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Hurrahs for the "death of neoliberalism" are premature

October 18, 2016

6-minute read

 The crushing of protest and the promotion of corporate power – by instruments such as the proposed Transatlantic Trade and Investment Partnership – are just two forms of the extreme government intervention required to create a system which claims to be free from government intervention.  —George Monbiot.

The Nonagenarian's NotebookThe damaging economic, social, and environmental effects of neoliberalism have become so conspicuous that some of its erstwhile advocates, including Harvard economist Larry Summers and Martin Wolf of the Financial Times, are expressing concern.

Even two of the most prominent international bulwarks of neoliberalism – the Organization of Economic Co-operation and Development and the International Monetary Fund – have admitted that the effects of implementing neoliberal policies have been much more harmful than helpful.

A recent paper by three IMF researchers states that neoliberalism “hasn’t helped everybody, just made a few people a lot better off.” They accuse the dominant ideology of causing epic crashes “that leave behind human wreckage and cost billions to clean up – a finding with which most customers of food banks would agree.”

A recent OECD study found that neoliberal policies have had the effect of shrinking workers’ share of global economic growth “to its lowest level since the Second World War.”

The reality now so glaringly obvious is that neoliberalism has plunged the world into a dystopian morass instead of creating the virtual Utopia promised by its proponents. Its decline in credibility has opened the newspaper columns and TV/radio airwaves to anti-liberalism voices that were previously unwelcome.

The views of progressive economists such as Paul Krugman, Joseph Stiglitz, Dani Rodrik and Jeffrey Sachs — now featured in major newspapers and magazines — are increasingly influential. Thomas Piketty’s Capital in the Twenty-First Century has become a global best-seller that has boosted inequality to the top of the political agenda in many countries.

Is neoliberalism really doomed?

This assault on a discredited neoliberal imperium has become so preponderant that many of its critics are hailing what they consider its imminent demise. It’s a celebratory mood that I’m afraid is premature.

Martin Jacques, for example, writing in the English newspaper The Guardian, discusses the rise of both left-wing and right-wing anti-establishment fervor in the United States, England, and other countries. He sees this insurgency as evidence of a fast-growing disillusionment with — and resentment of — governments whose policies cater to the upper class and neglect the working class.

Jacques cites the vote in Britain to leave the European Union as a classic example of the rise of populism. “Although ostensibly about Europe,” he writes, “Brexit was in fact about much more: a cri de coeur from those who have lost out and been left behind, whose living standards have stagnated or worse since the 1980s.” Similarly, during the current U.S. election campaign, the upsurge of working class support for both Donald Trump on the right and Bernie Sanders on the left has displayed the same swelling disenchantment with “politics and economics as usual” in that country.

Although his Guardian essay is titled The death of neoliberalism and the crisis in Western politics,” Jacques doesn’t go that far in his text. But he does declare that “the critics of hyper-globalization are gaining ground,” and strongly implies that neoliberalism can’t survive much longer.

Time to celebrate?

As much as I would like to join in acclaiming the anticipated defeat of neoliberalism, I suspect that, like the unfounded news of Mark Twain’s death, it is “greatly exaggerated.”

We should always keep in mind that neoliberalism is as much a methodology as it is an ideology. Perhaps more so. It is the deeply entrenched doctrine through and by which corporations exert and maintain their dominant economic system. Global capitalism could not survive without the prevalence of neoliberalism, or some equivalent belief system that rationalizes its brutally inequitable operations.

No matter how vigorous the upsurge of anti-establishment populism becomes, it will never on its own topple the titans of corporate rule. That could only happen when countries have genuinely democratic governments instead of governments that function mainly as the flunkeys of big business. We live in a world where nearly all governments (including Canada’s) have embraced and deployed neoliberalism as zealously as the corporations — and on behalf of the corporations.

As long as the corporations can rely on this powerful political support, neoliberalism will remain unassailable. Without the levers of reform that only governments can provide, the dissidents can never succeed in their crusade, no matter how large their numbers. This is the grim reality.

Jacques and other eminent pundits point to Brexit as proof that voters still can stop a government from enacting a policy they detest. But the people who wanted to leave the European Union were unexpectedly granted the political means to make it happen: a national referendum. The British government was not obliged to put the country’s EU membership to a vote, but Prime Minister David Cameron was so presumptuously confident that he made a serious tactical blunder — one that soon forced his resignation.

The Charlottetown Accord

Such referendums are rare, but there was one held in Canada in 1992 which closely paralleled Brexit, and was also won by the voters who opposed a major federal government initiative. It was a referendum on amending the constitution to give Quebec “distinct society” status. But this would have required a devolution of federal jurisdiction over resources and culture to all the provinces, not just Quebec. So it was a very unpopular proposal in most parts of the country, where it was viewed as a threat to national unity. Even many Quebecois, including former Prime Minister Pierre Trudeau, voiced their disapproval.

The constitutional reform was proposed by the Conservative government of Brian Mulroney and called the Charlottetown Accord because that was where it was drafted. Mulroney garnered support from both opposition parties (the Liberals and NDP), from all ten provincial governments, from all the big business organizations, and, shockingly, even from the Canadian Labour Congress. It was truly a deal backed by the entire Canadian establishment, and as such seemed certain to be approved in the referendum.

But, as with Brexit, the establishment leaders in Canada badly miscalculated. They were so confident of their superiority in debate and persuasion that they agreed to give opponents of the deal equal time and space in the media. The people of Canada, for the first time in my lifetime, got to hear both sides of a debate on a major issue in equal proportions, and to make up their minds in full knowledge of the pros and cons. They learned that, if approved, the constitutional change would in effect split Canada into ten autonomous fiefdoms, and most voters were horrified.

The result of the vote was that the arrogant political, business, and labour establishments all went down in flames. It wasn’t a complete rout, but the anti-Charlottetown Accord voters won a decisive victory, 54.3% to 45.7%.

Resistance is not futile

Unfortunately, those who want neoliberalism scrapped can never count on being given a referendum to vote on it — certainly not one that would be as fair-and-square as Brexit or the one on the Charottetown Accord in Canada. As long as governments remain as firmly committed to neoliberalism as the corporations, that avenue to democratic reform is barred.

There is some hope that, if a massive multitude of voters could be mobilized against the nabobs of neoliberalism, it could be concentrated into a powerful electoral force. What if every MP who favoured neoliberalism — or even a majority of them — were defeated in the next election and replaced by a candidate who wanted it scrapped? If duplicated in every large industrial country, could this international tsunami of anti-establishment populism sink global neoliberalism?

Simply to pose this fanciful scenario, however, exposes its improbability — if only because the destruction of neoliberalism also entails the destruction of capitalism.

Neoliberalism is the lifeblood, the very beating heart, of modern capitalism. So it will be fiercely defended by both corporations and their obsequious political allies, regardless of the social, economic, and environmental devastation it wreaks.

Capitalism vs. life

The subtitle of Naomi Klein’s last book was Capitalism versus the climate. Appropriately so, since the mills of capitalism and their industrial products emit most of the greenhouse gases that are responsible for global warming. But capitalism is also inimical to health, to equality, to poverty-free families, to fair wages, to non-renewable resources, and even to peace.

What Naomi was pointing out is that capitalism and a clean climate are incompatible, and the same could be said about its incompatibility with everything else that is conducive to human happiness, health, and welfare – and even to the survival of most of the world’s inhabitants.

I know I’m getting into taboo territory by charging that capitalism is at the root of almost all our woes, and that, unless it goes, we all go; but as a nonagenarian I’ve become indifferent to negative feedback. I am very concerned, however, about the future of my children, grandchildren, and all the members of the current and future generations. As difficult as it is to remain hopeful, I still believe (believe it or not) that the dedication and resolve of so many millions of people on this planet will prevail over its powerful would-be neoliberal destroyers.

But it’s vitally important, first, that the leaders of this crucial campaign realize that, before they can have any hope of success, they have to find some way of electing genuinely democratic governments.

Ed Finn was Senior Editor at the CCPA and editor of the CCPA Monitor from 1994-2014. Formerly, as a journalist, he worked at The Montreal Gazette and for 14 years wrote a column on labour relations for The Toronto Star. He also served for three decades as a communications officer for several labour organizations, including the Canadian Labour Congress and the Canadian Union of Public Employees. And yes, Ed is a true nonagenarian, having celebrated his 90th birthday this past summer. Stay tuned for more passages from The Nonagenarian’s Notebook.


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