After decades of protests and riots against neoliberal structural adjustment; after anti-globalization mass movements flourished across North America and Europe; after a large portion of Latin America and the Caribbean elected socialist governments; after waves of anti-Western cultural and religious revitalization movements (some violent, some not) have spread from Indonesia to Europe; after nationalist and nativist movements have achieved unprecedented political prominence in Europe since the 1930s; and, with entire libraries of research produced to show all of the illogic and injustices of corporate globalization which make sense only as the orchestration of the most massive transfer and concentration of wealth in history–after all of this, it would have been surprising if we were not yet in a position to speak of the impending death of neoliberalism. The neoliberal elites know this, and they are seized by an absolute panic as they see the fundamental tenets of neoliberalism come under mass, electoral repudiation in the heart of the international capitalist system, the US itself. Discussion of the collapse of the neoliberal imperial disorder is therefore far from premature; it is overdue.
Nobody should have believed that the end of neoliberalism would be smooth, peaceful, harmonious or pleasant. There is absolutely nothing to say that movements that are politically right-wing cannot be the ones to bring an end to this order. Once we put these two forms of wishful thinking aside, that is, that there will be a peaceful transition and it will be led by “progressives,” we can be better prepared to grasp current realities.
For too long, the public in numerous nations spanning the globe has been sold a series of spurious, ideological maxims, lacking in historical substance as much as they were devoid of empirical depth. Questions, disagreement, and criticism have been routinely ignored, deflected, or suppressed, as various members of encrusted upper-class elites and their surrogates in academia, think tanks, and the media, monopolized all discussion. Directors of international financial institutions behaved as if they were the high priests of an inevitable new world order. Corporate elites have been publicly lionized and celebrated, by the media which they own. Politicians, worst of all, promised leniency and delivered ever greater amounts of neoliberal-prescribed austerity. Those who have suffered the most have had to endure the indignity of being characterized as inherently inferior, as willing masters of their own poverty and marginalization. Among the most common, ideological axioms of free market capitalism that we have been force fed, and which many continue to reproduce without question, without blinking, are:
- free market capitalism is the only system that works
- a free market is the most efficient means of allocating resources
- the private sector is better than the public sector in meeting demand
- the private sector is better than the public sector in terms of management and efficient production
- capitalism is human nature
- globalization is inevitable
Assumptions about capitalism, and possessive individualism, being representative of basic human nature, and therefore more likely to succeed in organizing human affairs because they were more natural, have been prevalent.
A litany of axioms have been tested by real outcomes, and found to be untrue. For example, several non sequiturs were advanced as if they might be logical propositions or empirical observations (they are neither):
- Increased productivity would increase everyone’s standard of living. Why? Not only has productivity increased less in many regions than before trade liberalization, but it simply does not follow that everyone’s standard of living will improve from the increased productivity of a few corporations, who pay less tax than ever, who move operations overseas whenever convenient, and which prefer automation to employment whenever possible, and prefer lower wages always.
- Economic growth would benefit everyone. Not only does it not follow that everyone benefits from economic growth, neoliberalization has had limited success in achieving economic growth.
- Wealth generated at the top would filter down. This is the greatest of all the falsehoods, as wealth has been transferred to the top to a degree never seen before.
- It’s wise to concentrate resources in the hands of the wealthy, of large corporations, since they generate jobs. Instead, they have increased unemployment, or have failed to be the engines of job creation.
The real challenge to this order is not in finding economic solutions to economic problems–but to find political solutions to the power imbalances that created these economic inequalities.
What has brought neoliberal globalization to a terminal point is that now the inequality in the social spread of benefits from this system has become more or less evenly spread, meaning that even in the global economic centres such as Europe and North America, poverty, decline, and despair have become visible and palpable. Austerity has been globalized. Nor is it just one class that has suffered loss from neoliberal globalization, which must account for some of the classic fracturing of the capital-owning classes that we now see in the US. One can see more clearly now the lines of division that emerge in political battle: the alliance between Silicon Valley, Wall Street, and the defense contractors, versus local real estate development which suffered from the 2008 financial crisis.
Voters in the US find themselves in a unique position, compared with many of the rest of us: they have a chance to effectively vote on neoliberalism, on globalization. It’s not an inconsequential election, where the really big decisions have already been made by others and are settled. Now everything seems unsettled, and the big decisions seem to be open to popular choice. That the dominant elites should react with as much panic and hysteria as they do now (which they are successfully transferring to others lower down in the social order via mass media), shows what inept managers they have been–unable to predict when matters would come to a head, or that they even would come to a head. Let’s look at some of the signs of the breaking point that we now see.
1. Declining Class Optimism
In North America many of us are familiar with the phenomenon of blue- and white-collar workers claiming to be “middle class”. In some periods, those self-identifying as middle class made up such a vast portion, that it defied the very notion of “middle”. Adding to the dominant ideology that commanded belief in prosperity, this sense of well-being was heavily inflated by credit. The jobs paid less in real dollars over time, and became less secure. Rather than pay workers more, those in control of political and financial power opted to increase credit–fueling consumption, and excavating even more from workers’ pockets through a system of generalized debt bondage. Now the banks will even try to sell you “insurance” on your credit card, so you can help to insure their debt in case you lose your job or fall ill (so they will suffer no loss from your loss), an amazing scam but also a sign that they know they are creating yet another bubble ready to burst.
Far from class optimism, now more more people in the US identify as working or “lower” class: 48% according to Gallup, with those self-identifying as “middle class” constituting 51%, which is down from 61% just after the 2008 crisis. The biggest drop is among those without a college education.
2. Lower Wages
Among non-college educated workers, globalization and in particular the liberalization of international trade, wages fell by 5.5% in 2011. This cost the average worker $1,800. The reasons offered by researchers with the Economic Policy Institute largely validated the claims made by Donald Trump: trade with China, but as they put it, the overvaluing of the US dollar. It is also important to recognize that a majority of people in the US do not have a college degree: this continues to be true of more than 60% of the population. The US Labor Department’s Bureau of Labor Statistics found that by the time they were 27 years old, 72% did not have bachelor’s degrees.
3. NAFTA/Free Trade: Loss
Studies of the impact of free trade agreements, such as NAFTA, have found that US workers have overall fared poorly:
“…most citizens of North America do not support themselves on their investments. They work for a living. The overwhelming majority has less than a college education, has little leverage in bargaining with employers, and requires a certain degree of job security in order to achieve a minimal, decent level of living. NAFTA, while extending protections for investors, explicitly excluded any protections for working people in the form of labor standards, worker rights, and the maintenance of social investments. This imbalance inevitably undercut the hard-won social contract in all three nations….from the point of view of North American working people, NAFTA has thus far largely failed.”
NAFTA alone cost the US 766,000 jobs, and has increased US trade deficits. US trade deficits with Mexico specifically, cost the US an estimated 682,900 jobs as of 2010. By and large, almost all of the predictions of growth offered by those who promoted NAFTA, have turned out to be the opposite. Despite the liberalization of trade, and a 239% increase in food imports from Canada and Mexico, nominal food prices in the US still rose by a whopping 67%. Even when taking into account the import of cheaper goods, US workers lost the equivalent of 12.2% of their wages under free trade. Not surprisingly, according to a 2012 Angus Reid Public Opinion poll, 53% of Americans believe the United States should “do whatever is necessary” to “renegotiate” or “leave” NAFTA.
Overall, according to the U.S. Census Bureau, there has been a loss of nearly 5 million jobs just in manufacturing, only since 2001, with more than 60,000 factories shut down. Since 2001 there has been a steep decline from the US having 352,600 manufacturing establishments employing nearly 16 million people, down to 292,100 establishments, employing 11.3 million people in 2013.
4. Worried Voters
Among those voting Republican, 42% of those who say they are worried about the economy, are voting for the populist candidate, Donald Trump. When one includes the “somewhat worried,” that number jumps to 81%. Telling the voters that “America never stopped being great,” as Hillary Clinton does, is definitely not a winning proposition. Indeed, while she claims (correctly) to have had more people voting for her than Trump during the primaries/caucuses–she has had only one competitor. Meanwhile, Trump has had a shadow, a mini-me on many economic issues (Ted Cruz), who has claimed half as many of the worried voters, plus a battery of additional candidates. Where Clinton’s boasts are cut down to size, is in the total number of those voting Republican versus Democrat. As of March 7, 2016, 10,101,902 Republican voters have turned out, vs. 6,843,570 Democrat voters.
There has generally been a steep drop in the turnout of voters for this year’s Democratic primaries and caucuses–whereas the Republicans have scored record-breaking turnouts. In addition, the Democrats cannot count on keeping their own voters. According to one poll, 20% of Democrats would likely defect and vote for Trump. Adding to Trump’s movement is the widely recognized fact that he is drawing more voters in from the “independent” category, which is now by far the single largest group of potential voters in the US. The share of Democratic voters is at its lowest level in the past 30 years, and both parties are seeing historic lows in the number of registered members. According to Gallup, 42% of voters now identify as independent.
In the face of worries, what also drives many voters to Trump is preference for the “authoritarian” solution: the direct leader who is willing to take action and make the necessary choices in difficult periods. As one professor at Vanderbilt University commented, “There’s this notion that all the nuanced navel gazing that liberals do is superior. Not always.”
5. Heightened Death Rates
“We’re focusing on middle-aged whites because the data show that something has gone terribly wrong with their lives,” says an eerie article in The Washington Post, in an attempt to explain the geographic and social concentrations of support for the populist Trump. The increased death rate is not due to mysterious “natural” causes, but rather self-harm: suicide, alcohol and drug abuse, among depressed and impoverished whites, particularly working-class white males without a college education. That these people should suffer being demonized in the media, by the elites that own the media, adds insult to injury. I have written elsewhere about this tradition of fearing the poor, and bashing white “hicks”.
6. Class Betrayal?
Among Republicans, it was already during the last presidential election period that a leading candidate, Rick Santorum, spoke of how “we have to start bringing [back to the Republican Party] those who are being left behind by this economy. We have to give them an opportunity to be able to reach that American dream again,” a point made in his book, Blue Collar Conservatives. On the side of the Democratic Party, a similar distancing from the working class occurred. No wonder then that the number of people identifying with either party has plummeted. Speaking of the Democrats, Thomas Frank recently commented in an incisive account of the rise of Trump:
“…let us stop and smell the perversity. Left parties the world over were founded to advance the fortunes of working people. But our left party in America – one of our two monopoly parties – chose long ago to turn its back on these people’s concerns, making itself instead into the tribune of the enlightened professional class, a ‘creative class’ that makes innovative things like derivative securities and smartphone apps. The working people that the party used to care about, Democrats figured, had nowhere else to go, in the famous Clinton-era expression. The party just didn’t need to listen to them any longer.”
The entrenched patrician elites of the Republican Party, such as Mitt Romney, fret about what Trump will do to their party’s chances of attracting more “Latino” and “minority” voters. Here we see class being displaced into ethnicity. The neocons and their neoliberal twins would love nothing more than to have voters think this is an election about “racism” or “sexism”. Having abandoned the working class, the search is on for another group to vote Republican, a voter base conceived in non-class terms, that is, in terms that favour identity politics and erase material politics–anything to evade the class consequences of concentrated power producing class inequality.
One might have expected the neoliberal crisis to be a boon to the political left. However, over the past decades, and more so now than ever, the left is deeply splintered–it is divided, and thus conquered. Large portions have “neoliberalized,” at most calling for a greater domestic redistribution of income derived from neoliberal globalization, without challenging the international order itself. Bernie Sanders largely falls within the latter camp of tamed leftists, whose past “revolutionary” associations seem to be a point of embarrassment. Others are instead divided into ever smaller splinters of fragmented cells, with ever more convoluted self-labeling and growing acronyms. They appear to be devoted almost exclusively to policing and disciplining others, angrily consumed by empty scholastic exercises of orthodox quotation from Marx and Lenin or others, authoritatively arguing and re-arguing over events in the distant past or even in other countries. They can afford to open fire on each other, because they understand that ultimately they are going nowhere. Ideology is sport. They prefer carping to conversing, and generally lack the kind of interpersonal skills that would appeal to an audience outside of their micro-committees. The US left is certainly nowhere near producing a charismatic, attractive and popular figure as Hugo Chávez Frías. (Even the US populist is but a pale reflection of an Argentinian populist like the mighty Juan Domingo Perón.) US leftists, through their own many failures, largely play their own part in making Trump successful. Almost anything would be successful, compared to the US left. To either expect or demand the challenge to Trump, or more importantly to neoliberalism, to come from such quarters becomes more and more a fool’s errand.
For several years now on this site, I have offered the opinion (often in passing), that in the US the most successful and direct challenges to both US military interventionism abroad, and neoliberal free trade, would come from the political right and not the left. I am seeing nothing to challenge the foundations for that opinion. If correct, then another schism will likely result where “the left” is concerned: one either commits to supporting the left (whichever left), no matter what, as if support for the left is an end in itself, or one works to support the most likely avenue of success in defeating the neoliberal free trade regime and global military expansionism.
In this article, I have attempted to offer at least part of an explanation for the rise in popularity of Donald Trump, primarily, and perhaps Bernie Sanders, secondarily. The attempt at explanation here largely collides with my attempt at “understanding” in the prior article. While I try to adopt both approaches, I am still wary of “rational” explanations that resolve everything into instrumentalist calculations of gain, loss, class membership, interests, etc. This does not mean that Trump supporters are “irrational,” “crazy,” or “dumb”; it means that human experience cannot be accounted for purely in monetary or material terms. I am especially not interested in denunciation pretending to be analysis. Much of the partisan axe-grinding has been dreary and predictable. Most of all, over the years I have developed an extreme allergic reaction to mass orchestrated, mass mediated demonization, with all of the transparently planted cues designed to flash selective outrage.
The next articles here on the US elections–these elections being of world-historic importance, I think–will explore some of these issues further.
While much has been written about neoliberalism, I would still recommend David Harvey’s A Brief History of Neoliberalism, which is largely accessible to the general reader, densely packed with information, and cogently argued in terms of neoliberal politics creating the largest wealth transfer in history.
Three articles in the media that have come out recently, and that are particularly good in dealing with many of the issues above (though I may disagree on certain points), are:
“Why Trump and Sanders Were Inevitable: It was only a matter of time before we had a populist backlash to 30 years of flawed globalization policies that both parties embraced,” by Michael Hirsh, Politico Magazine, February 28, 2016
“Trump’s 19th Century Foreign Policy: His views aren’t as confused as they seem. In fact, they’re remarkably consistent—and they have a long history,” by Thomas Wright, Politico Magazine, January 20, 2016
“Millions of ordinary Americans support Donald Trump. Here’s why,” by Thomas Frank, The Guardian, March 8, 2016.
7 thoughts on “Terminal Condition: Neoliberal Globalization”
I am a bit confused. In my honest opinion i actually feel that for all the reasons and analysis that you have so eloquently offered the Neoliberal Globalization is far from a terminal state. I would even suggest that Neoliberalism is triumphing in every aspect of the modern state. How else can you explain the rise of Trump? Electoral apathy and class confusion is probably Neoliberalsm’s biggest success stories not signs of its demise. The biggest economic axiom that has given birth to all of the here mentioned axioms of Neoliberalism is being left out. This is the axiom of economic scarcity of resources. Economic and political economy is about the means and principles governing the production and exchange of goods. Neoliberalism as a form of capitalism just builds on to its theoretical premises as it has always done so. The main contributor to Neoliberalism’s growing success story its unfortunately the ideological drought of the Radical left. Where at least during the 60’s 70’s and even during the 80’s we had some fruitful philosophical debates within the radical left either in the forms of Althouser or Jean-Paul Sartre or Memmy now we are left having debates about the Blair’s new left or Varoufakis’ pseudo fiscal marxism.
“Electoral apathy and class confusion is probably Neoliberalsm’s biggest success stories not signs of its demise”.
While I am not sure there is anything approaching agreement by analysts on this being the measure of the success or failure of neoliberalism, I also do not think they accurately describe the present, or the rise of Trump. First, we are seeing the opposite of apathy: as I mention in the article, there are record-breaking turnouts for the Republicans, arguably because of Trump. Second, there may not be a crystalline class consciousness like the Marxists might desire, but there certainly is not class confusion–Trump’s support is heavily rooted in class. So is Sanders’ for that matter.
I was judging the failure of neoliberalism, in the terms listed at the outset of the article: a) a failure to achieve even its own stated goals, and, b) a failure to achieve the necessary degree of popular support to sustain it peacefully. Some of the elites leading neoliberalism, also increasingly acknowledge these failures (they have to–they cannot be ignored), whether it’s Alan Greenspan in 2005 or Neville Isdell in 2015.
“The neocons and their neoliberal twins would love nothing more than to have voters think this is an election about “racism” or “sexism”. Having abandoned the working class, the search is on for another group to vote Republican, a voter base conceived in non-class terms, that is, in terms that favour identity politics and erase material politics–anything to evade the class consequences of concentrated power producing class inequality.”
It’s not just the neocons and neoliberals who would love this.
The progressive left media, such as Democracy Now!, has become (or it always was) completely mired in the “racism” and “sexism” wrong turn when they could be and should be hammering on the class issue. As Max Keiser stated 2 days ago, Trump, with his constant talk about bad trade deals and jobs, is the anti-racist, since his programs proposed would give more people good jobs, including blacks.
As a radical for my entire life, I have been finding it difficult to tolerate the progressive left’s tireless carping and crowing about identity issues while giving relative short-shrift to material economic issues. Almost every broadcast of Democracy Now! will have 70 – 100% on race or sex issues, with 5 to 10% at most on matters of economic importance. The exact opposite proportion is what they should be doing, and even their focus on sexism and racism is so shallow and without countervailing analysis and opinion.
This fact reinforces your assessment: that change may come from the right.
Levantine here. Long time no ‘see,’ in terms of exchange.
Your last sentence surprised me with qualifying these US elections as being of world-historic importance. In one sense it is true to the point of banality: all US elections in the past hundred years have been such. In another sense it is profoundly wrong, because the real dominant elite is the Deep State. The Deep State demonstrated its powers by assassinating one president with impunity fifty plus years ago. It impeached another forty years ago. Since then, as far as we can tell, its powers have only grown in size and subtlety. It dwarfs the significance of any presidential elections.
Except… at the start of your article, you name two forms of wishful thinking:
.Nobody should have believed that the end of neoliberalism would be smooth, peaceful, harmonious or pleasant. There is absolutely nothing to say that movements that are politically right-wing cannot be the ones to bring an end to this order.
Then you proceed discussing only the latter, portraying a country of disaffection, deep social frustrations, and so on, things much less present half a century ago. It means that as the growing influence of Trump (and his messages) receives an ever stronger backlash, all of it can lead to an escalation of conflicts, indefinitely widening … and worrying. That makes me understand why these elections can be of special historic importance. There might also be other reasons and lines of thinking that I’ve missed.
One has to be careful not to produce ahistorical statements about the power of a supposed “Deep State”. To be historical, is to recognize that change is not impossible, it is inevitable. This article is a historical one in the sense that it is premised on this principle that change itself is normal, and one particular change is long overdue. Clearly, US presidential elections do matter, or the elites would not invest billions into trying to shape their outcomes.
What has also grown immensely since 1947, is the power of the Executive, while checks and balances have become increasingly mythical.
Now one may argue about what changes a president can really bring about. However, when you reach a historical turning point such as this, what you cannot predict is what happens once the door is opened. You don’t know for certain what will try to escape through that door, and what forces might try to push their way in. In other words, arguments extracted from a stage of apparent equilibrium, simply will not work in analyzing a system undergoing immense agitation as now.
One has to be careful not to produce ahistorical statements about the power of a supposed “Deep State”.
However, when you reach a historical turning point such as this, what you cannot predict is what happens once the door is opened.
I’d like to point out that the literature on Deep State is based, among else, on qualified, academic analysis of events from fifty, sixty and seventy years ago. That, by any normal criteria, qualifies as *history* proper.
I’d also point out that speaking of the present moment as “a historical turning point” is decidedly ahistorical.
One ought to distinguish between change being inevitable, and a certain moment being a turning point. A turning point means a time when a decisive change in a situation occurs. That’s the accepted meaning. If you’re introducing a new meaning of that phrase, which is absolutely okay, I encourage you to be explicit about it. I just googled trying to find whether you’ve discussed such a meaning already, without good results.
I am very familiar with much of the literature on the shadow state. What makes the concept a historical one is not how long people have been writing about it, as you suggest. What makes it historical is if it has a beginning, middle, and an ending–it has to be temporal. Suggesting that the shadow state lives on, no matter what, is not historical.
Speaking of the present moment as a turning point is not ahistorical, if only by definition. In addition, however, what is most widely acknowledged is:
a) there have not been elections with such intense divisions and so much at stake, in anyone’s living memory;
b) that the dominant elites have entered into the public limelight, and are transparently in panic mode;
c) that the current international order is in jeopardy, and hence most world leaders have already delivered unprecedented, stark commentaries on the US elections;
d) that turnouts for the Republicans have reached historical high points, and,
e) the rest of the article which I need not repeat.
So if there is any doubt about this being a historical turning point, it’s only because you wish to deny that, not because I have not offered sufficient enough explanation.
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