Capitalism good, Globalism bad

Take a look at this graph of UK GDP growth from 1955 to just about now. Clearly, it's in two halves, as they say - but what marked the change of the roller coasters of the economy in the sixties, seventies and early eighties and the dull, mediocre, flat performance since then? The 2008 shock is the only visible bit of excitement (though the virus will do something interesting)

I've been reading David Graeber, lefty LSE academic and Corbyn supporter, but a man with half a brain. His observations are good, his conclusions dire. Here are a couple of good bits, the first on Neoliberalism -

.. global economic performance over the last thirty years has been decidedly mediocre. With one or two spectacular exceptions (notably China, which significantly ignored most neoliberal prescriptions), growth rates have been far below what they were in the days of the old-fashioned, state-directed, welfare-state-oriented capitalism of the fifties, sixties, and even seventies. By its own standards, then, the project was already a colossal failure even before the 2008 collapse.

He manages to miss the real reason for this dire economic performance despite describing its manifestation .

While the new free market ideology has framed itself above all as a rejection of bureaucracy, it has, in fact, been responsible for the first administrative system that has operated on a planetary scale, with its endless layering of public and private bureaucracies: the IMF, World Bank, WTO, trade organizations, financial institutions, transnational corporations, NGOs.

Yes, Globalism. What Globalism has managed to achieve is to destroy the benefits of the version of capitalism that made us rich up until about 1990. Oh not rich in terms of disposable incomes, consumer toys, cars that we don't own but in the important things.

You may also note that the falling of the Wall and the start of NATO's decline also coincides with this Globalism - indeed, helped to enable it. All economics is human behaviour, so here's an anecdote.

Back in the 1970s I had a gap year before going to university. At the end of the year, I had enough saved as a deposit on a little flint-rubble cottage, which cost the princely sum of £5,250. The attraction was the rear garden, which was huge, with a little orchard of six trees and enough room to run a gaggle of hens and grow a crop of tobacco - but that was for later years. I was going away, and my student grant wouldn't pay the mortgage - no problem. A quick call to the USAF produced the first of my Master Sergeants, superlative tenants whose rent payments were generous and warranted by the US government. That sort of thing was possible back in those spiky, variable years.

If you measure wealth not in the volume of cheap £10 electric drills and £5 jeans one can buy but in having a stake in the country, a country with a standing army of over 100,000, a navy of a least 50 warships and an air force with more than a handful of squadrons, in which there was the freedom to take the sort of financial risks that we did, and enjoy the rewards that we did, then we were rich. Pre-Globalism we also had personal freedom and independence to a far greater degree than subsists now, and even though the State owned a lot more business and industry than it does now, it was also somehow a much smaller State. The Big State that supports Globalism is also supported by what Graeber calls Bullshit Jobs -

But rather than allowing a massive reduction of working hours to free the world's population to pursue their own projects, pleasures, visions, and ideas, we have seen the ballooning of not even so much of the ‘service’ sector as of the administrative sector, up to and including the creation of whole new industries like financial services or telemarketing, or the unprecedented expansion of sectors like corporate law, academic and health administration, human resources, and public relations. And these numbers do not even reflect on all those people whose job is to provide administrative, technical, or security support for these industries, or for that matter the whole host of ancillary industries (dog-washers, all-night pizza delivery) that only exist because everyone else is spending so much of their time working in all the other ones.

These are what I propose to call ‘bullshit jobs’.

The paradox, as Graeber points out, is that the new de-nationalised capitalist Neoliberal West shouldn't allow such massive economic inefficiencies, such a huge waste of resources. Yet it does. That's an answer in itself. What's the point of having a Big State, a regulatory state, if you don't have a society replete with willing, conformist drones to enforce all the regulations?

I'm sorry, but all the cheap Chinese electric drills in the world and the availability of flash new cars I don't own don't come close in compensating for the real wealth of those pre-Globalist days.

Update
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The costs to the UK economy of over regulation, from the IEA

The report concludes regulation has become a political tool, used to drive social or distributive objectives, rather than to correct market failures. Failure of regulation, including over-regulation, has led to increasing barriers to entry for new businesses, stagnating competition between incumbents, and in many cases no evidence of beneficial outcomes for consumers.

Regulations are being judged on their intentions – not their outcomes – and increasingly weak mechanisms for accountability of state regulators risk undermining the rule of law, the report warns.