Protests, Strikes & Rallies: The Grassroots Fight for a Moral Economy
When Neoliberalism Went Mainstream
Since Jimmy Carter first pushed for austerity in 1978, there has been a bipartisan consensus in the United States and across much the world about the basic role of governments, both at-home and abroad.
This consensus has been especially strong within the English-speaking West, and in the 1990s it became dreadfully apparent that the Democrats in America and Labour in the United Kingdom had both been co-opted by “third way” politicians who became vocal supporters for “free-trade” and white-collar corporations, like the tech industry and the financial industry.
In the 1990s, the Iron Curtain officially fell, unleashing a torrent of consultants into former-Soviet states. These consultants brought with them the gospel of neoliberal economics. The instructions were simple: cut government spending to keep inflation low; contract out government services to the lowest bidder; weaken labor protections and attack unions to create a “freer” labor market (and a more desperate work force). Naomi Klein brilliantly lays out the history of such economic transitions in her book, “The Shock Doctrine: The Rise of Disaster Capitalism.”
At the same time, business groups in America began to negotiate on behalf of multinational corporations, through the United States government, to ensure sweetheart trade deals for those multinational corporations — deals like NAFTA and CAFTA.
I’m going to loosely define “neoliberalism” here as a regime of “small government” deregulation, where the government takes a hands-off approach to the economy. The result is that government is seen as secondary to non-state actors in the international marketplace. In the case of international trade, it means that governments acts as a representatives for corporate actors.
Neoliberalism was conceived as a third-way between laissez-faire capitalism and socialism. In the words of French philosopher and neoliberal patriarch, Louis Rougier,
“Being [neo]liberal is not […] letting cars drive in any direction, which would cause traffic jams and constant accidents. Nor is it like “planned economy,” in which each car would be told when to leave and where to go. Rather, it is imposing a highway code, while accepting that this code is not necessarily the same at times of accelerated transport as at times of caution.”
To the neoliberal, governments are there to incentivize certain behaviors, to provide infrastructure that reduces transaction costs for corporations, and to provide a military to support the actions and interests of corporations.
In the neoliberal’s mind, world peace will be achieved when countries set aside the self-interested zero-sum motivations of Realpolitik and instead participate in global trade that will stimulate across-the-globe growth.
Despite Similarities, Neoliberalism Isn’t Libertarianism
At this point, it’s important to differentiate libertarianism from neoliberalism: while both may argue for a form of trickle-down economics based on the logic that “a rising tide lifts all boats,” there are key differences in terms of policies and reactions to real-world economic failures.
One key functional difference between libertarians and neoliberals became apparent in 2008 with “Too Big to Fail Banks.” To the question of whether to let the banks fail, the libertarian says simply, “the government isn’t in the business of picking winners or losers, and so the government should let failing banks fail.”
On the contrary, the neoliberal says, “the government should save those banks in order to preserve stability and order.”
To the neoliberal, major banks are so essential that they are “too big to fail.” If those banks failed, they would bring entire global economic system down with them. And because neoliberals assume that the global economic system provides some sort of stability, the neoliberal finds it only reasonable that governments need to support those banks to promote as much stability as possible.
Another functional difference comes in terms of international trade: the libertarian generally objects to trade deals because “trade deals end up with two governments deciding who will be winners and losers.”
In contrast, the neoliberal says, basically, “that’s the point. And in doing so, we have reduced transaction costs and made the economy more efficient, which is good for consumers.”
Libertarianism prioritizes property rights and the freedom of the individual above all else. On the other hand, neoliberalism prioritizes the larger economic system above all else, which is why a neoliberal will allow state intervention to save a failing bank — if that bank is seen as essential to the stability of the system.
Was 2016 About Racism or Neoliberalism? (Or Both?)
In 2018, from teacher’s strikes in the United States to rail strikes in France, people are rejecting the neoliberal consensus.
And it’s not the first time.
We saw a bipartisan rejection of neoliberalism from voters in both U.S. parties during the 2015 campaign season and in the 2016 primaries and general election.
Donald Trump and Bernie Sanders both presented ideas that resonated as rejections of a forty-year consensus on global politics and economics. Whole books have now been written about whether Trump’s voters were motivated by economics or racism, by sexism or by cultural despair.
I posit that yes, it was all of those. And I’ll make the case that they are inextricable from one another.
Proponents of neoliberalism say that it’s an economic philosophy, and that it makes no statements about race, sex or gender. And, therefore neoliberalism can’t be blamed for racism or sexism within a society - according to its proponents.
I argue that at one level, that is exactly why neoliberalism has failed to address inequality meaningfully: because it refuses to acknowledge that racism and sexism exist within economic frameworks.
And by refusing to acknowledge racism and sexism within an economic framework, neoliberals turn a blind eye to the massive economic externalities associated with racism and sexism, which include, but are not limited to: below optimum employment; redundancy in businesses; inefficient transactions; suppressed wages; and, violence in all its forms — emotional, psychological, physical, and economic.
Economic inequality is closely related to racism and sexism. Economic inequality is very real, and it fosters a few myths that become fertile ground for racist and sexist beliefs.
One myth that inequality fosters is the idea that wealthy individuals possess something intrinsic to their person and their family that explains why they are wealthy.
On the other hand, impoverished individuals must either accept that there is something intrinsic to their person to explain why they’re poor — or they look for reasons to explain how they are being short-thrifted by society. From this second point springs a fountain of racist and sexist conspiracies: from “Women/Immigrants are taking all of the jobs!” to “A Jewish conspiracy is keeping my group of people down!”
The current president has routinely played off both sides of this. On the one hand he writes and says things like, “I consider my health, stamina and strength one of my greatest assets. The world has watched me for many years and can so testify — great genes!”
And on the other hand, Trump spent a significant portion of his rallies railing against America’s neoliberal trade agreements, and against immigrants. And by equating immigration with crime, he successfully elevates unemployed whites who can look around and say, “I may be unemployed, but at least I’m leading a righteous life — unlike those criminal immigrants!” (This is functionally the same as what Dixiecrats told out-of-work whites during Reconstruction and into the Jim Crow era.)
The flip side of Trump and others having “great genes” is that there then must be others who do not have “great genes.” It’s a variation of religious predetermination, whereby some people believe the outcome of an individual’s life is squarely placed on “God’s Providence.” In this case, “God’s Providence” takes the form of “great genes!”
Like neoliberalism, the “Great Genes!” model of the world ignores the realities of class, race, gender, and the innumerable environmental factors that effect gene expression.
It also fails to explain recent economic history, such as why workers’ wages have stagnated as economic productivity grows.
And it provides no satisfactory explanation to one of the biggest drivers of economic anxiety: the collective realization that for the first time in U.S. history, “it’s basically a coin flip as to whether you’ll do better than your parents.”
More than any other group, white American men have been subtly (and not-so-subtly) promised that the “American Dream” will provide them with a life better than their parents had.
When that expectation isn’t met, they demand an explanation.
To make matters appear more dire, identity politics have created a situation where these same men feel as though they’re losing the advantages that they had during most of the history of America, in terms of social standing and potential for economic advancement (especially in comparison to women and American minorities). This is not to say that they are actually losing anything, but rather that this is the perception among a large swath of Americans.
Despite the successes of the Obama administration, it failed to provide a satisfactory explanation or solution to these economic and social anxieties, aside from, “the economy is more stable and further from the brink of collapse than it was in 2009.”
And that’s not a satisfying answer to Americans who remember when their town’s main street bustled with small businesses and window shoppers. The Republicans have known this for decades now, and they play up these social and economic anxieties.
With the Bush tax cuts, Americans received physical checks in the mail — tangible evidence of how Bush and the Republicans were helping struggling Americans (even if corporations received much more in terms of tax breaks).
A few years later, they put “Joe the Plumber” on a pedestal — a flesh and blood representative of economic anxiety in America.
I argue that Barack Obama would’ve lost in 2012 had Republicans put up different candidates instead of Mitt Romney and Paul Ryan — both of whom advocated for neoliberal policies that were only slightly more right-wing than what President Obama was presenting.
Republicans have become masters of playing on small-town economic and social anxiety, both real and imagined. Donald Trump, with the help of Steve Bannon and others, tapped into this better than 15 other Republican candidates.
So, when swaths of the country lashed back at our first African American president for perpetuating a 40-year-failed economic agenda — was it racism, or economic anxiety? I’d say they’re impossible to separate.
When Hillary Clinton came forward and proposed extending many of the same economic policies — did she lose the electoral vote because of economic anxiety, or sexism? Again, I’d say they’re impossible to separate.
Economic anxiety is easily translated into social anxiety in the forms of racism and sexism. This is something Dr. Martin Luther King, Jr. made clear before he was assassinated.
Neoliberalism is Appealing Because It’s Sterile — That’s Also Why It Fails
Back to neoliberalism. While the “neoliberal agenda” is often conflated with conspiracy theories about Agenda 21, The Illuminati, or Lizard-People, I don’t think there’s any such grand conspiracy.
The appeal to neoliberalism lies in the way that its presented as a philosophy, underpinned by data, which makes it seem scientific.
Again, neoliberalism doesn’t “see” race, sex, gender, ethnicity, religion or any other identity. Rather, it sees the world in broad economic terms, such as: efficiency, choice, transaction costs, stability, and growth.
It measures success in terms of low costs for businesses and high growth for economies.
These are sterile measures, which make them appealing to intellectuals. But because they are sterile measures, they also are poor reflections of reality.
While neoliberalism aims to set aside the Realpolitik motivations of countries, it says nothing about curbing the selfish motivations of corporations. Because neoliberalism encourages governments to reduce their interference in the private sector, the private sector has turned around and hijacked governments around the world.
But after forty years of technocrats pushing the sterile economic logic of neoliberalism, working people around the world are standing up and demanding that governments do more than simply prop up large corporations and encourage international trade.
The Fight For a Moral Economy
This year we have seen teacher’s strikes across the United States (West Virginia; Arizona; Kentucky; North Carolina), where teachers are saying, “Enough! Our state governments must do more than cut budgets to preserve low tax rates for corporations!”
In France we have seen tens of thousands in the streets protesting one-time-investment-banker Emanuel Macron’s neoliberal attacks on public unions and his plan to gut France’s social safety net.
In the United Kingdom, we have seen massive rallies in support of the country’s healthcare system, pension system, and to demand tuition-free university education — all rejecting Margaret Thatcher’s neoliberal economic policies.
Within the United States’ political system, Bernie Sanders’ messages from 2016 have taken hold within the Democratic Party. For the first time in nearly 50 years, many Democrats now once again support largescale government programs, such as: a jobs guarantee; Medicare For All; expanding Social Security; and, tuition-free college.
All of those proposals would have been rejected as pie-in-the-sky a decade ago, but only because they lie outside of the neoliberal consensus that “market solutions are the best solutions. Government should only step in in case of total failure.”
Economic models are only as good as their real-world outcomes — and neoliberalism has been a failure for most people. It has failed in eradicating poverty or hunger; it has failed to achieve equitability; it has failed to allocate resources efficiently; it has failed to address the environmental crises of our times; it has failed to secure peace; it has failed to create more leisure time for workers. By nearly any measure outside of stockholder value, neoliberalism has been an abject failure.
Working people all over the world are taking to the streets to make that clear.
And the sooner that the political and economic elite around the world realize that neoliberalism has failed most people on this planet, the sooner we can begin to conceive of a framework that will promote a moral economy. One that de-emphasizes growth and corporate profits as the principle measures of success.
But it’s not enough to simply reject what hasn’t worked. Now that we have identified what’s wrong — we need to make it right.
For instance, to address both the economic and social anxieties that have been fostered by neoliberalism, perhaps it is finally time to implement Martin Luther King, Jr’s plan for an “Economic Bill of Rights,” that “would guarantee a job to all people who want to work and are able to work. It would also guarantee an income for all who are not able to work.”
That would be a big step forward towards a just and moral economy, one that would address institutional racism at its core by dissolving the myth that one group is stealing another group’s jobs.
And there are plenty of contemporary groups presenting tangible solutions. For instance, I strongly encourage readers to check out the Poor People’s Campaign, which has presented a list of fifteen concrete actions that can be taken to fix our morally corrupt, and inherently prejudiced, economic system.
We need solutions like these.
We need to create and foster an economic framework that measures success based on the well-being of workers, families, communities, and the environment — and not based on multinational corporate profits and ill-conceived measures of economic growth.