Call To Action – A New Book
I am delighted to report that a new book, co-authored by my long-time colleague, John Mills, and myself was published in London last week by W H Allen. The book is called “Call To Action” and comprises a powerful argument for addressing the major problems that have now held back the British economy for decades. Those problems include a damaging loss of competitiveness, a policy blind spot on the importance of the exchange rate, a perennial and debilitating foreign payments deficit, the perilous decline of manufacturing, and the futile focus on the government deficit as the prime goal of policy. The book provides a carefully researched case for taking action now before it is too late and could offer the way to better outcomes following the May election.
Call to Action by John Mills and Bryan Gould
Published by WH Allen, part of Ebury Publishing
£10.00
Buy now
This book is also available as an ebook.
Myths, Politicians and Money
My new book, Myths, Politicians and Money, was recently published in London by Palgrave Macmillan to coincide with the Labour Party conference in Brighton. It has been very well received and reviewed, and has attracted a good deal of attention. It is a comprehensive account of what I think has gone wrong for Western democracies over the last three decades; the argument is summarised in a separate posting (called Myths, Politicians and Money) of a piece I wrote for the Yorkshire Post. Find out more here.
Rescuing the New Zealand Economy
Bryan Gould’s new book “Rescuing the New Zealand Economy: What Went Wrong and What We Can Do to Fix It” will be published in New Zealand by Craig Potton Publishing. It will be in the bookshops on 22 September. Below is a short article about the subject-matter of the book.
As the Reserve Bank struggles to deal with both recession and inflation, it is time to review the course of the New Zealand economy over the past 25 years and to seek reasons for the cumulative failures which have led us to such disappointing long-term outcomes.
For too long, our policy-makers have argued that our poor performance – particularly in terms of productivity – is the result of everything other than their policies. Our comparative decline is now so endemic and so damaging to our living standards and even our continued viability, however, that we must draw the obvious conclusion that our policy-makers must take some of the blame.
The truth is that the simple certainties of monetarism, which seemed such a sure-fire recipe for success in the mid-1980s, have long since given way to a more balanced view of the true role of macro-economic policy. We now know that there is a huge downside to locking economic policy into a straitjacket from which only a single unelected official armed with one single target and one single instrument knows the escape route.
If we want a better economic performance, and in particular an improved productivity outcome, we must find a way of controlling inflation without burdening our producers with the highest interest rates in any advanced economy and with the perennial threat and reality of an overvalued exchange rate. The constant inhibition to competitiveness that results from an overvalued dollar means that New Zealand industry is never profitable enough to re-invest in new capability and innovation.
There is no shortage of options for dealing with inflation that are both more effective as counter-inflationary measures and less damaging to the productive economy. It is only the ideology of the “free market” fanatics that prevents us from taking these sensible steps.
Bryan Gould
12 September 2008
The Democracy Sham
In The Democracy Sham: How Globalisation Devalues Your Vote, Bryan Gould considers the impact of the global economy on the democratic process in a number of countries, including New Zealand and Britain. He shows that international capital is, by virtue of its freedom to move at will across national boundaries, now able to dictate to democratic parties and elected governments the economic and other policies they can and cannot pursue. The result is that the political choice offered to voters has, without their realising it, been narrowed and constrained and the voice of the left has been muted and virtually extinguished.
Bryan Gould explains the development of the global economy and the reasons for its current hegemony. He shows that the orthodox justifications for globalisation – that it has delivered better economic and other outcomes for both the world economy and individual countries – cannot be supported, and that it has, on the contrary, produced a global slowdown and unsustainable inequalities and instabilities on both the international and domestic scale.
He looks at the political implications of what he describes as an historic shift in the balance of power between capital and labour, and at the failure of parties of the left to mount any effective resistance. He concludes by considering the steps that could and should be taken to restore balanced and sustainable economic development in the world economy and a fully democratic choice to voters in countries as diverse as New Zealand and the United Kingdom.
The Democracy Sham: How Globalisation Devalues Your Vote is published by Craig Potton Publishing in September 2006.
National Radio Interview
Bryan Gould was interviewed by Chris Laidlaw about The Democracy Sham on New Zealand National Radio on the morning of Sunday, 10 September. Excerpts from the interview appear below.
“What I am concerned to do is to dispel the notion that the social and political and environmental downsides [of globalisation] that are becoming increasingly apparent can be offset by economic considerations…in other words, the economic story is not a good one either. National governments have found the going tough and internationally the economy has grown quite slowly since globalisation and has been marked by tremendous inequities and uncertainties and instabilities.
If we’re drawing up a balance sheet, and we can show that it’s not very strong on the economic side, that then frees us to look at the political and environmental and social consequences that I think are inimical to the kind of world economy we’re trying to develop.”
“It’s not surprising that people have on the whole been persuaded that globalisation has meant better times because for some people it has. What you have to ask is, but which people? It turns out that those who have done well, both globally and within national economies, have been the top ten or twenty per cent. They are able to develop the myth of better times for all by virtue of their ability to influence the way the media treats these issues. The facts show that many people – certainly those below the median point and some of those even above it – have not done well out of globalisation, and that’s true in strictly economic terms as well as in terms of controlling their own lives and influencing events close to home.”
“I wrote the book to answer the question as to why, when there is so much unhappiness about particular aspects of globalisation across the political spectrum, these concerns have so little political traction. The answer is, I think, that people have lost touch with the sort of analysis that I have tried to develop. They tend to look at third world poverty or threats to the environment or the loss of control to multinational corporations as separate, individual and discrete issues rather than as manifestations of the huge loss of control that has flowed from the ability of international capital to dictate to elected governments what the political agenda should be. So, without people being aware of it, the political debate has been narrowed, so that no major party, either in power or seeking power, dares to pursue a policy, either economic or flowing from economic policy, that would discomfort the international investors on whom they think they depend. So, even quite liberal or radical governments, like the Labour government in New Zealand, tailor their economic policies to suit international investors.”
“Thirty or forty years ago, overseas investors would have to negotiate terms with the elected government of a country in which they wished to operate. That government would specify the terms that were needed to reflect the interests and needs of their electorate. Today, the free movement of capital around the world means that international investors – and that means in reality fewer and fewer but bigger and bigger – can roam the world looking for the most congenial conditions, with the result that across the globe wage rates are driven down, and the treatment of profits becomes ever more favourable because competing governments feel that they must do what is required of them if they are to secure the investment they need.”
“One of the many downsides of increasing globalisation is that there are fewer and fewer companies [in a country like New Zealand] flourishing and maintaining their headquarters in New Zealand….That means that fewer and fewer decisions about our economy are being made in New Zealand and that decisions about how workers should be treated and where investment should be made are being made by people who don’t even know where New Zealand is, let alone care about it. And there are some severe economic consequences as well. One of the major burdens overhanging the New Zealand balance of payments is the huge proportion of our economy accounted for by repatriated profits and the interest we pay to [purveyors of “hot money”] in order to finance our deficit.”
“You can’t argue that the huge power of international capital will be deployed to secure the best outcomes from the viewpoint of the international investor, which means that only market values and market forces that impact on the bottom line will be taken account of, and that they will then sit back and allow governments to come along and change those outcomes. This is not a play exercise. International investors want certain outcomes and they will insist on getting them. They might allow a little cosmetic exercise at the margins but they are not going to allow claims for social justice to override the infallible market. The deliberate objective of free market economics is social injustice. The dice must lie where they fall.”
“I think it’s quite possible that the pendulum [of intellectual fashion that would normally allow a change of policy in the light of increasing dissatisfaction with globalisation] may have got stuck because of the power of international capital and the international media, which are just a subset of that same group, to dominate the agenda.”