“In so far as neoliberalism values market exchange as ‘an ethic in itself, capable as a guide to all human action, and substituting for all previously held ethical beliefs’, it emphasizes the significance of contractual relations in the marketplace. It holds that the social good will be maximized by maximizing the reach of market transactions, and it seeks to bring all human action into the domain of the market.”
David Harvey
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Neoliberalism broadly describes an epoch in capitalism in which the dominant set of ideas, and political and economic practices are characterised by the emphasis on limited regulation on markets, increasingly financialised set of practices emerging in various institutions, the introduction or expansion of marketisation to services previously held by the public sector, the lowering of barriers to free trade, and the free-flow of capital to anywhere in the world. To put it simply, neoliberalism is “the subordination of the social world to the will of the market”.
Neoliberalism is sometimes believed to be a buzzword in left and progressive circles, but it is a very real political and economic ideology with promoters and practictioners who sought to bring 19th century ideas and practices into the 20th century. It should go without saying that neoliberalism replaces an epoch of Keynesianism which has at times been described as “the golden age of capitalism” due to the rapid economic growth, high social mobility, strong welfare systems and relatively limited unemployment in the advanced capitalist nations. This is not to say that neoliberal programs implemented in various countries (e.g. the so-called “Asian Tigers”) did not lead to economic growth – just that it never did so without undermining nearly all of the features that made Keynesianism seem attractive. Despite this, neoliberalism has endured from the 1970s until today, defining not only modern economic practices, but our political and social life.
It is believed that neoliberalism emerged sometime in the 1970s, and even argued that the basis that its building blocks were set up right after the Second World War. However, its ideological framework was developed in the 1930s by a group of classical liberal economists in a conference held in Paris in 1938 – Among them were Friedrich A. Hayek, Walter Lippmann, Louis Rougier and Ludwig von Mises. The aim of these conferences is to develop a means of combatting what they believed to be the rise of collectivism throughout the world (in the forms of communism, Nazism and social democracy) by introducing a set of laissez-faire capitalist principles fit for a new era. They agreed on the term, neoliberalism to define their ideas described as “the priority of the price mechanism, free enterprise, the system of competition, and a strong and impartial state”.
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Many of these economists would set up a think tank known as the Mont Pelerin Society in 1947 as a hub for their ideas, and eventually – the locus of a global network of think tanks, with the accompanying deluge of financial backers and a coterie of academics, journalists, corporate leaders and politicians moving within and through the MPS – they existed as a niche movement during the heyday of Keynesian capitalism, and its alternative in communism across the world, with pockets of fascist-inflected corporatism. The influence of the neoliberal ideas emerging within the MPS led to the creation of various institutions such as the Heritage Foundation, the Institute for Economic Affairs and the Adam Smith Institute, as well of the reconstitution of others such as the University of Chicago via its economics department, even the World Bank, the International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT) – organisations which were the brainchildren of Keynes, came to embody neoliberal programs. The early German neoliberals were able to forge an alliance between the intellectual, business and political forces to build an early iteration of what was to come known as ordoliberalism – a system that eschewed the Keynesian welfarism, and maintained competitive markets in exchange for state interventions in prices. The once marginalised collective of classical liberals became an international movement that was reshaping the Western world.
The crisis of capitalism that emerged in the 1970s had forced the decoupling of the US dollar from the gold standard, leaving it a floating currency. The introduction what would become neoliberalism took place in Chile, which was already a target of covert involvement by the American intelligence services, who sought to overthrow the socialist government of Salvador Allende. In 1973, a coup was launched by several high-ranking members of the armed forces led by General Augusto Pinochet, with the assistance of the CIA. The result was the collapse of the Allende government, and the emergence of a dictatorship led by Pinochet. The Pinochet regime’s economic policies were informed by a team of economists trained in the University of Chicago (nicknamed the “Chicago Boys”) who advocated monetarist policies, resulting in 40% of Chileans thrown into poverty.
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As the compromise between capital and labour became unmoored, as the former sought greater profits – the labour unions which maintained the security of social welfarism would be smashed – in many cases literally, and their power would be legally curbed. In the United Kingdom, the Conservative government under Margaret Thatcher sought to place Britain at the centre of the increasingly fierce global economy, and decided to do so by bolstering the financial services sector. Commission rates were abolished and trading was was deregulated, while a state-of-the-art digital trading system was introduced. The changes took effect on the 27th October 1986 – the spike in market activity from deregulation of the City of London was dubbed “the Big Bang”. Many old firms were swallowed up by larger banks – both foreign and domestic; it had solidified the British economy’s shift to financial capital over industrial capital, and indeed – it had come to place London among other financial centres as the preeminent hub of global finance. It was part of an overall process called ‘financialization‘, where financial institutions and financial elites become more influential in the economic policy of nations.
With the onset of various global commodity booms experienced during the ‘high’ point of neoliberalism, the socialist world attempted an rapproachement in order to have access to the global market by either opening up its markets through internal restructuring of their economies, or through IMF loans to those seeking to develop their economies after the success of their anticolonial struggle which had achieved the same thing. The most violent result of this has been the collapse of the Soviet Union and the Eastern Bloc nations, and the adoption of some form of market socialism to the surviving communist nations. The IMF’s ‘structural adjustment’ packages had also imposed a retardation of the so-called post-imperial nations of the Global South, ensuring their continued dependency to Western economies – making a mockery of their struggles for independence.
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In the 1990s, thanks to the IMF and the World Bank, a set of policies promoting low tarriffs on trade, privatisation of key sectors of the economy, and deregulation – spread across the world; the trend had come to popularise the term, “globalization” to reflect its scope. As if to solidify this trend the GATT had reformed into the World Trade Organisation (WTO) in 1994 which promoted anti-protectionist policies. The absence of a rival system counterposing capitalism, and concurrent trends in Western societies (post-Fordism, new managerialism, “knowledge economy”), gave rise to highly optimistic predictions (some of which ironically made during the Keynesian epoch) by a number of academics around a supposed “post-materialism” defining social and political engagement, a supposed “death of class” resulting in the decline of organised labour and decomposition of political bases in favour of a politics by value frameworks.
In political and cultural analyses, globalization was also perceived as potentially leading to a relative peace, and also a synthesis between disparate cultural frameworks across the world – a(nother) ‘benign’ era of capitalist world economy. This conceit only served to obscure the intensification of exploitation in the world outside of the Western Hemisphere. And even then, some of the claims with respect to “the death of class” in advanced capitalist societies were shown to be flat-out wrong, confusing the specialisation of work – especially the rise of immaterial labour (knowledge is a key example), and increasingly fecund expressions of consumption for the disappearance of a unified experience of class (which never existed), to say nothing on the wage/capital relation. The new system ushered in globalization was not a harmonious interconnected world, where all commodities and cultures mix evenly. It was the unfettered expansion of new markets, the free flow of capital, the creation of a new global working class (many of them experiencing the same labour protections resembling that of the 1920s for advanced capitalist societies), and if anything – in a cultural sense, was closer to the “Americanisation” of the world.*
Rather than enact a new kind of freedom and autonomy, neoliberalism had in fact led to the immiseration of large scores of people, the retreat of the social safety net, and the atomisation of the experience of social life. In the Global South, this is felt even sharper – with the presence of transnational corporations (TNCs) exploiting the local labour force in their pursuit of ever-greater profits – with the advantage of weaker labour protections offered by underdeveloped nations**. Neoliberalism has also transformed almost all spaces of social and political life – from education, work, healthcare, to even the conduct of politics. Interestingly, neoliberalism has been a feature of global capitalism for a period even longer than the Keynesian era***, which should give sobering reflection towards the context of the dominance and eventual decline of Keynesianism, and what its purpose actually was, along with that of neoliberal hegemony. But neoliberalism had produced its own set of contradictions, with global consequences.
Chaos in the market New Eden
- The progressive reaction was the anti-globalization (or alter-globalization) movement emerged using the uprising of the Zapatistas against the Mexican government after it accepted the North Atlantic Free Trade Agreements (NAFTA) launched on January 1st, 1994, as a launchpad. The movement demanded greater political transparency, the scaling back of the power of corporations, and the restoration of public institutions. They tried to bring to attention how TNCs were exploiting the Global South, and their facilitation by the WTO and the World Bank; and operated in a decentralised and horizontalist style, drawing inspiration from the Zapatistas. They were said to represent a new kind of anti-capitalism, or resembled one that had not been seen for over two decades. The dynamics of the movement culminated in the protests in Seattle, Washington outside the WTO conference in 1999; the World Trade Center attacks in New York, US in 2001 had shifted their momemtum and they were largely integrated into the anti-war movement in the 2000s – in so far as the Global North is concerned, this movement, while key to the establishment of the World Social Forum, and raising concerns around debt relief on an international scale, its capacity for systemic change had diminished significantly following the War on Terror (see below)
- The reactionary emergence of right-wing “anti-globalism” was also a feature, developing into outright conspiracism around the formation of a global elite establishing a “new world order” (ironically taken from the 1991 speech of George H.W. Bush). Former Nixon consultant Pat Buchanan and Vladimir Zhirinovsky were prominent figures around movements which promoted ultra-nationalism in face of what they believed to be the loss of national sovereignty to financial and political elites. Given that anti-materialism is a consistent feature of this kind of nationalism, all kinds of mystification around globalisation ensued, such as the belief that the UN had the kind of hard power usually assumed from the US, and so hysteria arose around a planned invasion of UN armed forces to signal a “new world order”; and the belief that a globalised world economic system is some kind of Zionist conspiracy. A nationalist worldview reduces everything to national struggle. Figures like Buchanan and Zhirinovsky initially caused concern over their popularity within their respective countries but events overtook them and their chauvinistic causes taken up by their leaders (the 9/11 attacks and the rise of Putin, and the swift conclusion of the Chechen War respectively created a fervently nationalistic sentiment in the US and Russia) leading to their decline. However, the conditions that created them, and what they represented did not disappear….
- The collapse of nationalist movements in an anti-colonial struggle in the Middle East, had led to a movement which synthesized a revivalist Islam with insurrectionist politics known as Islamism. While Islamism was already a political force which had adopted the party form, this new version mostly eschewed the capture of state power, they nonetheless claimed authority within the Islamic world, and some of their most prominent figures adopted special titles to signify their authority. The primary concern of the new Islamists is the presence of the American empire on what they considered to be Muslim lands, and the acquiesence of the leaders (religious and political) of these countries to the West. For them, it solidified that they indeed lived in an “age of jahiliyya” (‘age of ignorance’), in which even established Islamic authorities were corrupt – indeed they were seen as false Muslims. The aims of Islamism are restorationist in their function, in that it seeks to remove all elements of jahiliyya and revive the ‘true’ expression of Islam, and to purge the cultivators of this jahiliyya – which they attribute to Western and Zionist influence. Islamists – particularly Salafist Islamists/jihadists differed on questions around the creation of a caliphate; who represents its foremost leaders; and whether the “near enemy” (the ‘corrupt’ Arab nations) or the “far enemy” (the West, principally the United States) should be the main target. Since the 1990s, the focus of the jihadists was primarily to go after the “far enemy”: in part due to the optimistic enthusiasm in the aftermath of the Soviet-Afghanistan war and the following collapse of the Soviet Union, which had convinced them of their ability to challenge the imperialism of the premier economic superpower and bring it to its heels. The attack on the World Trade Center in September 11th, 2001 was the most notable engagement with Islamism and its adversaries, although cells claiming affiliation to active jihadist organisations are active across the world – in particular, South-West Asia, Africa, and East Asia. The features of Salafist Islamism was the creation of non-state entities which drew the ire and the military might of the United States – along with her allies, the accompanying disdain of the religious establishment and of the majority-Muslim governments, the rejection of a democratic practice, an emphasis on direct engagement with the Qur’an over the long-standing exegetical and legal traditions of Islam as justification for their acts, the decentralised networks that these organisations functioned in, effective usage of new technologies in propaganda, and rearticulations of Islamic concepts like jihad, shari’a and the ummah emphasizing individualistic interpretation. It is for this reason why Suzanne Schneider argues that modern Islamism, contrary to claims that they represent a call to pre-modernism, are in fact hypermodern; in that they represent an expression of the tensions produced by globalisation, the dialectic between individualistic ethos and highly authoritarian practice, and the decentralised nature of the organisations and the claim by Islamic State of a “global caliphate” with authority over all Muslims across the world reflected the neoliberal era it arose from.
- The social dislocation experienced by the working and middle-classes of Latin America as a result of the authoritarian governments between the 1970s-1980s, and the emergence of neoliberal/’Third Way’-type policies meant that the anti-globalization movement in Latin America took a different form. Various social movements around indigenous rights, feminist groups and trade unions mobilise in opposition to Latin American governments (some of them center-left) which had enacted neoliberal policies, and the colonial system which still defines their existence. These groups would become incorporated with left-wing political parties which went from strength to strength, starting with capturing municipal governance to their ascent to forming national governments, often with the alliance – even incorporation of the social movements to their political base. The rise of left, and centre-left governments of the 2000s was dubbed: the ‘pink tide‘. These governments focused on programs emphasizing the nationalisation of companies, massive social welfare programs intended on tackling poverty, and incorporating the participation of various marginalised groups (women, black people, indigenous people, etc.) The combination of these programs came to be dubbed ‘post-neoliberalism’; the rapid economic growth experienced by these countries as a result of the high prices of their main exports (oil. gas, etc.) and the Chinese commodity boom of the 1990s/2000s was what sustained their ‘interventionist’ programs. The ‘pink tide’ had also saw an attempt of economic integration across the South American nations, as Cuba and Venezuela spearheaded the establishment of the Bolivaran Alliance for Peoples of Our America or ALBA – a supranational organisation which had come to incorporate the membership of several countries in Latin America and the Caribbean. ALBA is explicitly stated to be anti-imperialist and anti-neoliberal – in some contexts, even anti-capitalist. It was used as a means for its members to use the oil brought from Venezuela to support various social welfare programs and even set up a virtual currency called the sucre. However, the success of the ‘pink tide’ had apparently relied strongly on the Chinese commodity boom, and the high price of oil on the global market – the resulting slump in the price of oil would lead to a reversal…
And this is describing global trends even before 2008. You know what happens next…
The big crash
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In 1999, US President Bill Clinton repealed the Glass-Steagall Act. The act was introduced by Franklin D. Roosevelt in 1933 to prevent commercial banks from dealing with non-governmental securities for clients in Wall Street. Clinton argued that the bill was all but dead anyway; he had simply finalized what was the new normal. Banking regulators had since the 1960s interpreted the Act as allowing for commercial banks to engage in some securities activities – a list that had gradually expanded over time. The result was the immediate frenzy of mergers between firms which created huge financial conglomerates hungry to get into securities ventures well outside the scope of their underlying business. The introduction of computer-based mathematical models to financial risk management led to the promotion of increasingly complex financial instruments to buy and sell securities loans. The billions of investment dollars flowed into ‘residential mortgage-backed securities’ with the promise of big payouts from the mortgage securities. This created a massive property bubble which burst around 2007, leading to the devaluation of housing-related securities, hundreds of thousands of foreclosures, and collapse of major financial institutions such as Fannie Mac, Freddie Mac, IndyMac Bank, Morgan Stanley, J.P. Morgan Chase, Lehman Brothers, Merrill Lynch – and many more, had either declared bankruptcy or faced it, leading them in desperate need of salvation.
The Bush, and later – the Obama administrations made it their priority to issue massive bailout packages to save the financial institutions deemed “too big to fail”. The UK and other advanced capitalist nations followed suit. The massive injections of capital to rejuvenate the financial markets came at a price: the US government would own shares in the businesses that were affected. The banks seeking to rebuild their capital base could no longer afford to give massive loans in the way they did before. Due to the global credit freeze, businesses reliant on credit found it harder to obtain, leading to massive layoffs of workers. Unemployment skyrocketed as a result of the slump in industrial output, and the stock markets dropped substantially.
The Group of 20, or G20 – 19 heads of state/government along with the President of the EU, were hastily assembled to discuss solutions to the global financial crisis – the first of the meetings took place in Washington, D.C. on 14-15 November 2008, and the second in London on the 2 April 2009. Their overall goal was to “start the process of reform so as to manage globalisation as a force for good in the medium term”. A $1.1 trillion stimulus package was agreed to several programs in order to improve international finance, credit, and trade, and provide overall economic stability and recovery. Other outcomes were the creation of a Financial Stability Board to work with the IMF, and rising economic powers – China and India, having the ability to determine IMF and World Bank policies.
The global financial crisis had created a profound scepticism on the viability of neoliberalism, and that the outcome of the G20 summits did not conclude with a commitment to establishing greater regulatory oversight on the national and global level had, for many observers marred the entire summit. When arch-libertarian Alan Greenspan, who formerly served as the Federal Reserve Chairman, says that the entire period had shown that neoliberalism no longer worked, then one should take heed. Naturally, the period had for many people in the Global North led to a discontent around globalisation, with one outcome being a more explicitly socialist**** politics reviving, and another being the reemergence of nationalist or nativist ideologies. Some commentators observing these developments described these phenomena with the flattening and unsophisticated term “the rise of populism”; The following ten years through this paradigm saw a kind of chaos engulf the world. A much more materialist analysis would suggest that the contradictions produced in the neoliberal mode of capitalism gave rise to new social, national and global tensions, producing various reactions in response.
When you just keep doing wrong knowing it’s wrong
Whatever sentiments emerged from neoliberalism, its institutional operation was not going to disappear. No international commitment to build an alternative economic system emerged from the Great Reccession. However, what came next was the very opposite of a return to the normality of the period prior to 2008 crisis:
- Fury towards the government bailouts of the major banks, worsening standards of living, the layoffs of workers, and the economic recession, protests across the US built up occpying university buildings, until enough momentum built up to an action to occupy Zuccotti Park on the 17 September 2011. Organised by the anti-consumerist activist group Adbusters, the inciting demonstration was coined #OccupyWallStreet, and was believed to be one of the first large-scale demonstrations organised via social media. The general demands of Occupy Wall Street were for the major banks to be reformed, for the influence of money to be removed from politics, for the forgiveness of student debt, and for a more distributive income. The latter underpinned the OWS slogan: “We are the 99%” (of which late anthropologist David Graeber was credited with coining), in opposition to “the 1%” made of CEOs, hedge funders, industrialists, and other capitalists or “elites”, distorting the ideal of democracy. The protest itself lasted 59 days before the police were ordered to clear Zuccotti Park of the protestors. From there, the targets shifted to banks, corporate headquarters, foreclosed homes, to universities to be occupied by protestors. The spirit of OWS spread internationally, and similar protests were held in the UK, France, Spain, Australia, New Zealand, Canada, Cyprus, Nigeria, Brazil, Colombia and the Czech Republic. OWS did not necessarily have a firm ideological base beyond its call for a more democratic process, and had everything from anarchist to libertarian tendencies – some of which declaring to represent the ‘real’ character of OWS. However, its general economic concerns, reliance on direct democracy , and overall reformist character has lead some observers to describe it as ‘left-populist’. OWS is said to have overall failed in its goals, however segments of people who engaged in OWS and were politicised by it had gone on either to incorporate their radical democratic politics into the institutional political framework. In turn, the innovations from the Occupy movement – from the “human microphone”, engagements in participatory democracy and general assemblies, and use of the “progressive stack” – giving priority to people from marginalised communities to speak first, had all had significant influence on the expression of the New New Left of the 2010s, especcially those in the Global North. The politics of OWS is also said to have led to the rise of left-wing politicians such as Jeremy Corbyn, Bernie Sanders, Jean-Luc Melenchon, as well as the formation of the Progressive International. Ultimately, Occupy Wall Street at best can be seen as the final form, or logical conclusion to the kind of formation seen in the alter-globalization movement – its commitment to the liberal framework – especially in its understanding of democracy had ultimately limited its ability to create a new kind of politics, and ultimately to address the economic problems that created the movement.
- The Arab world, dominated by autocratic leaders faced their greatest test of legitimacy since the end of the Cold War. The spark was said to be a Tunisian street vendor setting himself alight after police confiscated his material, the outrage from this incident – along with broader issues around economic inequality, and poor living standards – exacerbated by the Great Reccession, government corruption, and political repression, had led to the eruption of protests – largely organised by labour unions. After 28 days, the government of Zine El Abidine Ben Ali was toppled. Popular unrest spread across several Arab nations – in particular: Libya, Egypt, Yemen, Syria and Bahrain; as well as smaller protests in Lebanon, Kuwait, Jordan and Sudan. While Tunisia and Egypt were the most successful revolts resulting in a change of government – and even then, the latter resulted in Mohammed Morsi of the Islamist Muslim Brotherhood briefly taking charge, before removed in a coup installing military dictator Gen. Abdel Fattah el-Sisi; Libya and Syria descended into civil war. If the entire regional conflagration were not initially great power politics struggling for influence in the Arab world, then this was eventually the character of the ‘revolution’: Libya, abandoned by the Arab League – was subject to a NATO intervention primarily led by the US, UK, and France, to assist the rebels opposing the regime of Muammar Gaddafi. Gaddafi was brutally executed by these rebels in Sirte, and in no time, Libya was turned into a glorified slave market – with its stock primarily being (guess) able-bodied dark-skinned Africans. African refugees seeking to escape the barbarity found themselves blocked from entry into the European Union, and returned to the Libyan Coast Guard. Two civil wars have erupted since the overthrow of Gaddafi; Libya is now under a so-called “unity government” formed of the competing factions. Time will tell how long this will last. As for Syria, The government of Bashar al-Assad at first had to contend with the “Free Syrian Army” formed by defected members of Syrian Armed Forces, and other groups unhappy with his regime, to the emergence of Islamic State. While the US surreptitiously provided aid to the FSA and other anti-Assad forces, and attempted to mobilise a coalition for an outright invasion; The presence of Islamic State had pushed Russia to directly intervene and assist the Assad government in fighting Islamic State along with any anti-governmental forces. Meanwhile, the stateless Kurds in Northern Syria declared the creation of the Autonomous Administration of North and East Syria (AANES) – popularly known in the West as Rojava, fighting off the Syrian government forces, along with IS and the FSA. Turkey, threatened by the presence of armed forces controlled by the Kurdistan Workers Party (PKK), invaded Syria once the Kurdish People’s Defense Units (YPG) went into alliance with the US to fight IS – to prevent the Afrin region from linking with the rest of Rojava. They had in effect created a proto-state in Syria, leading YPG to allow the Syrian government to form a buffer zone between them and Turkish-controlled Syria. In short, the whole situation there is a mess. Yemen likewise descended into civil war following the overthrow of Ali Abdullah Saleh. Saudi Arabia – concerned with the regional stability and its threat to national security from Iran – suspected of backing the Houthi insurrectionists, launched a military incursion pounding Yemen with drone strikes – provided primarily by the UK and US. The humanitarian crisis is dire – indeed it is the worst in the world: UN figures suggest that around 375,000 people were killed as a result of the war – 70% were children. Over 3 million people are dying on their feet due to starvation or disease: The coronavirus outbreak had made things even worse. 6 million people have been displaced as a result of the war; 4.5 million internally. With these into account, there have been accusations that the Arab Spring was not really a popular revolution – with one or more powers – notably the US – accused of weaving it wholesale. That the movement had no intellectual anchors, or even a demand for a new social order (even for Islamism); not to mention that the monarchic regimes in Bahrain, Oman, and Saudi Arabia were left virtually unscathed has only fuelled suspicions of foreign interference. The US State Department-supported National Endowment for Democracy (NED) is even alleged to have been involved in the Tunisian and Egyptian uprisings. Whatever the truth of foreign involvement, the issues around the results of the Arab Spring – which is said to have inspired by OWS above; underscores the abject ineffectuality of horizontalism, and the hollowness that the “NGOfication” of a civil society does to a people in need of tools for revolution. That the ones who gained the most out of this were organisations with a political program or long-term aims (Muslim Brotherhood, Egyptian officer class, Gulf state monarchies, ruling elites of regional hegemons), or that the whole thing turned into regional power plays is perhaps fairly unsurprising. At least the AANES has armed militias (oh, and a concrete idea of what they want their society to look like). A case study of “capitalist realism” on an entire region.
- The Great Recession had built up enough economic turmoil that the Eurozone itself came to be under threat in what was known as the European Sovereign Debt Crisis. The crisis had deeply affected one country in particular – Greece. The Greek government was trapped in deficits that it couldn’t meet and its funds were running out. The explanations given to the Greek crisis was generally ‘government corruption’ once the Greek government revealed that it had been underreporting the extent of its debt for years. The reality is much more stark: Greece was allowed into the Eurozone with knowledge (or at least, indifference) of the financial irregularities performed by the Greek government. In fact, Greece was the hub of a financial bonanza in the 1990s, as investors – in anticipation for the euro bought government bonds as if were a fire sale, as interest for them drove the prices for the bonds down – a manner curiously similar to the subprime mortgage crisis – though at the time, it was politically convenient for the Eurozone project to ignore signs of the Greek economy overheating. In 2002, the Greek government struck a deal with Goldman Sachs with the offer to swap government debt with dollars and yen as currencies, in exchange for euros for a brief period of time – to be exchanged back to the original currency at a later date…but the 2008 crash put the kibosh on that. As a result, much of Greece’s expenditure was used to pay off these investors who lost money as a result of their own speculation. The crisis had threatened the stability of the Eurozone, and so the IMF, the European Central Bank and the European Commission – the ‘troika’ – stepped in with the offer to bailout Greece in exchange for harsh austerity measures – Greece agreed and received £275bn as various cuts to public services – especially welfare. As Greece experienced severe economic hardship, its economy shrank, and unemployment rose to 25% – massive anti-austerity protests spread throught the country. The political consequence was that the ruling party, PASOK – a giant of social democratic politics for four decades, collapsing. The decline of PASOK, and of various centre-left parties across Europe gave rise to the term, “Pasokification” by political analysts. As PASOK smouldered, the left-wing Syriza Party superseded them – led by Alexis Tsipras, Syriza secured victory in the 2015 national elections, on the pledges to reverse the austerity measures. However, Syriza’s time in the sun would not last. Multiple times did the troika offer bailout packages which was rejected by the government. Not wishing for Greece to crash out of the EU, yet also trying to make good on his promise, Tsipras decided to put the decision to the Greek people in a plebiscite whether Greece should accept the package deals offered by the troika. The referendum resulted in 61% voting “no” to the deal – an overwhelming rejection. However, pressures from the EU, the Greek Parliament, and fears that Syriza will be held responsible for the economic ruin of Greece, had put Tsipras between a rock and a hard place, and he eventually acquiesced to the demands of the Troika, and accepted the deal. As expected, tax increases were given to Greece’s farmers, and the public pension system received major cuts. The capitulation of Syriza and Tsipras in particular to the EU and IMF, had to many disgruntled citizens and to international observers, signified that they had disregarded the weight of a public vote, which had severely harmed Syriza’s popularity and that of the prime minister. The EU creditors offered further packages to last over three years with austerity demands, to which the Greek government accepted – but with the slow economic growth, a lack of improvement into the lives of the Greek people, and the fact that the money had primarily gone to pay off their creditors – notably major German and French banks, Greece experienced sharp social divisions, and social unrest; the climate was fertile for the spread of nationalism and anti-immigration – seeing the rise of the far-right Golden Dawn. The 2019 general election had led to Syriza was thrown out of power to the right-wing Democracy Party, led by Harvard-educated lawyer Kyriakos Mitotakis. With Mitotakis as prime minister, promises were made to the Greek people that Greece will become economically stronger under his leadership, and the key to Greece’s recovery, according to Mitotakis – is stricter immigration regulations. As it stands, the Greek debt crisis is a prime case study on the effects of financialisation to a middle-tier economy, and had generated profound scepticism on the supposed benefits to globalisation – and more specifically, to the European Union – whose purported aim was to create a federal institution where all members had equality, yet promoted the neoliberal politics that saw Greece as a subordinate member, and then saddled them with debt bondage after a global economic crisis.
‘We hate this ride and want to get off!’
As the ‘New Tens’ set in, across the world, recovery from the Great Recession introduced social dislocation, and a decidedly negative attitude to transnational organisations or institutions said to determine or influence policy of the nations within them. Public figures and politicians associated with globalisation, of technocratic managerialism, who spoke of the inevitability of the market – specifically the global market – were denounced as out-of-touch elites removed from the concerns of the people. Popular appeal for globalisation had evaporated. The only kind of leader that had many sway among their people seemed to be ones who rejected the kind of modernity globalisation represented, but such politicians is as likely to be outside ‘traditional’ or consensus politics as is generally understood. As mentioned before, popular support for a redistributive politics in Europe had resurged leading to the rise of Jeremy Corbyn, Bernie Sanders, Jean-Luc Melenchon, Podemos, and briefly – the aforementioned Syriza. Their positionings were firmly reformist, yet their prominence had represented a commitment to break with the neoliberal order.
However, they had also come in an age of a particular international crisis: the aforementioned Arab Spring as it had taken place in Syria had led to a massive exodus of Syrian refugees to Europe. It is often suggested that had the European Union not been ‘constrained’ by the capacity of the member states to make policies affecting their respective nations, then the EU would be much closer to realising its universalist ethos, and a much more humanitarian response to the Syrian refugee crisis would have been possible.
This assessment generally ignores that the EU could have easily objected to the border security measures – but is itself committed to hard borders as part of the project of ‘securitization’ it had followed since its creation. The Syrian refugee crisis was a catalyst for the rise of nationalist sentiment across Europe, and the emergence of a new kind of reactionary politics to articulate the festering anxieties. Sentiments around a declinist narrative of the United Kingdom had produced the Brexit referendum in which 52% voted to leave the European Union*****. In the United States, similar anxieties around deindustrialisation and the outsourcing of jobs, unemployment, and declining living standards led to the rise of Donald Trump as he secured the presidency of the US. Viktor Orban of Hungary maintained political legitimacy by appealing to national anxieties around globalisation erasing the domestic culture – and so used convenient scapegoats like immigration, LGBTQ+ communities subverted traditional culture, and multiculturalism. He blamed his one-time ally, the Hungarian-born American billionaire George Soros, for orchestrating Hungary’s problems. In India, the rise of Narendra Modi in 2013, saw the culmination of the project of Hindu nationalism that lay in the shadows of India since independence. Jair Bolsonaro, a retired military officer, soared into office amidst a severe reccession in Brazil, and the collapse of legitimacy of the Workers’ Party through the supposed ‘anti-corruption campaign’/military orchestrated coup plot “Operation Car Wash” – leading to the impeachment of Dilma Rouseff, and the imprisonment of Lula de Silva.
The post-GFC left, or so-called ‘left-populists’ promoted the reassertion of state intervention, and for a reversal of austerity programs ushered in after the Great Reccession. However, lacking institutional influence, inability to meet the challenge of nationalism (either through the effective promotion of a new universalism, or succumbing to its ideology) their social bases composed of disparate ideological tendencies either without undergoing a process of synthesis or even a stable enough coalition, and the very parties they led (or parties embedded in the establishment) reacting to their politics like an organ transplant rejection – and it was eventually defeated, with only authoritarian nationalism, or the so-called ‘right-populisms’, the new normal. These nationalists promised to turn away from globalisation and cater to the national economy, but their purported protectionism did not break from neoliberalism – quite the opposite.
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The Trump administration consciously converted the affairs of American politics more overtly into that of a corporation, with Trump himself as the CEO. Trump introduced anti-labour regulations, tax cuts to major corporations, and advanced deregulation as part of a neoliberal logic just like all the presidencies before his up to the time of Nixon. The US trade wars with China had expressed a ‘neoliberal protectionism’ of which the US has yet to deviate from. The Modi government introduced neoliberal reforms opening Indian agriculture to national and foreign companies in the ability to produce, sell and market agricultural products. The fury from Indian farmers was such that it led to the largest recorded strike in history. Bolsonaro likewise opened up the rainforests to domestic and foreign capital – a process that meant the erasure of fauna, wildlife and the indigenous peoples there, as well as evacerbating the climate crisis in the long term, while committing to deforestation and triggering forest fires in the short term – removing the indigenous groups from their home, and exacerbating the climate crisis.
A world in stasis; a runaway planet
The COVID-19 pandemic had a significant effect on global economic activity as governments across the world initiated lockdowns to reduce the spread of coronavirus. The global response was far from effectively coordinated, and even today, a “vaccine apartheid” – where an inequitable distribution of vaccines between the Global North and the Global South became apparent, undermining the goodwill and ambitions of organisations like COVAX, was itself catalysed by the patenting of COVID-19 vaccines; Intellectual property rights had hampered aims around the development of a global supply of vaccines ready for distribution; as it stood, access the vaccines couldn’t be paid for by its poorest nations*****. In response, India (a rising economic superpower), and South Africa appealed to the WTO seeking a waiver on vaccine patents, which was granted in mid-2022. The results have been mixed: While the waiver has been beneficial to India, Africa still continues to have low vaccination rates, highlighting the continued dependency of the continent to the Western capitalist powers.
Tensions were still building in Latin America, specifically Chile – over the the expansion of privatisation as the national protests, briefly interrupted by the lockdown, mobilised again to topple the government of Sebastian Pinera. “Pink Tide 2.0” had brought into power left-wing governments in not only Chile, but Brazil, Peru, Colombia, Nicaragua, Honduras and Bolivia as well as Venezuela’s PSUV staving off a coup attempt. Brazil’s Worker’s Party and Bolivia’s Movement for Socialism avenged successful coups with their electorical victories – and in both instances, reactionary agitation resulted in violent protests ending in the jailing of many of those involved. Peru is the exception as it was subject to ‘lawfare’ by its National Congress – largely composed of ministers either affiliated with or had their tenures going back to the period of dictator Alberto Fujimori, resulting in the impeachment and imprisonment of the left-wing Pedro Castillo.
In the West, the results of the 2020 presidential election in the US had confirmed that Joe Biden would be the 46th President of the United States, with Donald Trump out of office. Having built his reputation as a force against globalism, Trump and his political allies were able to organise a protest outside of the Capitol, which later turned into a riot and attempted capture of the Capitol. The restoration of order by the security services and the military had suppressed the insurrection, and led to the discrediting of Trump. Even so, Biden was broadly not deviated significantly from the “neoliberal protectionism” characteristic of Trumpism. In the UK, Boris Johnson – who completed the Brexit process – resigned from his positions as leader of the ruling Conservative Party and as Prime Minister. Beneath accusations of his conduct during the pandemic, forces within the Conservatives were unconvinced that he was a suitable neoliberal steward, and so after a party leadership contest, Liz Truss emerged victorious. However, Liz Truss – inspired by the ideas of the neoliberal Institute for Economic Affairs – introduced a wildly unpopular tax bill, which the party elites panicked after seeing the reaction to it. Truss was pressured to resign, and another party election – albeit a carefully managed one, brought in Rishi Sunak as the leader of the Conservative Party and the Prime Minister of the United Kingdom. In France, to see off the far-right in Marine Le Pen and Eric Zemmour as well as the hard-left Jean-Luc Melenchon, the centrist Emmanuel Macron leaned in to the former’s anti-immigration rhetoric, to considerable success, and retain a second term. Macron has since restructured the political party which brought him into power – including a rename from Republique en March to Renaissance in an effort to insist on neoliberal modernity. In Italy, following the collapse of the unity government (which itself was a non-partisan government brought into being after the collspse of both left and right-based coalitions) in response to domestic challenges of its very own ‘cost-of-living crisis’, in October 2022, the Brothers of Italy – a far-right party drawing its lineage to the post-World War II neo-fascist Italian Social Movement, became the ruling party on September 2022, with its leader Georgio Meloni becoming the Prime Minister of Italy. The result has led observers to claim that there had been no party so far to the right until the current one since the end of World War II. The “post-fascist” Meloni has made an effort to tone down (or conceal) the more radical of her political stances – including the repudiation of some of Mussolini’s policies, and her opposition to the EU. Almost certainly, Meloni is conscious of the suspicion within the European Commission of her – and for good reason, since their fear is of the development of a hard-right bloc from the formation of an alliance between Meloni and Orban. The EC are also fearful of the rise of the far-right Sweden Democrats in Sweden, and of Vox in Spain.
Institutions, along with political and economic figures in support of the continuation of globalisation, have now come to terms that the luster associated with it had long-since disappeared, and are ever reliant on leaders committed to a managerial approach to maintaining neoliberalism. One of the side-effects are political figures coming out of the discontent of globalisation finding expression…and thus far, the institutions that maintain its operation had used its sheer weight to push them into line, at least for the time being. In a sense, neoliberalism today operates as what it always was in clear sight: not as an integrative process melding all societies, and bringing them into prosperity; but the unfettered expansion of markets across the globe, unequal exchange in the periphery, and a vigorous form of capital accumulation concentrated in the core (US, Canada & Western Europe). To put it simply, it is the current form of capitalist-imperialism – only that unlike in the Keynesian era, even who gets to share the world’s wealth is largely denied to the masses of the global North.
So will neoliberalism ever end?
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One way or another, neoliberalism will certainly come to an end. What is depends on, is the terms that it does end on. After the financial crisis of 2008, many commentators said that neoliberalism has come to an end. And after the COVID-19 pandemic, a new batch of commentators that neoliberalism has come to an end. Neoliberalism is very much trudging on, although it is long past its sell by date – either already one foot in the grave, or already undead. With that said, studies have shown that even in such volatile conditions such as a global pandemic and a global economic downturn, the largest firms will somehow find a way to make more profits – either because of government patronage, or because of being economically well-suited to profit out of the circumstances. Workers’ wages have not slowed in rising, they stagnated altogether since before the pandemic; and with the rise of the cost of commodities, the conditions for inflation and the ‘cost-of-living crisis’ emerges. But even those on their own are not enough to bring an end to neoliberalism. Time and again, we have seen that the business and political elites are very invested in its continuation – no matter the cost. But in order to properly explore why neoliberalism continues to define our era, we must also understand why it is it became our current reality in the first place.
As mentioned before, the 1960s – 1970s was the period that global capitalism was in crisis, and Keynesianism had reached its limits. The major economies experienced the slowdown in growth, and inflation was high. The intervention of US President Richard Nixon by way of an incomes policy had failed to reduce inflation. Moreover, unemployment was rising in places like Britain, the US – which had created a ‘stagflation’ crisis – and was resistant to Keynesian methods to curb inflation and unemployment, making both worse. Wider context being the fallout of the Vietnam War (The US were printing money like crazy just to fund it, and many countries placed the influx of dollars into their reserves), and the energy crisis caused by OPEC (Saudi Arabia) raising the global price of oil.
When the neoliberals came with their solutions, they saw the pillars of Keynesian capitalism in strong labour securities eg. high wages, interventionist state willing to issue payments to firms and support those who were unemployed; and argued that to restart economic growth that you can have low inflation, or high wages – but you can’t have both: one has to go. The neoliberal epoch exists primarily to resolve the falling rate of profits in global markets. This worked, for about two decades – now economic growth even in the advanced capitalist nations has slowed down, with them increasingly reliant on financialization and the creation of new mechanisms to deal with the flow of financial capital. This led to the buying and selling of securities, which led to an economic bubble, which to led to…you know the rest.
In other words, the very thing that the introduction of neoliberalism was supposed to address: economic stagnation, has itself become a feature of the neoliberal era – the difference is that within the nations that make up the Global North, stagnant and low wages in proportion to profits generated by capital are a common feature – to say nothing of the discrepancy generated in the Global South. With the end of neoliberalism over the horizon, we find ourselves at an impasse. The real question appears to be what comes next?
To its advocates and detractors, neoliberalism gave the appearance of the terminal point of capitalism – its most advanced manifestation to date. And depending on how you look at it either from the left or the right, the acceptance of this reality can either be very distressing or a very positive state of affairs. But what possibilities appear on the routes beyond neoliberalism?
The crisis of neoliberalism has led to calls within the US and Europe for new social welfare proposals such as the introduction of a universal basic income, or setting up an enivronmentally-conscious economic program as the Green New Deal. Other proposals include the creation of a new Bretton Woods system, with added restrictions on transnational companies (TNCs) from interfering with a country’s economic goals. Naturally, all three – especially the first reflect concerns within the Global North. The more pessimistic possibilities include the manifestation of new methods of social control: the first by corporations, specifically the companies in online communications, in the compiling and selling of personal data; with the potential from anything to tailor-made advertising to the management of “digital dossiers” on people as a liaison for the security services. The emergence of an immanent “surveillance capitalism” means the potential of new disciplinary powers at work (such as breaks, attendance, performance, etc.), management of consumer activity, and the profiling of subjects deemed to be potentially threatening.
And the second, a product of domestic and international politics in response to the climate crisis: in the event that measures to halt or reverse the problem become untenable, climate change will almost certainly impact the Global South earlier and significantly harder than anywhere else, with the largest refugee crisis the world will ever see an existential risk. This is likely to be met with a highly securitized border regime maintained in the global core – especially the US*****, and in Europe – with steps to establish these hard borders already in place. “Exterminism” is the appropriate term for a future where most of the planet is doomed to conflicts over resources, starvation, displacement, and in the possibility of entry into the wealthy nations – near-permanent second-class citizenship in a hostile culture. And the rest represent, in effect, a permanent global underclass, with the global elite shielded from the worst effects of climate change.
It is for this reason that within the Global South, the search for an alternative has led towards a restart of dirigismes and “post-neoliberal” programs – except that in doing so, they would be attached to the “Belt-and-Road” initiative launched by China; with favourable loans that they would not receive from the IMF, and the push towards “de-dollarisation”, with the Chinese yuan as the reserve currency over the US dollar, for more amenable conditions for import substitution. Basically, an ‘inverted Keynesianism’ even with the hypothetical anti-Bretton Woods system.
One thing is clear: neoliberalism has proven and made simple that the interests of capital and the interests of labour are diametrically opposed and irreconcilable. With 600 million people in the Global South dragged into the global working class, they have the greatest impetus to put an end to neoliberal capitalism. Any project, organisation, or general demand for the end of neoliberalism has to acknowledge and be in solidarity with the global working class – and overcome any boundaries, whether cultural, social and especially material – to accomplish this, and bring about a more equitable, and freer world.
Components
- Privatization – The transfer of companies from the public space to the private sector.
- Deregulation – The removal of state regulation in the economy, i.e. parts of the industrial sector.
- Liberalization of trade – The removal or reduction of trade barriers between nations.
- Financialization – The increased role of finance via markets and institutions in economic functions.
Ideological inspirations
- Liberalism
- Libertarianism
- Austrian school
- Chicago school
- laissez-faire capitalism
- rational choice theory
- Libertarianism
Organisations & Institutions
- Mont Pelerin Society
- Business Roundtable
- International Monetary Fund
- World Bank
- World Trade Organization
- World Economic Forum
- Organisation of American States
- European Union (you heard me)
- Heritage Foundation
- Institute of Economic Affairs
- Centre for Policy Studies
- Adam Smith Institute
- American Enterprise Institute
- Cato Institute
- Brazilian Institute for Democratic Action
- Institute of Public Affairs
- Hayek Society
- Liberal Institute of Rio de Janeiro
- Institute for Liberty and Democracy
Tools ‘of the trade’ (or weapons)
- Structural adjustment program (generally comes with an IMF loan)
- ‘Shock therapy’
- Austerity
- Neoliberalization
- Private finance initiative / public-private partnership
- Academization
- Workfare
- Free-trade zone
Political projects & iterations
- Pinochetism
- Thatcherism
- Reaganism
- Washington Consensus / Beijing Consensus
- Fujimorism / Lima Consensus
- ‘New Russia’
- Third Way (‘progressive-neoliberalism’) / New Democrats / New Labour (Blairism)
- ‘New Iraq’
- Neoliberal protectionism / Trumpism
Social and cultural developments
- Post-Fordism
- postmodernism / late modernity
- New managerialism
- immaterial labour
- ‘technoscientific domination’ / ‘cognitive capitalism’ / surveillance capitalism
- precariat
- Capitalist realism
- ‘the entrepeneurial self’/’hustle culture’
People associated with neoliberalism
Economists:
- Friedrich A. Hayek
- Milton Friedman
- Gary Becker
- James M. Buchanan
- Lionel Robbins
- ‘Chicago Boys’
- Sergio de Castro
- Jose Pinera
- Hernan Buchi
- Christian Vignau
- Fransisco Rosende
- Joaquin Lavin
- Ernesto Fontaine
- Rolf Luders
- Ricardo Ffrench-Davis
- Jeffrey Sachs******
- Paul Volcker
- Hernando de Soto
- Larry Summers
- Ricardo Hausmann
Politicians:
- Ludwig Earhard (kinda)
- Margaret Thatcher
- Ronald Reagan
- Augusto Pinochet
- Jose Alfredo Martinez de Hoz
- Domingo Cavallo
- Deng Xiaoping*******
- Junichiro Koizumi
- Carlos Salinas de Gortari
- Ernesto Zedillo
- Alberto Fujimori
- Vicente Fox Quesada
- Bill Clinton
- Tony Blair
- Al Gore
- Manmohan Singh
- Bob Hawke
- Paul Keating
- Barack Obama
- Donald Trump
- David Lange
- Hosni Mubarak
- Emmanuel Macron
Other public figures:
- Thomas Friedman
- George Soros
- David Brooks
References:
– Neoliberalism: A Very Short Introduction – Steger, M.B.; Roy, R.K.
– Neoliberalism: Key Concepts – Cahill, D.; Konings, M.
– A Short History of the Mont Pelerin Society – Butler, E.
– The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective – Mirowski, P.; Plehwe, D.
– The Shock Doctrine: The Rise of Disaster Capitalism – Klein, N.
– The Apocalypse and the End of History: Modern Jihad and the Crisis of Liberalism – Schneider, S.
– “The death of class”? – Tittenbrun, J.
See also
- end of history
- ‘there is no alternative’
- laissez-faire
- Neoconservatism