As an introduction, we have a short video on media issues we face today. These are powerful tenets as Tamil issues have been squeezed out of the normal debate in India. The first step is to understand on what exactly are the impediments to debate. Hopefully you can connect the dots on who restricts the flow of news and information in India and Tamilnadu and who controls it.
This is a powerful documentary on propaganda and how it affects us on a daily basis.
Ever since journalists covered the World War/Korean War/Vietnam War and depicted the graphic violence, death, dismemberment and savagery of war, Governments have gone to great lengths to hide the macabre machinations of war and its aftermath.
The first method of media control was in controlling news released to the major news distributors (witness the rise of the press conference), secondly grooming’ newspapers to publish articles complementary to the official state line – primarily dealt with by ’embedding’ journalists and giving them access to a ‘stage’, and thirdly: actively spreading disinformation which would strengthen their point of view. The modern day founding father for propaganda – Josef Goebbels of the Nazi’s would be delighted if he were alive today perusing our newspapers.
Currently what we see around us are large media firms ‘selling’ space for content in their news channels on, the internet, television and radio. Their budgets are large and consequently their clients includes: firms with unsavory projects, politicians with vested agenda’s, military’s with propaganda, and countries with pasts to hide. Furthermore the establishment of think tanks (Institutes of XYZ etc.) populated with academics, ex-bureaucrats, ex-military spooks and an assortment of narcisstic ‘intellectuals’, funded by corporations, military agencies and governments serve to legitimize goals and agenda’s and set the stage for what can charitably be termed as: mass hypnosis.
Consequently you are faced with a scenario where a ‘big’ media news channel ‘interviews’ an ‘expert’ from a corporately funded ‘think tank’ talking in a suitably serious tone on how useful it will be to ‘remove’ (kill/re-locate/destroy) about 450,000 people to set up a useful mining/industrial project which will ‘develop’ (enrich corporations pockets)and lead to the dawn of a new tomorrow for said peoples. You see this happening around you ad nauseum: apropos in crime, corruption, genocide, and scandals. Lock step in this are a breed of sycophantic, self-serving journalists or ‘media whores’ who gushingly agree with the ‘official’ view.
Two major players allow this to continue: Governments (who generally have more to hide than to be transparent) and Corporately owned media who maintain the old boys club of accruing profits and stifling alternate views.
A recent egregious example of state and corporately sponsored news has been the absence of reports on the butchering of 175,000 Tamils in Northern Sri Lanka and the killings of a large number of Tamil fishermen from southern Tamil Nadu. However there have been literally hundreds of news items on ‘peace and tranquility’ in Sri Lanka and the ‘absolute brilliant tourist spots’ to visit. ‘A new beginning’ cry the media whores, conveniently ignoring a genocide which took place.
It is interesting to note that the official perpetuators of the Tamil genocide have engaged an advertising agency/’lobbying firm’ in the United States to sell their goods and services. This leads to the question on who are their advertising minions in India. Is it news agencies? Is it the Indian Government? Is it the usual group of Corporations jockeying to sell the Sri Lankans goods and services? Or is it perhaps mining and drilling barons angling for mineral and oil deposits in Northern Sri Lanka? The entire sordid sequence of episodes over the last 5 years point to the systematic abuse by both the governments in India and Sri Lanka on disseminating news, the absolute failure of ‘corporate news’ papers on reporting it and the de-sensitization of the populace with ‘non- news’ . The end results have exposed the flaws of the Indian state in dealing with gross human rights violations in its immediate neighborhood, bringing into question the ability of the Indian state to uphold its own constitution.
A Neoliberal Field Guide
by JASON HIRTHLER
In author and editor Michel Chossudovsky’s excellent book, “The Global Economic Crisis,” he quotes democracy’s bête noire emeritus, Henry Kissinger, who stated in that plain and bloodless manner, “Control oil and you control nations; control food and you control people.” This cynical insight could be the mission statement of global corporate power bent on the total control of the world’s food and fossil fuel. As Chossudovsky and writers including James Petras and Michael Hudson variously illustrate, this goal is pursued largely through three techniques perfected in the killing fields and bombed out urban craters of the developing world, in the maquiladoras and sweatshops of the Third World, and in the borderless ether of global finance. Sometimes characterized as a neoliberal class war by the rich on the poor, elite policies are funded by Fortune 500s, implemented domestically by bought governments, and abroad by a two-tiered alliance of military power and perverted Bretton Woods institutions. Their proven strategies for success include illegal wars of aggression, building commodity monopolies, and rampant financial speculation. If there were ever a field manual made for neoliberal exploitation, these three models, and their representative case studies, would comprise its core chapters. Here are a few cases worth considering.
Blinded on the Road to Damascus: Warmongers at Work
When Abby Martin interviewed dissident writer William Blum on her Russia Today program, “Breaking the Set,” she asked him why he focused so squarely on foreign policy. With his inimitable frankness, Blum replied that it was because that was where the most damage is done. So let’s start there. Although engineered famines compete with war, nothing seems to quite match warfare in its capacity to extend its cruel hand into the past, present, and future. Like nothing else, war obliterates the cultural heritage of the past, slaughters and displaces the living, and deforms the unborn. Past, present, future—no generation untouched, no soil uncontaminated.
While militaries get all the press, the defense corporations that supply their arsenals too frequently skirt the media’s roving eye. Corporations like Lockheed Martin, Northrop Grunman, Boeing, and General Dynamics comprise the American quarto of elite weapon makers. Generals at the Pentagon peruse their brochures over apple balsamic salads, checking off their preferred items: Hellfire missiles and military aircraft from Lockheed Martin, the latest in gun systems and ammunition from Alliant Techsystems and ArmaLite, Predator and Reaper drones from General Atomics, F-15 fighter jets from Boeing and Abrams tanks from General Dynamics. The list goes on. We know little about it in the States.
But if you live in Damascus, for instance, you may find yourself an unwitting “early adopter” of some of this leading-edge technology, like a Raytheon Tomahawk missile blasting its way through Syria’s antiquated missile-defense systems into your local hospital or perhaps into your living room. If you live in Waziristan, you may have already grown accustomed to the buzz of MQ-1 Predator drones in the high sky, surveilling your neighborhood for energetic youth bearing the hallmarks of terror. You are savvy enough to know, however, that should your neighbors be hit by a “signature strike,” you shouldn’t attempt to rescue any potential survivors lest you find yourself blown apart by a “double tap” strike, which targets first responders (or, friends of terrorists, according to Pentagon and CIA logic).
It’s no coincidence that Raytheon’s stock price hit a 52-week high on rumors of war with Syria. But aren’t these arms makers seeing their remits reduced? Sequestration? Don’t kid. Austerity? For whom? Northrup Grumman shares are up by 56 percent this year despite the theatrical claims of deficit reduction emanating from beltway bean counters. Northrup also enjoyed a tidy income spike of $38 million year over year. The message is clear: war is coming, one way or another, one place or another. For these corporations, war is good. War is bounty. War is a new guest wing on the CEO’s Monticello-like mansion. And a fresh coup in some remote and abstracted nation.
Jilted in Java: Speculating the World to Death
Many needless nonmilitary crises are caused by financial speculation. The collapse of the U.S. housing market was perpetrated largely by greed-driven derivatives trading and speculation. Likewise, the unnecessary spikes in commodity prices before the 2008 crisis owed much to the same speculative frenzies. When the price of wheat and rice and corn and oil double overnight for no good reason other than futures and options trading, billions are negatively affected—from the billons living on $2 a day, who suddenly can’t afford basic foodstuffs through no fault of their own, to the Western commuter who finds the rising price of gas unsustainable or sees his equity evaporate over a weekend.
Author Amy Chua, in her book World on Fire, pointed out several useful examples of the dangers of speculation, drawn from the finance-fueled collapse of the Asian Tigers in the late nineties. Let’s say you’re a tofu maker in Java. One day, unbeknownst to you, thanks to some clever price manipulations on the Chicago and London commodities exchanges, the price of soybeans triples. After some hand-wringing conversations with your wife, you pull your children out of school and put them to work so that you have enough money to buy the beans that you turn into tofu. Fortunately, the price of fuel is steady; you need about 100 liters a day of fuel to light your pressure cookers. Then the Indonesian government announces, with great fanfare and optimism, that it has rescinded its fuel subsidies based on the sage advice of the IMF, which promises that “free trade” will deliver an economic boom. Your wife walks in to the room. “Welcome to bankruptcy,” she says.
Far from Indonesia, Goldman Sachs, Morgan Stanley, and Bank of America are all heavily invested in some or all of the various trading boards, from Chicago’s CME to the NYSE to London’s International Commodity’s Exchange (ICE) and International Petroleum Exchange (IPE). Ever since the deregulation of futures under the Clinton administration, houses like Goldman have been able to stake huge commodity positions, even employing a derivative especially formulated for commodity indices. Over the last decade, money has poured into commodities futures, generating the price bubble that eventually wrecked small farmers and lined the pockets of banking behemoths like Goldman and JPMorgan.
Swindled in Addis Ababa: Cornering the Market
Instead of gun running or commodity swindling, some imperialists prefer the rather more serene methodology of agricultural dispossession. In market terms, this might be known as a monopoly, in that it dispossesses people of their market opportunities. Corporations like Monsanto, Archer Daniel Midlands (ADM), and ConAgra, use standing international institutions like the International Monetary Fund (IMF) and the World Bank to smuggle their products into developing markets. The IMF Structural Adjustment Programs (SAPs) have always conditioned loans on the “liberalization” of the local economy. This often meant not only the acquisition of domestic industry by foreign capital, but also the eradication of protectionist measures designed to shelter fledgling domestic businesses, like small farmers, from infusions of competitive foreign products with absolute advantage.
This opening up to “free trade” instances two fairly cruel events. First, the dumping of Western agribusiness commodity surpluses on poor countries. The laws of the WTO stipulate unfettered market access for global agribusiness under the principles of free trade. Naturally, there are no agribusiness titans in Kampala dying to penetrate the American peanut market, so this trade is usually a one-way highway from the overflowing grain silos of the West. Generally, this “food aid” paradoxically leads to a loss of food security in a once self-sufficient land. Instead of producing beans or maize for local consumption, farmers are either pushed out of business or find themselves producing Arabica coffee beans for export to trendy Western cafes (while the government takes loans to import corn and other essential foodstuffs).
Second, and this is even more invidious, say you are a small farmer in an African country. As Chossudovsky has outlined numerous times in relation to Ethiopian agriculture, perhaps you’ve just marginally survived a terrific drought (brought on in part by climate change owning to the outsized and indiscriminate consumption habits of the Western world). Suddenly, with all the serendipity of a Countrywide lender approaching a unwitting mark, an NGO or perhaps an agribusiness agent himself is standing at your door, arms extended, cupping a handful of seeds for which he requires no recompense. You gratefully accept, thinking God has granted you a fresh bounty for your suffering.
A year later things have changed. You discover that either the seeds are “terminator seeds” that go sterile after their first harvest; or you discover that replanting the seeds requires a sizeable outlay of cash to the true owner of the seed, Monsanto. You are told that Monsanto owns the intellectual property rights to the seed variety, which is conjured in a laboratory in Missouri, building a new genetic form based on several existing strains, some of them drawn from your own backyard, hewed over millennia of local hybridization, which cost nothing, and the benefits of which were shared throughout the community.
Not only that, but you’ve got to purchase costly pesticides to ensure you achieve the promised yields at harvest. You might need a pre-emergent herbicide to kill the weeds and a post-emergent fungicide to kill the mold, and significantly more water, since the seed, although touted as drought-resistant, may requires more water at planting to achieve a healthy stand. You can’t afford all this, your crop collapses, your farm fails, and you think—suicide or lifelong shame? 270,000 thousand Indian farmers chose the former. It should be an oft-repeated trope that once the IMF enters a developing economy, it ceases to develop.
Of course, I’ve failed to mention the external cost of agribusiness to the local population. As a report on Argentina recently noted, cancer rates in rural communities there spiked almost simultaneously with Monsanto’s introduction of glyphosate, the infamous ‘silver bullet’ herbicide launched in 1996. While ‘Round Up Ready’ seeds have helped farmers make unproductive land arable, contamination of the water table and, subsequently, the local population, is frightening. In yawning self-defense, the global giant lamely rehearsed its warmed-over talking points about the safety of its toxins. They’ve probably had enough of the troublesome Argentines anyway, given that the government threw the IMF out of the country a decade ago. When it comes to smashing protectionist measures, there’s nothing quite so helpful as the dangling carrot of a multi-billion dollar IMF loan. Not too dissimilar from the sight of Commodore Perry sailing into Tokyo Bay with a squadron of steaming gunships. One inspired avarice, the other fear, but the result was much the same.
Bamboozled in Baghdad: Two for the Price of None
Of course, sometimes there’s no need to involve international lending organizations or the World Trade Organization (WTO) at all. In Iraq, after blowing apart Saddam Hussein’s vaunted Republican Guard, the Americans set up camp at Saddam’s presidential palace in Baghdad, crafting their neoliberal utopia under the gilded domes and marble columns of the fallen dictatorship. As Vice President Dick Cheney hustled no-bid reconstruction contracts into hands of his Halliburton friends, Viceroy Paul Bremer outlined 100 Orders designed to de-Bathify the government and neoliberalize the economy. Order 81 stipulated the use of “stable” plant varieties, a coded term for GMO seeds delivered on demand from Western agribusiness.
As a rough guide to the kind of money there is in agribusiness, Monsanto banks about a billion dollars a quarter—clean profit. They netted $1.48 billion in Q2 this year, coinciding with the infamous “Monsanto Protection Act”, which protects GMO seed producers from litigation over health risks. (This legislation received the Midas-like imprimatur of President Obama in March.)
Under the Viceroy (or is that the vizier?), oil, too, was quickly opened to Western multinationals through Production Sharing Agreements (PSAs) that would apply to the dozens of unbuilt Iraqi oil fields. British Petroleum, ExxonMobil, and other oil conglomerates receive fresh oil exploration contracts when the U.S. occupies a country and shreds existing production arrangements (Often, it’s the French or Russians who get screwed in this regard).
One of the unmentionable crimes of Saddam Hussein was the fact that he nationalized Iraqi oil fields in 1972. ExxonMobil, BP, and Shell all have billion dollar production arrangements to mine Iraqi oil fields—this despite the Iraqi government’s unwillingness to sign the hydrocarbon law the Bush administration attempted to push through.
Of course, simply promising the local government a hefty slice of the pie also works. Shell has been wreaking havoc in Nigeria since the 1990s, mostly in the southern Niger Delta region. Various militant organizations have sprung up in largely vain attempts to wrestle control of their own resources away from the corrupt government and multinational alliance. Notably the Movement for the Emancipation of the Niger Delta and its telling acronym MEND. Nonplussed, Shell has offered scant compensation for its oil spills in the region and last year pocketed $25 billion, a small rise over 2011, which naturally unsettled greed-soaked shareholders (as opposed to oil-soaked but penniless Nigerian villagers).
As Shamus Cooke recently wrote, “The essence of neoliberalism can be reduced to the following: government should be used exclusively to help big business and the wealthy with tax cuts, subsidies, privatizations, anti-labor laws, etc., while all government programs that help working and poor people should be eliminated. It’s really that simple.” Sadly, Cooke’s definition of the core of the neoliberal program is spot on—profits, by any means necessary.
Jason Hirthler is a veteran of the communications industry. He lives and works in New York City.
This short essay is extracted from :
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Neoliberalism is a new form of corporatism based on the ideology of market fundamentalism, dominance of finance and cult of rich (“greed is good”) instead of the ideology on racial or national superiority typical for classic corporatism. Actually some elements of the idea of “national superiority” were preserved in a form superiority of “corporate management” and top speculators over other people. In a way, neoliberalism considers bankers and corporations top management to be a new Aryan race. As it relies on financial mechanisms and banks instead of brute force of subduing people the practice of neoliberalism outside of the G7 is also called neocolonialism. Neoliberal practice within G7 is called casino capitalism, an apt term that underscore the role of finance and stock exchange in this new social order. Neoliberalism is an example of emergence of ideologies not from their persuasive power or inner logic, but from the private interests of ruling elite. Political pressure and money created the situation in which intellectually bankrupt ideas could prevail.
Historically neoliberalism came as an ideology that displaced Marxism, not because it was a “better ideology”, but because Marxism self-destructs due to two major problems:
•Inability of “socialist” countries like the USSR to match or exceed the standard of living of major Western countries. Marxism promised that socialism as a more “progressive” social formation should be able to secure higher standard of living for the people, then capitalism. This promise proved to be false at least in comparison with standard of living in Western Europe.
•Intellectual collapse of the idea of proletariat as a new dominant social class. This idea first suffered a mortal blow from the “Elite Theory” and then from the evolution of trade union in major western countries into hierarchical subservient to management organizations with its own elite.
Neoliberalism is not a collection of theories meant to improve the economy. Instead, it should be understood as a class strategy designed to redistribute wealth upward toward an increasingly narrow fraction of population (top 1%). It is the Marxist idea of “class struggle” turned on its head and converted into a perverted “revolt of the elite”, unsatisfied with the peace of the pie it is getting from the society. While previously excessive greed was morally condemned, neoliberalism employed a slick trick of adopting “reverse”, Nietzschean Ubermench morality in bastartized form propagated in the USA under the name of Randism.
This neoliberal transformation of the society into a top 1% (or, more correctly, 0.01%) “have and have more” and “the rest” undermined and exploited by financial oligarchy with near complete indifference to what happens with the most unprotected lower quintile of the population. The neoliberal reformers don’t care about failures and contradictions of the economic system which drive the majority of country population into abject poverty, as it happened in Russia. Nor do they care about their actions such as blowing financial bubbles, like in the USA in 2008 can move national economics toward disaster . They have a somewhat childish, simplistic “greed is good” mentality: they just want to have their (as large as possible) piece of economic pie fast and everything else be damned. In a way they are criminals and neoliberalism is a highly criminogenic creed, but it tried to conceal the racket and plunder it inflicts of the societies under the dense smoke screen of “free market” newspeak.
That means that in most countries neoliberalism is an unstable social order as plunder can’t continue indefinitely. It was partially reversed in Chile, Russia, and several other countries. It was never fully adopted in northern Europe.
One can see an example of this smoke screen in Thatcher’s dictum of neoliberalism: “There is no such thing as society. There are only individuals and families.” In foreign policy neoliberalism behaves like brutal imperialism which subdue countries either by debt slavery or direct military intervention. In a neoliberal view the world consist of four concentric cycles which in order of diminishing importance are
Finance is accepted as the most important institution of the civilization which should govern all other spheres of life. It is clear that such a one-dimensional view is wrong, but neoliberals like communists before them have a keen sense of mission and made its “long march through the institutions” and changed the way Americans think (Using the four “M” strategy — money, media, marketing, and management)
A well-oiled machine of foundations, lobbies, think-tanks, economic departments of major universities, publications, political cadres, lawyers and activist organizations slowly and strategically took over nation after nation. A broad alliance of neo-liberals, neo-conservatives and the religious right successfully manufactured a new common sense, assaulted Enlightenment values and formed a new elite, the top layer of society, where this “greed is good” culture is created and legitimized.
Neoliberalism as yet another civic religion
As we have already referred to neoliberalism as a cult: an interesting question is if neoliberalism can be viewed as a new “civic religion”. The answer is an unconditional yes! and I think that like Marxism before it should be considered to be yet another civic religion. It has it’s set of holy books, Supreme being to worship, path to salvation and set of Apostes. Like communism before, it propose humanity grand purpose and destiny.
Theistic and civic religions are also similar in that they both offer visions of humanity’s grand purpose and destiny.
There are also significant differences between theistic religions and civil religions. Theistic religions explicitly rely on claims of divine authority for their validity, while civil religions rely on reason and the interpretation of commonly-accepted historical knowledge. Followers of theistic religions stress the importance of faith in times of adversity, while followers of civil religions tend to have a more pragmatic attitude when reality casts doubt on their beliefs.
Civil religions are more like big social experiments than actual religions because their central claims are much more falsifiable, and their followers show evidence of holding this perception (e.g. references to “the American experiment”; the voluntary abandonment of Communism throughout Eurasia when it became clear that it wasn’t working).
Communism bears so much resemblance to Christianity because, as you mentioned last week, the Western imagination was thoroughly in the grip of Christianity when Communism emerged. Communism is similar to Christianity out of practical necessity: had it not been based on the Christian template, Communism probably would have been too intellectually alien to its Western audience to have ever taken off. Luckily for the founders of Communism, they were also subjected to this Christian cultural conditioning.
With all this in mind, and given that religion is evolving phenomenon, I think that civil religion is actually a distinct species of intellectual organism which has (at least in part) evolved out of religion.
Like Marxism, neoliberalism is first and foremost a quasi religious political doctrine. As a political doctrine neoliberalism is aimed at restoring the power of capital. Neoliberalism originated in the rich countries of Anglo-Saxon world (GB and USA), not in some poor country. In global politics, neoliberalism preoccupies itself with the promotion of four basic issues:
•global governance through international organizations,
As such, neoliberalism, in its crudest form, is crystallized in the Ten Commandments of the 1989 Washington Consensus (policy of debt slavery set for the world by the US via international financial institutions). They implicitly postulate hegemony of the financial elite (which is a part of “economic elite” that neoliberalism defines as a hegemonic class). Financialization of the economy also serves as a powerful method of redistribution of wealth. This is done largely via credit system and in this sense neoliberalism represents “reinters paradise”. Neoliberal globalization was built on the foundation of US hegemony, conceived as the projection of the hegemony of the US capital. As such it is critically dependent of the power and stability of the US and the financial. economic, political and military supremacy of the US in every region.
Neoliberalism, typically is highly criminogenic (i.e., having the quality of causing or fostering crime) and often lead to conversion of a “normal” but problematic state into a kleptocratic state (Yeltsin’s Russia is a good example) with the requisite mass poverty (Global Anomie, Dysnomie and Economic Crime Hidden Consequences of Neoliberalism and Globalization in Russia and Around the World). Unfortunately architects of this transformation (Harvard Mafia in case of Russia) usually avoid punishment for their crimes. Corruption of the US regulators which happened under neoliberal regime starting from Reagan is also a pretty well covered theme.
While economic crisis of 2008 led to a crisis of neoliberalism, this is not necessary a terminal crisis. The phase of neoliberal dominance still continues, but internal contradictions became much deeper and the regime became increasingly unstable even in the citadel of neoliberalism — the USA. Neoliberalism as an intellectual product is practically dead. After the crisis of 2008, the notion that finance mobilizes and allocates resources efficiently, drastically reduces systemic risks and brings significant productivity gains for the economy as a whole became untenable. But its zombie phase supported by several states (the USA, GB, Germany), transnational capital (and financial capital in particular) and respective elites out of the sense of self-preservation might continue (like Bolshevism rule in the USSR in 70th-80th) despite increasing chance of facing discontent of population and bursts of social violence.
Cornerstone of neoliberal regime, the economic power of the USA is now under threat from the rise of Asia. This is one reason of mutation of neoliberalism into aggressive neoconservative imperialism that we witness in the USA.
While intellectually neoliberalism was bankrupt from the beginning, after 2008 believing in it is possible only by ignoring the results of deregulation in the USA and other countries. In other words the mythology of self-regulating “free market” became a “damaged goods”. In this sense, any sensible person should now hold the neoliberal sect in contempt. But reality is different and it still enjoy the support of the part of population which can’t see through the smoke screen. With the strong support of financial oligarchy neoliberalism will continue to exists in zombie state for quite a while, although I hope this will not last as long as dominance of Catholicism during European Dark Ages ;-). Still the US is yet to see its Luther. As was noted about a different, older sect: “Men are blind to prefer an absurd and sanguinary creed, supported by executioners and surrounded by fiery faggots, a creed which can only be approved by those to whom it gives power and riches”.
Like communism in the USSR it is a state supported religion: Neoliberalism enjoys support of western governments and first of all the US government. Even when the US society entered deep crisis in 2008 and fabric of the society was torn by neoliberal policies it did not lose government support.
Neoliberalism and Trotskyism
The simplest way to understand the power of neoliberalism as an ideology, is to view it as Trotskyism refashioned for elite. Instead of “proletarians of all countries unite” we have slogan “elites of all countries unite”. Instead of permanent revolution we have permanent democratization. Among the ideas that neoliberalism borrowed from Trotskyism via renegades such as James Burnham we can mention the following 14 traits:
1.The pseudoscientific ‘free-market’ theory which replaces Marxist politeconomy and provides a pseudo-scientific justification for the greed and poverty endemic to the system, and the main beneficiaries are the global mega-corporations and major western powers (G7).
2.The idea of Permanent revolution to bring to power the hegemonic class. In neoliberalism this takes that form of “export of democracy” as the method of achieving and maintaining world dominance of globalist elite (which in its role of hegemonic class replaces proletariat used in Trotskyism):◦The idea of Permanent Revolution formulated by Trotsky in 1905 is the defining characteristic of Trotskyism. Trotsky argued that in Russia only the working class could overthrow feudalism and win the support of the peasantry. Furthermore, he argued that the Russian working class would not stop there. They would win its own revolution against the weak capitalist class, establish a workers’ state in Russia, and appeal to the working class in the advanced capitalist countries around the world. As a result, the global working class would come to Russia’s aid, and socialism could develop worldwide. In neoliberalism the role of Russia is replaced by the USA. And it is the US elite which asks compradors elite in other countries to come to the US elite aid to establish global neoliberal regime.
◦Like Trotskyism, neoliberalism consider wars to impose a liberal-democratic society on weaker countries (which in modern times are countries without nuclear weapons) which cannot give a fight to Western armies are inherently just (“regime change” mentality). So both are ready to bring revolution to new countries on the tips of bayonets.
3.The role of propaganda machine and journalists, writers, etc as the solders of the party that should advance its interests. Compete, blatant disregard of truth to the extent that Pravda journalists can be viewed as paragons of objectivity (Fox news etc.)
4.The idea of the party as an vanguard of the hegemonic class and representing its interests. Open desire to dismantle and privatize all the mechanisms of redistribution of income, including (in the USA) Social Security and Medicare.
5.Creating and maintaining the illusion of “imminent threat” from powerful enemies for brainwashing the population (National Security State instead of “Dictatorship of proletariat”).
6.The idea of revolutionary situation for overthrow of “unfriendly” regimes (and artificial creation of it via color revolution methods); role of students in such a situation. Compradors instead of communist parties as the fifth column inside the societies.
7.Like Trotskyites, Neoliberals are inherently hostile to competing non-liberal societies – which they see not simply as different, but as wrong. That include nationalistic regimes (Hussein, Kaddafi) as well as theocracies (with a notable exception of Saudis)
8.The ideas of truth as “a class truth”; neoliberals reject the idea that there are any external moral values. They feel that these should be result of ‘market of opinions’ and the truth is the one that market favors.
9.Use of academic science and “think tanks” for brainwashing of the population.
10.Economic fetishism. Neoliberals see the market as a semi-sacred element of human civilization. They want to impose global market that favors transnational corporations. Everything should be profitable and run as a market. Including labor market. The idea of employability is characteristically neoliberal. It means that neoliberals see it as a moral duty of human beings, to arrange their lives to maximize their value on the labor market. Paying for plastic surgery to improve employability (almost entirely by women) is a typical neoliberal phenomenon – one of those which would surprise Adam Smith.
11.Reliance of international organizations to bully countries into submission (remember Communist International and its network of spies and Communist Parties all over the world). The global financial institutions are indeed a bastion of neoliberal ideology, and they can bully some poor countries into adopting neoliberal policies. The global financial institutions are an instrument of US policy – and if there is a quasi-imperial power, it is the United States.
12.Capitalist International. Neoliberalism advocates the globalized unity of elites ( hierarchy to be exact under benevolent guidance of the US elite). At the same time conditions of population of countries with “globalized” elite go downhill and internal social protection mechanisms are dismantled. That creates resistance to globalism and neoliberalism.
13.Like Marxism, neoliberalism tries to weaken, if not abolish, nation states replacing state sovereignty with international organizations dominance (for weaker countries typically using debt slavery to IMF and World bank). Neoliberalism reflect the nature of global capitalism as a hegemonic transnational phenomenon. By deemphasizing the role of the nation-state in the global economy and increasing the significance of transnational production and the rise of a transnational elite and the transnational corporations neoliberalism realizes dreams of Marx in a very perverted form.
14.Finally, neoliberalism has become associated with specific cultures (especially US culture) and a specific language (English). But as an ideology Neoliberalism as is not tied to any culture or language. Theoretically any global language would suit, and it can be Esperanto. But in reality the English language, neoliberal policies, and pro-American foreign policy is a “package deal” for neoliberals and its fifth column supports outside G7; this was especially true in Central and Eastern Europe. That does not exclude corporatism-style jingoism, chauvinism, flag-waving and foreigner-bashing in the USA and other G7 countries.
This “capitalists counteroffensive” or “revolt of the elite” was pioneered in Britain, where Margaret Thatcher was elected leader of the Tory Party in 1975 and given real shape by Ronald Reagan in 1981-1989 (Reaganomics). Margaret Thatcher victory was the first election of neoliberal ideologue. Both Thatcher and Reagan mounted a full-scale counterattack against the unions. In GB the miners were the most important target. In USA traffic controllers. In both cases they managed to break the back of trade unions. Since 1985 union membership in the USA has halved. Privatizing nationalized industries and public services fragments, large bargaining units formed of well organized public-sector workers, creating conditions in which wages can be driven down in the competition for franchises and contracts. This most important side effect of privatization was dramatic redistribution of wealth to the top layer of financial and managerial elite (corporate rich).
Neoliberalism gradually gained strength since the late 1950s with free-market theorists like Friedrich Hayek and Milton Friedman as influential ideologues. Ann Rand also made an important contribution with her “greed is good” philosophy of positivism. Still many economists and policy-makers favored a ‘mixed economy’ with high levels of state intervention and public spending. That changed in the 1970s when state capitalism ran into the rocks. In a way the rise of Neoliberalism was the elite response to the Long Recession of 1973-1992: they launched a class war of the global rich against the rest. Shrinking markets dictated the necessity of cutting costs by sacking workers and driving down wages. So the key program was to reverse the gains made by the US lower and middle class since 1945 and it needed an ideological justification. Neoliberalism neatly fitted the bill. With outsourcing, the global ‘race to the bottom’ became a permanent feature of a new economic order.
In the 1980’s it became clear that the age of national economies and ‘autarkic’ (self-contained) blocs like the USSR block ended as they will never be able to overcome the technological and, standard of living gaps with the major Western economies. This inability to match the level of standard of living of western countries doomed communist ideology, as it has in the center the thesis that as a superior economic system it should match and exceed the economic level achieved by capitalist countries. The collapse of the USSR in 1991 (in which KGB elite played the role of Trojan horse of the West) was a real triumph of neoliberalism and signified a beginning of a new age in which the global economy was dominated by international banks and multinational corporations operating with little or sometimes completely outside the control of nation-states.
The rise of neoliberalism can be measured by the rise of the financial and industrial mega-corporations. For example, US direct investment overseas rose from $11 billion in 1950 to $133 billion in 1976. The long-term borrowing of US corporations increased from 87% of their share value in 1955 to 181% in 1970. The foreign currency operations of West European banks, to take another example, increased from $25 billion in 1968 to $200 billion in 1974. The combined debt of the 74 less-developed countries jumped from $39 billion in 1965 to $119 billion in 1974. These quantitative changes during the Great Boom reached a tipping point in the 1970s. Global corporations by then had come to overshadow nation-states. The effect was to impose a relentless pressure on national elites to increase the exploitation of ‘their own’ working class. High wages became a facto that deters new investment and labor arbitrage jumped in full swing. Taxes on business to pay for public services or welfare payments became undesirable. As well as laws designed to make workplaces safe, limit working hours, or guarantee maternity leave. While from purely theoretic perspective the ‘free-market’ theory espoused by neoliberal academics, journalists, politicians, bankers, and ‘entrepreneurs’ is compete pseudoscientific Lysenkoism-style doctrine, it became a very popular, dominant ideology of the last decade of 20th century. It provides a pseudo-scientific justification for the greed, poverty, as well as economic crisis endemic to the system. It also justified high level if inequality of the political and business elite an a normal state of human society. In this sense, neoliberalism became an official ideology of the modern ruling elite.
Stages of development of neoliberalism
During its history which starts around the 1970’s (with the first major success the Pinochet’s coup de etat in Chile, which was supported by the USA), neoliberalism has undergone several basic stages of development:
•Deconstruction of Keynesian consensus (known as New Deal in the USA). Includes deregulation and acquiring by finance sector commanding influence in government (corruption and transformation of Democratic Party into Wall Street Party under Clinton). See Glass-Steagall repeal. At this point neoliberalism became official ideology of both republican and democratic parties (Clinton Democratic Party transformation was ended the process started under Carter).
•Construction of a new, neoliberal alternative: financial capitalism (aka “casino capitalism”). While a push for neoliberalism emanated from the United States, it was Margaret Thatcher government which first tried to implement it as a full scale social program in GB, with the side effect of bolstering GB financial industry and partially returning London the glory of major international financial center. The USA went into overdrive in implementing neoliberal doctrine under Reagan. Neoliberalism is characterized by flow of the capital to the USA and other major western countries, rather than spreading the wealth from the wealthy center to the poorer periphery. Denominating a growing proportion of “third world” (and some first world countries like Greece, Cyprus, Italy, Spain) countries debt in external currency (euro or dollars) increased the debt burden and the level of political dependence on the USA and other major Western countries. “Dollarized” countries became political satellites of the USA (a classic example here is Yeltsin’s Russia), with a weakened “privatized” economy (which amounted to sell off assets to foreigners on pennies for a dollar) and are forced into debt slavery via the International Monetary Fund (IMF) and its sister institution, the World Bank. As professor Hudson noted (Financial Capitalism v. Industrial Capitalism, 1998): “These institutions are imposing the same creditor-oriented monetarism that wrecked the world economy in the 1920s, triggering the Great Depression. Instead of helping the world’s poorer debtor economies develop, the IMF and World Bank programs ‘underdevelop’ them, polarizing their economies between a wealthy top layer and poverty for the vast majority. Turned into a U.S. Cold War arm under the stewardship of Robert McNamara, the World Bank has become a powerful arm of the new global class war, most notoriously Russia and East Asia.”
The upshot has been to leave the world’s poorer economies even deeper in debt, and so financially strapped that they are obliged to sell off to international financial institutions whatever assets remain in their public domain. While wealth and incomes have polarized as a result of the active intervention of the World Bank and IMF on behalf of the ruling kleptocracies throughout Africa, Latin America and Asia, the physical environments of these debtor economies have been devastated by the ecological consequences of the World Bank’s raw-materials export programs. Pandemics have broken out as public health programs have been dismantled as domestic budgets have been stripped to service the mounting foreign debt. This has impaired the ability of governments to contain new diseases and undertake ameliorative social spending.
•Triumphal march of neoliberalism over the world. It started with dissolution of the USSR and ended with attack on Serbia.
•Neoconservative stage (Imperial overstretch). This stage started with attack on Serbia and continued till 2008. Neoconservatism is best defined by its aggressive foreign policy agenda which includes full spectrum dominance, imperial overstretch, nuclear primacy, the right of pre-emptive strikes at any states which do not possess nuclear weapons, and support of Israel as an official goal of the US middle east policy.
•Zombie stage. This stage started in 2008 and still continues. While economic crisis of 2008 led to a crisis of neoliberalism, this was not a terminal crisis. The phase of neoliberal dominance still continues, it is just the idea of self-regulating market that was completely discredited by the crisis (it was discredited before during Great Depression but the generation the remembered the lesson is now extinct (so it takes approximately 50 year to completly forget the lessons of history ;-). Also internal contradictions became much deeper and the neoliberal regime became increasingly unstable even in the citadel of neoliberalism — the USA (with the Republican Party becoming a roadblock for any meaningful reform and tea party sending its representatives to Congress). Neoliberalism as an socio-economic doctrine and as an intellectual product is practically dead. But its dominance paradoxically continues unabated. Still, after the crisis of 2008, the notion that finance mobilizes and allocates resources efficiently, drastically reduces systemic risks and brings significant productivity gains for the economy as a whole became untenable. But like was the case with Bolshevism in the USSR, the ‘zombie’ phase of neoliberalism can last decades (in the USSR, “zombie” state lasted two decades, say from 1970 to 1991) , as it is still supported by elites of several major western states (such as the USA, GB, Germany), transnational capital (and financial capital in particular) and respective elites out of the sense of self-preservation might continue (like Bolshevism rule in the USSR in 70th-80th) despite probably interrupted by bursts of social violence.
Hegemony of the USA
The globalist bloc of Western countries led by the USA achieved hegemony in the end of the twentieth century because it managed to become the center of technological progress and due to this acquired a commanding influence over industrial production and social life around the world, including the ability to provide rewards and impose sanctions.
It also achieved an ideological dominance by developing an alternative to discredited at this time Marxist ideology. Neoliberalism’s start was pretty modest as a useful tool to counter communist ideology. So against Godless communism which does not respect private property and used the “all-powerful” state, it idealized private property and stressed the necessity to control the size of the government. But at some point this flawed idea ,went out of control and became the theory the deified markets and explicitly stated the necessity of diminishing the role of the state to a minimum (note not optimizing it for a given historical conditions and technology available, but unconditionally diminishing to the point of elimination). Reagan’s famous phase “Government is not a solution to our problem, government is the problem.” is perfect example of how to “Throw out the baby with the bath water”.
Still despite being extremely flawed to the point of being anti-scientific, neoliberal ideology was supported by a higher standard of living of population in selected Western countries.
The USA was and remain the center of neoliberalism and firmly established as most important and the most powerful promoter of the doctrine (in some case like with Serbia, Iraq and Libya on the tips of bayonets).
Neoliberalism as an anti-scientific social trend with cult properties is somewhat similar to Catholicism in middle ages. The greed of catholic clergy in Middle ages (trade in indulgencies) is a match of the greed of neoliberals( with financial derivates replacing indulgencies ;-). It is equally hostile to any attempts to analyze it, with the minor difference that heretics that question the sanctity of free market are not burned at the stake, but ostracized. It support “new Crusades” with the same mechanism of “indulgences” for small countries that participate.
The United States’ position as the leading maker of global culture has been basically unchallenged for the last century or so, especially in the Western world. Yet the economic power of the Western world is waning even as new nations, with new models of economic and social life, are rising. Might one — or several — of these nations like China, India or Brazil become new centers of global culture?
I believe that the answer to this question for the foreseeable future is “no.” While the U.S.’s cultural prominence is partially related to its political, military and economic power, such power is not the only cause of America’s global cultural hegemony. Rather, the U.S. offers a unique convergence of several factors, including economic opportunity, political freedom and an immigrant culture that served as a test bed for new cultural products.
Let me offer a brief account of the rise of the American film industry to suggest the way political, economic and immigrant forces shaped American cultural hegemony. In the U.S., the film industry started as commercial enterprise largely independent of state control. Movies had to adapt to market conditions to earn profit for their producers. In order to achieve this goal, American movies needed to appeal to a diverse population made up of both native-born and immigrant citizens. As a consequence, filmmakers had to make movies that could appeal to international audiences simply to meet domestic demand. This fact helped the American film industry become globally preeminent well before the U.S. became a superpower. In other words, while U.S. military and economic power strengthened the position of the U.S. movie industry as globally dominant, that position was not dependent on U.S. military and economic power. Instead, American producers had a competitive advantage in global markets that was later cemented in place by the U.S. post-war economic and military hegemony in the West.
After the dissolution of the USSR, the USA became natural center of the neoliberal revolution and a dominant force in the new world order (the world’s only superpower). And they used their newly acquired status against states which were not “friendly enough” to the new cult, launching a series of invasions and colorful revolutions against “nonbelievers” in a globalist neoliberal model, with the level of plunder that looks like a replay of Crusades with the siege of Constantinople as primary example (which was purely monetary enterprise of the time with fig leaf of spread of Catholicism attached) look not so bad. This neoliberal crusades continued till 2013, sometimes using various proxy to achieve ” regime change”.
A Short Lived Triumph of Neoliberalism after the Dissolution of the USSR
As we mentioned before, the greatest triumph of neoliberalism was the dissolution of the USSR in 1991. At this movement it looked like an incontestable ideology propagated by “sole superpower” with the help of subservient financial institutions such as World Bank and IMF. The dominance on the USA in 1991 looked rock-solid and if somebody would tell me in 1999 that in less then 20 years the USA would be on ropes both politically and financially I would just laugh. Still after the dissolution of the USSR neoliberalism managed to dissipate most of the gains in approximately 20 years and in 2008 entered the phase of crisis. As of 2013 the idea of self-regulating market is dead and even solidarity of international elites is under question.
The first cracks in neoliberalism facade appeared as Clinton’s attack on Yugoslavia in 1999, the first armed neoliberal crusade attempted under the smoke screen of protecting the right of Kosovo Muslims in Serbia. It failed to implement “regime change” in Serbia and despite overwhelming military superiority of NATO forces has shown that bringing neoliberal regime on the tips of bayonets is a costly and high risk exercise. It took another several years and a revolution in Serbia to achieve those goals. It did establish the second Muslim state in Europe (effectively a NATO protectorate), which was part of the plan. Revolution in Serbia started a series of other successful revolutions in Georgia (Saakashvili regime came to power), Ukraine (Viktor Yushchenko regime came to power in 2004) and several other countries. After those successes, there were several setback: revolutions failed in Belorussia and Russia. Results of revolution in Ukraine were partially reversed by government of Viktor Yanukovych who ousted Uytchenko government defeating Yulia Tymoshenko in 2010 election (with Yutchshenko personally having less the 3% support). They are close to partial reversal in Georgia where the Saasaskvily regime is hanging in the air.
Incorporation of “globalist” parts of national élites as second class citizens of the transnational ruling class
Another aspect of power of neoliberalism is that it accepts national elites (on some, less favorable then “primary” elites conditions) as a part of a new transnational elite, which serves as the dominant class. By class, following classic Marxism we mean a group of people who share a common relationship to the process of social production and reproduction, positioned in the society relationally on the basis of social power.
The struggle between descendant national fractions of dominant groups and ascendant transnational fractions has often been the backdrop to surface political dynamics and ideological processes in the late 20th century. These two fractions have been vying for control of local state apparatuses since the 1970s.
Trans national fractions of local elites swept to power in countries around the world in the 1980s and 1990s. They have captured the “commanding heights” of state policymaking: key ministries and bureaucracies in the policymaking apparatus — especially Central Banks, finance and foreign ministries — as key government branches that link countries to the global economy. They have used national state apparatuses to advance globalization and to pursue sweeping economic restructuring and the dismantling of the old nation-state–based Keynesian welfare and developmentalist projects. They have sought worldwide market liberalization (following the neoliberal model), and projects of economic integration such as the North American Free Trade Agreement (NAFTA), the Asia Pacific Economic Cooperation (APEC) forum, and the European Union. They have promoted a supra-national infrastructure of the global economy, such as the World Trade Organization, as we discuss below.
In this new, transnational social system transnational corporations are intermixed with nation-states which they have special privileges. And the state itself now serves not the people of the country (which historically were upper classes) but primarily service the interests of the transnational corporations (and, by extension, narrow strata of “comprador” elites, much like the aristocracy of the past). It is now an extension and projection of corporate power (“What is good for GE is good for America”). Both the transactional elite (and first of all financial oligarchy) and transnational corporation enjoy tremendous privileges under such a regime (corporate socialism, or socialism for the rich). Like the Bolshevik state was formally a dictatorship of the proletariat but in reality was a dictatorship of the elite of an ideological sect called Communist Party (so called nomenklatura), transformed nation-states like the USA, GB, France, Russia, etc now to various degrees look like dictatorships of transnational elite (transnational bourgeoisie like Marxist would say 😉 while formally remaining sovereign democratic republics. Like with the Communist Parties in various countries, that does not excuse antagonism or even open hostilities.
That does not eliminates completely the elites competition and for example the EU elite put a knife in the back of the US elite by adopting the euro as completing with the dollar currency (so much about transatlantic solidarity), but still internalization of elites is a new and important process that is more viable that neoliberal ideology as such. Also for any state national elite is not completely homogeneous. While that is a significant part of it that favor globalization (comprador elite or lumpen elite) there is also another part which prefer national development and is at least semi-hostile to globalism. Still the comprador part of the elite represents a very important phenomenon, a real fifth column of globalization, the part that makes globalization successful. It plays the role of Trojan horse within nation states and the name “fifth column” in this sense is a very apt name. This subversive role of comprador elite was clearly visible and well documented in the Russia’s unsuccessful “white revolution” of 2011-2012: the US supported and financed project of “regime change” in Russia. It is also clearly visible although less well documented in other “color revolutions” such as Georgian, Serbian, and Ukrainian color revolutions. Trotsky would probably turn in his coffin if he saw what neoliberal ideologies made with his theory of permanent revolution ;-).
Market fundamentalism as an ideology of neoliberalism;
Market fundamentalism is an ideology of neoliberalism and represents a pseudo-scientific approach to economic and social policy based on neoclassical theories of economics that absolutized the role of the private business sector in determining the political and economic priorities of the state and consider privatization as the ultimate solution of all problems in the society. Like social theories behind Italian and German versions of corporatism ideology of neoliberalism is pretty eclectic.We need to note, that neoliberal ideology adoption and implementation patterns varies from country to country, similar to classic corporatism as well. In the USA this form of corporatism emerged in the most radical form. Another center of neoliberalism was in GB in which it also has had a more radical form then, say, in Spain or Italy. And we called the US version of neoliberalism radical, it is not a metaphor: corporatism under General Franco is a pale shadow of corporatism under the Bush-Obama regime. This new stage of capitalism development is often called “corporate socialism” of “socialism for rich” or “socialism for banks”. The latter name is applicable because the key component of transnational elite is financial oligarchy. All of those terms reflect the key fact that at this stage of capitalism development it is the transnational elite and first of all financial oligarchy which completely dominates power structures of the society. Due to the role of financial oligarchy in this new elite this social system was also nicknamed Casino Capitalism. Neoliberalism should probably be viewed as a further development of a form of corporatism that emerged in the USA in late 1960’s. It came to power in Ronald Reagan administration which was in a way quite a coup. And it became completely dominant after the collapse of the USSR during the Clinton regime during which the Democratic Party also adopted neoliberalism as an official platform.
The term itself emerged in the 1970s, when some Latin American economists began using “neoliberalism” to designate their program of market-oriented reforms. It has come into wide use starting with 1973 Chilean coup d’état. After the triumph of neoliberalism in Chile under Augusto Pinochet (from 1973) neoliberalism spread to Great Britain under Margaret Thatcher (from 1979) and then to the United States under Ronald Reagan (from 1981). Broadly speaking, neoliberalism seeks to transfer control of the economy from the public to the private sector with the state providing guarantees only to corporations and not to individual citizens like under socialism. That’s why is often called “corporate socialism”.
After the dot-com bust of 2000-2002, however, the term “neoliberalism” had become a pejorative used to denigrate prostitution of economics advanced by Milton Friedman and the Chicago school . This trend increased after the financial crisis of 2008-2012. So it is probably fair to say that right now neoliberalism has entered a stage of decline. The last important victory of neoliberalism was probably navigating Russia into joining WTO, which happened in the summer of 2012. Neoliberalism uses jargon that include such terms as ‘free market’, ‘efficiency’, ‘consumer choice’, ‘transactional thinking’ and ‘individual autonomy’. In essence this is a modernized ideology of the merger of state and corporate power that is the hallmark of classic corporatism, with an additional twist of emphasizing the aryan style theories of inferiority of lower classes (reflected in promoting the “class of creators”, entrepreneurs( Randism), etc) and “ultimate justice” of redistributing wealth to the top 1%.
On the state level it tries to abolish social programs and completely shift the risks to individuals (replacing pensions with a 401K plan in the USA), while fully providing social protection to corporations, especially financial giants involved in casino style gambling. In other words it socializes private losses and privatize social program that benefits individual citizens. Neocolonial aspects of neoliberalism is often called the “Washington Consensus”, a list of policy proposals that appeared to have gained consensus approval among the Washington-based international economic organizations (like the International Monetary Fund (IMF) and World Bank) and directed on making developing nations “debt slaves” of the industrialized nations. This policy got tremendous impetus with the dissolution of the USSR.
The concept and name of the Washington Consensus were first presented in 1989 by John Williamson, an economist from the Institute for International Economics, an international economic think tank based in Washington, D.C. The list created by Williamson’s included ten points:
1.Legal security for property rights;
2.Financialization of capital.
3.Fiscal policy Governments should not run large deficits that have to be paid back by future citizens, and such deficits can only have a short term effect on the level of employment in the economy. Constant deficits will lead to higher inflation and lower productivity, and should be avoided. Deficits should only be used for occasional stabilization purposes.
4.Redirection of public spending from subsidies to people to subsidies to corporations (tax breaks, preferred regime, etc). Especially hurt were classic socialist programs, which neoliberal call “indiscriminate subsidies” that neoliberal deem wasteful. They are limited to those what benefit corporations such as primary (but not university) education, primary health care and infrastructure investments. Pensions and other social problems need to be privatized.
5.Tax reform– broadening the tax base by shifting tax burden to the poor and middle classes and adopting low taxes for corporations and top 1% with the states goal to encourage “innovation and efficiency”;
6.Interest rates that are market determined and positive (but moderate) in real terms;
7.Floating exchange rates;
8.Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by law and relatively uniform tariffs; thus encouraging competition and long term growth. Financial liberalization under the smoke screen of trade liberalization and complete dominance of foreign banks in local financial systems of developing countries.
9.Liberalization of the “capital account” of the balance of payments, that is, allowing people the opportunity to invest funds overseas and allowing foreign funds to be invested in the home country
10.Privatization of state enterprises; Promoting market provision of goods and services which the government can not provide as effectively or efficiently, such as telecommunications, where having many service providers promotes choice and competition.
11.Deregulation – abolition of regulations that impede market entry or restrict competition, except for (G7 only) those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;
Great propaganda success of neoliberalism
Neoliberal propaganda has succeeded in fixating the public on a peculiar definition of “freedom” that has served as a smoke screen to conceal a project of speeding upper class wealth accumulation.
The key component of neoliberal propaganda (like was the case with Marxism) was an economic theory. Like Marxism it has three components
Chicago School of neoclassical economics (with small doses of Supply Side or Trickle down economics, Invisible Hand Hypothesis: The Theory of Self-regulation of the Markets and other pseudo theories which would make even orthodox Marxists flush). Neoclassical economics and cadre of bought by financial oligarchy economists in major universities (high priests of neoclassical economics) represent the key component of neoliberalism.
Positivism by Ann Rand.
Christian self-gratification churches. Churches which traded in a Christian worldview of work, thrift, savings, and prudence, and embraced the false worldview of wealth, consumerism and instant gratification.
Centrality of financial flows (including emerging countries debt) and financial oligarchy in a neoliberal regime
Finance under any neoliberalism-bound regime can be best understood as a form of warfare, and financial complexs as an extension of the military-industrial complex. Like in military conquest, its aim is to gain control for occupying country of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentration on social as well as economic planning using central banks. The main advantage of neoliberalism in comparison with the similar practice of the past is the conquest is accomplished by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by a military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight. Actually following a successful attack by neoliberalism and conquest of the country by a neoliberal elite, the Russian economy was devastated to a larger extent then during WWII. This attack is being mounted not by nation states alone, but by a cosmopolitan financial class and international financial institutions with full support of major western banks. Finance always has been cosmopolitan more than nationalistic – and always has sought to impose its priorities and lawmaking power over those of parliamentary democracies. Like any monopoly or vested interest, the financial “Trojan horse” strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance profits via privatization and protect finance capital from the population to allow “the miracle of compound interest” to siphon most of the revenue out of the country. Some share of this revenue is paid to compradors within the national elite. In good years such tactics keeps fortunes multiplying exponentially, faster than the economy can grow. This “paradise for rentiers” last until they eat into the core and cause deindustrialization and debt crisis. Eventually they do to the economy what predatory creditors and rentiers did to the Roman Empire.
Fear of population and establishment of “National Security State”
to protect the interest of transnational elite
Politically neoliberalism correlates with growth of political power of financial oligarchy and media-military-industrial complex. Growth of political power of financial oligarchy among national elite has led to the dramatic growth of inequality and created growing fear of top 0.01% (oligarchs) over preserving their power and financial gains achieved after Reagan. That naturally leads to the establishment of “National Security State” state, militarization of police and introduction of total surveillance over the citizens under the pretext of fighting against terrorists. So some repression forms that were characteristic for both Italian and German fascism reemerge under new sauce of fighting terrorism. In his book “Brave New World Order” (Orbis Books, 1992, paper), published long before 9/11 Jack Nelson-Pallmeyer identified seven characteristics of a National Security State:
•The first characteristic of a National Security State is that the military is the highest authority. In a National Security State the military not only guarantees the security of the state against all internal and external enemies, it has enough power to determine the overall direction of the society. In a National Security State the military exerts important influence over political, economic, as well as military affairs.
•A second defining feature of a National Security State is that political democracy and democratic elections are viewed with suspicion, contempt, or in terms of political expediency. National Security States often maintain an appearance of democracy. However, ultimate power rests with the military or within a broader National Security Establishment.
•A third characteristic of a National Security State is that the military and related sectors wield substantial political and economic power. They do so in the context of an ideology which stresses that ‘freedom” and “development” are possible only when capital is concentrated in the hands of elites.
•A fourth feature of a National Security State is its obsession with enemies. There are enemies of the state everywhere. Defending against external (aka invasions into other countries) and/or internal enemies becomes a leading preoccupation of the state, a distorting factor in the economy, and a major source of national identity and purpose.
•A fifth ideological foundation of a National Security State is that the enemies of the state are cunning and ruthless. Therefore, any means used to destroy or control these enemies is justified.
•A sixth characteristic of a National Security State is that it restricts public debate and limits popular participation through secrecy or intimidation. Authentic democracy depends on participation of the people. National Security States limit such participation in a number of ways: They sow fear and thereby narrow the range of public debate; they restrict and distort information; and they define policies in secret and implement those policies through covert channels and clandestine activities. The state justifies such actions through rhetorical pleas of “higher purpose” and vague appeals to “national security.”
•Finally, the church is expected to mobilize its financial, ideological, and theological resources in service to the National Security State.
Neoliberalism as a key contributor to growth of amorality and economic crimes
If you think that the level of penetration of the Mexican mafia into the US is the result of external forces think again. In a way the Reagan regime was a clear invitations for any self-respectful international crime syndicate to start operating in the US territory. And the exposition of crime that was a side effect of neoliberal counterrevolution in Russia has a distinct blowback effect in the USA. The same reasoning is applicable to various sophisticated financial crimes including computer related.
Neoliberalism and propaganda of amorality
As Will Hutton noted in The Guardian neoliberalism doctrine entail direct propaganda of amorality( Across Europe, political leaders have lost the trust of their people: There was a time when to live a life virtuously was well understood. It embraced personal integrity, commitment to a purpose that was higher than personal gain, a degree of selflessness and even modesty. Those at the top may have got there through ruthlessness and ambition, but they understood that to lead was to set an example and that involved demonstrating better qualities than simply looking after yourself. No more. Perhaps the greatest calamity of the conservative counter-revolution has been the energy it invested in arguing that virtue, whatever its private importance, has no public value. The paradox, the new conservatives claim, is only through the pursuit of self-interest can the economy and society work best. Responsibilities to the common wealth are to be avoided.
The retreat of virtue has become the plague of our times. Greed is legitimate; to have riches however obtained, including outrageous bonuses or avoiding tax, is the only game in town. But across the west the consequences are becoming more obvious. Politics, business and finance have become blighted to the point that they are dysfunctional, with a now huge gap in trust between the elite and the people.
In the USA it took more then three decade to eliminate morality and to establish “law of jungle” mentality in the population. In other countries such as Russia this process was much quicker and run deeper. And in no way this newly acquired level of criminally is reflected in incarceration statistics. Most of “neoliberal-style: crimes are financial crimes and as such they are difficult to direct and difficult to procecute. Sometimes they are impossible to procecute either because of the political influence of the players or the potential effect on the economy if particular persons and institutions are brought to justice. The latter factor was acknowledged by the US justice department. Neoliberalism propagates criminal behavior by creating acute means-ends discrepancies due to an excessive cultural emphasis on monetary/material success goals (“greed is good” mentality) for members of society. At the same time mobility is restricted and majority of members of the society has no realistic chances to attain those goals. Still media brainwashing incites the desire more than they have. Success stories of going from rags to riches make the American Dream more believable, despite the fact that it is deeply and irrevocably fake. As this cultural meme is internalized it creates a strain, which combined with the culturally induced underemphasize on the proper methods, stimulates deviance of various types. If the deviant solution is successful (i.e., perpetrators are not caught or adequately punished), this adaptation may become normative for others in a similar social context. To the extent that this solution is available to them (demand for illicit goods or services, access to illegitimate opportunity structures), they may adopt this role model — and may be expected by their significant others to follow this path. This process creates a vicious circle toward higher rates of deviance and widespread anomie under a neoliberal regime. Anomie is a withdrawal of allegiance from conventional norms and a weakening of these norms’ guiding power on behavior. This is caused by structural contradictions within the neoliberal doctrine and affects deviance in two ways. One is associated with strain, relative deprivation, frustrations, and the almost obsessive focus on goals. This makes deviance thinkable, as conventional norms are regarded as nonbinding, at least temporarily. Rationalizations enable departures from otherwise accepted/internalized social rules, as actors convince themselves that in their particular circumstances an exception is acceptable. Through interactive processes, techniques of neutralization and rationalizations contribute to a context in which newly socialized actors may adopt normative referents and deviant behavior as a matter of course. If “this is the way business is done around here,” people may engage in price fixing or misleading advertising or insider trading or running a prostitution ring. While those criminogenic effects of neoliberalism became prominent in the USA as was demonstrated by the 2008 financial crisis, when most of financial players involved were engaged in behavior that is deeply and irrevocably asocial and amoral. However, a very similar process is now being reproduced throughout the world. Promises are made that are not fulfilled. People’s expectations are exalted at a time when economic and power asymmetries increase and become less justifiable and intolerable in the eyes of the people affected. The logic of the market permeates popular thinking and introduces rationalizations, making the adoption of a criminal or unethical solution more acceptable. This high criminogenic impact of globalization and neoliberal policies is extremely difficult and costly to reverse.
Legal arbitrage is a powerful instrument for transnational corporations to press government into compliance. As soon as government tries to impose some restriction on their operations they threaten to leave.
This behavior is by-and-large conditioned by the low price of oil. With price of oil above, say $200 per barrel, transportation costs became big enough to make this behavior less likely
Moral relativism and concept of “Justice for some”
Moral relativism means that anything that helps to achieve the goal is moral. It was actually pioneered by Marxism in context of means to be used to achieve “proletarian revolution”. It is a part of Randism as a ersatz version of Nietzschean Philosophy. Corruption, facilitated by the credibility trap, is the biggest problem facing the West and the East today. That is the real subsidy, the most debilitating entitlement. It is the belief of the elite that the power of their office is an achievement that rewards them with the right to lie, cheat and steal, both for themselves and their friends. Although it is most important to understand that they would be shocked and insulted if one uses those words, lie, cheat and steal, to describe what they are doing. They view themselves as exceptionally hard working, as obligated by their natural gifts and superiority. Through a long indoctrination that starts sometimes in their families, but is most often affirmed in their elite schools and with their circle of privileged friends, they learn to rationalize selective moral behaviour not as immoral but as ‘the entitlement of success.’ And they are supported by a horde of morally ambivalent enablers who will tell them whatever they wish to hear. There are one set of rules for themselves and their friends, and another set of rules for the rest.
Few who actually do evil consciously choose to be evil. They rationalize what they do in any number of ways, but the deceit often hinges on their own natural superiority, and the objectification and denigration of the other. We are makers, and they are takers. Although many may work hard, they see their own work as having special value and merit, while the actions of the others are inconsequential and unworthy. Given enough time, their rationalizations become an ideology, desensitized to the meaning and significance of others outside their own select group. This supremacy of ideology empties their souls, and opens the door to mass privation and even murder, although rarely done by their own hands. This is what Glenn Greenwald calls ‘justice for some.’ Or even earlier what George Orwell captured in the slogan, ‘Some animals are more equal than others.’
And just to be clear on this, with regard to the Anglo-American political situation, the tragedy is not that just some are corrupted, which is always the case. The tragedy is that the Democrats and the Labor Party learned that they could become as servilely corrupted by Big Money as the Republicans and the Conservative Party, while maintaining the illusion of serving their traditional political base. And it has rewarded them very well in terms of extraordinarily well-funded political power, and almost unbelievable personal enrichment afterwards.
In such a climate of corruption, political discourse loses the vitality of ideas and compromise for the general good, and take on the character of competing gangs and crime families, engaged in aggressive schemes and protracted turf wars, tottering from one pitched battle and crisis to another.
“A credibility trap is a condition wherein the financial, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform, or even honestly address, the problems of that system without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves.
The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even the impulse to reform within the power structure is susceptible to various forms of soft blackmail and coercion by the system that maintains and rewards. And so a failed policy and its support system become self-sustaining, long after it is seen by objective observers to have failed. In its failure it is counterproductive, and an impediment to recovery in the real economy. Admitting failure is not an option for the thought leaders who receive their power from that system. The continuity of the structural hierarchy must therefore be maintained at all costs, even to the point of becoming a painfully obvious hypocrisy. The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.
The problem which the modern world has not yet grappled is how to react to the rise of a global elite, which considers itself the children of a power which is above national restraints, and a law unto themselves.
Their success has been propelled by the dominance of Anglo-American financialization, and the rise of oligarchies in Russia, China, Latin America, and India. Countervailing power has been co-opted and subsumed. Any opposition has become marginalized and isolated. The new oligarchs are supported by their fiat currencies, which together the increase of insubstantial ‘cashlessness’ in wealth, provides the ability to define and allocate value at will. They have a penchant towards globalization and deregulation to support selective justice, to the extreme detriment of local rule, and individual choice and freedom. Above all, they are a law unto themselves, above what they consider subhuman restraint. Übermenschen.
To quote Chrystia Freeland, The Rise of the New Global Elite:
“Our light-speed, globally connected economy has led to the rise of a new super-elite that consists, to a notable degree, of first- and second-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, worldwide economic competition—and many of them, as a result, have an ambivalent attitude toward those of us who didn’t succeed so spectacularly. Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves… A multibillion-dollar bailout and Wall Street’s swift, subsequent reinstatement of gargantuan bonuses have inspired a narrative of parasitic bankers and other elites rigging the game for their own benefit. And this, in turn, has led to wider—and not unreasonable—fears that we are living in not merely a plutonomy, but a plutocracy, in which the rich display outsize political influence, narrowly self-interested motives, and a casual indifference to anyone outside their own rarefied economic bubble.”