Tag Archives: Margaret Thatcher

How the West eats its children

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By Thierry Meyssan

Source: VoltaireNet.org

The cause of Western recession

International relations experienced a profound change with the paralysis of the Soviet Union in 1986, when the State was unable to control the civilian nuclear incident in Tchernobyl [1], then with the revocation of the Warsaw Pact in 1989, when the East German Communist Party [2] destroyed the Berlin Wall, and finally, with the dissolution of the USSR in 1991.

At that time, the President of the United States, George Bush Sr., decided to demobilise one million soldiers and devote the efforts of his country to its own prosperity. He wanted to transform US hegemony within its zone of influence, and expand it into that of the leader of the world, the guarantor of world stability. With that, he laid the foundations for a « New World Order », first of all in the speech he gave side by side with British Prime Minister Margaret Thatcher, at the Aspen Institute (2 August 1990), then during his speech to Congress (11 September 1990), announcing operation « Desert Storm » [3].

The world of the après-Soviet Union is one of free circulation, not only of merchandise, but also world capital, under the unique control of the United States. In other words, the passage from capitalism to financialisation – not the triumphant culmination of free exchange, but an exacerbated form of colonial exploitation of the whole world, including the West. Within the space of a quarter of a century, the major US fortunes have multiplied many times, and the global wealth of the world has increased considerably.

By allowing capitalism to run wild, President Bush Sr. hoped to extend prosperity to the world. But capitalism is not a political project, it is simply a system of logic designed for creating profit. The logic of the US multinationals was to increase their profits by delocalising production to China, where it is now possible, and where workers are the lowest paid in the world.

Those who were prepared to measure the cost of this advance for the West were few and far between. New middle classes began to appear in the third world, and although they were, of course, far less wealthy than those in the West, they enabled new, mainly Asian states, to play a rôle on the world stage. But simultaneously, Western middle classes began to disappear [4], meaning that it became impossible for the democratic institutions they built to survive. Above all, the populations of entire regions were to be entirely crushed, starting with those of the African Great Lakes. This first regional war caused 6 million deaths, in Angola, Burundi, Namibia, Uganda, the Democratic Republic of Congo, Rwanda and Zimbabwe, and was met with general incomprehension and indifference. The aim was to continue to seize the natural resources of these countries, but to pay less and less for them, which meant dealing with gangs rather than with the States who had to feed their populations.

The sociological transformation of the world is happening very fast and is clearly without precedent, although we do not have the statistical tools available today to evaluate it with precision. However, everyone can witness the increase in power of Eurasia, (not in the Gaullist sense of « Brest to Vladivostok », but that of Russia and Asia without Western and Central Europe), which seeks liberty and prosperity, while the Western powers, including the United States, are slowly and progressively declining, limiting individual freedom and ejecting half of their population into zones of poverty.

Today, the percentage of imprisonment in China is four times inferior to that of the United States,while their purchasing power is slightly higher. Objectively therefore, with all its faults, Chine has become a freer and more prosperous country than the United States.

This process was predictable from the beginning. Its application was studied for a long time. So, on 1 September 1987, a US forty-year-old published a page of counter-current publicity in the New York Times, the Washington Post and the Boston Globe. He warned his compatriots about the rôle that President Bush Sr. was planning to allocate to the United States – to assume and finance out of their own pockets the responsibility for the developing « New World Order ». People read it and laughed. The author of these texts was real estate promoter, Donald Trump.

The application of the economic model to international relations

One month after the attacks of 11 September 2001, US Secretary of Defense Donald Rumsfeld nominated his friend Admiral Arthur Cebrowski as Director of the new Office of Force Transformation. He was tasked with changing the culture of the entire US military in order to enable it to respond to a complete change in its mission

There was no longer question of using US armies to defend principles or interests, but to use them for a reorganisation of the world by dividing it into two parts – one one side the states integrated into the globalised economy, and on the other, the others [5]. The Pentagon would no longer fight wars in order to steal natural resources, but to control access to those resources by the globalised nations. A division directly inspired by the process of globalisation which had already trashed half of the Western populations. This time, it was half of the world’s population which was to be excluded [6].

The reorganisation of the world began in the political zone known as the « Greater Middle East », that is to say stretching from Afghanistan to Morocco, with the exception of Israël, Lebanon and Jordan. This brought about the alleged epidemic of civil wars in Afghanistan, Iraq, Sudan, Libya, Syria and Yemen, which has already caused several million deaths.

Like a monster eating its own children, the global financial system based in the United States faced its first crisis in 2008, when the subprime bubble burst. Contrary to a commonly-held belief, this was absolutely not a global crisis, but a Western problem. For the first time, the NATO states experienced the first consequences of the policy they were supporting. Yet the upper Western classes changed nothing in their behaviour, as they witnessed with compassion the wreck of the middle classes. The only notable modification was the adoption of the « Volcker rule » [7], which forbade banks from profiting from information obtained from their clients in order to speculate against their interests. But while conflicts of interest enabled a number of crooks to get rich fast, they are not the root of the problem, which is far more wide-reaching.

The revolt of the Western populations

The revolt of the Western middle and working classes against the globalised upper class began two years ago.

Aware of the Western recession as compared with Asia, the people of the United Kingdom were the first to attempt to save its life-style by leaving the European Union and turning to China and the Commonwealth (referendum of 23 June 2016) [8]. Unfortunately, the leaders of the United Kingdom were unable to conclude the agreement they hoped for with China and experienced great difficulty in reactivating their links with the Commonwealth.

Then, witnessing the collapse of their civil industries, a part of the United States voted, on 8 November 2016, for the only Presidential candidate who was opposed to the New World Order, Donald Trump. He spoke of a return to the « American dream ». Unfortunately for his voters, although Donald Trump began to question the rules of globalised commerce, he had no team with him apart from his family, and was only able to modify, but not change, the military strategy of his country. Almost all of the general officers had adopted the Rumsfeld-Cebrowski ideology, and could no longer imagine themselves in any other role than defenders of financial globalisation.

Aware of the collapse of their national industry, and certain that they would be betrayed by their upper class, the Italians voted, on 4 March 2018, for an anti-system party composed of the Ligue and the 5-star Movement. These parties built an alliance in order to implement social policies. Unfortunately, they were rejected by the European Union [9]. In France, tens of thousands of SME’s (small and medium-sized enterprises), subcontractors of industry, had gone bankrupt over the last ten years, but their compulsory tax deductions, already among the highest in the world, increased by 30 % over the same period.

Several hundreds of thousands of French people suddenly took to the streets to demonstrate against abusive financial measures. Unfortunately for them, the French upper classes have been contaminated by the very idea that was rejected by the United States, and therefore did their best to adapt their policies to the popular revolt, but not to change its basic causes.

If we look at each of these four countries separately, we will find four different explanations for what is happening there. But if we analyse the situation as a single phenomenon affecting different cultures, we will discover the same mechanisms across the board. In these four countries, consecutive with the end of capitalism, the middle classes disappeared more or less rapidly, and with them the political system that they incarnated – Democracy.

So either the Western leaders abandon the financial system they have developed and return to the productive capitalism of the Cold War, or they will have to invent a different organisation that no-one has so far been able imagine. Failing that, the West, which has directed the world for five centuries, will sink into a long period of internal chaos.

The Syrians were the first non-globalised People capable of surviving and resisting the destruction of Rumsfeld-Cebrowski’s infra-world. The French were the first globalised people to rise up against the destruction of the West, even if they are not aware that they are fighting the same unique enemy of all of humanity. President Emmanuel Macron is not the man for the situation, not because he has any responsibility for the system that preceded him, but because he is pure product of that system. In response to the riots in his country, he spoke from the G20 in Buenos-Aires, declaring that the meeting was a success in his eyes, (which it was not), and that he intended to advance more efficiently than his predecessors – in the wrong direction.

How to save privilege

It appears that the British ruling class has its solution – if London in particular and the Western nations in general are no longer capable of ruling the world, it will be necessary to cut one’s losses and divide the world into two distinct zones. This is the policy implemented by Obama in the final months of his presidency [10], then by Theresa May, and now by Donald Trump, with their refusal to cooperate and their ready-made accusations, first of all against Russia and now against China.

It also seems that Russia and China, despite their historical rivalry, are aware that they will never be able to ally themselves with these Westerners who have never ceased trying to carve them up. This is the source of their project, the « Eurasian Economic Union » – if the world must be split in two, each participant will have to organise its own. In concrete terms, for Beijing, this means abandoning half of its « Silk Road » project and its redeployment with Moscow only in Greater Eurasia.

How to determine the line of demarcation

For the West and Greater Eurasia, it will be necessary to determine the split line as fast as possible. For example, what side will Ukraine choose? The construction by Russia of the Kertch bridge was aimed at separating the country, absorbing the Donbass and the Azov Sea basin, then Odessa and Transnistria. On the contrary, the incident at Kertch, organised by the Western powers, is aimed at enrolling all of Ukraine into NATO before the country fractures.

Since the ship of financial globalisation is sinking, many people are beginning to save their personal interests without any care for others. For example this is the source of the tension between the European Union and the United States. As far as this game is concerned, the Zionist movement has always had a length’s lead, which explains the mutation of Israëli strategy, which has abandoned Syria to Russia, and turned to both the Gulf States and East Africa.

Perspectives

Taking into account what is at play here, it is obvious that the insurrection in France is only the beginning of a much wider process which is going to spread to other Western countries.

It would be absurd to believe that at a time of financial globalisation, a government, whatever it might be, could resolve the problems of its country without first of all questioning international relations and at the same time regaining its capacity for action. But precisely, foreign policy has been kept on the sidelines of the democratic field since the dissolution of the Soviet Union. It is both necessary and urgent to resign from almost all of the treaties and engagements of the last thirty years. Only the states which are able to re-affirm their sovereignty can hope to recover.

Translation
Pete Kimberley

[1] According to Michaïl Gorbatchev, this was the event that made possible the dissolution of the Warsaw Pact and the Soviet Union in so far as it delegitimised the State.

[2] Contrary to a commonly-held belief in the West, it was the nationalists from the East-German Communist Party (and the Lutheran churches), and not the anti-Communists (and pro-US movements), who broke down the symbol of Soviet domination, the Wall.

[3] The main purpose of the invasion of Iraq was not to liberate Kuwaït, but to use this affair to build the strongest coalition possible under US command, including the USSR.

[4] Global Inequality. A New Approach for the Age of Globalization, Branko Milanovic, Harvard University Press, 2016.

[5] “The US military project for the world”, by Thierry Meyssan, Translation Pete Kimberley, Voltaire Network, 22 August 2017.

[6] It is obvious that the wars of Bush Jr. and Obama were never intended to expand the Empire. First of all because by definition, democracy can only come from the People, not imposed by bombs. And then because the United States was already a plutocracy.

[7] The ex-president of the US Federal Reserve, Paul Volcker, is on the other hand, one of the architects of global financialisation. It is Volcker who took legal action on behalf of the UNO against the people and entities who had helped Iraq to bypass the UN embargo (the « oil for food » affair). Volcker is one of the principal personalities of the Pilgrim’s Society, the trans-Atlantic club presided by Queen Elizabeth II. As such, he became the main economic advisor to President Barack Obama, and organised part of his cabinet.

[8] “The new British Foreign Policy”, by Thierry Meyssan, Translation Pete Kimberley, Voltaire Network, 4 July 2016.

[9] Replacing the European Common Market, which was originally a system for cooperation between states, the European Union, as defined by the Treaty of Maastricht, is a supranational

[10] “Two separate worlds”, by Thierry Meyssan, Translation Pete Kimberley, Al-Watan (Syria) , Voltaire Network, 8 November 2016.

Time to Wake Up: the Neoliberal Order is Dying

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By Jonathan Cook

Source: CounterPunch

In my recent essay, I argued that power in our societies resides in structure, ideology and narratives – supporting what we might loosely term our current “neoliberal order” – rather than in individuals. Significantly, our political and media classes, who are of course deeply embedded in this neoliberal structure, are key promoters of the very opposite idea: that individuals or like-minded groups of people hold power; that they should, at least in theory, be held accountable for the use and misuse of that power; and that meaningful change involves replacing these individuals rather than fundamentally altering the power-structure they operate within.

In other words, our political and media debates reduce to who should be held to account for problems in the economy, the health and education systems, or the conduct of a war. What is never discussed is whether flawed policies are the fleeting responsibility of individuals and political parties or symptoms of the current neoliberal malaise – manifestations of an ideology that necessarily has goals, such as the pursuit of maximised profit and endless economic growth, that are indifferent to other considerations, such as the damage being done to life on our planet.

The focus on individuals happens for a reason. It is designed to ensure that the structure and ideological foundations of our societies remain invisible to us, the public. The neoliberal order goes unquestioned – presumed, against the evidence of history, to be permanent, fixed, unchallengeable.

So deep is this misdirection that even efforts to talk about real power become treacherous. My words above and below might suggest that power is rather like a person, that it has intention and will, that maybe it likes to deceive or play tricks. But none of that is true either.

Big and little power

My difficulty conveying precisely what I mean, my need to resort to metaphor, reveals the limitations of language and the necessarily narrow ideological horizons it imposes on anyone who uses it. Intelligible language is not designed adequately to describe structure or power. It prefers to particularise, to humanise, to specify, to individualise in ways that make thinking in bigger, more critical ways near-impossible.

Language is on the side of those, like politicians and corporate journalists, who conceal structure, who deal in narratives of the small-power of individuals rather than of the big-power of structure and ideology. In what passes for news, the media offer a large stage for powerful individuals to fight elections, pass legislation, take over businesses, start wars, and a small stage for these same individuals to get their come-uppance, caught committing crimes, lying, having affairs, getting drunk, and more generally embarrassing themselves.

These minor narratives conceal the fact that such individuals are groomed before they ever gain access to power. Business leaders, senior politicians and agenda-setting journalists reach their positions after proving themselves over and over again – not consciously but through their unthinking compliance to the power-structure of our societies. They are selected through their performances in exams at school and university, through training programmes and indentures. They rise to the top because they are the most talented examples of those who are blind or submissive to power, those who can think most cleverly without thinking critically. Those who reliably deploy their skills where they are directed to do so.

Their large and small dramas constitute what we call public life, whether politics, world affairs or entertainment. To suggest that there are deeper processes at work, that the largest of these dramas is not really large enough for us to gain insight into how power operates, is to instantly be dismissed as paranoid, a fantasist, and – most damningly of all – a conspiracy theorist.

These terms also serve the deception. They are intended to stop all thought about real power. They are scare words used to prevent us, in a metaphor used in my previous post, from stepping back from the screen. They are there to force us to stand so close we see only the pixels, not the bigger picture.

Media makeover

The story of Britain’s Labour party is a case in point, and was illustrated even before Jeremy Corbyn became leader. Back in the 1990s Tony Blair reinvented the party as New Labour, jettisoning ideas of socialism and class war, and inventing instead a “Third Way”.

The idea that gained him access to power – personified in the media narrative of the time as his meeting with Rupert Murdoch on the mogul’s Hayman Island – was that New Labour would triangulate, find a middle way between the 1 per cent and the 99 per cent. The fact that the meeting took place with Murdoch rather than anyone else signalled something significant: that the power-structure needed a media makeover. It needed to be dressed in new garb.

In reality, Blair made Labour useful to power by re-styling the turbo-charged neoliberalism Margaret Thatcher’s Conservative party of the rich had unleashed. He made it look compatible with social democracy. Blair put a gentler, kinder mask on neoliberalism’s aggressive pursuit of planet-destroying power – much as Barack Obama would do in the United States a decade later, after the horrors of the Iraq invasion. Neither Blair nor Obama changed the substance of our economic and political systems, but they did make them look deceptively attractive by tinkering with social policy.

Were the neoliberal order laid bare – were the emperor to allow himself to be stripped of his clothes – no one apart from a small psychopathic elite would vote for neoliberalism’s maintenance. So power is forced to repeatedly reinvent itself. It is like the shape-shifting Mystique of the X-Men films, constantly altering its appearance to lull us into a false sense of security. Power’s goal is to keep looking like it has become something new, something innovative. Because the power-structure does not want change, it has to find front-men and women who can personify a transformation that is, in truth, entirely hollow.

Power can perform this stunt, as Blair did, by repackaging the same product – neoliberalism – in prettier ideological wrapping. Or it can, as has happened in the US of late, try a baser approach by adding a dash of identity politics. A black presidential candidate (Obama) can offer hope, and a woman candidate (Hillary Clinton) can cast herself as mother-saviour.

With this model in place, elections become an illusory contest between more transparent and more opaque iterations of neoliberal power. In failing the 99 per cent, Obama so woefully voided this strategy that large sections of voters turned their back on his intended successor, the new makeover candidate Hillary Clinton. They saw through the role-playing. They preferred, even if only reluctantly, the honest vulgarity of naked power represented by Trump over the pretensions of Clinton’s fakely compassionate politics.

Unstable politics

Despite its best efforts, neoliberalism is increasingly discredited in the eyes of large sections of the electorate in the US and UK. Its attempts at concealment have grown jaded, its strategy exhausted. It has reached the end-game, and that is why politics now looks so unstable. “Insurgency” candidates in different guises are prospering.

Neoliberal power is distinctive because it seeks absolute power, and can achieve that end only through global domination. Globalisation, the world as a plaything for a tiny elite to asset-strip, is both its means and its end. Insurgents are therefore those who seek to reverse the trend towards globalisation – or at least claim to. There are insurgents on both the left and right.

If neoliberalism has to choose, it typically prefers an insurgent on the right to the left. A Trump figure can usefully serve power too, because he dons the clothes of an insurgent while doing little to actually change the structure.

Nonetheless, Trump is a potential problem for the neoliberal order for two reasons.

First, unlike an Obama or a Clinton, he too clearly illuminates what is really at stake for power – wealth maximisation at any cost – and thereby risks unmasking the deception. And second, he is a retrograde step for the globalising power-structure.

Neoliberalism has dragged capitalism out its nineteenth-century dependency on nation-states into a twenty-first ideology that demands a global reach. Trump and other nativist leaders seek a return to a supposed golden era of state-based capitalism, one that prefers to send our children up chimneys if it prevents children from far-off lands arriving on our shores to do the same.

The neoliberal order prefers a Trump to a Bernie Sanders because the nativist insurgents are so much easier to tame. A Trump can be allowed to strut on his Twitter stage while the global power-structure constrains and undermines any promised moves that might threaten it. Trump the candidate was indifferent to Israel and wanted the US out of Syria. Trump the president has become Israel’s biggest cheerleader and has launched US missiles at Syria.

Faustian pacts

The current power-structure is much more frightened of a left insurgency of the kind represented by Corbyn in the UK. He and his supporters are trying to reverse the accommodations with power made by Blair. And that is why he finds himself relentlessly assaulted from every direction – from his political opponents; from his supposed political allies, including most of his own parliamentary party; and most especially from the state-corporate media, including its bogus left-liberal elements like the Guardian and the BBC.

The past three years of attacks on Corbyn are how power manifests itself, shows its hand, when it is losing. It is a strategy of last resort. A Blair or an Obama arrive in power having already made so many compromises behind the scenes that their original policies are largely toothless. They have made Faustian pacts as a condition for being granted access to power. This is variously described as pragmatism, moderation, realism. More accurately, it should be characterised as betrayal.

It does not stop when they reach high office. Obama made a series of early errors, thinking he would have room to manoeuvre in the Middle East. He made a speech in Cairo about a “New Beginning” for the region. A short time later he would help to snuff out the Egyptian Arab Spring that erupted close by, in Tahrir Square. Egypt’s military, long subsidised by Washington, were allowed to take back power.

Obama won the 2009 Nobel peace prize, before he had time to do anything, for his international diplomacy. And yet he stepped up the war on terror, oversaw the rapid expansion of a policy of extrajudicial assassinations by drone, and presided over the extension of the Iraq regime-change operation to Libya and Syria.

And he threatened penalties for Israel over its illegal settlements policy – a five-decade war crime that has gone completely unpunished by the international community. But in practice his inaction allowed Israel to entrench its settlements to the point where annexation of parts of the West Bank is now imminent.

Tame or destroy

Neoliberalism is now so entrenched, so rapacious that even a moderate socialist like Corbyn is seen as a major threat. And unlike a Blair, Obama or Trump, Corbyn is much harder to tame because he has a grassroots movement behind him and to which he is ultimately accountable.

In the US, the neoliberal wing of the Democratic party prevented the left-insurgent candidate, Bernie Sanders, from contesting the presidency by rigging the system to keep him off the ballot paper. In the UK, Corbyn got past those structural defences by accident. He scraped into the leadership race as the token “loony-left” candidate, indulged by the Labour party bureaucracy as a way to demonstrate that the election was inclusive and fair. He was never expected to win.

Once he was installed as leader, the power-structure had two choices: to tame him like Blair, or destroy him before he stood a chance of reaching high office. For those with short memories, it is worth recalling how those alternatives were weighed in Corbyn’s first months.

On the one hand, he was derided across the media for being shabbily dressed, for being unpatriotic, for threatening national security, for being sexist. This was the campaign to tame him. On the other, the Murdoch-owned Times newspaper, the house journal of the neoliberal elite, gave a platform to an anonymous army general to warn that the British military would never allow Corbyn to reach office. There would be an army-led coup before he ever got near 10 Downing Street.

In a sign of how ineffectual these power-structures now are, none of this made much difference to Corbyn’s fortunes with the public. A truly insurgent candidate cannot be damaged by attacks from the power-elite. That’s why he is where he is, after all.

So those wedded to the power-structure among his own MPs tried to wage a second leadership contest to unseat him. As a wave of new members signed up to bolster his ranks of supporters, and thereby turned the party into the largest in Europe, Labour party bureaucrats stripped as many as possible of their right to vote in the hope Corbyn could be made to lose. They failed again. He won with an even bigger majority.

Redefining words

It was in this context that the neoliberal order has had to play its most high-stakes card of all. It has accused Corbyn, a lifelong anti-racism activist, of being an anti-semite for supporting the Palestinian cause, for preferring Palestinian rights over brutal Israeli occupation. To make this charge plausible, words have had to be redefined: “anti-semitism” no longer means simply a hatred of Jews, but includes criticism of Israel; “Zionist” no longer refers to a political movement that prioritises the rights of Jews over the native Palestinian population, but supposedly stands as sinister code for all Jews. Corbyn’s own party has been forced under relentless pressure to adopt these malicious reformulations of meaning.

How anti-semitism is being weaponised, not to protect Jews but to protect the neoliberal order, was made starkly clear this week when Corbyn criticised the financial elite that brought the west to the brink of economic ruin a decade ago, and will soon do so again unless stringent new regulations are introduced. Useful idiots like Stephen Pollard, editor of the rightwing Jewish Chronicle, saw a chance to revive the anti-semitism canard once again, accusing Corbyn of secretly meaning “Jews” when he actually spoke of bankers. It is a logic intended to make the neoliberal elite untouchable, cloaking them in a security blanket relying on the anti-semitism taboo.

Almost the entire Westminister political class and the entire corporate media class, including the most prominent journalists in the left-liberal media, have reached the same preposterous conclusion about Corbyn. Whatever the evidence in front of their and our eyes, he is now roundly declared an anti-semite. Up is now down, and day is night.

High-stakes strategy

This strategy is high stakes and dangerous for two reasons.

First, it risks creating the very problem it claims to be defending against. By crying wolf continuously about Corbyn’s supposed anti-semitism without any tangible evidence for it, and by making an unfounded charge of anti-semitism the yardstick for judging Corbyn’s competence for office rather than any of his stated policies, the real anti-semite’s argument begins to sound more plausible.

In what could become self-fulfilling prophecy, the anti-semitic right’s long-standing ideas about Jewish cabals controlling the media and pulling levers behind the scenes could start to resonate with an increasingly disillusioned and frustrated public. The weaponising of anti-semitism by the neoliberal order to protect its power risks turning Jews into collateral damage. It makes them another small or bigger drama in the increasingly desperate attempt to create a narrative that deflects attention from the real power-structure.

And second, the effort to stitch together a narrative of Corbyn’s anti-semitism out of non-existent cloth is likely to encourage more and more people to take a step back from the screen so that those unintelligible pixels can more easily be discerned as a smoking gun. The very preposterousness of the allegations, and the fact that they are taken so seriously by a political and media class selected for their submissiveness to the neoliberal order, accelerates the process by which these opinion-formers discredit themselves. Their authority wanes by the day, and as a result their usefulness to the power-structure rapidly diminishes.

This is where we are now: in the final stages of a busted system that is clinging on to credibility by its fingernails. Sooner or later, its grip will be lost and it will plunge into the abyss. We will wonder how we ever fell for any of its deceptions.

In the meantime, we must get on with the urgent task of liberating our minds, of undoing the toxic mental and emotional training we were subjected to, of critiquing and deriding those whose job is to enforce the corrupt orthodoxy, and of replotting a course towards a future that saves the human species from impending extinction.

Gaius Publius: Defining Neoliberalism

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By Yves Smith

Source: Naked Capitalism

For years I’ve been using the term “neoliberalism” (or sometimes neo-liberalism*) and I’m always uncomfortable, since it sounds so academic. So I usually add one-phrase definitions and move on. For example, this from a recent piece on Puerto Rico:

If neoliberalism is the belief that the proper role of government is to enrich the rich — in Democratic circles they call it “wealth creation” to hide the recipients; Republicans are much more blatant — then the “shock doctrine” is its action plan.

That’s sounds pretty blunt, but it’s a true statement, even among academics. See this great interview (start at about 6:15) with Professor Philip Miroski of the University of Notre Dame on how modern neoliberals have come to see the role of government in society. It’s weedy but excellent.

I want to offer our readers a better description of neoliberalism though, yet not get into too many weeds. So consider these excerpts from a longer Guardian essay by the British writer George Monbiot. (My thanks to Naked Capitalism commenter nonclassical for the link and the idea for this piece.)

Neoliberalism — The Invisible Water the West Is Swimming In

We’ll start with Monbiot’s brief intro, just to set the scope of the problem:

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Ask people to define “neoliberalism,” even if they’ve heard of it, and almost no one can. Yet the comparison of our governing ideology to that of the Soviet Union’s is a good one — like “communism,” or the Soviet Union’s version of it, neoliberalism defines and controls almost everything our government does, no matter which party is in office.

The Birth of Neoliberalism

What is neoliberalism and where did it come from? Monbiot writes:

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

Neoliberalism is an explicit reaction to Franklin Roosevelt and the welfare state, which by a quirk of history was called “liberalism” at the time, even though, in the nineteenth century, “liberalism” had roughly the same meaning that “neoliberalism” has today. In other words, “FDR liberalism” is in many ways the opposite of classical “liberalism,” which meant “liberty (freedom) from government,” and a quirk of history has confused these terms.

Back to Monbiot and Hayek:

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international” [a term modeled on “the Communist International]: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Note the mention of Milton Friedman above. Neoliberalism is a bipartisan ideology, not just a Clintonist-Obamist one.

Democrats, Republicans and Neoliberalism

As Monbiot explains, for a while neoliberalism “lost its name” and was more or less a fringe ideology in a world still dominated by the ideas of John Maynard Keynes and Keynesian economics. When neoliberalism later came back strong in the Republican Party, it wasn’t called “neoliberalism” but “Milton Friedman free market conservativism,” or something similar.

Only when Bill Clinton and his Democratic Party allies adopted it in the 1980s did the term “neoliberal” re-emerge in public discourse.

[I]n the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. [emphasis added]

Note the role of Jimmy Carter and start of deregulation in the late 1970s. For that reason, many consider Jimmy Carter to be the “proto-neoliberal,” both for the nation and the Democratic Party.

Neoliberalism — “Just Deserts” for Predators and Prey

What makes “neoliberalism” or “free market conservatism” such a radical — and destructive — ideology? It reduces all human activity to economic competition. It creates and glorifies, in other words, a world of predators and prey, a world like the one we live in as today:

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

In a world where competition is right and good, a world in which the “market” is the defining metaphor for human activity, all social ties are broken, the individual is an atom left to survive as an individual only, the strongest relentlessly consume the weakest — and that’s as it should be. (It’s easy to imagine how the apex predators of our social order would be attracted to this, and insist on it with force.

Thus the bipartisan world we live in today. Under a neoliberal regime, everyone gets what they deserve. Big fish deserve their meal. Little fish deserve their death. And government sets the table for the feast.

The Role of Government in a Neoliberal World

Since for neoliberals, the “market” is the source of all that is good in human interaction, non-interference in “the market” is rule one for government.

Over time that has changed, however, as winners have grown more successful and their control of government more absolute. The proper role of government in today’s neoliberal regime is not merely to allow the market to operate for the benefit of wealth-holders; it’s to make sure the market operates for the benefit of wealth-holders.

In other words, the role of government is to intervene in the market on behalf of wealth-holders, or, as I put it more colloquially, to proactively enrich the rich. The interview with Professor Mirowski, as I noted above, makes that same point, but from an academic standpoint.

From this it should be also clear that until we free ourselves of rule by neoliberals and the pain and misery they create, we’ll always be victims to the predatory giants — the very very wealthy and the corporations they use as power-extenders — those, in other words, who want merely to own everything else in the world.

This means we need to free ourselves from neoliberals in both parties, not just the ones in current seats of power. But that idea seems to have been excised from most discussions these days. Fair warning though. If the Age of Trump ends with the Restoration of Mainstream Democrats, we’ll have won almost nothing at all.

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* I sometimes spell “neo-liberalism” with the hyphen to suggest the following connection: Neo-liberalism is “new liberalism,” and has the same relationship to FDR liberalism as New Labour has to Labour — the two are exactly opposite.

Right to Burn

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Free-market economics gives the poor equal rights to substandard housing

 By Siddhartha Deb

Source: The Baffler

At the very end of the film High-Rise, Ben Wheatley’s 2015 adaptation of J.G. Ballard’s novel from the seventies, we hear a familiar authoritarian voice extolling the virtues of capitalism. Against the backdrop of the high-rise building that is in many ways the protagonist of the film, the camera closes in on a young boy sitting on a jerry-rigged structure made up of discarded tires, a golf bag, a hockey stick, and a profusion of wires that have allowed him to tune in to the wisdom of Margaret Thatcher. “There is only one economic system in the world, and that is capitalism,” Thatcher says, and the only remaining argument is whether this is to be a form of state capitalism, “where there will never be political freedom,” or if capitalism is to be “in the hands of people outside State control.”

The fire last month that killed eighty people in Grenfell Tower, a twenty-four-story high-rise for low-income, mostly minority Londoners, is a stark example of what that Thatcherite vision looks like when carried out to its logical extreme. Built in the seventies in what can now be seen as the last great wave of public housing in Britain, a trend that started under the post-war Labour Government with the New Towns Act of 1946, Grenfell Tower steadily came under assault from the market forces unleashed by Thatcher. Located in London’s wealthiest borough of Kensington and Chelsea, the upkeep of the building was outsourced by the borough council to the ingeniously named Kensington and Chelsea Tenants Management Organisation, a body that steadfastly ignored, and sometimes used lawyers to threaten, tenants protesting about safety concerns.

The cladding newly installed on the exterior, apparently more for the purpose of making the building appear attractive to private buyers of available units than for reasons of maintenance, was found to be highly flammable and responsible for spreading the fire throughout the building. Other “refurbishment” work left the building with just one staircase and exit, and that too partially blocked. In the aftermath of the fire, when the Conservative party prime minister Theresa May visited the site to talk to members of the emergency services, she avoided meeting residents of the building. The borough council, meanwhile, at first refused to admit residents and media into its “public” meeting. Then, when ordered by a court to allow the media to attend its proceedings, it cancelled a scheduled session.

When Ballard’s novel was published in 1975, Thatcher was merely a rising star in the Conservative Party, still four years away from occupying 10 Downing Street. From there, she would go on to use every lever of the state to promote her vision of state-less capitalism, a ferocious ideology of elite self-interest that would ravage Britain and, promoted across the Atlantic by her American counterpart Ronald Reagan, blight the United States. Given a massive boost by the end of the Cold War, this worldview received regular technocratic updates from the Anglo-American leaders who succeeded Thatcher and Reagan, the old piss always managing to find new bottles—Tony Blair’s New Labour, Bill Clinton’s New Democrats, George Bush’s New American Century and so on, all the way to Barack Obama and David Cameron until we reach what now looks like the terminal point of that blight, the endgame of Theresa May and Donald Trump.

The rhetoric of neoliberalism was that, with a market society taking root in Britain and the United States, the model could be exported to the world at large. Grenfell Tower shows, instead, that it meant turning Britain, the so-called home of free markets and democracy, into a banana republic. The same could be said of the United States, where crises in infrastructure show a similar trajectory, including in the cost-cutting measures that led to the presence of lead and other toxins in the drinking water of Flint, Michigan, in the very town that, as portrayed by Michael Moore in the documentary Roger and Me, was once home of the nation’s largest General Motors plant.

In London, this transformation was achieved, by successive Conservative governments as well as by Blairite New Labour types, through a relentless stripping away of public housing in favor of private residences for the extremely wealthy. Thatcher, in 1979, had introduced “Right to Buy,” allowing tenants in public housing to buy their units at discounts of up to 50 percent. Initially reluctant at the idea of providing a state subsidy to buyers, and nudged into the populist move by other Conservative politicians, Thatcher was nevertheless the one who endowed Right to Buy with an aspirational flavor that everyone could become middle class. The buyers, however, tended to be the most well-off among the tenants, and although the units were initially meant to be lived in, they were eventually often sold at market rates to private landlords, in effect a privatization carried out with the help of public money. It is a process similar to what has happened to Mitchell-Lama housing in New York as buildings have steadily been acquired by private investors, including a building in East Harlem where seven died in a fire in 1987 and that, once purchased by a company backed by a Morgan Stanley investment fund, saw long-time minority residents harassed to make way for new, wealthier tenants.

The resulting housing crisis in London has been accompanied by an evisceration of services, as in the cuts in fire services and policing pioneered by May as home secretary. And all this has been achieved swiftly, accompanied by a technocratic jargon that appears utterly self-referential. Among these are words like deregulation, outsourcing, and, especially, “austerity,” as if what has been going on is some kind of secular Ramadan, a communal fasting to be followed by an iftar party, rather than a refusal by elites to provide basic services to citizens of the sort depicted, recently, in Ken Loach’s film, I, Daniel Blake.

Ballard’s novel captures all this quite perfectly, including the arc from enlightened self-interest to enlightened dementia as his high-rise, which starts out as a self-contained utopia for the professional classes, descends steadily into a small-scale civil war. It ends, as emphasized by the opening passage of the novel where a character eats “the roast hindquarter of the Alsatian,” in a man-eats-dog free enterprise society. With its forty floors, thousand apartments, supermarket, swimming-pools, bank, and school, Ballard’s high-rise, one guesses, has been at least partially funded by taxpayers’ money. It is built, after all, in a reclaimed area of London’s “abandoned dockland and warehousing along the north bank of the river.” Once completed, however, one of five such towers, it looks out with a glance every bit as predatory as the wealthy in Kensington and Chelsea eyeing the property values near Grenfell Tower, at the “rundown areas around it, decaying nineteenth-century terraced houses and empty factories already zoned for reclamation.”

But if Grenfell is a working-class, minority other to Ballard’s tower, ravaged from the outside by predatory capitalists rather than a gated community devoured from within, it also provokes something that is not to be found in Ballard’s prescient work. The tenants who voiced concerns about safety, including two minority women who went missing in the blaze, exemplify a social vision quite different from Ballard’s crazed professionals turning upon each other. In the continuing protests of survivors and their allies asking to be let into the closed meetings being conducted by the borough council and in the demands made by the Labour party leader  that empty residences in the borough, owned by absentee rich landlords, be used to house survivors, we see the inverse of Ballard’s psychotic elites competing to the death. Corbyn’s proposal stirred a Tory writer to ventilate about his “true, disturbing nature,” as if he were beginning a class war. But in Corbyn’s bringing to life a moribund Labour party in the face of a relentless media campaign against him, in the votes his party received in the recent general elections, especially from the disenfranchised young, the working class, and minorities, there is a profound stirring of hope, the beginnings of a refusal of Thatcher’s diseased world of man eats dog in a gutted tower.