Sunday, January 22, 2017

He's Right. Yanis Varoufakis on Why Liberal Democracy Must Jettison Neoliberalism.

He's the most interesting fellow that the Greek Syriza movement produced, its former finance minister until his resignation in July, 2015.

Now, Yanis Varoufakis is warning of two insurgencies underway.

A clash of two insurgencies is now shaping the west. Progressives on both sides of the Atlantic are on the sidelines, unable to comprehend what they are observing. Donald Trump’s inauguration marks its pinnacle.

One of the two insurgencies shaping our world today has been analysed ad nauseum. Donald Trump, Nigel Farage, Marine Le Pen and the broad Nationalist International that they are loosely connected to have received much attention, as has their success at impressing upon the multitudes that nation-states, borders, citizens and communities matter.

However, the other insurgency that caused the rise of this Nationalist International has remained in the shadows: an insurrection by the global establishment’s technocracy whose purpose is to retain control at all cost. (See here and here) Project Fear in the UK, the troika in continental Europe and the unholy alliance of Wall Street, Silicon Valley and the surveillance apparatus in the United States are its manifestations.

The era of neoliberalism ended in the autumn of 2008 with the bonfire of financialisation’s illusions. The fetishisation of unfettered markets that Margaret Thatcher and Ronald Reagan brought to the fore in the late 1970s had been the necessary ideological cover for the unleashing of financiers to enable the capital flows essential to a new phase of globalisation in which the United States deficits provided the aggregate demand for the world’s factories (whose profits flowed back to Wall Street closing the loop nicely).


Thatcher’s and Reagan’s neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks.

After the events of 2008 something remarkable happened. For the first time in modern times the establishment no longer cared to persuade the masses that its way was socially optimal. Overwhelmed by the collapsing financial pyramids, the inexorable buildup of unsustainable debt, a eurozone in an advanced state of disintegration and a China increasingly relying on an impossible credit boom, the establishment’s functionaries set aside the aspiration to persuade or to represent. Instead, they concentrated on clamping down.


The only weapon we have to defend liberal democracy against the nationalist and technocratic insurgencies is a restoration of progressivism, progressive democracy.

It was against this insurgency of a cornered establishment that had given up on persuasion that Donald Trump and his European allies rose up with their own populist insurgency. They proved that it is possible to go against the establishment and win. Alas, theirs will be a pyrrhic victory which will, eventually, harm those whom they inspired. The answer to neoliberalism’s Waterloo cannot be the retreat to a barricaded nation-state and the pitting of “our” people against “others” fenced off by tall walls and electrified fences.

The answer can only be a Progressive Internationalism that works in practice on both sides of the Atlantic. To bring it about we need more than fine principles unblemished by power. We need to aim for power on the basis of a pragmatic narrative imparting hope throughout Europe and America for jobs paying living wages to anyone who wants them, for social housing, for health and education.

Only a third insurgency promoting a New Deal that works equally for Americans and Europeans can restore to a billion people living in the west sovereignty over their lives and communities.


Toby said...

It looks to me that most so called progressives never did understand neo-liberalism.

Ben Burd said...

I like you Mound think that this guy is the only one speaking to the truth these days, can't get enough.

Anonymous said...


But the argument would be bolstered by some links indicating the allaeged connections between sikicon valley and the agenda

Toby said...

Does the thrust of this post contradict your latest on the need for a TPP to control China?

The Mound of Sound said...

I don't know that these issues are mutually exclusive, Toby. We do need a progressive restoration and we're buggered if we don't make that a reality.

The TPP is one of those deals that looks different from one party's perspective to the next. As Stavridis reveals it's a geopolitical pact as much as a trade deal. It's designed to bring the smaller Asian economies closer to America's umbrella, thereby giving the US expanded leverage against China.

The US and China are in a sometimes heated race to dominate Asia Pacific and the smaller nations of that region know that they're pawns in a larger game, one in which taking the wrong side could have serious consequences. America is coming to be viewed as insincere, unreliable and China will use the TPP withdrawal to cement those doubts.

I would not be at all surprised to see China replicate TPP in some "Western Pacific Partnership" and thus further weaken US hegemony in the region.

Stavridis sees TPP as a buffer, a trade weapon that might buffer a more conventional conflict between the US and China. Now add the tempestuous Trump factor to that mix. What do you think?

Toby said...

Well I'm against all of the trade deals that are built around what corporations want as opposed to what is good for people and the environment. I'm also opposed to the constant need by big countries to dominate and bully. Using a trade deal to manipulate is no more satisfying than using it to make the rich richer.

What's wrong with small Asian countries doing business with their neighbours? It must be easier and cheaper than having to ship product across the Pacific? Oh, right, the Americans think they should bve able to control everything.

Sorry, I want neo-liberal economics and neo-con world domination to go away.

The Mound of Sound said...

Toby, read the post on Trump axing the TPP. China and Japan are following up with a pan-Asian trade deal.

Anonymous said...

" insurrection by the global establishment’s cabal of banksters whose purpose is to retain control at all cost."