I want to step back from the "celebrity politics" foisted upon us by the media. In this diary I will raise the profile of the abstract theories of government that stand behind the political issues, about which bloggers like us argue. Before you decide to skip this diary, remember that its those abstract theories which define a "government of laws, not of men".
For the last thirty years, the political left in general, and the "Democratic wing of the Democratic Party" in particular, have identified "neoliberal" theories as being harmful to the non-financial economy, to the environment, and to democracy. For the past eight years, the even more odious and more anti-democratic "neoconservative" theory has brutalized America and the world.
Unlike "terror-ism", there is no doubt that the neo-isms ARE philosophies of government, and proven pernicious ones at that. Therefore, it makes sense to fight them. There is no question that the current administration is repudiating neoconservatism, but the question is: what is it doing about neoliberalism? Repudiating it or rescuing it? Is neoliberalism dead? Or must we drive wooden stakes through its multiple bankster hearts? More below the fold.
I need not recount the outcries against the economic and social (e.g., healthcare, education) policies being put into action and/or law by the Obama administration. I want to talk about them, but in a way that avoids the "celebrity politics" fight about "dissing" someone's hero. To do that, let me move the debate into the abstract. Let me talk about political theories that have been around long before the current politicians came upon the scene. (Unless you're an expert on neoliberalism, you would do well to read the synopsis of David Harvey's "A Brief History of Neoliberalism" at the bottom. Be warned: the synopsis is longer than this essay! ) Done that? Great.
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Let's begin our discussion of neoliberalism in the Obama administration with a historical analogy.
The immediate revival of the Chilean economy (after the 1975 adoption of neoliberalism) in terms of growth rates, capital accumulation, and high rates of return on foreign investments was short lived. It all went sour in the Latin American debt crisis of 1982. The result was a much more pragmatic, and less ideologically driven, application of neoliberal policies in the years that followed.
- David Harvey, "A brief history of neoliberalism" (p 9)
As Harvey points out, neoliberals have a fantastic ability to improvise and huge resources to implement any improvisation that works. The historical example of Chile teaches that, in the face of a complete economic meltdown, neoliberals will slightly lift their feet off the throats of their victims - but only long enough so that the victims don't expire. Call it "kinder, gentler neoliberalism". (So, maybe the top bracket tax increase and the Estate Tax restoration will survive.) The lesson of the 1994 Mexican bailout is that neoliberals will spend huge amounts of taxpayer dollars to protect the private profits of money center banks in NYC. (In the 2008-9 crisis, we've pledged over $10 Trillion, and counting.)
At bottom, as Harvey's analysis shows, neoliberals are opportunists and pragmatists, not ideologues. They want the money - ideological purity be damned. (Maybe you can understand why I find calls for "message discipline" nothing but hypocrisy by a pack of venal opportunists.)
Since the 2008 election, Americans have been treated to breathless coverage of how engaged and concerned Democratic politicians are for the average American's sufferings, and what great laws and programs they will create to rescue us. (OTOH, unless you're a gun dealer, the GOP isn't concerned for you.) All that made-for-TV baloney goes into the K Street sausage factory and the Blue Dog neutering shop. What comes out, some three months into the administration, is yet another neoliberal bailout package, and yet more privatization of government services. That wonderful grassroots support which got the democrats elected? Oh, it now needs "message discipline". Democratic support for EFCA? Its now lukewarm. The Message of the Day is "give Obama some time". (How many more Friedman Units do you think the underlying economic disaster will grant us? More time to appoint more bozos like Geithner?)
There are some fundamental political problems within neoliberalism...A contradiction arises between a seductive but alienating possessive individualism on the one hand and the desire for a meaningful collective life on the other. While individuals are supposedly free to choose, they are not supposed to choose to construct strong collective institutions (such as trade unions) as opposed to weak voluntary organizations (like charitable organizations). They most certainly should not choose to associate to create political parties with the aim of forcing the state to intervene in or eliminate the market...Faced with social movements that seek collective interventions, therefore, the neoliberal state is itself forced to intervene, sometimes repressively, thus denying the very freedoms it is supposed to uphold. (p 69)
It is precisely in such a context of diminished personal resources derived from the job market that the neoliberal determination to transfer all responsibility for well-being back to the individual has doubly deleterious effects. As the state...diminishes its role in arenas such as health care, public education, and social services, which were once so fundamental to liberalism, it leaves larger and larger segments of the population exposed to impoverishment. (p 76)
During the campaign, we heard how we must finally fix healthcare, but instead the "public option" is under merciless attack by lobbyists. Everyone wants to get rid of NCLB and to repair the damage to our public schools. Instead, we get Arne Duncan and his privatization schemes. Across the board, on critical issues, we get more weasel-worded pretending that government intervention is being increased when, in reality, government intervention is being decreased, if not privatized. This is not the direction in which America voted to go. The politicians are supporting the inverse of the policies which public opinion polls show people overwhelmingly favor.
Contemporary practices with respect to finance capital and financial institutions are perhaps the most difficult of all to reconcile with neoliberal orthodoxy. Neoliberal states typically facilitate the diffusion of influence of financial institutions through deregulation, but then they also all too often guarantee the integrity and solvency of financial institutions at all costs. (p 72)
MY TAKEAWAY: No to neoconservatism; yes to neoliberalism. That's the change you can believe in.
Yes, Obama is rolling back the neoconservative lunacy. You will see effective repudiations of those crazy, counterproductive, and nakedly authoritarian policies. You will also see less substantive (as opposed to symbolic) kowtowing to the neocon electoral power base - the religious right, a bunch of useful idiots whose 15 years of fame is now over. The rollback will be most apparent in the areas of civil rights that do not impinge upon key economic and military policies. You will see some cutting of the more insane and obvioulsy failed military acquisition gravy trains - hopefully including Star Wars. Notice, though, that while Obama signs executive orders (neolib method 101) to stop torture and to close Gitmo, his DOJ is arguing in court (neolib method 102) to keep all of Bush's GWOT precedents.
However, even acknowledging the rollback of the neocon ideology, the economic policies of Treasury and the Federal Reserve are the same, failed, class-warfare, neoliberal policies we have had for the last thirty years. So are the sellouts to the health insurance industry, the continued outsourcing of manufacturing, the sudden "obstacles" to labor reform, the corporate-friendly education policies. The reliance upon economic "experts" and the lack of economic transparency are hallmarks of the neoliberal approach to government - anti-democratic. We forget, at our peril, the "there is no such thing as society" attitude of the neoliberal saint, Margaret Thatcher.
The sum total of Obama's policies does represent some change; but its only half the change we voted for. I get this really worrying "good cop; bad cop" vibe from the act that is being presented in the corporate media: the relentless coverage of the personal virtues of Obama and his family, versus the out-of-control lunacy emanating from Beck, Hannity, and Limbaugh, coupled with the deliberate under-coverage of the dirty details of vital, proposed legislation. If you've never seen this act before, you might "sign" the document "good cop" Obama is putting in front of you. Me, I'd ask for my own lawyer.
Given the synopsis in the appendix of what an anti-democratic, inequality-manufacturing fraud neoliberalism is, why shouldn't I be blistering ANYONE who serves up these disastrous theories as the justification for the same old failed policies? Given the thirty year track record of neoliberalism in power, why does anyone think these guys, unpresssured, will do anything different? So, to those who tell me to stop pressing the case against the Geithner plan, the health insurance plan, the education plan, the Blue Dog sellouts, and so on, I say:
Power concedes nothing without a demand. It never did and it never will..."
"If there is no struggle there is no progress. Those who profess to favor freedom and yet depreciate agitation, are men who want crops without plowing up the ground, they want rain without thunder and lightening. They want the ocean without the awful roar of its many waters."
- Frederick Douglas
My glass-half-empty takeaway is the reason why I needed the long detour appendix about political theory. What is being done to America is very sophisticated, very psychologically manipulative, and not financially good for anyone but the already rich. But, if you know your recent history, you can follow the pea under the shell. The question is, do enough voters know the game of Three Card Monte to stop us from losing our collective shirts?
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APPENDIX
A SYNOPSYS OF THE ROTTEN THEORY OF NEOLIBERALISM
While most examinations of neoliberalism reference Naomi Klein's powerful, and deservedly praised "The Shock Doctrine", I want to recommend the latest book from David Harvey, "A Brief History of Neoliberalism". It is much shorter, more abstract, and less encyclopedic; but that briefness and emotional distance give it the virtue of being a quick and concise read. I also like Harvey's emphasis on how the neolibs themselves were not omniscient, but rather stumbling blindly towards workable tactics; and how the left misunderstood the nature of the attack upon it by neoliberalism, and was therefore splintered and defeated by it. He discusses the profoundly different economic and political contexts successfully conquered by neoliberalism, and the opportunistic and ad hoc methods used in each case.
Consider this theoretical counter-attack against neoliberalism to be one of those theories which Naomi Klein argues needs to be in place BEFORE a crisis happens - so that it will be at hand to be implemented DURING the crisis. Klein and Harvey have provided the theory. Its up to us to use it in the current, on-going crisis.
1. A cover story for elitism
Most importantly, Harvey begins and ends with the intellectual fraud of neoliberalism. He begins by noticing its economic failures, coupled with its class-warfare successes; and ends by concluding that re-establishing elite power was the intention of the neoliberal Randian Utopianism all along.
Neoliberalization has not been very effective in revitalizing global capital accumulation, but it has succeeded remarkably well in restoring, or in some instances (as in Russia and China) creating, the power of an economic elite. The theoretical utopianism of neoliberal argument has, I conclude, primarily worked as a system of justification and legitimation for whatever needed to be done to achieve this goal. The evidence suggests, moreover, that when neoliberal principles clash with the need to restore or sustain elite power, then the principles are either abandoned or become so twisted as to become unrecognizable. (p 19)
The market, depicted ideologically as the way to foster competition and innovation, became a vehicle for the consolidation of monopoly power. (p 26)
The Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed under forced privatization. The country and its ruling elites, along with foreign investors, did extremely in the early stages. Redistributive effects and increasing social inequality have in fact been such a persistent feature of neoliberalization as to be regarded as structural to the whole project. (p 16)
After the 2008 financial meltdown, ordinary people are finally awake enough to hear critiques of the effectiveness of neoliberal economic policy. They are also open to the idea that the entire neoliberal program is theoretically flawed. The evidence cannot simply be denied and disappeared any longer.
2. Flawed, but powerful, social theory
Harvey, quoting heavily from Karl Polyani, goes on to critique the Hayekian underpinnings of neoliberal theory:
In a complex society, the meaning of freedom becomes as contradictory and as fraught as its incitements to action are compelling. There are, (Polyani) noted, two kinds of freedom, one good and the other bad. Among the latter he listed 'the freedom to exploit one's fellows, or the freedom to make inordinate gains without commensurable service to the community, the freedom to keep technological inventions from being used for public benefit, or the freedom to profit from public calamities secretly engineered for private advantage'....The idea of freedom thus 'degenerates into a mere advocacy of free enterprise', which means 'the fullness of freedom for those whose income, leisure and security need no enhancing, and a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of property.'...Neoliberal utopianism is doomed, in Polyani's view, to be frustrated by authoritarianism...The good freedoms are lost, the bad ones take over. (p 37)
The left has recognized the falsity of "freedom equals free enterprise" from the beginning. But it still has not come up with an effective response to the "individual liberty" trope. Harvey's discussion of this is, to me, the most powerful point he makes:
Values of individual freedom and social justice are not, however, necessarily compatible. Pursuit of social justice presupposes social solidarities and a willingness to submerge individual wants, needs, and desires in the cause of some more general struggle for, say, social equality or environmental justice...Neoliberal rhetoric, with its foundational emphasis upon individual freedoms, has the power to split off libertarianism, identity politics, multi-cultruralism, and eventually narcissistic consumerism from the social forces ranged in pursuit of social justice...It has long proved extremely difficult within the US left...to forge the collective discipline required for political action to achieve social justice without offending the desire of political actors for individual freedom and for full recognition and expression of particular identities. Neoliberalism did not create these distinctions, but it could easily exploit, if not foment, them. (pp 41-2)
Given the lack of effective left-wing organizing, even within the Democratic Party due to the DLC, the neoliberals have been able to embed their toxic theory of government - in both Republican and Democratic administrations.
3. Anti-democratic political theory
The neoliberal theory of government, to a lesser degree than the neoconservative theory, is royalist.
Neoliberal theorists are profoundly suspicious of democracy. Governance by majority rule is seen as a potential threat to individual rights and constitutional liberties. Democracy is viewed as a luxury, only possible under conditions of relative affluence coupled with a strong middle-class presence to guarantee political stability. Neoliberals therefore tend to favor governance by experts and elites. A strong preference exists for government by executive order and by judicial decision than democratic and parliamentary decision making. Neoliberals prefer to insulate key institutions, such as the central bank, from democratic pressures. (p 66)
Internally, the neoliberal state is necessarily hostile to all forms of social solidarity that put restraints on capital accumulation...trade unions...have to be disciplined, if not destroyed, and this in the name of the supposedly sacrosanct individual liberty of the isolated laborer.The general outcome is lower wages, increasing job insecurity, and in many instances loss of benefits and job protections. Such trends are readily discernible in all states that have taken the neoliberal road. Given the violent assault on all forms of labour organization and labour rights and heavy reliance upon massive but largely disorganized labour reserves in countries like China...it would seem that labour control and maintenance of a high rate of labour exploitation have been central to neoliberalization all along. The restoration or formation of class power occurs, as always, at the expense of labor. (p 76)
Americans have long expressed distaste for rule by financial experts, and are beginning to wake up to the need for labor solidarity, although the neocons are frantically playing the xenophobia card to prevent that solidarity from forming. Still, the anti-democratic nature of neoliberalism is too abstract for most people to effectively oppose it.
4. Class warfare
After the Paulson bailout circus, Americans are also willing to listen to charges of favoritism for the banksters. By rehabilitating the idea of "elite power" (a.k.a. class), Harvey makes it quite clear why seemingly technical changes in the way government prioritizes financial obligations are nothing more than class warfare:
...in 1975 a powerful cabal of investment bankers (led by Walter Wriston of Citibank) refused to rollover the (NYC) debt and pushed the city into technical bankruptcy. The bail-out that followed entailed the construction of new institutions that took over the management of the city budget. They had first claim on city tax revenues in order to first pay off bondholders; whatever was left went for essential services...The final indignity was the requirement that municipal unions should invest their pension funds in city bonds.
This amounted to a coup by the financial institutions against the democratically elected government of NYC, and it was every bit as effective as the military coup that had earlier occurred in Chile. Wealth was redistributed to the upper classes in the midst of a fiscal crisis. (p 45)
(There is) a key difference between liberal and neoliberal practice: under the former, lenders take the losses that arise from bad investment decisions, while under the latter the borrowers are forced by state and international powers to take on board the cost of debt repayment no matter what the consequences for the livelihood and well-being of the local population. If this requires surrender of assets to foreign companies at fire sale prices, then so be it. (p 29)
In a manner similar to Naomi Klein, David Harvey lays out the history of the last forty years so there can be no mistake. The economic and political confidence tricks on the table in Washington today have been used many times in the past by neoliberal elites. All that is different about the 2009 Financial Crisis is its gigantic scale and the fact that it is happening in the nation at the center of the world's economy.