Neo-liberalism: Eternity on Life-Support

The American economy is “the” economy in the global free market system. All roads leads to it as the epicenter of global market economy; its consumers are “the” consumers of this integrated economy as trendsetters of new patterns of consumption, pioneers in the use of new technologies, new payment technologies, or just consumers consuming.

How did this come to be?

Answer: neo-liberalism

Neo-liberalism, the political theory partnering the economicsof globalization, was instituted during the Conservative administration of Prime Minister Margaret Thatcher of United Kingdom (1979) and, the Republican Presidential administration of Ronald Reagan (1981).

Thatcherism was defined by deregulation, flexible labor markets, privatization of state owned corporations, and hostility to trade unions. Reagonomics was defined by “supply-side economics”-(i.e., monetarism)- and was based upon disciplined control of money supply to control inflation, reductions in corporation tax, reduction in red tape, reductions in government spending, at the Federal, State, and Municipal levels and unbridled hostility to trade unions.

For both political leaders state monetary policy-(i.e., preserving the value of money to avoid a rise in inflation by controlling the government’s printing of money) – was the raison d’etre of responsible government. This project had a missionary commitment to profit making in a free market for global corporations and an unbridled hostility to the state as an agent of social progress, which for it was equivalent to socialism. The state, for the neo liberalism, was an ally of multinational corporations.

The state was a night-watchman state, a minimalist state, that is, one minimally involved in the management of the economy and which kept its distance from the private affairs of private business, conceiving of the unregulated private sector as the chief vehicle for wealth accumulation for private holders of investment capital. This private wealth would eventually “trickle down” to the middling classes and poor. The main intellectual architect of this economic philosophy was the University of Chicago economist, Milton Freidman-(of “Capitalism and Freedom” fame)-, along with Austrian economists Friedrich Hayek-(The Road to Serfdom)-and Ludwig von Mises-(Socialism: An Economic and Sociological Analysis).

The state was purposed to free business from unnecessary regulation and social obligations. The coordinates of this line of thinking: removal of state support in the provision of social services to better the common lot of ordinary people-“the social compulsive”-through privatizing social services via levying of fees for services that previously the state provided for free; removal of state controls on corporate taxes (or oversee substantial reductions) and remitted profits; removal of foreign currency controls; repression of trades unions and lowering of wages; the removal of wage and price controls; restriction of the money supply. This formula of corporation-friendly economics at its core was insensitive to the material lot of working people and was predetermined by a desire by ruling elites in the metropole to reverse post-Second World war concessions to its own working classes and organized labor, made to preserve social unity in their war against established socialism-(read: Soviet led international socialism and the Cold War).

Anti-socialism was the dominant subtext of the imperial project of neoliberal globalization both domestically and globally.

The United States of America as the most powerful capitalist nation in the world in post-Second World War era, along with its British ally-(the American-Anglo compact)- desired to crush socialism globally and sought to so do by a variety of measures one of which was the integration of the entire world economy on a free market platform of integrated production and supply networks for agricultural, low cost consumer items and natural resources from the periphery with unregulated capital and sophisticated technology supplied from the metropole. Obedience to its dictates meant celebration and support for elites so complicit; rebellion: regime change; assassination; sanctions; isolation and exclusion from global financial markets.

The periphery is not allowed to engage in secondary production of manufactured goods for a  integrated domestic market. They are to meet their needs for manufactured goods and technology via imports from the metropolitan core-(think: European Union; USA; UK; and Japan) and content themselves supplying raw materials to the global market in accordance their supposed comparative advantage. This arrangement of the global order viewed the new entrants into the global production cycle as cheap labor pools that would remain in such a condition in perpetuity. Neo-liberalism was the natural order of the universe and as such was the earliest footprint of the eternal in the present.

Unseen and hence unprepared for by the architects of empire, that is, the corporate and policy makers in Washington, London, the World Bank and International Monetary Fund, was the advantage some nations would make of their incorporation into this order to the detriment of the domestic economy in the metropole-(think: China). Their labor cost advantages savaged the high wages of working people in the domestic economies of the metropole, destroying the traditional industries that provided them a high standard of living: car; steel; consumer products. Even though this was intended, its pace of revelation came as a shock to the managerial constitution of imperial policy makers.

Some of the paradoxes of this exercise are that the minimalist night-watchman state was, in practice, just as interfering in the production process avoiding involvement as it were when involved, since the modern economy is interdependent with the authority and responsibility complex of the modern state-the two are necessarily intertwined. The ideology of “trickle down economics” was betrayed by the reality of trickle-up wealth and substantial structural inequality between rich and poor. The natural resources comparative advantage of the periphery was in practice a comparative disadvantage vis a vis the metropole and its technological superiority. Neoliberal globalization far from being a new world order, in practice, was a continuation of old imperial relations under a new name.

Neo-liberalism brought gross ecological despoliation and robbed many nations of fair market value for their natural resources. It abandoned the public good and in making of politics a violent indifference to human needs reformulated economics into an autistic science of private profit accumulation. It has unleashed what the Uruguayan essayist, Eduardo Galeano, has called genocide on the peoples of the periphery.

The diminishment of its technical value, discrediting of its developmental promises and degradation of its statistical evidence of mass harming has collectively made of neo-liberalism an ideological project on terminal life support in the court of global public opinion, so much so that even its two most noted votaries, IMF and World Bank, are distancing themselves from its profit seeking singularity.

The ending of the neoliberal era is marked by the birth of the post-liberal where moral uncertainty, transformation in American imperial practices, rise of new global market competitors, deindustrialization and the new knowledge economy is giving birth to a new set of crises of profit making provoking civilizational anxieties unparalleled in the history of western civilization.

Good sources for further reading include the following: Michael Parenti’s, “The Face of Imperialism” (2011); Robert Wood, “From Marshall Plan to Debt Crisis”; George Caffentzis, “Rambo on the Barbary Shore: Libya, the Oil Price and the US”; David Harvey, “A Brief History of Neoliberalism” (2007);  and, Noam Chomsky and Robert W. McChesney, “Profit Over People: Neoliberalism & Global Order” (2011). 

Charles Simon-Aaron: Mugabe: Land Wars, Resource Nationalism and Empire (forthcoming); Dilemmas of Western Civilization: Narratives of Loss (forthcoming):

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