no class divisions or dynamics designed to redistribute national income from the majority (the workers) to the minority (the top-end-of-town).
After all, how could that possibly be the ‘agenda’? Weren’t the trade union bosses and welfare agencies signatories to the final communique?
That is the way Groupthink works to pattern behaviour and perpetuate a ruling elite that couldn’t possibly sustain itself, given how damaging the manifestation of its behaviour is to the prosperity of most of us, without co-opting key ‘opponents’ and holding them out as being representative of all of us.
The Summit was an amazing exercise in social engineering though it was patently obvious to the ‘trained eye’ what the event was about. But the majority of the population are ‘trained’ in another way – to be blind to underlying agendas and accept the mythology that reinforces a delusion that these people are really operating in the best interests of the most disadvantaged people in our society.
So we get the contribution of the current central bank governor, for example – ‘Reform’ and Economic Growth
He told us to us that there had to be less regulation to enhance the capacity to compete – inference – less government activity in the economy and that self-regulating private markets are trustworthy and will deliver higher prosperity to all.
He said that “In arguing the case for reform, though, the way the discussion is framed matters” because the concept “doesn’t do much to excite the general public.”
This framing should be about “growth” which means, among other things, according to the RBA governor, less regulations to increase “work effort”, and “accepting, as a condition, that there is an amount of revenue the government must raise to fund the provision of services only the government can supply”.
So the message is that ‘sacrifice’ is required. Workers need to work harder (put in more ‘effort’) rather than work less and enjoy higher incomes through matching real wages growth with productivity growth and stopping the top-end-of-town siphoning the growth gap between wages and productivity growth off for themselves.
And we must accept that governments are financially constrained and have spending limitations. In other words, accept the equivalent of the earth being flat – accept a plain falsehood because that mythology is convenient for advancing the welfare of the minority.
He also said that we shouldn’t frame distributional debates within debates about “fairness” – rather we should just talk about “how do we grow the pie” because then everyone is better off.
But, of course, the majority could be much better off now with existing growth rates if there was fundamental redistribution of income. That realisation, however, would interrupt the dynamic that serves the interests of the top-end-of-town and therefore we need to suppress it from the debate.
He also said that “Reasonable people get this”, which makes me highly unreasonable.
But the inference is clear.
If one doesn’t agree with this ‘free market, light regulation, growth oriented vision’ where governments aim to run fiscal surpluses but avoid discussing “when will we get back to surplus” and, instead, concentrate on getting “more growth”, then one is unreasonable.
There is no mention as to whether the pursuit of fiscal surpluses itself is a ‘reasonable’ goal for any currency-issuing government to pursue, however, that pursuit is framed. It is just taken as gospel that it is a reasonable goal and that the public just needs that pursuit to be framed differently because then we will accept austerity as good.
The unwillingness of these elites to engage in conversations about what a fiscal balance actually means is telling.
They want to suppress a broader understanding of the monetary system and, certainly, do not want the general public to appreciate the capacities that a currency monopoly that most national governments possess have to advance public purpose and welfare.
They know that if we all understood that the unemployment rate, for example, is a policy choice and that a currency-issuing government could virtually immediately eliminate it through clever public sector job creation, then the wage suppression function of mass joblessness would be lost and real wages would have to grow more in line with productivity.
That would deprive the elites of the ‘gold mine’ where they can get workers to put in more “work effort” for less real wages growth – which has the consequence of redistributing the growing pie increasingly towards profits.
After all, the financial markets, which largely do nothing productive to advance societal well-being, need the largesse redistributed through real wage suppression, for their gambling chips!
The dscussions at the Summit in the so-called ‘Fiscal Sustainability Stream’ were ludicrous. According to the released – Discussion Summary:
Australia is in a structural deficit environment. And continuing with the current policy settings will only perpetuate this situation.
So?
Then it said:
As any good therapist will tell you, before someone can improve their own situation they must first acknowledge the situation they are in.
Aha – the medical metaphor. Australia is sick because it runs a fiscal deficit and needs therapy. We have to own up that this is the case – that fiscal deficits are a malady – therapy is needed.
And the purpose of the event is revealed:
So this National Reform Summit has enabled all participants to confirm our problem. What’s even more important is raising the awareness in the broader community that we do have a real fiscal sustainability problem, and that solving it will involve everyone to some degree.
This stuff is so unbelievable that I have to remind myself that actual people attended this event and drank and ate well and actually took themselves seriously.
But they all agreed that Australia “to turn Australia’s fiscal position around” and that “spending cuts alone won’t do enough; tax increases alone won’t do enough; rather, we need a combination of both”.
The summary didn’t actually tell us why a fiscal deficit is the ‘problem’. That was just assumed. Groupthink doesn’t really encourage analysis that might invoke understanding.
It defines away inconvenient issues and suppresses understand. Of course, Australia has a fiscal deficit problem! How do we know that? Because it is running a fiscal deficit! Don’t be so stupid and unreasonable. TINA.
Conclusion
This was an amazing exercise in self-deception (the warmth of being one of the inner sanctum of the Groupthink elite) and broader public indoctrination and manipulation.
Breaking into that process and to expose the public to verities that are suppressed by the elites is difficult.
I see my role with this blog as trying to achieve some degree of ‘break-in’.
But then I am among the unreasonable crew.
First Dog on the Moon on the Fiscal Emergency
Here is the First Dog on the Moon with the – Joe Hockey’s budget emergency, brought to you by playdough and an old shoe box – after the Australian Treasurer has made a fool of himself again at the so-called ‘Reform Summit’.
London Event last night
A YouTube video of the event will appear in the coming days.
It was very well attended and the organisation was superb – I thank Deborah Harrington and Prue Plumridge from the NHA for their sterling efforts.
It was also great meeting a lot of people who until now have just popped up as ‘names’ in my E-mail inbox or as commentators on my blog.
So thanks to all those who travelled the breadth of fair England (and beyond) to participate and contribute.
Perhaps I should say unfair England.
The Streets of London
I thought given my location today that this song was appropriate, Ralph McTell’s – Streets of London – which I interpret as telling a story of humanity afflicted with capitalist class divisions with a large number of people left behind by unemployment, homelessness, ageing, and poverty.
Its all around us and yet we conspire in our own ways to largely ignore it.
This came of his 1969 album the Spiral Staircase. Rather ironically, it was Ralph McTells “greatest commercial success”.
We can all sing along and remind ourselves that fundamental changes are needed to make the economy work for us rather than the top 10 per cent.
Advertising: Special Discount available for my book to my blog readers
Here is the information for all those who asked me last night about getting a Special 35 per cent discount for my new book – Eurozone Dystopia – Groupthink and Denial on a Grand Scale.
Please go to the – Elgar on-line shop and use the Discount Code VIP35.
It applies only to the hard-cover version.
Some relevant links to further information and availability:
1. Edward Elgar Catalogue Page
2. Chapter 1 – for free.
3. Hard Back format – at Edward Elgar’s On-line Shop.
4. eBook format – at Google’s Store.
Upcoming Event – Book Launch Maastricht, August 31, 2015
The official book launch for my new book – Eurozone Dystopia – Groupthink and Denial on a Grand Scale – will be held on Monday, August 31, 2015 at the Maastricht University, the Netherlands.
The Launch will be held at the SBE Building, Tongersestraat 53, Maastricht University.
Room: A0.4.
The event will run from 13:15 to 14:30 (drinks to follow).
There will be two excellent speakers:
1. Dr László Andor, former Commissioner for Employment, Social Affairs and Inclusion in the Barroso II administration of the European Commission.
2. Professor Arjo Klamer, Professor of Economics of Art and Culture at Erasmus University in Rotterdam, The Netherlands. He “holds the world’s only chair in the field of cultural economics”.
The public is welcome to the event. I hope to see a lot of people there in Maastricht on August 31.
Saturday Quiz
The Saturday Quiz will be back again tomorrow. It will be of an appropriate order of difficulty (-:
That is enough for today!
(c) Copyright 2015 William Mitchell. All Rights Reserved.