[Marxism] [Pen-l] Walden Bello on the coming capitalist consensus
pbond at mail.ngo.za
Fri Dec 26 08:01:51 MST 2008
Louis Proyect wrote:
> (Interesting 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.)
Moreover, Walden worries that "many progressives are still fighting the
last war, that is, against neoliberalism", and yeah, I think we still
need to. I tried this on ZNet:
End of neoliberalism? Sorry, not yet.
Dec 24, 2
By Patrick Bond
Patrick Bond's ZSpace Page / ZSpace
Those who declare that the Great Crash of Late 2008 heralds the end of
free market economic philosophy - "neoliberalism" for short - are not
paying close enough attention.
This includes the Swedish Bank's Economic Nobel Prize laureate,
Princeton professor Paul Krugman. "Everyone's talking about a new New
Deal, for obvious reasons," he told his New York Times column readers.
"In 2008, as in 1932, a long era of Republican political dominance came
to an end in the face of an economic and financial crisis that, in
voters' minds, both discredited the free-market ideology and undermined
its claims of competence. And for those on the progressive side of the
political spectrum, these are hopeful times."
But notwithstanding some promised fiscal stimulation and public works
projects in the US, a more realistic - and also radical - approach
requires us to first humbly acknowledge that a dangerous period lies
immediately ahead, because of at least three factors:
o public policy will suffer from the financial sector crisis via intense
austerity, pressures associated with extreme economic volatility, and a
renewed lobby for micro-neoliberal strategies like privatisation;
o there remains unjustified faith in multilateral system solutions (from
Kyoto climate change mitigation to Bretton Woods revivalism), which
distracts us from the national-scale solutions that are both potentially
feasible and just; and
o a new threat arises, in the form of relegitimised neoliberalism and
imperialism, via the election of Barack Obama as US president.
The mid-November G20 meeting on the international financial crisis was
one site where illusory post-neoliberalism was on display. International
Monetary Fund managing director Dominique Strauss-Kahn suggested "fiscal
stimulus equal to 2 percent of gross domestic product" across the world,
"everywhere, everywhere where it is possible".
In reality, though, the IMF was simultaneously treating South Africa -
and even wealthier Seychelles - like a typical Third World debtor
deserving of a full neoliberal work-out. For at precisely the same
moment, on November 15, the IMF lent Seychelles $26 million to cure a
sickness (currency collapse) caused, in turn, by IMF medicine.
According to one report, "As part of its reform package, the Seychelles
lifted long-standing currency exchange controls earlier this month,
prompting a 48 percent slide in the value of the rupee. The IMF said the
government had made a good start... but it said further steps were
needed... 'in order to secure substantial primary surpluses over the
medium term.'" (Translation: no fiscal stimulus for Seychelles citizens.)
The South African case is even more telling, for on 22 October, the IMF
filed several lengthy reports which made the following points:
o the SA government should run a budget surplus;
o the government should adopt privatisation for 'infrastructure and
social needs' including electricity and transport;
o the Reserve Bank should maintain existing inflation-targeting andraise
o the Treasury and Trade Ministry should remove protections against
international economic volatility, especially financial and trade rules;and
o the Labour Ministry should remove worker rights, including
'backward-looking wage indexation' to protect against inflation.
Instead of conceding the need for exchange controls and import controls
on luxury goods so as to restore payments and trade account balances,
the IMF had one solution, contrary to Strauss-Kahn's rhetoric: "Tighter
fiscal policy to avoid exacerbating current account pressures."
Even the apparent death of South Africa's neoliberal project in
September, personified by former president Thabo Mbeki, is misleading.
The ruling party leader, Jacob Zuma, appears intent on not only
retaining finance minister Trevor Manuel as long as possible but
preparing a collision course with his primary internal support base,
trade unionists and communists, in the run-up to the general election
Zuma's main opposition, former ruling party chairperson Terror Lekota
(who recently cofounded "The Congress of the People" party), also
confirmed his allegiance to neoliberalism and fiscal discipline,
attacking welfare grants at a debate our Centre for Civil Society hosted
between Lekota and Dr Ashwin Desai last week (http://www.ukzn.ac.za/ccs).
Worsening austerity awaits South Africa and many poorer, aid-dependent
countries, thanks to the useless mode in which multilateral economic,
political and climate arrangements have been negotiated. Last week's
Poznan climate talks again revealed how dysfunctional global processes
During the height of the false prosperity, numerous promises about
increased development aid were offered by wealthy countries (e.g. OECD
members), especially at the Gleneagles G8 meeting.
But, according to Trevor Manuel, who also serves as the UN secretary
general's Special Envoy on Financing for Development, "World military
expenditure is estimated by the Stockholm Institute to have been $1.3
trillion in 2007. Compare this to the $104 billion spent on Overseas
The Institute reports that rich countries decreased their aid flows by
4.7 per cent in 2006 and 8.4 per cent in 2007, in contrast to rising
military spending of 3 per cent in 2006 and 6 per cent in 2007.
Manuel lamented, "The food and fuel shocks and global financial turmoil
are a bellwether of the consequences of broken promises. They are a
signal of our failure."
I agree with him for once. Yet in the face of such consistent failure -
on development aid, Bretton Woods Institution reform, the World Trade
Organisation's disastrous Doha Agenda, international financial
regulation as proposed at the G20 summit, United Nations Security
Council democratization, and various other crucial challenges to world
elites - the most myopic approach is to advocate yet more 'global
I will concede that hope for a post-neoliberal global project emerged
from the (brief) presidency of the United Nations General Assembly by
Miguel d'Escoto Brockmann, the former Sandinista foreign minister.
D'Escoto chose as advisors some of the world's most profound left and
centre-left analysts, including Joseph Stiglitz, Maude Barlow, Leonardo
Boff, Fran?s Houtart, Noam Chomsky, Ramsey Clark, Richard Falk and
Stiglitz and Houtart joined a UN team at the Doha Financing for
Development summit in late November, hoping to promote a new, more
equitable and developmental Bretton Woods world financial architecture.
But that meeting too was a complete waste of CO2 emissions, energy and
time - as witnessed by the refusal of Strauss-Kahn and World Bank
president Robert Zoellick to even bother showing up.
D'Escoto's extraordinary gathering cannot substitute for more serious,
durable forces, such as control of at least four Latin American
countries by leftist governments. Unfortunately, the demise of both
neoconservatism's main power base (the US White House, Vice Presidency,
Pentagon and CIA) and neoliberalism's financial and ideological base,
has not fundamentally altered power relations between elites and
Indeed, neoliberalism may have another breath of life, with
mouth-to-mouth resuscitation applied from above by Barak Obama or the
IMF. Much stronger pressure is needed from below to resist.
Until grassroots forces again gather their strength to mount an assault,
national-scale challenges to global financial power are the only ways
forward given adverse global-scale power relations.
From a national power base, various financial sector reforms can be
pursued: imposition of exchange controls (such as were applied by
Malaysia in 1998 or Venezuela in 2003), financial nationalization (as
have some European countries egged), and fiscal stimulation (as national
states are generally being encouraged to do at present, in order to
avoid global depression).
In his famous 1933 article on national self-sufficiency, John Maynard
Keynes cautioned against nationalistic "silliness, haste and
intolerance", yet argued forcefully for the national not global scale of
economic revival: "I sympathize, therefore, with those who would
minimize, rather than with those who would maximize, economic
entanglement among nations. Ideas, knowledge, science, hospitality,
travel--these are the things which should of their nature be
international. But let goods be homespun whenever it is reasonably and
conveniently possible, and, above all, let finance be primarily national."
He continued, in a passage that rings true today: "Experience
accumulates to prove that most modem processes of mass production can be
performed in most countries and climates with almost equal efficiency...
A moderate increase in the real cost of primary and manufactured
products consequent on greater national self-sufficiency may cease to be
of serious consequence when weighed in the balance against advantages of
a different kind. National self-sufficiency, in short, though it costs
something, may be becoming a luxury which we can afford, if we happen to
For those (like myself) aiming for a society left of Keynes, it is still
the case that, as Marx and Engels wrote in the Communist Manifesto, "The
proletariat of each country must, of course, first of all settle matters
with its own bourgeoisie." The national scale is where the most power
lies, and where strategies against commodification and corporate
globalization have the best chance of success.
In South Africa, to illustrate, the Treatment Action Campaign and
Johannesburg Anti-Privatisation Forum have won, respectively,
antiretroviral medicines needed to fight AIDS and publicly-provided
water. The drugs are now made locally in Africa - in Johannesburg,
Kampala, Harare, etc - and on a generic not branded basis, and are
provided free of charge, a great advance upon the $15,000/patient/year
cost of branded AIDS medicines a decade earlier (in South Africa, half a
million people receive them).
And after massive battles, water in Johannesburg is now produced and
distributed by public agencies (Suez was sent back to Paris after its
controversial 2001-06 protest-ridden management of municipal water). In
April, a major constitutional lawsuit in the High Court resulted in a
doubling of free water to 50 liters/person/day and the prohibition of
pre-payment water meters.
But what is most crucial, then, for a realistic post-neoliberal project,
is ongoing delegitimisation of the US in its political and military
modes. One danger zone is Africa, where the Bush/Cheney/Gates
geopolitical and military machinery ground to a halt in the form of the
Africa Command. No state aside from Liberia would entertain the idea of
hosting the headquarters (which remained in Stuttgart), notwithstanding
an endorsement of Africom from even Obama's main Africa advisor, Witney
More importantly, even if Obama restores a degree of US credibility at
the level of international politics, US military decline will continue
to be hastened by failed Pentagon strategies against urban Islamist
guerilla movements in Baghdad, rural Islamist fighters in Afghanistan
and Pakistan, and the belligerent nuclear-toting state of North Korea.
None of these forces represent social progress, of course, but they
probably are responsible for such despondency in Washington that other
targets of US imperial hostility, such as the governments of Cuba,
Venezuela, Bolivia and Ecuador, remain safe from blatant overthrow in
the near term.
In turn, the leading Latin American countries have the best opportunity
in the world, today, to build post-neoliberal economic, social and
The latter eco-socialist project is vitally important, because to
counter the objectionable idea of petro-socialism, as practiced in
Venezuela, there are inspiring examples in Cuba's post-carbon
innovations, in Bolivia's indigenous people's power and in Ecuador's
official commitment - no matter how it wavers in practice - to a "keep
the oil in the soil" policy in the Yasuni National Park.
Finally, as even Keynes saw in 1933, global capitalism has had it: "The
decadent international but individualistic capitalism, in the hands of
which we found ourselves after the war, is not a success. It is not
intelligent, it is not beautiful, it is not just, it is not
virtuous--and it doesn't deliver the goods. In short, we dislike it, and
we are beginning to despise it."
Turning our energies of dislike/despise into social progress is not
impossible. But the most powerful SA examples are not (yet) the negation
of national neoliberalism, but rather the grassroots activist
initiatives - such as acquiring generic AIDS medicines and free public
water supplies - against forces of micro-commodification.
These are indeed useful signals that another world - realistically
post-neoliberal - is not only possible, but is being constructed now,
going into a very dangerous 2009.
(Bond is based at the Centre for Civil Society in Durban. A longer
version is forthcoming in the next issue of Development Dialogue,
From: Z Net - The Spirit Of Resistance Lives
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