Getting out of neoliberalism

, by MASSIAH Gustave

Neoliberalism is in crisis but still dominating. Position concerning neoliberalism plays a major political role. We could confirm it recently in all countries of Maghreb and Machrek.
After 2011, the new cycle of struggles and revolutions has offered and is still offering great hopes. They particularly put on the center stage freedoms and social questions. In Tunisia and Egypt, governments stemming from elections turned out to be in full agreement with neoliberalism. Like in many other countries all over the world, particularly in Europe, they are waiting for their economic salvation from international capitals and “foreign direct investments”. Forces opposed to it are showing a refusal of neoliberalism, but mostly, they are not putting forward concrete measures and policies to get out of neoliberalism. What can alter-globalization answer to the question: “How will we get out of neoliberalism?”

Global Situation

The global situation is characterized by what we agreed to call the crisis; a crisis that has been deepening since 2008. The most notable financial dimension is a consequence that results in open crises that can be alimentary, energetic, climatic, monetary, etc. The structural crisis turns on four dimensions: economic and social, the one of social inequalities and corruption; ecological with the global ecosystem endangerment; geopolitical with the end of the United States’ ‘hegemony, the crisis in Japan and Europe and the rise of new powers; ideological with the questioning of democracy, as well as xenophobic and racist eruptions.

In fact, we are dealing with three crisis that fit together: a neoliberalism crisis as a phase of capitalist globalization; a crisis of the capitalist system itself that combines specific contradiction of the production mode, between capital and work and between productivist modes and global ecosystem’s requirements; a civilization crisis that results from questionings on the relation between humankind and nature that defined occidental modernity and affected some basis in contemporary science.

Populations’ opposition emphasized the neoliberalism crisis; it confirms the social and cultural struggles’ role in the end of that phase of capitalist globalization. Social inequalities, unemployment and casualization led to a drop in popular consumption and caused an “overproduction” crisis. Appeal to over-indebtedness found its limits, with the derived financial markets’ expansion, it infected all securities markets.

Subprimes’ explosion marked the passage from households debt to banks’ debt. Banks rescue by the States led to the public debt crisis. Deficit reduction with austerity plans is supposed to bring about a solution to that crisis without challenging profits and by keeping control thanks to the capitals global market and shareholders’ privileges. Popular resistances are opposed to it. Peoples’ exasperation unmasked the financial power’s dictatorship and “the low intensity democracy” that ensues from it. Corruption is rejected because it is systemic. In its current form, it is part of neoliberalism. It results from the fusion between politics and finances that is corrupting the whole of the political class in a structural way. The refusal of corruption goes beyond financial corruption; it is about political corruption. How can you trust, when the same people, with sometimes another face, are applying the same policies, those of financial capitalism?

Meanwhile, changes are gaining ground, leading to the very long term. Among those changes and through the crisis, we must notice the extraordinary scientific and technical disruptions, particularly in digital technology and biotechnologies. The Cultural Revolution supported by ecology enhances the confrontation between possibilities: the taming if that progress to serve exploitation and alienation or new openings in favor of emancipation.

It is not easy to stand back as far as neoliberalism’s predominance is buffeted but still dominating. The long time of movements is giving the necessary distance. The working-class movement developed since the middle of the 19th century. It has known a period of advances between 1905 and 1970. In spite of wars and fascism, revolutions were possible in Russia, China and in several countries over the world; across its alliance with national liberation movements, it nearly surrounded colonial powers; it imposed social compromises and a welfare State in the center capitalist countries. Since 1970, there has been a period of forty years of defeats and regressions in social movements, in decolonized countries, in countries that have gone through revolutions and in industrialized countries. Upheavals and the crisis could characterize the end of that long period of regressions, and we might not be able to define precisely what will follow.

Possible Futures

Even so, Neoliberalism depletion does not mean the overturn of capitalism. It will lead to a new phase of capitalist globalization with a new logic, its contradictions and new anti-systemic forces. In the longer-term, the structural crisis carries the confrontation between several possible futures, between several visions of the world. The movements’ strategy is defined with regard to the possible futures and to the conceptions that underlie them. They were clarified during the debates at the Peoples Summit, organized by social movements, paralleling the Rio+20 Heads of State’s Conference held in June 2012.

Three horizons, three conceptions emerged from it: a reinforcement of financial involvment under new forms and its extension to Nature; a reorganization of capitalism based on public regulation and social modernization; a breakdown opening on a ecological, social and democratic transition. Specific linkages between those three logics will characterize concrete situations.

The first conception, which is a reinforcement of neoliberalism means a financial intervention in Nature. It was detailed in the working paper that was prepared by the United Nations and the States, for Rio+20. In that vision, the end of the crisis is achieved through the research of an “unlimited market” that is necessary for growth.
It bases the extension of the global market, also known as green market, on financial intervention in Nature, the commoditization of the living and the generalization of privatizations.

This approach recognizes that the Nature produces essential services (it captures carbon, purifies water, etc.). Nevertheless, that vision considers these services as being damaged because they are free. To improve them, they should be merchandized and privatized. In that perspective, private property would be the only way that could lead to a right management of Nature, which would be entrusted to financed big multinational companies.
Then, it is about the limitation of the references to fundamental rights that would weaken the markets’ superiority. It is about the subordination of international law to business law.

The second conception is the Green New Deal’s one, defended by leading members of the establishment such as Joseph Stiglitz, Paul Krugman and Amartya Sen, who were often referred to as neo-keynesians. It starts from the « green economy » that should be controlled. The proposal deals with a deep reorganization of capitalism from a public regulation and a redistribution of incomes. It is still not much audible today as it implies a struggle against the dominating logic, which is the one of capitals global market that denies Keynesian references and which is not ready to accept that any inflation could reduce the revaluation of profits. We have to remind that the New Deal, adopted in 1933, was applied successfully only in 1945, after the Second World War.

The third conception is the social and citizen movements’ one, as it was explained during the global social forums’ process. These recommend a break, which would be a social, ecological and democratic transition. They promote new conceptions, new ways to produce and consume. We can quote: the common goods and the new forms of property, the struggle against patriarchy, financial control, the end of the debt system, le “buen-vivir” and prosperity without growth, reinvention of democracy, common and differentiated responsibilities, and public services based on rights and free-access. It deals with the organization of societies and of the world on the access to rights for all and equality of rights.

The movements’ strategy defines alliances as far as the possible futures are concerned. The emergency is to gather together all those who refuse the first conception, which is about financial involvement in Nature. All the more so because imposing the dominating system in spite of the neoliberalism’s depletion brings the risks of a war-type neoconservatism. This alliance is possible as social movements are not unconcerned about improvements that could provide the Green New Deal concerning jobs and purchasing power. Nevertheless, many movements are noticing that public regulation could be impossible to realize regarding the present balance of powers. Moreover, they consider that a productivist growth matching with capitalism, even if regulated, could not escape to the global ecosystem’s limits. Over time, if the war-type neoconservatism danger cannot be avoided, a positive confrontation will oppose supporters of the Green New Deal and those of the overrun of capitalism. Concrete alliances will depend on the countries’ and big areas’ situations.

Capitalist Globalization Changes

Social movements are facing globalization’s evolution and geopolitical upheavals. The financial bourgeoisie is still in power and the dominating logic keeps being financial involvement. But globalization is evolving and its contradictions are increasing. It is resulting in a differentiation of situations according to world regions, a kind of continental drift. Each big region is evolving with its own processes and social movements are trying to adapt these new situations. That evolution is changing the conditions for the movements’ convergence.

In the reflection and mobilizations about the crisis and the transition, the geopolitical field is often neglected. It is too often thought as a subordinate to the economic and social fields whereas conflicts and wars remind us that geopolitics can determine, social situations and their outcomes. New powers are taking part in the world’s fall. But these « emerging » are not forming a homogeneous group. They do not cancel the present domination, which is still a relevant characterization to understand the state the world is in and the relationships between countries. But domination is evolving and geopolitical relationships have changed. The new powers are standing out in large regions and contribute to their differentiation.

The emerging economies’ nature joins the evolution of the global economy. Around the year 2000, several countries stood out with a sustained growth rate, a favorable trade balance and significant currency reserves. Those countries resisted the 2008 crisis. We are talking about around thirty countries in the world. After the emergence of the BRIC (Brasilia, Russia, India and China), a new group of countries is asserting itself, the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa). This group of countries is characterized by young populations, a diversified economy, a bearable debt and a relative political willingness. They are still enjoying high foreign investments and a particular attention from multinational companies. We should not forget the geopolitical role of some annuitant countries such as Saudi Arabia and Qatar.

These countries are starting a reorientation in the new international division of labor. Even if the confrontation about research and new technologies are intensifying and if some drops and step backs can appear as far as growth rates are concerned, a reorganization of exchanges and wealth is unlikely to go back to the previous situation. Yet, we can notice a restructuring in the dominating global class, which is reconstructed with financiers of the new economies. Major geopolitical consequences are still to come.

The geopolitical upheaval first affects the economy. Emerging economies want an open economy, but they do not let financial markets regulate prices and the exchange rates, and orient investments. Economic policies leave the State with a strategic intervention role. They are not breaking with the global market, but they try to control their relationships, especially with public investment funds. They are looking for new economic policies that would combine a respect for neoliberal restrictions with policies of partial redistribution, which reduce poverty but do not counterbalance inequalities.

In March 2013 in Durban, a counter-summit was organized by the movements of these countries during the fourth BRICS Heads of State’s summit. Links were set up with the WSF in Tunis. The call for that counter-summit made clear the question: “BRICS: anti-imperialist, sub-imperialist or in between?”

The emerging countries’ social movements are carrying several claims: a will of social negotiation; democratization; a denial of domination and external ukase. Those movements will play a major role in redefining the anti-globalization movement.

The alter-globalization strategy

The strategical thought is built on the structure between the question of emergency and a structural change. It aims to place the answers to emergency in a long-term prospect.
Two preoccupations appeared in the global social forums: a need to define immediate measures to impose in order to improve the popular class’ way of life and a necessary definition for an alternative direction.

To get out of neoliberalism, we can define several processes: in the short term, governments can define new policies under the movements’ pressure; in the medium term, efforts must be made to make the international system evolve and gain leeway; in the long term, alternative policies to go beyond capitalism. All these processes must be engaged here and now.

Movements are pointing out that other policies are possible. That is why they have to fight the inertia of governmental forces, as they are sure that there is no other alternative. We must answer that false obvious fact with a solution to the reasons that guide governments. There are several reasons leading the governments to reproduce dominating policies : They are doing so because international restrictions are too strong and make independent processes very difficult. Different coups d’état are possible: from the financial coup d’état to the military one, there is a whole range of possible destabilizations.
They are doing it because there is always a reason to wait: elections, a constitution and better situations.
They are doing it because they are conservative, deeply conservative and responsible for social order thus, neoliberal policies are the most complete representation of conservatism.
They are doing it because they think that they can find adjustments: some of them, for example, explain that the Arab capital would allow leeway while they perfectly know the prerequisite to the Arab capital is to follow the IMF’s theory.
They are doing it because they believe in it, being realistic, because there is no other way to boost the growth and answer the problems of labor and way of life, than foreign investments.

The New Policies

In certain conditions, governments could be tempted to implement policies that would depart from neoliberalism, which means from the global market’s absolute predominance and from the structural adjustment of societies to that market.

Two situations may lead to this. On the one hand, contradictions between the markets and the emerging economies that meet the limits resulting from the global market’s control by the western hegemony. On the other hand, social movements can lead to changes in government, even change of system that would like to answer to popular yearnings.

Policies of new emerging powers and progressive systems do have things in common. They do not merge one with the other, but they could lead to rapprochements or even to alliances against the hegemony of financial markets for a global reform of the economic system.

In Latin America, movements are influencing “desarrolistas” or developmentalistic systems, which are trying to implement post-neoliberal policies. Policies which are not at all anticapitalist and that combine tokens for the capitals global market and social policies on the national scale with redistributions. In several large countries in Asia, distinguished alliances combine state, national and globalized bourgeoisies. Specific and contradictory alliances are tried with state bourgeoisies, which share the means of production with private “national” bourgeoisies and multinational companies.

In Latin America, we can identify attempts and experiences that mark post-neoliberal policies across the diversity of the countries where movements weighed on the systems’ evolution. That is the case in Argentina, Brazil, Bolivia, Ecuador, Uruguay and Venezuela.

Which are the main measures of these policies?

  • A political treatment on the debt question (early refund to Brazil, cancellation in Argentina, audit in Ecuador)
  • A control in the financial sector and creation of a Sovereign Investment Fund
  • An attempt to control raw materials and natural resources
  • A redistribution of incomes (family grant, housing benefit, compensation policy, social protection)
  • Support for job and incomes creating sectors
  • An incitating environnemental policy
  • A fiscal policy and the struggle against tax and judiciary havens
  • The struggle against precariousness
  • A strengthening of the social State (education, health, social protection)
  • Food sovereignty and the defense of farming agriculture
  • Urban policies, transports, prevention for urban safety, territorial planning
  • Territorial planification and relocation strategy
  • A democratic system, which means a system that would guarantee individual and collective freedoms
  • Efforts in participative democracy (citizenship decentralization, municipalities, participative budgets)
  • A willing monetary policy
  • The organization of large regions (Mercosur, Alba, …)

Concrete policies depend on countries and situations. There are limits and many critics. Even if these policies have strengthened rapid economic evolutions and if they have led to significant reductions in poverty, social inequalities have been increasing. Tensions increased between middle and lower class. The return to the primary sector was used to feed the growth (soya, monopolizing of land, mining). The alliances with food exporters weighed on peasantry.

Nevertheless, there are possibilities for new policies. Doing nothing, invoking external restrictions, is reproducing and reinforcing the social system and subordination to the capital global market. These new policies can be engaged right now, without waiting for a change in the world system. The social movements can take the place in order to impose negotiations and a public discussion about political orientations.

The Prospects

Economic and social policies proposals make sense only if they are part of long-term proposals. This is what the alter-globalization strategy is based on. Organizing immediate proposals to improve lower class’ way of life with an alternative that implies a more fundamental break from the dominating logic.

A new policy is unlikely to be set up if we stay in the short term. There are two necessary conditions to start a structural transformation. Starting a transformation of the international system, of the world economic frame that would allow leeway with regards to the neoliberal concept. Starting an alternative orientation.

For ten years now, many immediate proposals were promoted in the world social forums for the global economic system’s transformation. For instance: the suppression of tax and legal havens, the tax on financial transactions, the separation between deposit banks and business banks, financial sector socialization, the ban on derived financial markets, income redistribution; universal social protection; rights for migrants and freedom of movement; environmental and climatic negotiations, a new international monetary system, etc.

It aims to establish an economic system based on the multilateral public regulation, breaking with a free-exchange, which has no freedom at all and that sets generalized dumping (social dumping, tax dumping, environmental dumping and monetary dumping). It also aims to prevent big financial groups and States from having a stranglehold on communication, information and digital means.

These proposals are not revolutionary by themselves. Today, they are used by establishment economists and even by some governments. But these statements have no effect because they need to break away from the neoliberal dogma and the dictatorship of financial markets. And these forces are still dominating and will not accept, without clash, to give up on their huge privileges.

The alternative orientation emerged in the world social forums. Social, ecological and democratic transition approach is defined in the WSF. That is one of an access to rights for all and equality of rights, from the local sector to the global one. We can organize each society and the world differently than by the dominating logic of subordination to the capital world market. The social movements are advocating for a break, which would be asocial, ecological and democratic transition. They promote new conceptions, new ways to produce and consume.

From practices, these new notions result in new approaches: the common goods, the “buen vivir” and the prosperity without growth, the rights of Nature, the struggle against patriarchy, citizenship regulation, radical democratization of democracy, food sovereignty, the end of colonization, the rights for migrants and the freedom of movements, the international institutions and the international law.

This alternative is built on struggles and resistances because resisting is creating. It results in a search of public policies of equality of rights. It is created from concrete alternatives, which are set up in societies, and the struggle for these alternatives result in more freedoms and for them not to be diverted by the search for profits in more inequalities, injustice and an adjournment of freedom.

The stakes for the new revolution are becoming clearer: the definition for new social and cultural relationship, new relationships between the human race and Nature, the new phase of decolonization and the reinvention of democracy.