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.