I blame neoliberalism

‘I blame neoliberalism’ is a phrase used by a friend of mine as a convenient source for society’s ills – from poor service on the British rail network to the failure of the England football team to achieve much more than an embarrassed departure from the pitch. As with all sweeping generalisations the point is only half in jest, not least because there is evidence to suggest that my friend is more, perhaps much more, than half accurate.

Nevertheless, it’s important to avoid an overly conspiratorial view of what is a somewhat loosely defined concept. It is undeniably the case that its chief defenders – the super-rich, the hyperglobalists, ‘Davos Man’ – suffer from a tenacious groupthink concerning its key tenets. But the liberalising of markets, the free movement of labour and the globalisation of trade have delivered jobs, growth and a certain amount of economic freedom at least to many. However, the characterisation of neoliberalism as essentially venal, narcissistic and corrupt, and only narrowly beneficial is the lens through which many choose to critique our present circumstance.

Neoliberalism is framed using some now familiar tropes. The lionisation of the ‘market’, which must remain ‘free’ no matter what the cost to the environment and human rights; a Hunger Games economy that relies on the never satisfied competition between atomised individuals – highly mobile, nakedly acquisitive and cynically collaborative only when it secures some personal gain; a state that must remain small, a super-rich that must go un-taxed, even as the impact of free markets and shattered communities mean that society’s needs – mental health services, drug treatment and rehabilitation, debt advice, ameliorating the precarious existence of the perennially under-employed – have all increased.

Injustice and unfairness are now socially tolerated components of our politics and our economics – we have accepted them as by-products of neoliberalism. This fatalism has led to a corresponding decline in trust – of institutions, politicians, business, the media and, as we have seen with some success on both sides of the Atlantic recently, facts. All provide no relief from the grind of abject inequality, inhibited opportunity and associated grievance.

The convenient catch-all ‘the elites’ are described with barely concealed disdain as a fractious public seeks solace not in expertise, but in emotions, rhetoric, iconography, an immersion in post-war nostalgia, and (sadly) racism – a retreat into anything that will bring succour to an otherwise contingent existence. Acres of newsprint have been dedicated to the still-unfolding outcomes of this scenario – the social and economic impact of Brexit, the rise of the far right in Europe, and the impact of Donald Trump (win or lose) on US society, amongst others.

Paradoxically, many have now concluded that Brexit and Trump-ism are so many convulsions of the corpse before the rigor mortis sets in and we can build a new, more equitable economic model. This is a view shared with almost impossible irony by the International Monetary Fund and, it seems, the new Conservative Prime Minister of the United Kingdom. That may be so, particularly if you prefer your history in long narrative arcs or if you simply seek a bright side. But at the threshold of the passing of neoliberalism there will be as many who continue to benefit from its manifest iniquities as those who are punished by its excesses.

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Beneath the Golden Arches, the merry dance of trade and security

Thomas Friedman’s so-called ‘Golden Arches Theory of Conflict Prevention’ famously proposed that no two countries with a McDonalds franchise will ever go to war. Such was their mutually mature state of economic development, what more was there to covet?  The economics of self-interest supersede nationalism, tribalism and the arduous work of quiet diplomacy.

Trade and security have, of course, always operated in a symbiotic relationship, but recent events have exposed the fault lines in the economic orthodoxy, something approaching an accepted international constitution, that represented the apogee of this relationship. Despite the apparent iniquities of our global economic system, and despite the challenges to its legitimacy posed by the financial crisis in 2008, it was nevertheless thought that we had settled on a unifying formula for judging the success or otherwise of the human project.  Organisations like the World Trade Organisation (WTO) and the European Union itself were the pre-eminent examples of this formula in practice.

Before Brexit upended the traditional analysis of how people reflect on their life chances, it did appear that economics had succeeded where political, diplomatic and legal instruments were found wanting. Pace Fukuyama, the end of history had indeed come, but the fall of the Berlin Wall and the collapse of the Soviet Union were not its concluding chapters. For that we must look to the measures adopted after the financial crisis, where electorates were forced to endure punishing austerity and a contraction of public services for the greater good of keeping the global economy liquid. In the UK at least they took their medicine well enough to re-elect a Conservative government in 2015 (albeit with a narrow majority).

Brexit challenges the notion that an integrated economy can circumvent the problems shared by our global community. There are documented benefits to increased trade, migration, the opening up of markets, and the adoption of uniform legal structures that facilitate the flow of capital and ideas. But can we seriously continue to privilege the economic sphere in the way we have done for forty years when so many in the UK used the referendum as an opportunity to deliberately undermine it (irrespective of the implied impact on their own lives)?  The warnings went unheeded – indeed people voted the way they did because of the warnings, leaving politicians on the Remain side utterly blind-sided.

Is this the ultimate consequence of submitting to the wholesale corporate capture of the political space? And if we want to find a bright side (because God knows we need one) could it at least be an opportunity for the return of politics – localised, engaged and responsive to the immediate anxieties and needs of the citizens it is supposed to represent?

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Taking back control 

In addition to the vicious debate over immigration, the vote for Brexit was rooted in a question of legitimacy and democratic accountability. The remoteness of the EU as an institution, the difficulties of calling our representatives there to account, and the diminution of British sovereignty (itself a deliberately fuzzy concept) comprised a substantial plank of the Vote Leave rhetoric.

This argument is not without some merit. It is indeed the noble dream of what the late legal scholar Deborah Cass refers to as the ‘hyperglobalists’, a world in which the ‘nation state has become virtually redundant other than as a conduit for global capital, and, in the new conditions of the single, global marketplace and global competition, new forms of social organisation will arise with great benefits to humanity.’

Paradoxically, the combined disciplines of international law, globalised politics and economics that underpin this dream also serve to fuel a powerful rhetorical device (‘Take Back Control!’) that exposes the institutions in their orbit to a number of now familiar criticisms. Governments appear weak, buffeted by the unstoppable winds of globalisation, and in hock to a remote and exotic technocracy at work in places like Washington, Brussels, Geneva (or Davos). Individual citizens feel disenfranchised from a system that they are told permeates their daily lives, but is at the same time beyond their democratic reach.

More specifically, it allows a genuine and necessary critique of the effectiveness of political and economic institutions (particularly in how they relate to pockets of extreme poverty) to become conflated and confused with the more amorphous and inchoate anger that is levelled at the iniquities of globalisation in general and the impact of migration in particular.

Institutions like the EU and the WTO achieved maturity at a time when globalisation was seen as the final iteration of political and economic progress. The unfettered movement of global capital facilitated by rapid advances in technology, together fostering a new monoculture of consumerism that appeared to transcend state politics, globalisation was interdependent and integrated, post-historical and post-political, and the world was better for it. Or so we thought.

Domestic economic management was to become subservient to international trade and finance rather than the other way round. Economic globalisation, the international integration of markets for goods and capital (but not labor), became an end in itself, overshadowing domestic agendas. Dani Rodrik, The Globalization Paradox

The problem for the hyperglobalists, as we have discovered, was that not everyone was buying it. The international economic constitution, as exhibited in the ‘good governance’ prescriptions of the European Central Bank, the IMF, the World Bank and the WTO, and supported by their business, media and academic sponsors, has come to be characterised as an instrument either of post-colonial economic plunder or a vindictive punishment of domestic excess (the ascetic Germans versus the profligate Greeks).

Ugo Mattei and Laura Nader, scholars of the long history of legally legitimised plunder, are clear in their assessment. This is the ‘transformation of the rule of law ideal into an imperial ideology [that] has accompanied the move from a need of social justice and solidarity towards the capitalist requirements of efficiency and cooperation.’ For Mattei and Nader, international economic law, embodied in ‘notions of structural adjustment, comprehensive development, good governance’, has been co-opted by those who have most to gain from this more subtle form of expropriation:

Their uncritical use produces a state of denial of the way in which the rule of law, often shielding plunder, is produced and developed by professional “consent building” elites. The consequences of such denial are the creation of a legal landscape in which the law “naturally” gives up its role of constraining opportunistic behavior of market actors. Ugo Mattei and Laura Nader, Plunder

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Recalling Seattle

The breakdown of the WTO Ministerial Conference in Seattle in 1999 amidst civil unrest was a watershed moment, an indication that the world was changing and not necessarily in ways that were desirable to those who had bet big on the triumph of neoliberalism. Even those who believed that the anger was misplaced recognised that legitimate questions were being asked of the WTO, at the time the chief whipping boy for the anti-globalisation movement, but which could equally apply to the EU of today:

trade liberalization creates losers as well as winners…[and]…economic integration and the broader forces of globalization threaten some traditions and local cultures. Daniel Etsy

We knew this in 1999. We knew it, but we let that sentiment fester, uncorrected again throughout the economic crisis and into the quagmire of our more recent estate. For many the solution to these crises of legitimacy has not been enhanced democratic accountability at the level of the nation state, but a deepening of international political integration. Recent events have demonstrated that whilst the ideal of the hyperglobalists may have noble intent, it remains very far removed from the ideals and experience of ordinary citizens.

The mood music from both the EU and the UK government post the referendum suggests an increased sensitivity to the needs of those who feel that globalisation has delivered only for the privileged few and has done so at the expense of community cohesion. We wait to see whether that mood will turn into concrete action.

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Armed with votes, not pitchforks

In 2014 the billionaire tech entrepreneur, Nick Hanauer, wrote an intriguing ‘memo’ to his fellow members of the so-called 0.1%. ‘The Pitchforks Are Coming’ (Politico Magazine, July/August 2014) was an attempt by an unashamed capitalist to focus minds on the long run implications of the extreme inequality caused by late 20th century capitalism. Quite literally, pitchforks.

…the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

But the pitchforks, along with barricades, torches and effigies, have not come en masse, outside of the skirmishes initiated by the short-lived Occupy movement. What has arrived instead is a somewhat inchoate, amorphous, contorted rage, often directed at the wrong target – migrants, Muslims, ‘the other’, experts, anyone but the principle representatives of the kind of capitalism Hanauer is referring to. Former Lehman Brothers CEO Dick Fuld, the Ozymandias of the 2008 financial crisis, still owns a number of big homes in the US where the views remain unspoiled by the gathering hordes of les miserables.

Perhaps it’s in the nebulous, chimerical nature of neoliberalism that we find the source of its endurance. A system that comprises the rules of an international economic constitution that are both omnipresent yet seemingly impossible to challenge through democratic processes, the routine assurance the private sector knows best (not always supported by the evidence), and the general privileging of the economic sphere over politics and diplomacy.

The EU Referendum vote contested this narrative (irrespective of whether the macro-economic numbers stack up). It was also a vote against the techno-idealism of the digital economy and the ongoing threat that it poses to the job prospects of everyone from shelf-stackers to lawyers. Artificial intelligence represents a level of social and economic disruption that was impossible to predict when neoliberalism and globalisation were in their infancy (I wonder what the grocer’s daughter from Grantham would have made of Amazon experimenting with groceries delivered by drone). Yet when politicians today talk of industry and jobs they are rarely far from a high-vis jacket and an assembly line. Literally, what planet are they on?

…three things have brewed a crisis in the West: globalisation, technological innovation and a political philosophy that supports both. The problem with the way society has been running itself is that it has created a handful of tech winners who win very big, making everyone else a loser by comparison. ‘Make no mistake, the vote for Brexit is a vote against digital’, Andy Pemberton, Campaign Magazine, 11 July 2016

The morning after the morning after

To those of us who woke on 24 June 2016 feeling a genuine trauma at what had taken place, something akin to a sudden violent death in the family, our most optimistic response might well be that the result and the process of Brexit itself could present an opportunity for people to re-connect with what it means to be a citizen. In short, domestic politics still matters. Engagement and protest still possess a power to alter the terms of the debate. Responsible politicians now need to find a way to respond.

A new approach has to start from the idea that the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good. People also want to feel that they are shaping the societies in which they live. It may be inevitable that impersonal forces of technology and changing global economic circumstances have profound effects, but it adds insult to injury when governments reach agreements that further cede control to international tribunals. ‘Voters deserve responsible nationalism not reflex globalism’, Lawrence Summers, Financial Times, 10 July 2016

Blaming neoliberalism is a cathartic response to our present ills, and indeed in many parts of the world, including parts of its once fourth largest economy, the response is warranted. But it doesn’t get us much further than a brief catharsis. A version of Brexit is likely to happen despite creative attempts to force a second vote, though it may look rather different than those who voted leave expected.

Brexit has carved a gaping hole in what was always a wafer thin edifice between the internationalist, cosmopolitan mindset of politicians from all sides of the political divide and the lived experience of citizens who feel alienated, excluded or otherwise threatened by the pace of change in their communities. Re-connecting with those communities, re-building trust and putting in place measures that afford the level of agency they require is going to be tough. Are our politicians, in the UK, Europe and around the world, up to the task?

REFERENCES

Deborah Cass, 2005. The Constitutionalization of the World Trading Organisation. Oxford University Press

Daniel Etsy 2002. The World Trade Organization’s Legitimacy Crisis. Yale Law School Faculty Scholarship Series. Paper 433

Thomas Friedman 2000. The Lexus and the Olive Tree. Random House

Ugo Mattei and Laura Nader, 2008. Plunder. When the rule of law is illegal. Blackwell

Dani Rodrik, 2011. The Globalization Paradox. Oxford University Press

IMAGE REFERENCES (all distributed under Creative Commons License 2.0)

Header Image: Gone with the wind, 2015, Theophilos Papadopoulos
Image 1: McDonalds, Manchester, CT, 2014, Mike Mozart
Image 2: Brexit, 2016, (Mick Baker)rooster
Image 3: Anti-WTO, 2005, Fuzheado
Image 4: Indignados, 2011, Quentin Bruno

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