Is neoliberalism – whereby the state promotes and facilitates the supremacy of the market in every area of society alongside tariff-free global trade – finally coming off the rails after an almost 40-year run?
Paradoxically, the most serious attack on the neoliberal world order has come from within the system itself in the shape of one Donald Trump, the oddball, racist, misogynist president of the United States.
He owed his election victory in some measure to the disillusionment with the neoliberal policies of his Democratic Party opponent, Hillary Clinton. She hardly went near the industrial states of the north-east while Trump pledged to protect jobs.
Trump’s “Make America Great” promise last week translated into unilateral imposition of hefty tariffs on imported steel and aluminium. Pennsylvania steel workers were in attendance when Trump signed off the executive order, in the teeth of fierce opposition from his own Republican Party, government advisers and big business executives.
The European Union and China immediately threatened retaliation, setting the scene for an international trade war which could plunge the global capitalist economy into a deep recession. Neoliberalism this is not.
However, on the same day as Trump imposed his tariffs, 11 nations met in Santiago, Chile, to sign the Trans-Pacific Partnership. Trump had already pulled the US out of the negotiations which Barack Obama’s administration had joined. The TPP is a far-reaching, multilateral free trade accord. Neoliberalism this is.
Nevertheless, neoliberalism in practice which can be traced back to the early 1980s and the governments of Margaret Thatcher and Ronald Reagan, is under sustained pressure as it is seen to work for the 1%.
- * A deepening ecological crisis can be laid squarely at the door of unfettered economic growth at the expense of the consequences for climate change and species loss
- * Opposition is growing to the domination of the tech giants like Facebook and Google, who mine our data and facilitate news manipulation and seem more powerful than states
- * Inequality is at an all-time high in the major capitalist countries, as is the growth of low-paid, precarious jobs in the gig economy
- * Access to housing, social care, culture, higher education – all subject to market “solutions” – is proving impossible to for many people.
Resistance has had contradictory outcomes. The Brexit referendum shocked the UK political elite with its rejection of a European Union run along neoliberal lines. In Scotland, opposition to austerity that followed the 2008 crash led to an upsurge for independence.
A surge in membership that has made Labour the largest party in Europe and reinforced Jeremy Corbyn’s position is largely driven by his rejection of neoliberalism and a pledge to make the state more proactive. In Italy, however, the failure of the centre-left has led to a massive swing to populism and support for anti-immigrant parties. A militant strike by UK university lecturers against a savage cut in their pensions has exposed a gig economy in institutions run by exorbitantly paid vice-chancellors along market lines, empire building at the expense of students.
This whole process is intimately connected to and driven by the intense period of corporate-led globalisation. Far from disappearing, the state has intervened directly, from bailing out the banks to imposing markets in, for example, education to guaranteeing contractors under extortionate “public-private partnership” deals.
So it would be a mistake to view neoliberalism solely as a set of policies that developed in opposition to the post-war Keynesian Welfare State (KWS) which dominated in the West until its breakdown in the 1970s. Without a state prepared to put them into practice, neoliberal ideas wouldn’t amount to anything more than words.
Our best approach is to focus on the crisis of our limited democracy that flows from the imposition of neoliberalism and take up the question of a transfer of power. Taking that forward requires a counter-narrative in theory and practice to the dominant ideology which views us, for example, us as customers rather than citizens.
Building a counter-hegemony should be centred on replacing the institutions that uphold neoliberalism and the power of the corporations it promotes. Our approach must embrace a theory of power, alternatives to capitalist production and cultural liberation. We can’t return to the KWS period because the world is a vastly different place. And why would we want to, in any case? Moving beyond protest at the impact of neoliberalism to putting an end to it by way of a democratic revolution is much more exciting a prospect!