By now it is old news that there is a coup afoot in Brazil and that the right-wing is using extraordinary political measures to overthrow of Dilma Rousseff.
What is little discussed amid all the talk of impeachment and corruption in Brazil is the larger context: how international finance capital is working with Hillary Clinton and other U.S. political elites to reassert the Washington Consensus in Latin America; how the right wing throughout the region is collaborating in this project; and how this is manifesting in the targeted countries. Though the pieces of this puzzle may be partially concealed, it is time to put them all together to see the big picture.
Brazil and Argentina: Case Studies in Wall Street Meddling
As the world waits for the next episode of the unfolding Brazilian drama, it is critical to note why the spectacle that is this “impeachment” process is happening. Having been elected, and re-elected, four times in the last four elections, Dilma Rousseff and the Workers’ Party are undeniably the single-most popular political formation in Brazil, a country known for its deep divide between a wealthy right-wing elite, and the masses of workers and poor people who predominantly support the left, including the Workers’ Party in recent years.
With this dynamic it is unsurprising to find that the government is being ousted by a coalition of right-wing extremists, from those who unabashedly support the U.S.-installed Brazilian military dictatorship, to those who simply want to see Brazil follow a more neoliberal model of economic development. However, what might be surprising to some is the key role that powerful financial interests have, and will continue to have, over this process, and any future Brazilian government.
In mid-April, just as the impeachment vote was set to take place,Reuters revealed that Brazil’s right-wing Vice President Michel Temer was already preparing the shortlist of his presumptive cabinet once Dilma and the Workers’ Party is removed. Temer tabbed Paulo Leme to serve as either finance minister or head of the Central Bank. Leme is the Chairman of Goldman Sachs’s operations in Brazil, making him perhaps the pre-eminent representative of Wall Street in the country.
Of course, one cannot discount the significant influence companies like Goldman Sachs have beyond just their actual holdings in the country. For instance, Wall Street finance capital is very well connected to Brazil’s richest man, Jorge Paulo Lemann, a multi-billionaire who owns Heinz Ketchup, Burger King, is the majority stockholder of Anheuser-Busch and Budweiser, and is a close associate of Warren Buffett. With his pedigree in finance capital, it is no surprise that Lemann, and the interests he represents, has been financially backing groups involved in the street protests calling for impeachment, including the highly visible VemPraRua (Come to the Streets).
It should be equally unsurprising that other key protest groups have been funded directly by other Wall Street interests, in particular the infamous Koch Brothers.Charles and David Koch are key moneymen behind the Free Brazil Movement (MBL) and Students for Liberty (EPL) via the Atlas Economic Research Foundation and Atlas Leadership Academy, both of which spawned some of the key protest leaders.
For these reasons, it should come as no surprise then that key players in the impeachment push in Brazil seem to be taking their orders directly from, or at the very least collaborating with, officials in the United States. In fact, the day after the impeachment vote was taken,Senator Aloysio Nunes was in Washington for high level meetings with Republican Senator Bob Corker, who is the chairman and ranking member of the Senate Foreign Relations Committee, and Democratic Senator Ben Cardin, a key supporter of Hillary Clinton. Nunes was also scheduled to meet with Undersecretary of State Thomas Shannon, the third highest ranking State Department official, and the lead on Latin American affairs, as well as representatives of the lobbyist organization Albright Stonebridge Group, headed by Clinton-backer Madeline Albright.
In effect, these meetings indicate a desire on the part of the coup plotters to collaborate with all sides of the Washington Consensus – Republicans and Democrats, private capital and government agencies – to execute a smooth, U.S.-backed transition in Brazil. In fact, one could be forgiven for thinking that they were watching a re-run of the 2009 coup in Honduras, presided over and sanctioned byHillary Clinton and her Beltway lobbyist and insider friends.
Indeed, it seems that all those lucrative speeches Clinton made to Goldman Sachs weren’t simply to impress the Wall Street giant with promises of how financier-friendly her administration would be at home, but also to demonstrate just what commendable customer service she could provide to her patrons in foreign policy too. To see just how those two work hand-in-glove, one needs to simply look South from Brazil at the shining example of Argentina.
In November 2015, Mauricio Macri edged out his rival to win the presidency of Argentina. But while the victory was a clear win for the right wing in Argentina, it was, in effect, the political equivalent of a hostile takeover by Wall Street. Within days of the electoral triumph, Macri had already unveiled his key economic team which was loaded Wall Street insiders and representatives of Big Oil, among other industries.
Under Macri, the economy of Argentina is now firmly in the hands of Alfonso Prat-Gay (finance minister), a longtime Wall Street banker, neoliberal ideologue, and former president of Argentina’s Central Bank. Francisco Cabrera (formerly of banking giant HSBC and other financier outfits) takes over as industry minister, while another neoliberal ideologue Federico Sturznegger now serves as president of the Central Bank. Additionally, the new energy minister Juan Jose Aranguren is the former president of the Argentine division of the oil giant Shell.
Essentially, Macri has made no pretense about his administration being a proxy of finance capital and big business, as his economic team obviously demonstrates. And Macri himself made this readily apparent with his capitulation to the demands of billionaire vulture capitalist Paul Singer in February, with Argentina agreeing to pay nearly $5 billion (75 percent of the claim) to Singer’s group which had been holding out against the steadfast refusal of the Cristina Fernandez government to submit to the will of Wall Street billionaires. With this single act, Macri demonstrated for the world, and especially for the financiers in New York and London, that Argentina is open for business.
Hillary Clinton and The Neoliberal Agenda in Latin America
There is no doubt that one of the targets in Latin America remains raw materials and commodities: both Brazil and Argentina are recognized as major sources for energy and other commodities, while Venezuela remains one of the world’s leading oil producers. So from that perspective alone, these countries are obviously highly prized by the Wall Street jackals. But it goes much deeper than that as Latin America is now seen as a focal point of the broader drive to extend U.S.-Wall Street-London hegemony both economically and politically.
Perhaps the centerpieces of this push are the much-discussed Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP), which would create a corporate supranational trade infrastructure that would essentially subordinate individual nations to the hegemony of corporations and capital. Naturally, the left-progressive forces in Latin America, and their allies, have been the major stumbling block to implementing the TPP and TTIP. But that is now set to change.
Macri has signaled his desire to use Mercosur as a vehicle for entering into TTIP, the massive free trade agreement that would open up participants to European and U.S. capital. He has equally indicated his desire to move closer to the Pacific Alliance countries, three of which (Chile, Peru, and Mexico) are already on board with the TPP. Such moves are made possible by two important factors.
First is the removal of the Rousseff government which, though willing to engage in dialogue on TTIP, has been unwilling to subordinate itself to the interests of Washington and London capital.
Second is the looming election of Hillary Clinton, who remains the principal representative of Wall Street in the U.S. presidential race. Though her long-standing ties to Goldman-Sachs and other powerful banks are well documented, her reverence for free trade in the service of U.S. policy, despite her vacuous campaign rhetoric, is equally well known.
Clinton unabashedly lied during Democratic national debates on the issue of the TPP, saying that she now opposes it, despite having been in favor of it as late as 2012 while Secretary of State when Clinton saidthe TPP “sets the gold standard in trade agreements.” While she now masquerades as a protectionist opposing a deal that would be bad for working people, she has demonstrated her unflagging support for this type of so called free trade in the past.
Conversely Donald Trump has actually indicated his opposition to the TPP, though it should be noted that his argument that it would benefit China is laughable. Still, Trump is not enamored with this sort of free trade agreement, and is less than reliable when it comes to being able to bring the necessary parties together in order to achieve it. Hence, Hillary Clinton once again emerges as the Wall Street choice.
Perhaps this is why Charles Koch, of the infamous Koch Brothers right wing billionaire tag team, recently admitted that he might support Hillary Clinton in the face of a Donald Trump nomination. Indeed, this is now the stated position of a number of highly influential right wing neocon thinkers and strategists including Max Boot, whodescribed Clinton as “vastly preferable,” Robert Kagan who sees Hillary as “saving the country,” and Eliot Cohen who describedClinton as “the lesser evil by a large margin.”
And why are these right wing neocons, coupled with the neoliberal ideologues of the liberal wing of American politics, all lining up behind Hillary Clinton? There’s one simple answer: Clinton will deliver the goods. And when it comes to Latin America, the biggest prize of all is political change in the service of economic exploitation and control.
Since the rise of Hugo Chavez, Latin America has gone its own way, democratizing and moving away from its former status as a “America’s backyard.” With Hillary Clinton and Wall Street working hand in hand with their right wing proxies in Latin America, Washington looks to reassert its control. And it is the people of the region who will pay the price.
This piece first appeared at Telesur.
CLEVELAND — Avik Roy is a Republican’s Republican. A health care wonk and editor at Forbes, he has worked for three Republican presidential hopefuls — Mitt Romney, Rick Perry, and Marco Rubio. Much of his adult life has been dedicated to advancing the Republican Party and conservative ideals.
But when I caught up with Roy at a bar just outside the Republican convention, he said something I’ve never heard from an establishment conservative before: The Grand Old Party is going to die.
“I don’t think the Republican Party and the conservative movement are capable of reforming themselves in an incremental and gradual way,” he said. “There’s going to be a disruption.”
Roy isn’t happy about this: He believes it means the Democrats will dominate national American politics for some time. But he also believes the Republican Party has lost its right to govern, because it is driven by white nationalism rather than a true commitment to equality for all Americans.
“Until the conservative movement can stand up and live by that principle, it will not have the moral authority to lead the country,” he told me.
This is a standard assessment among liberals, but it is frankly shocking to hear from a prominent conservative thinker. Our conversation had the air of a confessional: of Roy admitting that he and his intellectual comrades had gone wrong, had failed, had sinned.
His history of conservatism was a Greek tragedy. It begins with a fatal error in 1964, survived on the willful self-delusion of people like Roy himself, and ended with Donald Trump.
“I think the conservative movement is fundamentally broken,” Roy tells me. “Trump is not a random act. This election is not a random act.”
The conservative movement’s founding error: Barry Goldwater
The conservative movement has something of a founding myth — Roy calls it an “origin story.”
In 1955, William F. Buckley created the intellectual architecture of modern conservatism by founding National Review, focusing on a free market, social conservatism, and a muscular foreign policy. Buckley’s ideals found purchase in the Republican Party in 1964, with the nomination of Barry Goldwater. While Goldwater lost the 1964 general election, his ideas eventually won out in the GOP, culminating in the Reagan Revolution of 1980.
Normally, Goldwater’s defeat is spun as a story of triumph: how the conservative movement eventually righted the ship of an unprincipled GOP. But according to Roy, it’s the first act of a tragedy.
“Goldwater’s nomination in 1964 was a historical disaster for the conservative movement,” Roy tells me, “because for the ensuing decades, it identified Democrats as the party of civil rights and Republicans as the party opposed to civil rights.”
Goldwater opposed the Civil Rights Act of 1964. He himself was not especially racist — he believed it was wrong, on free market grounds, for the federal government to force private businesses to desegregate. But this “principled” stance identified the GOP with the pro-segregation camp in everyone’s eyes, while the Democrats under Lyndon Johnson became the champions of anti-racism.
This had a double effect, Roy says. First, it forced black voters out of the GOP. Second, it invited in white racists who had previously been Democrats. Even though many Republicans voted for the Civil Rights Act in Congress, the post-Goldwater party became the party of aggrieved whites.
“The fact is, today, the Republican coalition has inherited the people who opposed the Civil Rights Act of 1964 — the Southern Democrats who are now Republicans,” Roy says. “Conservatives and Republicans have not come to terms with that problem.”
Conservative intellectuals were blind to the truth about the GOP — hence Trump
The available evidence compiled by historians and political scientists suggests that 1964 really was a pivotal political moment, in exactly the way Roy describes.
Yet Republican intellectuals have long denied this, fabricating a revisionist history in which Republicans were and always have been the party of civil rights. In 2012, National Review ran a lengthy cover story arguing that the standard history recounted by Roy was “popular but indefensible.”
This revisionism, according to Roy, points to a much bigger conservative delusion: They cannot admit that their party’s voters are motivated far more by white identity politics than by conservative ideals.
“Conservative intellectuals, and conservative politicians, have been in kind of a bubble,” Roy says. “We’ve had this view that the voters were with us on conservatism — philosophical, economic conservatism. In reality, the gravitational center of the Republican Party is white nationalism.”
Conservative intellectuals, for the most part, are horrified by racism. When they talk about believing in individual rights and equality, they really mean it. Because the Republican Party is the vehicle through which their ideas can be implemented, they need to believe that the party isn’t racist.
So they deny the party’s racist history, that its post-1964 success was a direct result of attracting whites disillusioned by the Democrats’ embrace of civil rights. And they deny that to this day, Republican voters are driven more by white resentment than by a principled commitment to the free market and individual liberty.
“It’s the power of wishful thinking. None of us want to accept that opposition to civil rights is the legacy that we’ve inherited,” Roy says.
He expands on this idea: “It’s a common observation on the left, but it’s an observation that a lot of us on the right genuinely believed wasn’t true — which is that conservatism has become, and has been for some time, much more about white identity politics than it has been about conservative political philosophy. I think today, even now, a lot of conservatives have not come to terms with that problem.”
This, Roy believes, is where the conservative intellectual class went astray. By refusing to admit the truth about their own party, they were powerless to stop the forces that led to Donald Trump’s rise. They told themselves, over and over again, that Goldwater’s victory was a triumph.
But in reality, it created the conditions under which Trump could thrive. Trump’s politics of aggrieved white nationalism — labeling black people criminals, Latinos rapists, and Muslims terrorists — succeeded because the party’s voting base was made up of the people who once opposed civil rights.
“[Trump] tapped into something that was latent in the Republican Party and conservative movement — but a lot of people in the conservative movement didn’t notice,” Roy concludes, glumly.
For conservatism to live, the conservative movement has to die
Over beers, I ask Roy how he feels about all of this personally. His answer is very sad.
“When Marco [Rubio] lost, I went through the five stages of grief. It was tough. I had to spend some time thinking about what to do for the next several years of my life,” he says.
“I left a comforting and rewarding career as a biotech investor to do this kind of work. I did it because I felt it was important, and I care about the country. Maybe it’s cheesy to say that, but I really sincerely do,” he continues. “So then, okay, what do I do? Do I do the same things I’ve been doing for the last four years? To me, just to do that to collect a paycheck didn’t make a lot of sense.”
This soul-searching led Roy to an uncomfortable conclusion: The Republican Party, and the conservative movement that propped it up, is doomed.
Both are too wedded to the politics of white nationalism to change how they act, but that just isn’t a winning formula in a nation that’s increasingly black and brown. Either the Republican Party will eat itself or a new party will rise and overtake its voting share.
“Either the disruption will come from the Republican Party representing cranky old white people and a new right-of-center party emerging in its place, or a third party will emerge, à la the Republicans emerging from the Whigs in the [1850s],” Roy says.
The work of conservative intellectuals today, he argues, is to devise a new conservatism — a political vision that adheres to limited government principles but genuinely appeals to a more diverse America.
“I think it’s incredibly important to take stock,” he says, “and build a new conservative movement that is genuinely about individual liberty.”
I don’t know how this would work. I don’t think Roy knows either.
For the entire history of modern conservatism, its ideals have been wedded to and marred by white supremacism. That’s Roy’s own diagnosis, and I think it’s correct. As a result, we have literally no experience in America of a politically viable conservative movement unmoored from white supremacy.
I’ve read dozens of conservative intellectuals writing compellingly about non-racist conservative ideals. Writers like Andrew Sullivan, Ross Douthat, Reihan Salam, Michael Brendan Dougherty, and too many others to count have put forward visions of a conservative party quite different from the one we have.
But not one of these writers, smart as they are, has been able to explain what actual political constituency could bring about this pure conservatism in practice. The fact is that limited government conservatism is not especially appealing to nonwhite Americans, whereas liberalism and social democracy are. The only ones for whom conservatism is a natural fit are Roy’s “cranky old white people” — and they’re dying off.
Maybe Roy and company will be able to solve this problem. I hope they do. America needs a viable, intellectually serious right-of-center party.
Because we now know what the alternative looks like. It’s Donald Trump.
Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?
So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.
Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.
The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.
In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.
With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.
As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman– to the belief that monopoly power could be seen as a reward for efficiency.
Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.
At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.
But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.
After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised.”
It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Hayek remarkedon a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.
Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.
As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as “an opportunity to radically reform the educational system” in New Orleans.
Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.
Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.
Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.
The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.
Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.
Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is … unearned income that accrues without any effort”. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.
Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.
Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.
The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.
Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.
Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.
Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.
The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement. We find that Charles Koch, in establishing one of his thinktanks, noted that “in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised”.
The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What “the market wants” tends to mean what corporations and their bosses want. “Investment”, as Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.
A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entre preneurs. They claim to have earned their unearned income.
These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism: the franchise model which ensures that workers do not know for whom they toil; the companies registered through a network of offshore secrecy regimes so complex that even the police cannot discover the beneficial owners; the tax arrangements that bamboozle governments; the financial products no one understands.
The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.
For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.
Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was … nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.
Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.
What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.
Posted on Jun 19, 2016
By Chris Hedges
During the presidential election cycle, liberals display their gutlessness. Liberal organizations, such as MoveOn.org, become cloyingly subservient to the Democratic Party. Liberal media, epitomized by MSNBC, ruthlessly purge those who challenge the Democratic Party establishment. Liberal pundits, such as Paul Krugman, lambaste critics of the political theater, charging them with enabling the Republican nominee. Liberals chant, in a disregard for the facts, not to be like Ralph Nader, the “spoiler” who gave us George W. Bush.
The liberal class refuses to fight for the values it purports to care about. It is paralyzed and trapped by the induced panic manufactured by the systems of corporate propaganda. The only pressure within the political system comes from corporate power. With no counterweight, with no will on the part of the liberal class to defy the status quo, we slide deeper and deeper into corporate despotism. The repeated argument of the necessity of supporting the “least worse” makes things worse.
Change will not come quickly. It may take a decade or more. And it will never come by capitulating to the Democratic Party establishment. We will accept our place in the political wilderness and build alternative movements and parties to bring down corporate power or continue to watch our democracy atrophy into a police state and our ecosystem unravel.
The rise of a demagogue like Donald Trump is a direct result of the Democratic Party’s decision to embrace neoliberalism, become a handmaiden of American imperialism and sell us out for corporate money. There would be no Trump if Bill Clinton and the Democratic Party had not betrayed working men and women with the North American Free Trade Agreement, destroyed the welfare system, nearly doubled the prison population, slashed social service programs, turned the airwaves over to a handful of corporations by deregulating the Federal Communications Commission, ripped down the firewalls between commercial and investment banks that led to a global financial crash and prolonged recession, and begun a war on our civil liberties that has left us the most monitored, eavesdropped, photographed and profiled population in human history. There would be no Trump if the Clintons and the Democratic Party, including Barack Obama, had not decided to prostitute themselves for corporate pimps.
Con artists come in many varieties. On Wall Street, they can have Princeton University and Harvard Law School degrees, polished social skills and Italian designer suits that are priced in the tens of thousands of dollars. In Trump tower, they can have cheap comb-overs, fake tans, casinos and links with the Mafia. In the Clinton Foundation, they can wallow in hundreds of millions of dollars from corporate and foreign donors, including the most repressive governments in the world, exchanged for political favors. But they are all crooks.
The character traits of the Clintons are as despicable as those that define Trump. The Clintons have amply illustrated that they are as misogynistic and as financially corrupt as Trump. Trump is a less polished version of the Clintons. But Trump and the Clintons share the same bottomless guile, megalomania and pathological dishonesty. Racism is hardly limited to Trump. The Clintons rose to power in the Democratic Party by race-baiting, sending nonviolent drug offenders of color to prison for life, making war on “welfare queens” and being “law-and-order” Democrats. The Clintons do a better job of masking their snakelike venom, but they, like Trump, will sell anyone out.
The Clintons and the Democratic Party establishment are banking that the liberal class will surrender once again to corporate power and genuflect before neoliberal ideology. Bernie Sanders will be trotted out, like a chastened sheepdog, to coax his followers back into the holding pen. The moral outrage of his supporters over Wall Street crimes, wholesale state surveillance, the evisceration of civil liberties, the failure to halt the devastation of the ecosystem, endless war, cuts to Social Security and austerity, will, the Democratic Party elites expect, airily evaporate. They may not be wrong. Given the history of the liberal class, they are probably right.
Sanders supporters, however, were given a stark lesson in how the political process is rigged. Some are disgusted and politically astute enough to defect to the Green Party. But once they no longer play by the rules, once they become “spoilers,” they will be ignored or ridiculed by a corporate press, excoriated by liberal elites and chastised by their former candidate.
Liberals, as part of the quid pro quo with the establishment, serve as attack dogs to keep us within the deadly embrace of corporate capitalism. Liberals are tolerated by the capitalist elites because they do not question the virtues of corporate capitalism, only its excesses, and call for tepid and ineffectual reforms. Liberals denounce those who speak in the language of class warfare. They are the preferred group—because they claim liberal values—used by capitalist elites to demonize the left as irresponsible heretics.
Liberals are employed by corporate elites in universities, the media, systems of entertainment and advertising agencies to perpetuate corporate power. Many are highly paid. They have a financial stake in corporate dominance. The educated elites in the liberal class are capitalism’s useful idiots. They are tolerated because they contribute, by discrediting the left, to the maintenance of corporate power. They do not think or function independently. And they are given platforms in academia and on the airwaves to marginalize and denounce those who do think and function independently.
The battle between a bankrupt liberal class and the left will color the remainder of the presidential race. What is predictable, and sad, is that so many self-identified progressives and their organizations will once again serve as the pawns of neoliberalism. They will practice censorship. Progressive sites in the primaries refused to reprint columns by critics such as Paul Street, who did not see Sanders as the new political messiah. And as we move closer and closer to the election, these sites will become ever more hostile to the left and ever more craven in their defense of Clinton.
The system of corporate power, which Clinton and Trump will not alter, will continue to be ignored. The poison of imperialism and corporate capitalism, steadily hollowing out the country and pushing it toward collapse, will be sidelined. The campaign will be a political reality show, this season with a genuine reality star as a presidential candidate. Campaigning will ignore ideas to elicit emotions—fear, anger and hope. Insults will fly back and forth over social media. The race will be devoid of content. Clinton and Trump, in this world of political make-believe, will say whatever their listeners want to hear. They will furiously compete for “undecided” voters, essentially the apolitical segment of the population. And once the election is over, one of them will go to Washington, where corporations, rich donors and lobbyists—who they represent—will continue with the business of governing.
After November, our role will be over. We will no longer be asked to answer polling questions designed to elicit certain responses. We will no longer be asked to play a walk-on part in the tawdry drama called democracy. The political carnival on television will be replaced by other carnivals. The corporate state will claim democratic legitimacy. We will remain in bondage.
The real face of the corporate state, and the evidence that our democracy has been extinguished, will be on display during the party conventions in the streets of Cleveland and Philadelphia. The blocks around the convention halls will be militarized and flooded with police. There will be restricted movement. Pedestrians will be stopped at random and searched. Helicopters will hover overhead. Permits to hold rallies will only be issued to those, such as Sanders supporters, who stay within the parameters imposed by the political charade. Groups suspected of planning protests to defy corporate politics have already been infiltrated. They will be heavily monitored. Those who attempt to organize protests without permits will be arrested or detained before the conventions begin. The cities will be on lockdown.
If you want to see what America will look like soon, across the country, shift your focus from the convention halls to the streets in Cleveland and Philadelphia. It is in the streets that our corporate masters will win or lose. And they know it.