Sunday, June 05, 2016

Getting Out From Under Neoliberalism

The critics were right. Neoliberalism doesn't work. Got it. We've even got it from the brothel of neoliberal thought, the International Monetary Fund that has spent decades administering toxic neoliberal tonics to poor nations, especially Third World nations, around the world often finishing off the job begun by the developed nations. Even the IMF now says that neoliberal policy was "oversold" and, instead of helping, fuels inequality and economic chaos.

Here's how Fortune Magazine describes the IMF and neoliberalism:

Asking if the International Monetary Fund supports economic neoliberalism is like asking if the Pope is Catholic — the answer is so obvious it seems silly to even raise the question. The IMF has been one of the principle endorsers of neoliberalism—an ideology that promotes free markets, free trade, and small government—for decades.

So, what are we to make of this IMF mea culpa? I hope, very little. Take it for what it is, an admission. An admission that they've been driving us down a dead end road. Then go back to what the learned economists and social historians have been telling us for so long. Start with Nobel laureate economist, Joe Stiglitz, whose grounding in the subject of inequality goes back to his PhD thesis. Read Phil Mirowski and James Galbraith. Read John Ralston Saul's dissection of globalism.

There are many scholarly works exploring, analyzing and dissecting neoliberalism in all its guises including its core elements such as free market fundamentalism and globalism. It is a true Hydra, many-headed. It is not just an economic theory. It reaches right into the heart of governance and, especially, democracy. It creates a new order of power structures, economic and political. Given enough time and government collaboration it can transform democracy into oligarchy - even in the most powerful, notionally wealthy country on Earth. It is a stealth problem, operating out of the public eye, behind the scenes, under a veil of secrecy. 

The damage of neoliberalism could never have been achieved had it been undertaken in the open, subjected to public scrutiny from the get-go. This stuff is always presented to us, usually by then a fait accompli, as an agreement between governments or groups of governments, the EU for example. Yet the parties to these negotiations are public sector, governments, and private sector, corporations which today means transnationals. You know who doesn't get a seat at the table? That would be you. We have no place in this evolution of parallel powers, shared authority, this neoliberal partnership between government and corporate interests that can inevitably lead to something eerily resembling merger. They even have their own courts, secret courts, Investor-State Dispute Settlement tribunals, to manage their squabbles out of sight. Out of our sight, out of our mind.

Here's something to ponder. The United States worker, blue and white collar, has suffered about as much as any from the neoliberal era. Their once vibrant, prosperous middle class has been dismembered, limb by limb. Former Federal Reserve chairman Alan Greenspan even used a new, economic pejorative to define them. He called them the "precariat." The age of economic feudalism has arrived.

Now, do you think if you took America's Precariat, left it up to them, that they would choose to return to the economy of pre-Reagan America? Do you think they would choose to reverse the neoliberal decades of their decline? I think that would be a very safe bet.

Ten years ago when John Ralston Saul penned "The Collapse of Globalism," he pronounced the neoliberal age dead. Since then he's spoken of an "interregnum" or interval in which we're still stuck with neoliberalism mainly because we haven't imagined with what we'll replace it. We don't know what else to do.

There's a problem with our wallowing. Because neoliberalism harms far more people than it serves (that's the 99% versus 1% thing), the suffering it inflicts on the many breeds discontent and, eventually, unrest. People begin to look for a saviour, someone to rescue them from their oppression. And, where there's a demand, there'll be some charismatic show up to exploit it. It's called "populism"  and its face is the fascist movements rising across Europe and in the crowds that turn out to support people like Donald Trump. Sure Trump is backed by just 30% of the American voting public but history has shown that's easily enough on which to build an increasingly powerful movement.

Populism, like nationalism, is a force that can work for good or evil. There is negative and positive populism just as there is negative and positive nationalism. It can be confusing but there are ways to delineate one from the other and, history shows, that usually reflects whether it's a right wing or left wing movement.

Could the neoliberal order be supplanted by negative populism? Sure, it's happened before. It almost never turns out well, not for long, but it does flare up like a wood match. Negative populism also has a terrible track record of leading to wars.

Is there an alternative? Yeah, sure, if we want to reach for it. It won't be easy. My suggestion is that we embrace classic progressivism. Break the shackles of corporatism. Reconnect the state to the citizen. Reclaim sovereign powers that have been surrendered to the corporate sector and, yes, that means extracting ourselves from the tentacles of globalized free trade strictures. No new free trade deals. Gradually unwind the deals we're already in. 

We can still be a trading nation. Absolutely. That doesn't mean we have to prostrate ourselves to the transnationals and pay tribute to them in the form of unfettered access to the one thing they need most, access to our markets. The way we surrendered access to our markets reminds me of nothing so much as the Natives who traded Manhattan for beads. We did it on the strength of a promise that, eventually, down the road, we would have our reward - more jobs, better wages. There was a reward, to be sure, only it didn't go to the people, the wage earning public. It went to the 1%, the people who control the transnationals, and it came through the "trickle up" economy. All that Middle Class prosperity didn't evaporate. It went somewhere. Now where do you think it went?

We may not, today, have the great monopolies that Teddy Roosevelt sought to bust up but the new model of transnational corporations is equally oppressive. They have many advantages over traditional nation states including the ability to relocate economic activity, the ability to move capital and the ability to arrange their affairs so as to avoid taxation. It's a process of maximizing benefits by reducing commensurate obligations and responsibilities. These great advantages? To a very large extent they've all been bestowed by our governments, often for little or nothing but hollow promises in exchange. We and our governments have been conned.We've been had. People around the world have finally caught on.


Ben Burd said...

"People around the world have finally caught on."

yep but wtf are the people going to do about it?

The Mound of Sound said...

I gave my thoughts in the post, Ben. We begin by ending the wave of trade pacts and extracting us from the worst of those that we already are in.

We have to drop the neoliberal mantra that markets know best. Even the IMF agrees - finally - that's crap. What that means is rehabilitation of the public sector where that is warranted (and there are plenty of those opportunities). We have to revisit the entire notion of trade is a more clear-headed and nuanced manner. Tariffs and duties are not an abomination. They have a place just as there is a place for protectionism to build an industrial base and restore the middle class.

Think of it as though you've been walking down a mine shaft on the promise of something wonderful at the end. You finally realize you've been had. What do you do? If you're sane you turn around and walk back out. What else can you do?

Unknown said...

For one thing Mound we can start calling it what it is. Most Neoliberalism has been done in secrecy with government sanctioning and corporate nationalist collusion. I feel like our governments who are supposed to be looking after our interests have sold us out. The public needs to start literally learning about Neoliberalism. The MSM has been silent on this for too long. Maybe we should start holding town hall meetings or meetings over the internet, particularly for people who don't know that it is Neoliberalism that is destroying them. Canadians are pretty sophisticated people. I think they would grasp Neoliberals meaning very quickly. You're right about John Ralston Saul. He's been an intellectual life saviour for me.

Ben Burd said...

We know the people are mad as hell and not going to take it anymore but they can only express themselves two ways - at the ballot box and in the streets. In the streets is out because governments will ignore them. In 1972 during the 'days of action' we had hundreds of thousands on the Hill and Trudeau the dad narily looked out of the window.

The ballot box will fail in the present context all parties support some form of NLism. Perhaps you are waiting for the Canadian "Bernie". Love to see it but who will capture the imagination of the masses? The last guy that did it successfully was Rob Ford - should I say any more?

Still waiting!!!!!

The Mound of Sound said...

We're dead before we start if we don't try, Ben. Surely the New Dems can harness this discontent, cleanse itself of the neoliberalism of the Layton/Mulcair era.

It's not like there's no roadmap for doing this. Read Teddy Roosevelt's "Square Deal" speech from 1910. The core principles of progressivism are set out there. I read it regularly when I need to recalibrate my political moral compass. It's a set of principles on which you found a strong, viable democracy.

In my view these are principles that any party could advocate. They would resonate with the public because they offer good governance and honesty we've not known for decades. Have a look. See what you think.

The Mound of Sound said...

@ Pamela - go to Marie Snyder's blog, "A Puff of Absurdity" and read her latest post. I think you'll find it helpful, even inspirational.

Anonymous said...

"The ballot box will fail in the present context"...
Do PR (# of seats is directly proportional to the # of votes, particular flavour of PR should be "tamper proof" with respect of establishment's efforts) needs any further endorsement?

The Mound of Sound said...

A..non, you're dreaming if you think pro-rep or any other form of electoral reform is going to end this. If New Dems were honest they would admit that even the NDP is neoliberal, especially since the Layton/Mulcair era.

It's going to take much more than a change in how we vote to free our country and our government from the yoke of neoliberalism.

Anonymous said...

People may have caught on but what is happening regarding it. Just a pile of junk that is all.

Anonymous said...

Shell's Second Spill In Two Weeks: Why Are We Silent?
Our environment is dying, and all we're talking about is Donald Trump?!

Anonymous said...

Another bit of neoliberalism to watch go down regarding the spill....on and on and on it goes.

Anonymous said...

Currently, NDP is also on the establishment's leash.
PR is ONLY the first, essential step to break banksters' grip on power.

The Mound of Sound said...

A..non, we agree on that. It is an essential first step but translating power at the ballot box to meaningful votes on the floor of the House of Commons will take some doing.

Ben Burd said...

"We're dead before we start if we don't try, Ben. Surely the New Dems can harness this discontent, cleanse itself of the neoliberalism of the Layton/Mulcair era."

Unfortunately Mound retail politics demands a Messiah and unless the NDP leadership race produces one, who can speak with the fervour and message of "Bernie", they are done.

And Cheri DeNova aint it.