[Marxism] [Pen-l] Walden Bello on the coming capitalist consensus

Patrick Bond 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 
interest rates;
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 
next March.

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 
can be.

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 
Development Assistance!"

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 
economic governance'.

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 
Howard Zinn.

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 
subaltern forces.

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 
want it."

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 
environmental projects.

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
URL: http://www.zcommunications.org/zspace/commentaries/3721

The tool to turn commentary mailings off or on can be found in your 
account admin interface, under "View/Edit My Account".
To view commentaries online go here: 
Comment on this commentary: 

More information about the Marxism mailing list