Sunday, November 17, 2013

Staggering news from the Netherlands - The bankruptcy of neoliberalism according to bankers and entrepreneurs

On November 14, 2013 there was a meeting in Amsterdam with interesting and surprising statements, coming from the financial and business community in the Netherlands and Europe. They advocated – in a confidential setting – for measures virtually no socialist party would dare to take on his behalf. In business circles one is surprised that people do not rebel against the state’s budget cuts. Here is a report.

Last night we had a special, baffling Gulf Group Evening about neoliberalism. One of the attendees had just returned from a meeting with Dutch bankers and entrepreneurs, employees of the European Commission and the Dutch Central Bank and some scientists.
Here is a brief account of the evening. The following was said by bankers and entrepreneurs, with additions of participants to the evening:
- The Dutch economic and financial policy is all wrong , the economy is hurt dramatically by the cuts;
- The multinationals have accumulated too much money and are not investing it productively;  so there is over-accumulation, a Marxist term used by the bankers;
- The corporate tax for companies should be dramatically and rapidly increased so that money flows back to the state and can redistribute it;
- The ratio between capital and labour is totally skewed and has grown at the expense of labor;
- The wages in the Netherlands for many years have been too low and should urgently be increased because people are not spending and small and medium businesses go bankrupt;
- The cuts in state expenditures are fragmenting and undermining society;
- It is astonishing that the Dutch do not revolt, said a surprised banker;
- The 3 % target for the government budget deficit relative to GDP, which makes people widely unemployed and unhappy (according to a recent newspaper article the suicide rate in the Netherlands has increased by 30 percent) is a randomly picked rate;
- The banks in the Netherlands are in a precarious situation, because when people want to get their money en masse from the bank, that money is not there and the government must intervene with much higher amounts than previously - which is probably impossible;
- The trade union movement in the Netherlands is very weak, they are wimps, they walk behind the government policy .

The participants to the Gulf Group Evening noted that the same austerity policies in the Netherlands and other European countries in the thirties had led to almost all political parties to look alike in their austerity drive, and that this had led to a mellow population that lost confidence in politics, and to the emergence of nationalist and fascist movements, in the Netherlands and elsewehere, but especially in Germany. And it had led to the Second World War.
Only after the devastating war in Europe Keynesian policies were put in place, with an important role for the state in the economic process, and a redistribution of power between capital and labour in favour of labour, and the welfare state was carefully built.
Participants also noted that it was strange and unfortunate that it first appeared the financial and economic crisis of 2008 would lead to a replacement of the global financial system – that with its derivatives and ever newer and incomprehensible financial products had become unmanageable - by a better system, but that nothing was done with the proposals of the international committees that were set up. The current financial (non)system just went on, and even deepened. A large part of the population of Europe goes along with it, and is part of it by home ownership and as co-holder of the pension system.

Aafke Steenhuis
Jan Joost Teunissen