Neo Liberalism to National Market Liberalism: is this a Great Global Transformation?

“The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

These words of Ronald Reagan were the best and most concise summary ever of the creed of Neoliberalism, which he shared so avidly with Margaret Thatcher. They called themselves Conservatives: but their belief was utterly radical, dominating all public discourse and transforming the world at least until the Great Crash of 2007-2008.

The radical nature of that transformation is laid out by Branko Milanović in The Great Global Transformation. We have two reviews for you, one via the inestimable Nature Briefing [1] and the other by Ivan Radanović for the equally prestigious London Review of Books [2] As ever we won’t spoil these excellent pieces, humbly begging you to read both. However we could not resist this passage from Radanović’s review. For it highlights the contradiction at the heart of the Reagan led project which would ultimately bring it crashing down:

For Branko Milanović and many others, China is at the centre of the current ideological paradigm shift. China’s rise, enabled by global neoliberalism, also made the end of global neoliberalism inevitable, by growing too big to be integrated into a global order whose rules are written by the US and its allies.

The Chinese saw a blindspot which the complacent westerners had missed: if you build an economy where the private sector is good and the state bad, how do you cope when foreign governments act like private companies? In Britain many utilities privatised by Thatcher are owned by foreign governments: is that Socialism or Capitalism? The shrewd rulers of China simply flipped this conundrum: the State and the Communist Party oversee the activities of a thriving private sector. Is that Socialism or Capitalism? In which case, what do words like “Conservative”, “Liberal” and Neo Liberal” really mean?

Milanović worthily joins a list of critics of the Neoliberal project including Wilkinson and Pickett, Thomas Piketty, and Will Hutton. It is easy to see Neoliberalism’s faults now, but it was very popular once. And before we rejoice its final passing, what follows may be very much darker indeed.

[1]“Nationalism grows on the terrain of never-satiated mass plenty and greed,” writes economist Branko Milanovic in his new book, The Great Global Transformation. Milanovic argues that globalization benefited previously poor populations, notably those in China, and the already rich, but left the middle and lower classes in countries such as the United States behind. The result is “the exponential growth of ‘nationalism, greed and property’”, writes sociologist Roberto Patricio Korzeniewicz in his review. “For Milanovic, greed is the iron cage of our times, and our future is bleak.”

Nature | 7 min read

[2] Branko Milanović – is neoliberalism being replaced by something more capitalist? – LSE Review of Books

The Great Global Transformation: National Market Liberalism in a Multipolar World. Branko Milanović. Allen Lane. 2025.

#politics #economics #Ronald Reagan #free markets #capitalism #socialism #communism

Gold is King #3: How one of our old blogs really has come true!

Long standing readers (surely “long suffering”?-ed) will recall our two blogs Gold is King….(LSS 26 10 24) and ….Did we actually get something right?(LSS 23 4 25).Which severally predicted that a deteriorating security situation in general, and the policies of the Trump Administration in particular, would have two consequences. First that the dollar would start to lose reserve status. And that in the absence of any credible alternative, Gold would become the only reliable safe haven, and that its price had la way to rise. Now help has arrived from someone who really knows what they are talking about, the astute Richard Partington of the Guardian. Have a look at this killer quote from his succinct article The Dollar is losing Credibility: why Central Banks are scrambling for Gold: [1]

Investors – private and sovereign – believe their strategic reserves are no longer safe in dollar terms, as they can be confiscated overnight. The dollar is losing the credibility as the nominal anchor of the global monetary system because the Fed is losing credibility, and US Congress is losing its credibility.

And he explains how and why all the most astute and powerful people in the world can see nothing but gold as the only safe place in which to park their assets in the foreseeable future.

At the risk of blowing our own trumpet,(oh, come on!-ed) and in the sure and secure knowledge that we never offer financial advice, only economic commentary, and that wistful, we wish to adduce the following points:

1 Is LSS possessed of an eeerie mystic prescience? No. Even a stopped clock is right twice a day. But when real professionals like Partington confirm our thoughts, it means the facts are pretty grim indeed.

2 Isn’t this a lot of log rolling by the Guardian, which has a bit of a reputation for being a Lefty at times? No-all commentators are starting to agree, including a pretty astute lot at the Financial Times. And if you believe they are Lefties, then you might as well believe in a Flat Moon and the Abominable Yeti.

3 Is the dollar finished as the world’s reserve currency? Not yet. But its fall from 66% of global reserves to 57% in a single decade suggests all is not as healthy as it once was and that alone gives cause for concern.

4 So why has another currency not replaced the dollar? The experts we consulted think that Europe is too weak for the Euro to be a runner. While China’s yuan is just not convertible, and its political system is so different, that they rule it out altogether

5 What about all these ‘ere funny digital currencies, wotsit? We don’t even go there, we know nothing about them.

6 Is this more Trump-bashing? No. We think Mr Trump has a right to act in what he believes is America’s interests. We merely report the consequences of what happens when everybody acts like that.

7 Does LSS like what’s happening? No. we hate it. A world in which the principle economic activity becomes digging a metal out of the ground and then burying underground again somewhere else is operating far, far below its optimal economic potential. It would do much better with a single reserve currency, peaceful trade and stable international relations based on Law. But some of you will have found our thoughts on that matter elsewhere in our sequence of blogs.

[1]https://www.theguardian.com/business/2026/jan/16/the-dollar-is-losing-credibility-why-central-banks-are-scrambling-for-gold?CMP=Share_iOSApp_Other

#dollar #gold #economics #trade #currencies #international relations

Has Donald Trump just brought a World Government much nearer?

Last year we ran a series exploring the pros and cons of a World Government.(LSS 8 1 25 et seq) The general consensus was that it was a nice idea in theory: but utterly unattainable in practice. And the reason our critics gave was very strong: the incredibly firm attachments of people to their national states, which had served them very well up until now. “Sovereignty-it’s all about sovereignty,” they averred, “the right to make our own laws, and defend our own frontiers.”

The recent actions of Mr Trump in Venezuela have dealt that concept a heavy blow. We are ignorant of Mr Trump’s reasons, and lack the learning to judge the legality or the policy implications of his deeds. We know even less about Mr Maduro and his fitness to govern. But we do know that it is quite easy for a large power to enter the territory of a supposedly sovereign state. To take that state’s leader and to put him on trial for malfeasance in office, as though he were a provincial governor in an empire. And if this can happen to a country the size of Venezuela , it can happen to any nation. We ask: in such circumstances, what use is the concept of sovereignty as a practical guide to human action For all except the three very largest powers, Russia, China and the United States of America.

Citizens of lands with incomplete sovereignty will notice this difference in practice. If a businessman wants a law changed, will he attempt to influence his local government-or save time and address the real centre of power? Will an ambitious lawyer find her career served best in her native province? Or should she change her dress, language and manners to thrive in the Imperial Capital? The same choices will confront many-soldiers, sports professionals, entertainers…..Each choice will weaken attachments to the local, and strengthen the central. It will be slow at first, but the identity and culture of the old nation state will atrophy. At best they will be like the former City States of Italy, Venice and the others, venerable relics of lost dominion. . At worst, quaint tribal lands, endlessly repeating their plays and dances for the amusement of tourists, and selling quaint fabrics and pottery to make ends meet. No doubt ethnic jealousies and wars will flare between them, as they still do in lesser nations in various parts of the world. But these will be essentially tribal, and should suit the dominant Power. For people fighting among themselves can never unite to threaten its overarching force.. But their days of commanding the unconditional loyalties of the brightest, the most hard working, the most ambitious, will be numbered.

We didn’t really believe our World Government theory much ourselves after we wrote it. . But now the number of objections to our theory has suddenly dropped from 193 to 3. Which of that three finally brings it true remains to be seen; but has just become more likely that one of them will.

#united states of america #donald trump #china #russia #venezuela #sovereignty #international relations

Why Taxes are good for you #7: but why you still won’t want to pay them

It’s time to wrap up our counter-intuitive series Why Taxes are good for you. We started it as a slightly cheeky riposte to the massively funded and relentlessly intolerant opposition who insist that taxes must be, always and everywhere, a despicable evil. In the first part we met the industrious but not very knowledgeable Dave Watford who expounded upon the best of their arguments from his post at the bar of the Dog and Duck. We went on to learn the rather chilling truths about life in a low tax nirvana, where their are no laws, roads nor health services and violent death lies around every corner. Part three considered the little known but incredibly well documented story of 18th Century China whose low taxes led it to be conquered by the tax- funded armies of ruthlessly hypocritical western nations. Whatever else they are for, taxes are good for your health as we showed in part 4. We felt that part 5, despite being a historical argument, was crucial. No taxes equals no economy. And if you really do want to get rich, the best chance of doing it is by starting from a well-taxed society, as our part six concluded. We provided lots of links and books and that sort of thing for you to read in order to draw your own conclusions. And so we said ” Quod erat demonstrandum“

Except it wasn’t. Isn’t. And probably never will be. Because we forgot one thing. The benefits of taxes are long term, and require an immediate short term loss. Think how Dave Watford sees it. Money taken from his pocket to pay for armies, nurses, roads is not there now. Indeed, some of those hospitals, schools and museums may not even have been built yet. But Dave feels that loss of money very personally. Money which he could spend here, and now on, any number of Bright Shiny Things. And it is no good telling him “Dave-most of these Bright Shiny Things, that you covet so desperately, will have no value in the long term. Remember how you longed for an Austin Healey, a record by the Bay City Rollers, Watneys Red Barrel, a bottle of Hirondelle, a quadrophonic stereo? All good in their day, no doubt-but are they quite what they were, have not other things come along to take their places?

But Dave knows things that we do not. Has studied authors that we have never heard of. Like Thorstein Veblen who as long ago as 1899 showed that people buy Bright Shiny Things not because those things are useful, but to signal the wealth, status and sophistication of the buyer. To consume conspicuously, ostentatiously, vainly, and emptily. To doom themselves thereby to domination by rich men, and to conquest by foreign ones. Oh well. We tried to warn.

Veblen, T: The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions (1899).

#economics #taxes # finance #history #veblen #consumer society #production #marketing

Why taxes are good for you #6: The best thing for an Enterprise Economy

As we approach the end of this series, we could not resist two more arguments which have always irritated the “taxes are evil” lobby. If only because we haven’t met one of them who has come up with a convincing counter argument. And the first should be beloved of all: taxes are a superb way to control inflation. As Britain and the US began to gear up for the Second World War the sheer enormity of the spending needed ran the risk of runaway inflation. It was Keynes in How to Pay for the War who saw the answer. Taxes, he argued would not provide the money; they would suck excess cash from everyones’ wallets , thereby keeping prices on a relatively stable trajectory. The US applied a similar philosophy in its own way [1] The economy grew at unprecedented rate, bringing prosperity to all. And there was a an even more significant side effect, which led to prosperity lasting for decades thereafter.

Because in both Britain and the US, vast defence spending contracts generated an equally vast ecology of institutions, government departments, University research labs and the rest. All beavering away at new discoveries, new ideas and shiny technologies. No wonder the years 1945 -1970 are remembered so fondly as times of progress and prosperity . Names like Rolls Royce, Boeing and McDonnell Douglas are just the tiniest iceberg tips. If you want to know more, trying kicking off from the site of the US’ famous famous DARPA[2] a seed bed for an almost fractal cornucopia of new ideas. Even things we use today like GPS, the internet, and advanced semiconductors are all horses from this stable. By contrast, the economic ascendancy of western countries only really declined after the tax and regulation reforms of the Thatcher-Reagan years when Proud Finance finally crushed Humble Industry.

Why does this all work? Because ultimately the State is able to take a risk which private enterprise capital cannot. We don’t blame them: this is not a moral failing, just a question of numbers and distributed risk. Its true that in some countries private banks have a much more supportive relationship with their local industries: but these tend to be lands where such innovations as Regulations and Industrial Planning are celebrated, and not seen as wicked socialist evils. Leave aside the fact that taxes pay for the roads, hospitals and schools which provide entrepreneurs with a ready supply of able workers. Their real benefit is to create a vast pool of opportunity in which enterprise can afford to reach losses and profits in turn, and keep coming back for more. After all-what use is a football club without a League to play in? We will be revisiting these and other thoughts in the last of our series. Hold on to your seats.

[1]https://www.federalreservehistory.org/essays/wwii-and-its-aftermath

[2]https://www.darpa.mil/research

#fiscal #tax #financialisation #keynes #second world war #inflation #research and development #history #economics

George Monbiot on the arc of History

There’s a simple view of history as series of pageants. Kings fight glorious battles, heroes like Nelson and Genghis Khan kill lots of people, talented artists like Michaelangelo gaily paint frescoes of the male nude all over the walls of some slightly dodgy cleric’s new palace It’s interesting, it’s fun, it excites podgy old men who have never been in a war to dress up in funny costumes. There’s only one problem with it, in fact,

It’s bollocks.

Starting slowly at first, reading the works of much clever people like Professor Kennedy[2] [3] we realised that History is driven by deep slow moving inexorable forces: things like climate, infant survival rates and technology. Britain rose because it was the first to develop modern commercial and industrial processes. It fell when other countries started to do those things better. Rome succeeded, for a while ,because it turned the Mediterranean Sea into a single trading zone in an epoch when sail was the most economic means of transport. It fell when plagues and climate change so decimated its population that it could no longer defend the frontiers of that zone. Above all it’s demographics, economics and logistics that determine the fate of nations, not battlefield heroics.

It is in this light that we present this article by George Monbiot of the Guardian. [1] For it attempts to address this single determining factor, both in our lives-and those of the next four or five generations to come. It doesn’t matter if you love immigration, or hate it. Whether you thought everything would solved by a rising population or a falling one, (as we used to). See this more as advice from a wise accountant to a failing family firm “this much is in your coffers, therefore these will be your spending options” In world terms, the arc is very simple. The population will grow a little while longer. Then it will start to fall. Precipitously. All decisions on defence, finance culture, even our own little idées fixées like antibiotics and climate change, shall be made in the light of this simple, ineluctable fact.

We have followed Monbiot on many topics for years; his writings are always stark and cogent. We urge to you look him up and read more. But today, for now, we beg you to read this one, It should lend perspective like nothing else.

[1] https://www.theguardian.com/commentisfree/2025/dec/12/europe-migrants-birth-rates-immigration-countries

[2]Paul Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Random House, 1987).

[3] Kyle Harper, The Fate of Rome: Climate, Disease, and the End of an Empire (Princeton: Princeton University Press, 2017).

#history #population #demographics #immigration ##economics

Why taxes are good for you #5: No taxes= no economy

Let’s go back to part one of this series where our old friend Dave Watford is leaning on the bar of the Dog and Duck. Complaining how the government takes all his money in taxes and” if he ditnt ‘av ter pay no (expletive deleted) taxes his wife wouldn’t ‘av ter (expletive deleted) work at all!” It’s a widely held view, assiduously promoted by certain very well funded “think” tanks. In fact it’s the exact opposite of how a real economy works. Or exists at all. All the evidence suggests that without taxation, and the government to enforce it, there could have been no economy. Humanity would have frozen at the level of sheep grazers and dirt farmers.

It worked something like this Once there was a King somewhere in old Mesopotamia: and he invented something called an Urg, No one wanted it much at first. Until the King said: ”everyone has to pay ten Urgs a year in taxation. Which I will enforce.” Suddenly the Urg had value because-everyone needed it to pay the taxes. They started to work and trade to earn and swap all the Urgs they needed to pay the King. Who helpfully kept the whole process going by creating more Urgs which he issued to people in order that they could pay their taxes…….suddenly roads were built, trade networks flickered into life, and huge buildings like ziggurats started going up. “Ah!”. cry the detractors, “all these things were gong on before there was money!” It was Keynes who nailed this fallacy. Money is about much more than coins, and came much earlier, he said. Money is all about the network of obligations, debts and credits, which by their redemption make trade possible. The whole point of the king was to ensure that these contracts were enforced. Coins came much later in the archaeological record, as a convenient technological advance to the system. . The electronic banking of their day, if you like.[1] [2]

We’ve talked before how kings use taxes to pay for armies and policemen and courts and other things to keep its citizens safe. But below that level, they are even more fundamental to the very existence of an economy. Without them there would be no Dog and Duck bar for Dave to lean on. He would depend on home brewed beer and home spun clothes. And, as it was mainly women who produced all those sorts of things (they do most of the work in agricultural societies), think of this Dave:-she would indeed ‘av ter work, mate. Innit.

[1] The History Of Taxation In Ancient Civilizations: A Comprehensive Overview Of Early Fiscal Systems And Their Impact

[2] The Shocking Origins of Money Hidden in 1,000-Year-Old Artifacts

[3] Kelton, S The Deficit Myth John Murray 2021 see especially pp 25 et seq

#archaeolgy #economics #history #taxes #money #coins

World Government: Great Idea or daft fantasy?

We’ve passed a little time this year discussing the idea of a World Government. In our series which began back in January[1] we looked at the basic idea. Many of the world’s problems, we opined, were transnational: mass migration, climate change and pandemics are only a few. Nation states were no longer big enough to solve these on their own, we said. Or rather, their existence precluded the solutions, in any reasonable time frame, which would permit human survival. We also noted the terrible danger of a World State[2] : that it could quickly engender an tyranny even more terrible than those of Robespierre or Stalin: and this time with no where to escape to at all.

We spent some time discussing the idea both in these pages and with friends and acquaintances. We received some surprising responses. Even some quite hardened nationalists and Europe-bashers thought we had a good idea, but that it was utterly unfeasible in any meaningful time frame. We think that they are probably right. For another trope of these pages has been the depressing tendency of humankind to divide itself in to mutually loathing groups, over issues both large and small. We have looked at the work of thinkers Like Amy Chua , Eric Kaufman and David Ronfeldt{3.4] We looked at studies like the Robbers Cave Experiment [5] which seem to provide the essential psychological underpinning to these writers’ ideas. All of the foregoing made us feel that our sceptics had the point, and that our Big Idea was, if not wrong, then at least hopelessly impracticable.

It is the to the credit of Great Big Ideas that even when wrong, they can point the way to fertile new investigations, if they are catchy enough. No one thinks Henri Pirenne said the last word on Medieval Economics, not Freud on psychiatry. But it was the achievement of these scholars to make their ideas so strong that they challenged further studies, if only because some were so eager to prove them wrong. It is in this spirit that we shall turn to looking at some questions we have raised. Is the Nation State, which has served us so well so far, really constrained ? Can people from different groups and identities not only sink them into a common cause but actually achieve something thereby? These will be some of the the in the months ahead. And while you are waiting, don’t forget: problems like antibiotic resistance, climate change and mass migration will be getting worse.

[1]LSS 1 8 25, 14 1 25 et al

[2] LSS 22 1 25

3 LSS 16 8 20

4 LSS 10 3 21

[5]LSS 1 4 25

#world government #nation state #economics #politics #tribalism #amy chua

Why Taxes are good for you #3: look what happened to China

One of the great disadvantages of low taxes is that you end up getting conquered. As China learned at terrible cost. In the eighteenth century Qing China had been one of the greatest states in the world:, rich and populous, with booming trade, advanced techniques in agriculture, and envied craftsmanship Taxes were low, less than 5% of GDP it is estimated. So was military spending. And there was the problem. For nations in the west, like Britain for example, ran at much higher tax burdens, perhaps 15-20% GDP. With the result that they could pay for vast armies and fleets which captured all the world’s sea lanes and trade routes. It’s true that the most advanced western thinkers were classic Liberals like Ricardo and John Stuart Mill, who loudly proclaimed the virtues of low taxes and a minimal state. It was just that no one serious paid any attention to them. The result that these fleets and armies were eventually flung against China. The resulting Opium Wars were not only one of the most terrible crimes in History, they disgraced and destabilised China until 1949.[1] [2]

It was a lesson the British themselves had to relearn after the rise of Hitler forced them into frantic re-armament after 1937. After nearly two decades of orthodox economics like the Gold Standard and low taxes, suddenly the latter began to rise. Fast. All those Spitfires and cruisers and radar had to come from somewhere. So in 1938 the standard rate of income tax was raised to 27.5% (5s 6d in the pound) to help fund rearmament. A 41% surtax applied to very high incomes (over £50,000 annually), targeting the wealthiest. Other hated impositions like death duties and PAYE *were imposed. And -despite what it says in the Daily Mail-it worked. Not only was just enough done to survive the perilous summer of 1940, by 1944 Britain was the most fully mobilised of all the wartime economies. Pride indeed.

Yet there is a little irony at work here . It is our lived experience that those who most loudly proclaim the greatest patriotism are also those who would avoid paying taxes wherever and when ever possible. It is their right to say such things. But ours also to at least doubt the sincerity of a patriotism which will not pay to uphold that which it professes to adore.

_{*Pay as You Earn}

[1] Thomas Piketty Capital and Ideology

[2] David Ricardo Principles of Political Economy and Taxation

#taxation #economics #liberalism #free markets #imperialism #opium wars #china #britain

Making an end to Cervical Cancer, making a start on an end to Alzheimers- two stories of real hope

At a time when ignorance and anger are gleefully presenting themselves as the new norms, it’s heartening to see that some people are still active on our side. And achieving real, substantial progress. That’s why we’re proud to bring you two stories which show what educated minds, still employing the twin discipline of fact and reason, have achieved lately.

Repurposing old medicines. Regular readers will will recall our enthusiasm for lateral thinking, using old things which were there all along to do unexpected new ones. So Sharon Wooller of the Mail has a triple whammy for us this week.[1] After screening 80 commonly used drugs or vaccines , ingenious scientists at the University of Exeter selected three that might have a bearing on the terrible scourge of Alzheimers disease. They are: Viagra, which stops those pesky tau plaques from building up. Riluzole which may actually bring them down. And the shingles vaccine Zostavax which may also affect the immune system. Now we know the brain barrier frontier is pretty much down (LSS passim) this has to be a powerful runner, gentle readers. But best of of all is why these scientists set out to do this. To quote Sharon. in a nutshell:

Making drugs from scratch can take ten to 15 years and cost billions of pounds, with no guarantee they will work.

If you cant afford new ones, why not try a few old ones? Quod erat demonstrandum

Cervical success People can co-operate, even across national lines, when there is “cause sufficient”. One of these was cervical cancer, which not only blighted and destroyed lives, but effectively deprived the world of much of the better half of its workforce. Two releases today from GAVI and the WHO evince the remarkable strides in the vaccination programmes which have done do much to eliminate this disease. Hats off not just to the scientists, but also to the intrepid field workers who have combed the wildest, remotest corners of the earth, employing the most recondite means, to save lives and afford a brighter future to millions [2] [3]

When we read stories like these we know we are not alone. Our side is still out there. And unless they crush all universities and research institutes everywhere, we shall be back one day. For keeps.

[1]https://www.dailymail.co.uk/health/article-15298699/Viagra-Alzheimers-drugs-hope.html

[2] https://www.gavi.org/news/media-room/cervical-cancer-vaccines-save-over-1-million-lives-lower-income-countries

[3]https://www.who.int/news/item/17-11-2025-world-marks-cervical-cancer-elimination-day-as-countries-accelerate-action

#vaccine #drug #medicine #alzheimers #cervical cancer #women #health