[Marxism] Walden Bello on the coming capitalist consensus

Louis Proyect lnp3 at panix.com
Fri Dec 26 07:12:55 MST 2008

(Interesing article by Bello that claims a "global social democracy" 
is unfolding that will replace neoliberalism. You will see, however, 
that he opposes GSD from the left. I would only question this 
analysis which places emphasis on the importance of Joseph Stiglitz, 
George Soros et al. If there has been any evidence of Stiglitz's 
economic thinking in the new administration, it has escaped my attention.)

The Coming Capitalist Consensus
December, 26 2008
By Walden Bello

Not surprisingly, the swift unraveling of the global economy combined 
with the ascent to the U.S. presidency of an African-American liberal 
has left millions anticipating that the world is on the threshold of 
a new era. Some of President-elect Barack Obama's new appointees - in 
particular ex-Treasury Secretary Larry Summers to lead the National 
Economic Council, New York Federal Reserve Board chief Tim Geithner 
to head Treasury, and former Dallas Mayor Ron Kirk to serve as trade 
representative - have certainly elicited some skepticism. But the 
sense that the old neoliberal formulas are thoroughly discredited 
have convinced many that the new Democratic leadership in the world's 
biggest economy will break with the market fundamentalist policies 
that have reigned since the early 1980s.

One important question, of course, is how decisive and definitive the 
break with neoliberalism will be. Other questions, however, go to the 
heart of capitalism itself. Will government ownership, intervention, 
and control be exercised simply to stabilize capitalism, after which 
control will be given back to the corporate elites? Are we going to 
see a second round of Keynesian capitalism, where the state and 
corporate elites along with labor work out a partnership based on 
industrial policy, growth, and high wages - though with a green 
dimension this time around? Or will we witness the beginnings of 
fundamental shifts in the ownership and control of the economy in a 
more popular direction? There are limits to reform in the system of 
global capitalism, but at no other time in the last half century have 
those limits seemed more fluid.

President Nicolas Sarkozy of France has already staked out one 
position. Declaring that "laissez-faire capitalism is dead," he has 
created a strategic investment fund of 20 billion euros to promote 
technological innovation, keep advanced industries in French hands, 
and save jobs. "The day we don't build trains, airplanes, 
automobiles, and ships, what will be left of the French economy?" he 
recently asked rhetorically. "Memories. I will not make France a 
simple tourist reserve." This kind of aggressive industrial policy 
aimed partly at winning over the country's traditional white working 
class can go hand-in-hand with the exclusionary anti-immigrant 
policies with which the French president has been associated.

Global Social Democracy

A new national Keynesianism along Sarkozyan lines, however, is not 
the only alternative available to global elites. Given the need for 
global legitimacy to promote their interests in a world where the 
balance of power is shifting towards the South, western elites might 
find more attractive an offshoot of European Social Democracy and New 
Deal liberalism that one might call "Global Social Democracy" or GSD.

Even before the full unfolding of the financial crisis, partisans of 
GSD had already been positioning it as alternative to neoliberal 
globalization in response to the stresses and strains being provoked 
by the latter. One personality associated with it is British Prime 
Minister Gordon Brown, who led the European response to the financial 
meltdown via the partial nationalization of the banks. Widely 
regarded as the godfather of the "Make Poverty History" campaign in 
the United Kingdom, Brown, while he was still the British chancellor, 
proposed what he called an "alliance capitalism" between market and 
state institutions that would reproduce at the global stage what he 
said Franklin Roosevelt did for the national economy: "securing the 
benefits of the market while taming its excesses." This must be a 
system, continued Brown, that "captures the full benefits of global 
markets and capital flows, minimizes the risk of disruption, 
maximizes opportunity for all, and lifts up the most vulnerable - in 
short, the restoration in the international economy of public purpose 
and high ideals."

Joining Brown in articulating the Global Social Democratic discourse 
has been a diverse group consisting of, among others, the economist 
Jeffrey Sachs, George Soros, former UN Secretary General Kofi Annan, 
the sociologist David Held, Nobel laureate Joseph Stiglitz, and even 
Bill Gates. There are, of course, differences of nuance in the 
positions of these people, but the thrust of their perspectives is 
the same: to bring about a reformed social order and a reinvigorated 
ideological consensus for global capitalism.

Among the key propositions advanced by partisans of GSD are the following:

     * Globalization is essentially beneficial for the world; the 
neoliberals have simply botched the job of managing it and selling it 
to the public;
     * It is urgent to save globalization from the neoliberals 
because globalization is reversible and may, in fact, already be in 
the process of being reversed;
     * Growth and equity may come into conflict, in which case one 
must prioritize equity;
     * Free trade may not, in fact, be beneficial in the long run and 
may leave the majority poor, so it is important for trade 
arrangements to be subject to social and environmental conditions;
     * Unilateralism must be avoided while fundamental reform of the 
multilateral institutions and agreements must be undertaken - a 
process that might involve dumping or neutralizing some of them, like 
the WTO's Trade-Related Intellectual Property Rights Agreement (TRIPs);
     * Global social integration, or reducing inequalities both 
within and across countries, must accompany global market integration;
     * The global debt of developing countries must be cancelled or 
radically reduced, so the resulting savings can be used to stimulate 
the local economy, thus contributing to global reflation;
     * Poverty and environmental degradation are so severe that a 
massive aid program or "Marshall Plan" from the North to the South 
must be mounted within the framework of the "Millennium Development Goals";
     * A "Second Green Revolution" must be put into motion, 
especially in Africa, through the widespread adoption of genetically 
engineered seeds.
     * Huge investments must be devoted to push the global economy 
along more environmentally sustainable paths, with government taking 
a leading role ("Green Keynesianism" or "Green Capitalism");
     * Military action to solve problems must be deemphasized in 
favor of diplomacy and "soft power," although humanitarian military 
intervention in situations involving genocide must be undertaken.

The Limits of Global Social Democracy

Global Social Democracy has not received much critical attention, 
perhaps because many progressives are still fighting the last war, 
that is, against neoliberalism. A critique is urgent, and not only 
because GSD is neoliberalism's most likely successor. More important, 
although GSD has some positive elements, it has, like the old Social 
Democratic Keynesian paradigm, a number of problematic features.

A critique might begin by highlighting problems with four central 
elements in the GSD perspective.

First, GSD shares neoliberalism's bias for globalization, 
differentiating itself mainly by promising to promote globalization 
better than the neoliberals. This amounts to saying, however, that 
simply by adding the dimension of "global social integration," an 
inherently socially and ecologically destructive and disruptive 
process can be made palatable and acceptable. GSD assumes that people 
really want to be part of a functionally integrated global economy 
where the barriers between the national and the international have 
disappeared. But would they not in fact prefer to be part of 
economies that are subject to local control and are buffered from the 
vagaries of the international economy? Indeed, today's swift downward 
trajectory of interconnected economies underscores the validity of 
one of anti-globalization movement's key criticisms of the 
globalization process..

Second, GSD shares neoliberalism's preference for the market as the 
principal mechanism for production, distribution, and consumption, 
differentiating itself mainly by advocating state action to address 
market failures. The kind of globalization the world needs, according 
to Jeffrey Sachs in The End of Poverty, would entail 
"harnessing...the remarkable power of trade and investment while 
acknowledging and addressing limitations through compensatory 
collective action." This is very different from saying that the 
citizenry and civil society must make the key economic decisions and 
the market, like the state bureaucracy, is only one mechanism of 
implementation of democratic decision-making.

Third, GSD is a technocratic project, with experts hatching and 
pushing reforms on society from above, instead of being a 
participatory project where initiatives percolate from the ground up.

Fourth, GSD, while critical of neoliberalism, accepts the framework 
of monopoly capitalism, which rests fundamentally on deriving profit 
from the exploitative extraction of surplus value from labor, is 
driven from crisis to crisis by inherent tendencies toward 
overproduction, and tends to push the environment to its limits in 
its search for profitability. Like traditional Keynesianism in the 
national arena, GSD seeks in the global arena a new class compromise 
that is accompanied by new methods to contain or minimize 
capitalism's tendency toward crisis. Just as the old Social Democracy 
and the New Deal stabilized national capitalism, the historical 
function of Global Social Democracy is to iron out the contradictions 
of contemporary global capitalism and to relegitimize it after the 
crisis and chaos left by neoliberalism. GSD is, at root, about social 

Obama has a talent for rhetorically bridging different political 
discourses. He is also a "blank slate" when it comes to economics. 
Like FDR, he is not bound to the formulas of the ancien regime. He is 
a pragmatist whose key criterion is success at social management. As 
such, he is uniquely positioned to lead this ambitious reformist enterprise.

Reveille for Progressives

While progressives were engaged in full-scale war against 
neoliberalism, reformist thinking was percolating in critical 
establishment circles. This thinking is now about to become policy, 
and progressives must work double time to engage it. It is not just a 
matter of moving from criticism to prescription. The challenge is to 
overcome the limits to the progressive political imagination imposed 
by the aggressiveness of the neoliberal challenge in the 1980s 
combined with the collapse of the bureaucratic socialist regimes in 
the early 1990s. Progressives should boldly aspire once again to 
paradigms of social organization that unabashedly aim for equality 
and participatory democratic control of both the national economy and 
the global economy as prerequisites for collective and individual liberation.

Like the old post-war Keynesian regime, Global Social Democracy is 
about social management. In contrast, the progressive perspective is 
about social liberation.

Walden Bello is a columnist for Foreign Policy In Focus, a senior 
analyst at the Bangkok-based Focus on the Global South, president of 
the Freedom from Debt Coalition, and a professor of sociology at the 
University of the Philippines.

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