On the 'Necessity' of Neoliberalism
Recently, I wrote a piece that claimed the most revealing question was not how and why neoliberal capitalism failed as a system of economics, but how and why it has succeeded so well.
I said that the answer to this latter question is unsettling precisely because it implicates all of us—at least all of us who live in industrial capitalist countries which must now include Russia, India and China. Even if we are not equally blameworthy in creating such a monstrous ideology, we have all, in some measure, been co-opted into accepting neoliberal capitalism’s false premises and promises.
But another question one might ask is 'How is it that a destructive political ideology such as neoliberalism became 'necessary'? To put this another way, it had become clear even to the most conservative economists in the decades following the 1970’s right up to the financial crash of 2008 that Milton Friedman’s dream of unregulated trickle-down, laissez-faire capitalism was an utter disaster for 99% of people, even if it brought lavish and unprecedented wealth to an increasingly small number of bankers, hedge fund managers and corporate elite.
Unregulated Friedmanesque capitalism inevitably became casino capitalism for the very rich. It was obvious that such an economic system could not possibly flourish within a genuinely democratic polity, for the simple reason that if it were up to the majority of citizens wealth would have to be more reasonably and fairly distributed. In other words, job security and the unionized workplace would be protected, wages and salaries would have kept apace of inflation and rising prices; there would be something like a social safety net that would insure people did not have to go into great debt in order secure physical, material and psychological welfare. Some version of regulated capitalism might still exist under such political conditions, but it would look quite different than the present one.
The problem then, for the corporate power elite, was how to make certain that genuine democracy never got a foothold or became a force that would reign in the excesses of corporate capital expansion. In 1973 the wealthy banker and chairman of Chase Manhattan David Rockefeller inaugurated the Trilateral Commission composed of heads of major corporations and banks, partners in corporate law firms, millionaire politicians from the US, Western Europe and Japan. The trilateral commission concluded in their lengthy report that what was required was a “greater degree of moderation in democracy” in order to overcome what was emerging as an “excess of democracy”. This is, of course, code language: translated, it amounts to a call for a new hegemonic world order—a politics, (or more accurately anti-politics) that would be legitimated through a wide-ranging propaganda system and would secure the future of unregulated capitalism.
The result is what we now call neoliberalism—a political ideology and form of economic imperialism that preaches austerity for the masses and unrestrained accumulation of wealth for the elite; that gradually privatizes public goods and spaces; that dismantles labour unions, undermines health and environmental regulations; that creates a system of debt and undermines human rights when the latter threaten the interests of profit; that turns universities into institutions that churn out technocratic and policy oriented intellectuals while starving those departments that teach history and critical thinking; that uses the military and international bodies like the IMF and the World Bank to impose neoliberalism on any state that might appear to be moving toward demon socialism; that insures corporate interests and ‘rights’ are secured and enhanced through ‘free’ ‘trade’ agreements; that protects transnational corporate interests through private security and public police forces; that funds corporate lobby groups, Chambers of Commerce, Business Councils, think tanks, corporate super-pacs and non-profit corporate front groups such as the American Legislative Exchange Council (ALEC) who draft legislation in the interests of corporations and against environmental regulations, corporate taxation and labour rights.
Under neoliberalism two priorities become obvious: 1. That smaller independent states do not make any move toward socialism (too much democracy) and are prevented from taking control of their own resources—their water, forests, minerals, oil and gas; 2. That any polity that might seek to reign in or regulate capitalism's excesses would be immediately threatened by capital flight and be subject to crippling inflation and financial crisis. Both of the latter priorities give rise to the need to police the world (through military threat and economic austerity) to ensure the hegemony of neoliberalism.
One can begin to see now how the logic of unregulated capitalism and neoliberal political ideology must inevitably lead to the rise of fascism. If neoliberalism became necessary to secure unregulated capitalism, the rise of fascist regimes has become necessary to ensure the continuance of neoliberal capitalism.
However, it also becomes obvious that this state of affairs simply cannot continue: that the foundational presupposition of both unregulated capitalism and neoliberal ideology is that the earth can supply unlimited material, can be continuously developed.
For the first time in human history we now recognize this is impossible--that what the earth can provide is not only limited but that the earth's biosphere is fragile and in need of protection from the ravages of capitalist excess. We now know that the political and economic regime we have lived under for the past 60 years has put more than a million different species at risk of extinction including our own.
If that is not reason enough for coming up with an alternative economics and politics I cannot imagine what would be. If that is not reason enough for a mass revolution, what on earth would be?