As a consequence of Live 8 pop stars performing around the world, the G8 about to gather in Scotland and widespread protest actions, issues of global injustice are again in the news. This revival of attention is certainly a hopeful sign but to have any realistic chance of changing the world one must first understand how it works.
For the last 25 years weâ€™ve been living under a corporate-driven ideology called neo-liberalism. Itâ€™s neither new nor liberal in the American sense, but rather a return to the old mid-19th century liberal school of economics, the era of raw, unregulated, vulture capitalism that was thoroughly discredited by economic disasters like the Great Depression. It was â€œliberalâ€ only in insisting that capital be â€œfreeâ€ of any regulation.
More recently, powerful men gather periodically to write and (rewrite) the rules for managing the world economy at the G8 Summit (Canada, France, Germany, Italy, Japan, Russia, Britain, the United States); the annual World Economic Forums in Davos, Switzerland; and the forthcoming World Trade Organization (WTO) meeting in Hong Kong.
The World Bank, International Monetary Fund, and the WTO (since 1995) comprise the Holy Trinity managing the global economy. In the United States, dominant elements within both major political parties have embraced the catechism of global neo-liberalism andserve as faithful acolytes.
The essential canon of neo-liberalism includes:
* The market is sacred and should dictate rules and even ethics to society. If the market is left alone, everyone will get what they deserve. Survival of the fittest and inequality-producing competition are virtues. According to Friedrich von Hayek, one of its founding theorists, â€œ… in the new economic development model it will be an embarrassment to talk of social justice.â€
* Market fundamentalists preach that â€œThere is no such thing as society or the public welfare. The poor, the vulnerable, all those who arenâ€™t winners must fend for themselves.â€ This was the mantra of the Thatcher-Reagan era, carried forward with minor modifications by Blair-Clinton and ramped up by Bush II.
* Environmental protection laws are â€œunfair trade barriersâ€ and interfere with â€œfree markets.â€
* Public expenditures for the welfare of citizens must be abolished, including health care, education, water, and transportation. Everything should be privatized, including social security and any remaining social safety nets should be shredded.
* The only role for government is to assist wealth creation through abolishing all restrictions on investors. It should lower taxes on the wealthy and corporate profits, abolish all regulations on international capital flow and foreign ownership, and employ force, if necessary, to enforce the rules.
* Systematically dismantle the rights, power, and eventually the very existence of labor organizations.
* Itâ€™s consonant with human nature that only rugged self-reliance offers any prospect for personal advancement. If for any reason things wonâ€™t work out, itâ€™s the individualâ€™s own fault.
* Portray any critics of â€œfree tradeâ€ as naÃ¯ve protectionists, global village idiots, and unpatriotic.
[Note: Every successful wealthy nation today did so by protecting its markets and fledgling industries. They rejected neo-liberalism for themselves.]
After two decades the undeniable result of imperial neo-liberalism has been to severely exacerbate income and wealth inequality both between and within nations. Under privatization, wealth has been massively transferred from the public sector to a miniscule minority of private investors.
Global income has been redistributed upward to the top 20 percent who receive 87 percent of the worldâ€™s gross domestic product and a handful of billionaires now own more wealth than some half of the world.
In the U.S., according to American University economist Robin Hahnel, neo-liberalism means that â€œFor every wealthy beneficiary of rising stock prices, rising profit shares, and rising high-end salaries, there were 10 victims of declining real wages, decreased job security, and lost benefits.â€
Under IMF-enforced policies in the late 1980s, some 500,000 children under five years of age died each year in Africa and Latin America and some 11 million are dying from poverty around the world today.
In South Africa, for example, Nelson Mandelaâ€™s economic justice vision has been put on indefinite hold by the external imposition of the neo-liberal blueprint and the poor majority is actually worse off today. Political democracy without economic democracy is tolerated by neo-liberals in poor nations like South Africa precisely because their
political power is neutered by foreign capital. As a bonus, elected national governments become the scapegoats for economic failure.
As Arundhati Roy, an Indian development expert argues, â€œDemocracy has become the Empireâ€™s euphemism for neo-liberal capitalism.â€ Itâ€™s the new face of neo-colonization for the Third World. But not just there.
Under neo-liberalism in Russia a fabulously wealthy oligarchy has emerged, but the overall economy is now smaller than that of the Netherlands. As early as 1997, economist David Kotz could conclude that “… the majority of Russiaâ€™s population has been impoverished by the neoliberal experiment.â€ (Russian joke: What did neoliberalism accomplish in seven years that communism couldnâ€™t do in 70 years? Make communism look good).
The endless repetition of these depressingly predictable outcomes prompts one to ask: Is another world is possible? First, none of the above is inevitable. Neo-liberalism isnâ€™t God-given, the natural state of human beings, common sense, or a fact of life. The notion that neo-liberal economic systems function like a fine Swiss watch is pure fiction and exists only within the rarified world of economic models and mainstream college textbooks.
Second, contrary to neo-liberalismâ€™s protestations against big government, the key question is: Government acting on whose behalf? Mega-capitalists need the state to plan and enforce their design for global control,including war,if necessary. Their abiding fear is that ordinary folks will catch on about how the world works and the state will fall into the â€œwrong hands.” The primary reason that neo-liberal propagandists have tried (mostly successfully) to keep people in the dark is because genuine democracy is such an unnerving prospect. The elites understand, as British journalist George Monbiot writes, that â€œEverything has been globalized except our consent.â€
Enormous resources are spent persuading people to stop looking toward â€œbig government,â€ as a solution to their plight — leaving them totally vulnerable to the machinations of concentrated private power.
Therefore, as predisposed as I am toward decentralized power and less government, that dream must be temporarily deferred. Only strong and responsive democratic government has the potential to protect us from neo-liberalismâ€™s global onslaught and bring footloose capitalist globalization under social control.
For better or worse, this means thinking about alternatives to an inhuman and immoral system. It means thinking about how to achieve political power and return the state to our side. A tall order but absolutely indispensable to contemplate for anyone serious about creating a better world.
Gary Olson, Ph.D. is chair of the Political Science Department at Moravian College in Bethlehem, PA. Contact: [email protected]