Are We (Finally) in Late Neoliberalism?

The current wave of protests against austerity and imperialism indicate that we are at (another) crisis point in the roughly half-century since neoliberalism replaced Keynesian economics as the basis of contemporary capitalism.

It’s fitting that Chile, beginning with mass evasion of increased subway fares, and continuing to general strikes and a complete shutdown of the national infrastructure, is part of this wave. Neoliberalism, in its doctrinaire form, began in the aftermath of the 1973 coup that overthrew Salvador Allende and installed Pinochet as a dictator. The uprising in Haiti also connects to a longer historical process, as the Haitian people have been subject to imperialist efforts by major European powers (France historically, the United States now) to make them economically subservient and to overthrow or frustrate any attempt to build a political movement that is against austerity and foreign interference.

From Late English to Late Neoliberalism

Years ago, I wrote a post on this site about the evolution of the English language, and how future linguists will define the current moment. The feeling I had is that since Old English and Middle English both have fairly set beginning and end dates, that whatever form of the language we’re speaking today (usually dubbed “Modern English“) will eventually be given some historical marker, for the contemporary must eventually become the historical. This will be especially interesting given how English has become a highly diverse, global language since the beginning of Modern English, with English in different countries evolving at different rates, in different directions.

This general concept of evolution and the resulting terminology we use applies to capitalism, and neoliberalism more specifically. The term “late capitalism” (The Atlantic wrote about the term in 2017) is now used frequently, though I don’t run into it in academic literature as I do in podcasts and social media. The term usually refers to absurd products and business practices that seem unsustainable, thus giving a general feeling that capitalism is beginning to hollow out and collapse on itself. The saga of WeWork, which was once valued at $47 billion USD, despite losing huge amounts of money and having an obviously untenable business plan, fits into this. At some point I will write a more detailed, economics-focused post on the various players in the contemporary capitalist landscape, as we are likely on the edge of another Great Recession. WeWork fits into this landscape in being a venture capitalist-backed mirage, somewhere between the juggernaut companies that have enough cash on hand to survive even a terrible economic collapse, and the companies engaging in the same speculation that caused the 2007-2008 crisis, who will either be bailed out with public money and no accountability, or perhaps face some kind of takeover and structural change, depending on who wins the 2020 election.

I’ll quote a Jacobin interview with David Harvey to talk about what neoliberalism has meant in the context of post-war history:

I’ve always treated neoliberalism as a political project carried out by the corporate capitalist class as they felt intensely threatened both politically and economically towards the end of the 1960s into the 1970s. They desperately wanted to launch a political project that would curb the power of labor.

In many respects the project was a counterrevolutionary project. It would nip in the bud what, at that time, were revolutionary movements in much of the developing world — Mozambique, Angola, China etc. — but also a rising tide of communist influences in countries like Italy and France and, to a lesser degree, the threat of a revival of that in Spain

. . .

There were very few crises between 1945 and 1973; there were some serious moments but no major crises. The turn to neoliberal politics occurred in the midst of a crisis in the 1970s, and the whole system has been a series of crises ever since. And of course crises produce the conditions of future crises.

In 1982–85 there was a debt crisis in Mexico, Brazil, Ecuador, and basically all the developing countries including Poland. In 1987–88 there was a big crisis in US savings and loan institutions. There was a wide crisis in Sweden in 1990, and all the banks had to be nationalized.

Then of course we have Indonesia and Southeast Asia in 1997–98, then the crisis moves to Russia, then to Brazil, and it hits Argentina in 2001–2.

And there were problems in the United States in 2001 which they got through by taking money out of the stock market and pouring it into the housing market. In 2007–8 the US housing market imploded, so you got a crisis here.

Neoliberalism is characterized by the hollowing out of the state, the mass privatization of state assets, and the commodification of all things such that everything that’s not in the market begins to look and act like it. If we concieve of society as existing in three parts- the state, the market, and a civil society that exists externally of both, like this:

shows-a-conventional-Venn-diagram-depiction-of-the-spheres-of-civil-society-interacting

 

In a neoliberalized society, the market expands at the expense of the other two sectors, and the state and civil society begin to have more market-influenced aspects. In civil society, we see the rise of the Non-Profit Industrial Complex, which combines market forces with state surveillance. In the government, we see the rise of business metrics and corporate jargon that define and shape state action.

Is There A “Late Neoliberalism”?

So as Harvey says, neoliberalism has led to a series of interlocked, perhaps escalating crises all over the world. In the era of managed, Keynesian capitalism, central banks and governments were paying keen attention to growth metrics and financial speculation, so matters could only get so out of hand before actions was taken- bubbles were popped early or prevented entirely through regulation of speculative investments, slowdowns were countered with state investment. Since the state has become irrelevant in terms of financial regulation- instead being the muscle of the market to force compliance- the neoliberal era is a set of austerity reforms, a crisis related to these reforms, and further reforms in response. The thing is, none of these reforms actually solve anything- they just create further chaos that can be exploited. As Tony Weis states in a 2004 paper about how neoliberal reforms have destroyed the Jamaican agriculture industry, neoliberal action is not logical action, though contemporary economists attempt to depict themselves as following rigorous mathematical and logical precepts.

The question is whether there can be a crisis, a revolutionary reaction, so large that it overwhelms the neoliberal state. There are several directions this can take. One is the rise of far-right populism in the United States and parts of Europe, which use the gutting of the welfare state by neoliberal reforms and places the blames on various Others, stating that removing the undesirable parts of society will allow an era of abundance as existed in a (perhaps mythical) past.

Another is electoral anti-austerity movements. This includes the Bernie Sanders campaigns of 2016 and 2020, the Corbyn era of the Labour party, political parties that grew out of anti-austerity protests like Unidos Podemos in Spain and Solidarity-People Before Profit in Ireland. With the recent coup in Bolivia, and the releasing of Lula in Brazil, in addition to mass movements in Chile and Ecuador, the electoral and non-electoral responses to austerity and far-right reactionaries in Latin America are mixed together. This is not new- social democratic and democratic socialist politicians and parties have used social movements to help press for redistributive policies while in power, and against austerity when out of power.

Is neoliberalism in crisis? Yes, it always is somewhere in the world, and that’s pretty much the point. Is the crisis deep enough to lead to a new society? Well, here’s a bunch of Chileans with a banner reading “Chile will be the tomb of neoliberalism”, so they definitely think so:

ChileNeoliberalism

The remnant of the state in places like Chile, which is an oversized military and police force with some other things of much less importance, has to contain mass protests and general strikes while having very little to offer people to placate them. This is not the era of the New Deal, where programs were created in large part to stave off radicals who were making inroads in the working class. The neoliberal state has nothing but the stick, or as Loïc Wacquant calls it, the “iron fist” of the penal state. This polarizes people and totalizes the conflict. If the security forces blink, then it can be over- like the Bulldozer Revolution in Serbia at the dawn of the millennium. When a nationwide protest rocked the capital, the police and military decided to stand aside. And with that, the people, not the US and its enormous military, overthrew Slobodan Milošević. The federal buildings were seized, and the dictatorship melted away.

Perhaps it is happening again.

BulldozerRevolution
Belgrade, 5 October 2000

 

 

 

Author: Andrew Mackay

Poet, writer, anti-authoritarian, Unitarian Universalist.

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