Saturday, 6 January 2018

Social Exclusion, Popular Resistance and the Future of Neoliberalism

Social Exclusion

Every sector of society from the criminal justice system to elderly care has been impacted by neoliberal social marginalization. More significant than any other aspect of neoliberalism, the creation of a chronic debtor class without any assets is floating a step above the structurally unemployed and underemployed. The Industrial revolution exacerbated social exclusion producing an underclass left to its own fate by a state that remained faithful to the social contract’s laissez philosophy. Composed of vagrants, criminals, chronically unemployed, and people of the streets that British social researcher Henry Mayhew described in London Labour and the London Poor, a work published three years after the revolutions of 1848 that shattered the liberal foundations of Europe, the lumpenproletariat caught the attention of Karl Marx and Friedrich Engels (The German Ideology) interested in the industrial working class movement as the vanguard of the revolution.

Lacking a class consciousness thus easily exploited by the elites the lumpenproletariat were a product of industrial capitalism’s surplus labor that kept wages at or just above subsistence levels, long before European and American trade union struggles were able to secure a living wage. In the last four decades neoliberal policies have created a chronic debtor working class operating under the illusion of integration into the mainstream when in fact their debtor status not only entails social exclusion but relegated to perpetual servitude dependence and never climbing out of it. The neoliberal state is the catalyst to the creation of this new class.

In an essay entitled “Labour Relations and Social Movements in the 21st Century”
Portuguese social scientists Elísio Estanque and Hermes Augusto Costa argue that the manner that neoliberalism has impacted Europe’s social structure in both core and periphery countries has given rise to the new precarious working class, often college-degreed, overqualified, and struggling to secure steady employment especially amid recessionary cycles that last longer and run deeper.  

“The panorama of a deep economic crisis which in the last few decades has hit Europe and its Welfare state in particular has had an unprecedented impact on employment and social policies. The neoliberal model and the effects of deregulated and global finance not only question the “European social model” but push sectors of the labour force – with the youngest and well-qualified being prominent – into unemployment or precarious jobs. …the sociological and potential socio-political significance of these actions particularly as a result of the interconnections that such movements express, both in the sphere of the workplace and industrial system or whether with broader social structures, with special emphasis on the middle classes and the threats of 'proletarianization' that presently hang over them. … labour relations of our time are crossed by precariousness and by a new and growing “precariat” which also gave rise to new social movements and new forms of activism and protest.”

‘Proletarization’ of the declining middle class and downward income pressure for the working class and middle class has been accompanied by the creation of a growing chronic debtor class in the Western World. Symptomatic of the neoliberal globalist world order, the creation of the debtor class and more broadly social exclusion transcends national borders, ethnicity, gender, culture, etc. Not just at the central government level, but at the regional and local levels, public policy faithfully mimics the neoliberal model resulting in greater social exclusion while there is an effort to convince people that there is no other path to progress although people were free to search; a dogma similar to clerical intercession as the path to spiritual salvation.

The neoliberal path to salvation has resulted in a staggering 40% of young adults living with relatives out of financial necessity. The number has never been greater at any time in modern US history since the Great Depression, and the situation is not very different for Europe. Burdened with debt, about half of the unemployed youth are unable to find work and most that work do so outside the field of their academic training. According to the OECD, youth unemployment in the US is not confined only to high school dropouts but includes college graduates. Not just across southern Europe and northern Africa, but in most countries the neoliberal economy of massive capital concentration has created a new lumpenproletariat that has no assets and carries debt. Owing to neoliberal policies, personal bankruptcies have risen sharply in the last four decades across the Western World reflecting the downward social mobility and deep impact on the chronically indebted during recessionary cycles.;; Iain Ramsay, Personal Insolvency in the 21st Century: A Comparative Analysis of the US and Europe, 2017)

Historically, the safe assumption has been that higher education is the key to upward social mobility and financial security, regardless of cyclical economic trends. However, the laws of overproduction apply not only to commodities but to the labor force, especially as the information revolution continues to chip away at human labor. College education is hardly a guarantee to upward social mobility, but often a catalyst to descent into the debtor unemployed class, or minimum wage/seasonal part time job or several such jobs. The fate of the college-educated falling into the chronic debtor class is part of a much larger framework, namely the ‘financialization’ of the economy that is at the core of neoliberalism. ( Vik Loveday, “Working-class participation, middle-class aspiration? Value, upward mobility and symbolic indebtedness in higher education.” The Sociological Review, September 2014)

Beyond the simplistic suggestion of ‘more training’ to keep up with tech changes, the root cause of social exclusion and the chronic debtor class revolves around the ‘financialization’ of the neoliberal globalist economy around which central banks make monetary policy. Since the beginning of the Thatcher-Reagan era, advanced capitalist countries led by the US conducted policy to promote the centrality of financial markets as the core of the economy. This entails resting more on showing quarterly profit even at the expense of taking on debt, lower productivity and long-term sustainability, or even breaking a company apart and dismissing workers because it would add shareholder value. Therefore, the short-term financial motives and projection of market performance carry far more weight than any other consideration. 

Symptomatic of a combination of deregulation and the evolution of capitalism especially in core countries from productive to speculative, financialization has transformed the world economy. Enterprises from insurance companies to brokerage firms and banks like Goldman Sachs involved in legal and quasi-legal practices, everything from the derivatives market to helping convert a country’s sovereign debt into a surplus while making hefty profits has been part of the financialization economy that speeds up capital concentration and creates a wider rich-poor gap. Housing, health, pension systems, health care and personal consumption are all impacted by financialization that concentrates capital through speculation rather than producing anything from capital goods to consumer products and services. (Costas Lapavitsas, The Financialization of Capitalism: 'Profiting without producing'

Billionaire speculator George Soros has observed that market speculation not only drives prices higher, especially of commodities on a world scale, but the inevitability of built-in booms and busts are disruptive simply because a small group of people have secured a legal means for capital accumulation. At the outbreak of the US stock market collapse followed by the ‘great recession’ of 2008, the European Network and Debt and Development (EURODAD) published an article critical of financialization and its impact on world hunger.

“Do you enjoy rising prices? Everybody talks about commodities – with the Agriculture Euro Fund you can benefit from the increase in value of the seven most important agricultural commodities.” With this advertisement the Deutsche Bank t tried in spring 2008 to attract clients for one of its investment funds. At the same time, there were hunger revolts in Haiti, Cameroon and other developing countries, because many poor could no longer pay the exploding food prices. In fact, between the end of 2006 and March 2008 the prices for the seven most important commodities went up by 71 per cent on average, for rice and grain the increase was 126 per cent. The poor are most hit by the hike in prices. Whereas households in industrialised countries spend 10 -20 per cent for food, in low-income countries they spend 60 - 80 per cent. As a result, the World Bank forecasts an increase in the number of people falling below the absolute poverty line by more than 100 million. Furthermore, the price explosion has negative macroeconomic effects: deterioration of the balance of payment, fuelling inflation and new debt.”  

Someone has to pay for the speculative nature of financialization, and the labor force in all countries is the first to do so through higher indirect taxes, cuts in social programs and jobs and wages for the sake of stock performance. Stock markets around which public policy is conducted have eroded the real economy while molding a culture of financialization of the last two generations a large percentage of which has been swimming in personal debt reflecting the debt-ridden financialization economy. Contrary to claims by politicians, business leaders and the media that the neoliberal system of financialization is all about creating jobs and helping to diffuse income to the middle class and workers, the only goal of financialization is wealth concentration while a larger debtor class and social marginalization are the inevitable results. It is hardly surprising that people world-wide believe the political economy is rigged by the privileged class to maintain its status and the political class is the facilitator.; Costas Lapavitsa, Financialization in Crisis, 2013; Rona Foroohar, Makers and Takers: How Wall Street Destroyed Main Street, 2016)

Despite efforts by pluralist and populist neoliberals throughout the world to use ‘culture wars’ and identity politics as distraction while deemphasizing the role of the state as the catalyst in the neoliberal social contract, the contradictions that the political economy exposes the truth about the socially unjust society that marginalizes the uneducated poor and college-educated indebted alike. Not to deemphasize the significance of global power distribution based on the Westphalian nation-state model and regional blocs such as the European Union, but neoliberals are the ones who insist on the obsolete nation-state that the international market transcends, thus acknowledging the preeminence of capitalism in the social contract and the subordination of national sovereignty to international capital and financialization of the economy. After all, the multinational corporation operating in different countries is accountable only to its stockholders, not to the nation-state whose role is to advance corporate interests.

No matter how rightwing populists try to distract people from the real cause of social exclusion and marginalization by focusing on nationalist rhetoric, marginalized social groups and Muslim or Mexican legal or illegal immigrants have no voice in public policy but financialization speculators do. In an article entitled “The Politics of Public Debt: Neoliberalism, capitalist development, and the restructuring of the state”, Wolfgang Streeck concludes that neoliberalism’s systemic rewards provide a disincentive for capitalists to abandon financialization in favor of productivity.  “Why should the new oligarchs be interested in their countries’ future productive capacities and present democratic stability if, apparently, they can be rich without it, processing back and forth the synthetic money produced for them at no cost by a central bank for which the sky is the limit, at each stage diverting from it hefty fees and unprecedented salaries, bonuses and profits as long as it is forthcoming — and then leave their country to its remaining devices and withdraw to some privately owned island?

An important difference between pluralists and rightwing populists in their approach to the state’s role is that the former advocate for a strong legislative branch and weaker executive, while rightwing populists want a strong executive and weak legislative. However, both political camps agree about advancing market hegemony nationally and internationally and both support policies that benefit international and domestic capital, thus facilitating the convergence of capitalist class interests across national borders with the symptomatic results of social exclusion. (; Vicente Navarro, “The Worldwide Class Struggle”

Regardless of vacuous rhetoric about a weak state resulting from neoliberal policies, the state in core countries where financialization prevails has been and remains the catalyst for class hegemony as has been the case since the nascent stage of capitalism. Both Margaret Thatcher and Ronald Reagan strengthened the corporate welfare state while openly declaring war against trade unions and by extension on the working class that neoliberals demonize as the enemy of economic progress. As statistics below illustrate, the debtor class expanded rapidly after 1980 when the financialization economy took off, reaching its highest point after the subprime-induced great recession in 2008. Under neoliberal globalist policies, governments around the world followed the Reagan-Thatcher model to facilitate over-accumulation of capital in the name of competition. (Montgomerie Johnna, Neoliberalism and the Making of the Subprime Borrower, 2010)

Whether the state is promoting neoliberal policies under a pluralist or authoritarian models, the neoliberal culture has designated labor as the unspoken enemy, especially organized labor regardless of whether the ruling parties have co-opted trade unions. In the struggle for capital accumulation under parasitic financialization policies, the state’s view of labor as the enemy makes social conflict inevitable despite the obvious contradiction that the ‘enemy-worker’ is both the mass consumer on whom the economy depends for expansion and development. Despite this contradiction, neoliberals from firms such as Goldman Sachs has many of its former executives not just in top positions of the US government but world-wide, no matter who is in power. Neoliberal policy resulting in social exclusion starts with international finance capitalism hiding behind the pluralist and rightwing populist masks of politicians desperately vying for power to conduct public policy.

Just as the serfs were aware in the Middle Ages that Lords and Bishops determined the fate of all down here on earth before God in Heaven had the last word, people today realize the ubiquitous power of capitalists operating behind the scenes, and in some case as with Trump in the forefront of public-policy that results in social exclusion and rising inequality in the name of market fundamentalism promising to deliver the benefits to all people. Neoliberalism has created a chronic debtor class that became larger after the 2008 recession and will continue growing with each economic contracting cycle in decades to come. Despite its efforts to keep one step ahead of bankruptcy, the identity of the new chronic debtor class rests with the neoliberal status quo, often with the rightwing populist camp that makes rhetorical overtures to the frustrated working class that realize financialization benefits a small percentage of wealthy individuals.

Personal debt has skyrocketed, reaching $12.58 trillion in the US in 2016, or 80% of GDP. The irony is that the personal debt level is 2016 was the highest since the great recession of 2008 and it is expected to continue much higher, despite the economic recovery and low unemployment. Wage stagnation and higher costs of health, housing and education combined with higher direct and indirect taxes to keep public debt at manageable levels will continue to drive more people into the debtor class. Although some European countries such as Germany and France have lower household debt relative to GDP, all advanced and many developing nations have experienced a sharp rise in personal debt because of deregulation, privatization, and lower taxes on the wealthy with the burden falling on the mass consumer. Hence the creation of a permanent debtor class whose fortunes rest on maintaining steady employment and/or additional part-time employment to meet loan obligations and keep one step ahead of declaring bankruptcy. Austerity policies imposed either by the government through tight credit in advanced capitalist countries or IMF loan conditionality in developing and semi-developed nations the result in either case is lower living standards and a rising debtor class.

Maurizio Lazzarato's The Making of the Indebted Man: An Essay on the Neoliberal Condition argues that neoliberalism has created a debtor-creditor relationship which has supplanted the worker-capitalist dichotomy, an argument that others focusing on the financialization of the economy have made as well. Although in Keynesian economics public and private debt was a stimulant for capitalist growth amid the contracting cycle of the economy, the neoliberal era created the permanent chronic debtor class that finds it difficult to extricate itself from that status. Evident after the deep recession of the subprime-financialization-induced recession in 2008, this issue attracted the attention of some politicians and political observers who realized the convergence of the widening debtor class with the corresponding widening of the rich-poor income gap.

By making both private and public debt, an integral part of the means of production, the neoliberal system has reshaped social life and social relationships because the entire world economy is debt-based. Servicing loans entails lower living standards for the working class in advanced capitalist countries, and even lower in the rest of the world, but it also means integrating the debtor into the system more closely than at any time in history. While it is true that throughout the history of civilization human beings from China and India to Europe have used various systems of credit to transact business (David Graeber, Debt: the First 5000 Years, 2014), no one would suggest reverting back to debt-slavery as part of the social structure. Yet, neoliberalism has created the ‘indebted man’ as part of a policy that has resulted in social asymmetrical power, aiming to speed up capital accumulation and maintain market hegemony in society while generating greater social exclusion.

Ever since the British Abolition of the Slave Trade Act in 1807, followed by a number of other European governments in the early 1800s, there was an assumption that slave labor is inconsistent with free labor markets as well as with the liberal social contract rooted in individual freedom. Nevertheless, at the core of neoliberal capitalism US consumer debt as of October 2017 stood at $3.8 trillion in a 419 trillion economy. Debt-to-personal income ratio is at 160%; college student debt runs at approximately $1.5 trillion, with most of that since 2000; mortgage debt has tripled since 1955, with an alarming 8 million people delinquent on their payments and the foreclosure rate hovering at 4.5% or three times higher than postwar average; consumer debt has risen 1,700 since 1971 to above $1 trillion, and roughly half of Americans are carrying monthly credit debt with an average rate of 14%. The debt problem is hardly better for Europe where a number of countries have a much higher personal debt per capita than the US. In addition to personal debt, public debt has become a burden on the working class in so far as neoliberal politicians and the IMF are using as a pretext to impose austerity conditions, cut entitlements and social programs amid diminished purchasing power because of inflationary asset values and higher taxes.;

While personal debt is often but not always a reflection of a consumerist society, personal debt encompasses everything from education to health care costs in times when the digital/artificial intelligence economy is creating a surplus labor force that results in work instability and asymmetrical social relations. Technology-automation-induced unemployment driving down living standards creates debtor-workers chasing the technology to keep up with debt payments in order to survive until the next payment is due. Considering the financial system backed by a legal framework is established to favor creditors, especially given the safeguards and protections accorded to creditors in the past four decades, there are many blatant and overt ways that the state uses to criminalize poverty and debt. In 2015, for example, Montana became the first state not to take the driver’s license of those delinquent on their student debt, thus decriminalizing debt in this one aspect, though hardly addressing the larger issue of the underlying causes of debt and social exclusion.;

In an article entitled “Torturing the Poor, German-Style”, Thomas Klikauer stressed that the weakening of the social welfare state took place under the Social Democratic Party (SPD)-Green Party coalition (1998-2005) government pursuing pluralist neoliberal policies. Although historically the SPD had forged a compromise that would permit for the social inclusion of labor into the institutional mainstream, by the 1990s, the SPD once rooted in socialism had fully embraced neoliberalism just as the British Labour Party and all socialist partiers of Europe pursuing social exclusion. Klilauer writes: “Germany’s chancellor [Gerhard] Schröder (SPD) –known as the “Comrade of the Bosses”– no longer sought to integrate labour into capitalism, at least not the Lumpenproletariat or precariate. These sections of society are now deliberately driven into mass poverty, joining the growing number of working poor on a scale not seen in Germany perhaps since the 1930s.”

No different than working class people in other countries need more than one job to keep up with debt and living expenses, so do three million Germans (rising from 150,000 in 2003) that have the privilege of living in Europe’s richest nation. Just as the number of the working poor has been rising in Germany, so have they across the Western World. Social exclusion and the expansion of the debtor class in Germany manifested itself in the national elections of 2017 where for the first time since the interwar era a political party carrying the legacy of Nazism, the Alternative fur Deutchland (AfD), founded by elite ultra-conservatives, captured 13% of the vote to become third-largest party and giving a voice of neo-Nazis who default society’s neoliberal ills to Muslims and immigrants. Rejecting the link between market fundamentalism that both the SPD and German conservatives pursued in the last three decades, neoliberal apologists insist that the AfD merely reflects a Western-wide anti-Muslim trend unrelated to social exclusion and the policies that have led to Germany’s new lumpenproletariat and working poor.;

Interestingly, US neoliberal policies also go hand-in-hand with Islamophobia and the war on terror under both Democrat and Republican administrations, although the pluralist-diversity neoliberals have been more careful to maintain a politically-correct rhetoric. Just as in Germany and the rest of Europe, there is a direct correlation in the US between the rise in social exclusion of Muslim and non-Muslim immigrants and minorities and the growing trend of rightwing populism. There is no empirical foundation to arguments that rightwing populism whether in Germany or the US has no historical roots and it is unconnected both to domestic and foreign policies. Although the neoliberal framework in which rightwing populism operates and which creates social exclusion and the new chronic debtor class clashes with neoliberal pluralism that presents itself as democratic, structural exploitation is built into the social contract thus generating grassroots opposition.

Grassroots Resistance to Neoliberalism

Even before the great recession of 2008, there were a number of grassroots groups against neoliberal globalism both in advanced and developing nations. Some found expression in social media, others at the local level focused on the impact of neoliberal policies in the local community, and still others attempted to alter public policy through cooperation with state entities and/or international organizations. The most important anti-neoliberal grassroots organizations have been in Brazil (Homeless Workers’ Movement and Landless Workers’ Movement), South Africa (Abahlali baseMjondolo, Western Cape Anti-Eviction Campaign, Landless Peoples’ Movement), Mexico (Ejército Zapatista de Liberación Nacional, EZLN), Haiti (Fanmi Lavalas) and India (Narmada Bachao Andolan).

The vast majority of organizations claiming to be fighting against neoliberal policies are appendages either of the pluralist or the rightwing populist political camp both whose goal is to co-opt the masses as part of their popular base. The anti-globalization movement and by implication anti-neoliberal includes elements from the entire political spectrum from left to ultra-right. From India, to Bangladesh, from South Africa to Brazil, and from the US, France, and the UK, working class resistance to neoliberal globalism has been directly or indirectly co-opted and often de-politicized by corporate-funded or government-funded NGOs and by ‘reformist’ local and international organizations.

By promoting measures invariably in the lifestyle domain but also some social welfare and civil rights issues such as women’s rights, renter’s rights, etc, the goals of organizations operating within the neoliberal structure is not social inclusion by altering the social contract, but sustaining the status quo by eliminating popular opposition through co-optation. It is hardly a coincidence that the rise of the thousands of NGOs coincided with the rise of neoliberalism in the 1990s, most operating under the guise of aiding the poor, protecting human rights and the environment, and safeguarding individualism. Well-funded by corporations, corporate foundations and governments, NGOs are the equivalent of the 19th century missionaries, using their position as ideological preparatory work for Western-imposed neoliberal policies.;

On the receiving end of corporate and/or government-funded NGOs promoting the neoliberal agenda globally, some leading grassroots movements that advocate changing the neoliberal status quo contend that it is better to ‘win’ on a single issue such as gay rights, abortion, higher minimum wage, etc. at the cost of co-optation into neoliberal system than to have nothing at all looking in from the outside. Their assumption is that social exclusion can be mitigated one issue at a time through reform from within the neoliberal institutional structure that grassroots organizations deem as the enemy. This is exactly what the pluralist neoliberals are promoting as well to co-opt grassroots opposition groups.

Partly because governmental and non-governmental organizations posing as reformist have successfully co-opted grassroots movements often incorporating them into the neoliberal popular base, popular resistance has not been successful despite social media and cell phones that permit instant communication. This was certainly the case with the Arab Spring uprisings across North Africa-Middle East where genuine popular opposition to neoliberal policies of privatization, deregulation impacting everything from health care to liberalizing rent controls led to the uprising. In collaboration with the indigenous capitalists, political and military elites, Western governments directly and through NGOs were able to subvert and then revert to neoliberal policies once post-Arab Spring regimes took power in the name of ‘reform’ invariably equated with neoliberal policies.

In “Dying for Growth: Global Inequality and the Health of the Poor” Jim Yong Kim ed., 2000) contributing authors illustrate in case studies of several countries how the neoliberal status quo has diminished the welfare of billions of people in developing nations for the sake of growth that simply translates into even greater wealth concentration and misery for the world’s poor. According to the study: “100 countries have undergone grave economic decline over the past three decades. Per capita income in these 100 countries is now lower than it was 10, 15, 20 or in some cases even 30 years ago. In Africa, the average household consumes 20 percent less today than it did 25 years ago. Worldwide, more than 1 billion people saw their real incomes fall during the period 1980-1993.”

Anti-neoliberal groups assume different forms, depending on the nation’s history, social and political elites, the nature of institutions and the degree it has been impacted by neoliberal policies that deregulate and eliminate as much of the social safety net as workers will tolerate. Even the BRICS (Brazil, Russia, India, China and South Africa) that experienced rapid growth from the early 1990s until the great recession of 2008 have not escaped mass opposition to neoliberalism precisely because the impact on workers and peasants has been largely negative.; Juan Pablo Ferrero, Democracy against Neoliberalism in Argentina and Brazil, 2014; Mimi Abramovitz and Jennifer Zelnick, “Double Jeopardy: The Impact of Neoliberalism on Care Workers in the United States and South Africa”,

Grassroots organizations opposed to policies that further integrate their countries into the world economy and marginalize the working class have been especially persistent in South Africa, Brazil, and India. To assuage if not co-opt the masses the BRICS followed a policy mix that combines neoliberalism, aspects of social welfare and statism. Combined with geopolitical opposition to US-NATO militarism and interventionism, the BRICS policies were an attempt to keep not just the national bourgeois loyal but the broader masses by projecting a commitment to national sovereignty.

In Brazil, India and South Africa internal and external corporate pressure along with US, EU, and IMF-World Bank pressures have been especially evident to embrace neoliberal policies and confront grassroots opposition rather than co-opt it at the cost of making concessions to labor. Considering that the development policies of the BRICS in the last three decades of neoliberal globalism accommodated domestic and foreign capital and were not geared to advance living standards for the broader working class and peasantry, grassroots opposition especially in Brazil, India and South Africa where the state structure is not nearly as powerful as in Russia and China manifested itself in various organizations.

One of the grassroots organizations managing to keep its autonomy is Brazil’s Landless Workers Movement (MST) skillfully remaining independent of both former President Luiz Inacio Lula da Silva and Dilma Rousseff. Although the MST supported some policies of the former presidents who presented themselves as champions of labor rather than capital, both Lula and Rousseff made substantial policy compromises with the neoliberal camp and were eventually implicated in corruption scandals revealing opportunism behind policy-making. While the record of their policies on the poor speaks for itself, the Lula-Rousseff era of Partido dos Trabalhadores was an improvement over previous neoliberal president Fernando Henrique Cardoso (1995-2003).

The MST persisted with the struggle against neoliberal policies that have contributed to rising GDP heavily concentrated among the national and comprador bourgeoisie and foreign corporations. Other Latin American grassroots movements have had mixed results not much better than those in Brazil. Ecuador under president Rafael Correa tried to co-opt the left by yielding on some policy issues as did Lula and Rousseff, while pursuing a neoliberal development model as much as his Brazilian counterparts. With its economy thoroughly integrated into the US economy, Mexico is a rather unique case where grassroots movements against neoliberalism are intertwined with the struggle against official corruption and the narco-trade resulting in the assassination of anti-neoliberal, anti-drug activists. (William Aviles, The Drug War in Mexico: Hegemony and Global Capitalism;

Anti-neoliberal resistance in the advanced countries has not manifested itself as it has in the developing nations through leftist movements such as South Africa’s Abahlali baseMjondolo or Latin American trade unions that stress a working class philosophy of needs rather than the one of rights linked to middle class property and identity politics. Popular resistance to neoliberalism in the US has been part of the anti-globalization movement that includes various groups from environmentalists to anti-IMF-World Bank and anti-militarism groups.

Although there are some locally based groups like East Harlem-based Justice in El Barrio representing immigrants and low-income people, there is no national anti-neoliberal movement. Perhaps because of the war on terror, various anti-establishment pro-social justice groups assumed the form of bourgeois identity politics of both the Democratic Party and the Republican where some of the leaders use rightwing populism as an ideological means to push through neoliberal policies while containing grassroots anger resulting from social exclusion and institutional exploitation.

Black Lives Matter revolving around the systemic racism issue and Occupy Wall Street anti-capitalist group fell within the left orbit of the Democratic Party (Senator Bernie Sanders) who is an advocate of the pluralist-diversity model, opposes market fundamentalism, and proposes maintaining some vestiges of the Keynesian welfare state. With the exception of isolated voices by a handful of academics and some critics using social media as a platform, there is no anti-neoliberal grassroots movement that Democrats or Republicans has not successfully co-opted. Those refusing to be co-opted are invariably dismissed as everything from idealists to obstructionists. Certainly there is nothing in the US like the anti-neoliberal groups in Brazil, India, Mexico, or South Africa operating autonomously and resisting co-optation by political parties. The absence of such movements in the US is a testament to the strong state structure and the institutional power of the elites in comparison with many developing nations and even some parts of Europe.

As an integrated economic bloc, Europe follows uniform neoliberal policies using as leverage monetary and trade policy but also the considerable EU budget at its disposal for subsidies and development. A number of European trade unions and leftist popular groups fell into the trap of following either Socialist or centrist parties which are pluralist neoliberal and defend some remnants of Keynesianism. Those disillusioned with mainstream Socialist Parties pursue the same neoliberal policies of social exclusion as the conservatives fell in line behind newly formed non-Communist reformist parties (PODEMOS in Spain, SYRIZA in Greece, for example) with a Keynesian platform and socialist rhetoric.

As the government of Greek Prime Minister Alexis Tsipras proved once in power in 2015, self-baptized ‘leftist’ parties are leftist in rhetoric only. When it comes to policy they are as neoliberal as the opposition they criticize; even more dangerous because they have deceived people to support them as the alternative to neoliberal conservatives. Because grassroots movements and the popular base of political parties that promise ‘reform’ to benefit the masses are co-opted by centrists, center-left or rightwing political parties, social exclusion becomes exacerbated leading to disillusionment.

Consequently, people hoping for meaningful change become apathetic or they become angry and more radicalized often turning to rightwing political parties. Although there is a long-standing history of mainstream political parties co-opting grassroots movements, under neoliberalism the goal is to shape them into an identity politics mold under the pluralist or rightwing populist camp. Behind the illusion of choice and layers of bourgeois issues ranging from property rights and individual rights rests a totalitarian system whose goal is popular compliance.;

‘De-democratization’ under Neoliberalism

More subtly and stealthily interwoven into the institutional structure than totalitarian regimes of the interwar era, neoliberal totalitarianism has succeeded not because of the rightwing populist political camp but because of the pluralist one that supports both militarism in foreign affairs and police-state methods at home as a means of maintaining the social order while projecting the façade of democracy. Whereas the neoliberal surveillance state retains vestiges of pluralism and the façade of electoral choice, the police state in interwar Germany and Italy pursued blatant persecution of declared ideological dogmatism targeting ‘enemies of the state’ and demanding complete subjugation of citizens to the regime. Just as people were manipulated in interwar Europe into accepting the totalitarian state as desirable and natural, so are many in our time misguided into supporting neoliberal totalitarianism.

In her book entitled Undoing the Demos: Neoliberalism's Stealth Revolution (2015), Wendy Brown argues that not just in the public sector, but in every sector of society neoliberal ideology of ‘de-democratization’ prevails. Extensions of a hierarchical economic system rather than citizens with civil and human rights guaranteed by a social contract aimed at the welfare of the collective, human beings are more commoditized today than they were in the nascent phase of industrial capitalism. The kind of ubiquitous transformation of the individual’s identity with the superstructure and the ‘de-democratization’ of society operating under massively concentrated wealth institutionally intertwined with political power in our contemporary era was evident in totalitarian countries during the interwar era.
Whereas protest and resistance, freedom of expression and assembly were not permitted by totalitarian regimes in interwar Europe, they are permitted in our time. However, they are so marginalized and/or demonized when analyzing critically mainstream institutions and the social contract under which they operate that they are the stigmatized as illegitimate opposition. Permitting freedom of speech and assembly, along with due process and electoral politics best serves neoliberal socioeconomic totalitarianism because its apologists can claim the system operates in an ‘open society’; a term that Karl Popper the ideological father of neo-conservatism coined to differentiate the West from the former Communist bloc closed societies.

As Italian journalist Claudio Hallo put it: “If the core of neoliberalism is a natural fact, as suggested by the ideology already embedded deep within our collective psyche, who can change it? Can you live without breathing, or stop the succession of days and nights? This is why Western democracy chooses among the many masks behind which is essentially the same liberal party. Change is not forbidden, change is impossible. Some consider this feature to be an insidious form of invisible totalitarianism.

Post-modern consumerist culture has inculcated into peoples’ minds that they have never been so free yet they have never felt so helpless, as Polish sociologist Zygmunt Bauman has commented. Freedom is quantitatively measured based on materialist criteria at the individual rather than collective level and at a cost not just to the rest of society but to one’s humanity and any sense of social responsibility sacrificed in the quest for atomistic pursuit. Not only the media, but government at all levels, educational institutions and the private sector incessantly reinforce the illusion of individual freedom within the context of the neoliberal totalitarian institutional structure. This is a sacred value above all others, including knowledge, creativity, and the welfare of society as a whole (public interest supplanted by private profit), as though each individual lives alone on her/his planet.;;;

In an essay entitled “The unholy alliance of neoliberalism and postmodernism”, Hans van Zon argues that as the Western World’s dominant ideologies since the 1980s, “undermine the immune system of society, neoliberalism by commercialization of even the most sacred domains and postmodernism by its super-relativism and refusal to recognize any hierarchy in value or belief systems.” Beyond undermining society’s immune system and the open society under capitalism, as Hans van Zon contends, the convergence of these ideologies have contributed to the ‘de-democratization’ of society, the creation of illiberal institutions and collective consciousness of conformity to neoliberal totalitarianism. The success of neoliberalism inculcated into the collective consciousness is partly because of the long-standing East-West confrontation followed by the manufactured war on terror. However, it is also true that neoliberal apologists of both the pluralist and rightwing camp present the social contract as transcending politics because markets are above states, above society as ‘objective’ thus they can best determine the social good on the basis of commoditized value. (Joshua Ramsay, “Neoliberalism as Political Theology of Chance: the politics of divination.”

An evolutionary course, the ‘de-democratization’ of society started in postwar US that imposed transformation policy on the world with the goal of maintaining its economic, political, military and cultural superpower hegemony justified in the name of anti-Communism. Transformation policy was at the root of the diffusion of the de-democratization process under neoliberalism, despite the European origin of the ideology. As it gradually regained its status in the core of the world economy after the creation of the European Economic Community (EEC) in 1957, northwest Europe followed in the path of the US.

Ten years before the Treaty of Rome that created the EEC, Austrian economist Friedrich Hayek gathered a number of scholars in Mont Pelerin where they founded the neoliberal society named after the Swiss village. They discussed strategies of influencing public policy intended to efface the Keynesian model on which many societies were reorganized to survive the Great Depression. Financed by some of Europe’s wealthiest families, the Mont Pelerin Society grew of immense importance after its first meeting which coincided with the anti-labor Taft-Hartley Act, the Truman Doctrine formalizing the institutionalization of the Cold War, and the Marshall Plan intended to reintegrate Europe and its colonies and spheres of influence under the aegis of the US. Helped along by the IMF, World Bank, and the International Agreement on Tariffs and Trade established in 1947, US transformation policy was designed to shape the world to its own geopolitical and economic advantage based on a neo-classical macroeconomic and financial theoretical model on which neoliberal ideology rested.

Considering that millionaires and billionaires provide funding for the Mont Pelerin Society and affiliates, this prototype neoliberal think tank became the intellectual pillar of both the pluralist and rightwing neoliberal camps by working with 460 think tanks that have organizations in 96 countries where they influence both centrist and rightwing political parties. Whether Hillary Clinton’s and Emmanuel Macron’s pluralist neoliberal globalist version or Donald Trump’s and Narendra Modi’s rightwing populist one, the Mont Pelerin Society and others sharing its ideology and goals exercise preeminent policy influence not on the merit of its ideas for the welfare of society but because the richest people from rightwing Czech billionaire Andrej Babis to liberal pluralist billionaires either support its principles and benefit from their implementation into policy. (J. Peterson, Revoking the Moral Order: The Ideology of Positivism and the Vienna Circle, 1999;
If the neoliberal social contract is the answer to peoples’ prayers world-wide as Hayek’s followers insist, why is there a need on the part of the state, international organizations including UN agencies, billionaire and millionaire-funded think tanks, educational institutions and the corporate and state-owned media to convince the public that there is nothing better for society than massive capital concentration and social exclusion, and social conditions that in some respects resemble servitude in Medieval Europe? Why do ultra-rightwing Koch brothers and the Mercer family, among other billionaires and millionaires from North America, Europe, India, South Korea and Latin America spend so much money to inculcate the neoliberal ideology into the collective consciousness and to persuade the public to elect neoliberal politicians either of the pluralist camp or the authoritarian one?

Seventy years after Hayek formed the Mont Leperin Society to promote a future without totalitarianism, there are elected neoliberal politicians from both the pluralist and authoritarian camps with ties to big capital and organized crime amid the blurring lines between legal and illegal economic activities that encompasses everything from crypto-currency and insider trading to offshore ‘shell corporations’ and banks laundering money for drug lords and wealthy tax evaders. Surrender of popular sovereignty through the social contract now entails surrender to a class of people who are criminals, not only based on a social justice criteria but on existing law if it were only applied to them as it does to petty thieves. In the amoral Machiavellian world of legalized “criminal virtue” in which we live these are the leaders of society. Indicative of the perversion of values now rooted in atomism and greed, the media reports with glowingly admiring terms that in 2017 the world’s 500 richest people became richer by $1 trillion, a rise that represents one-third of Africa’s GDP and just under one-fifth of Latin America’s. Rather than condemning mal-distribution of income considering what it entails for society, the media and many in the business of propagating for neoliberalism applaud appropriation within the legal framework of the social contract as a virtue.;  Bob Brecher, “Neoliberalism and its Threat to Moral Agency” in Virtue and Economy. ed. Andrius Bielskis and Kelvin Knight, 2015)

Neoliberalism has led to the greater legitimization of activities that would otherwise be illegal to the degree that the lines between the legitimate economy and organized criminal activity are blurred reflecting the flexible lines between legally-financed millionaire-backed elected officials and those with links to organized crime or to illegal campaign contributions always carrying an illegal quid-pro-quo legalized through public policy. Beyond the usual tax-haven suspects Panama, Cyprus, Bermuda, Malta, Luxemburg, among others including states such as Nevada and Wyoming, leaders from former Prime Minister Silvio Berlusconi to President Donald Trump with reputed ties to organized criminal networks have benefited from the neoliberal regime that they served.

Self-righteous pluralist neoliberals castigate rightwing billionaires for funding rightwing politicians. However, there is silence when it comes to the millions amassed by pluralist neoliberals as the infamous “Panama Papers” revealed in 2016. Despite the institutionalized kleptocracy, the media has indoctrinated the public to accept as ‘normal’ the converging interests of the capitalist class and ruling political class just as it has indoctrinated the public to accept social exclusion, social inequality, and poverty as natural and democratic; all part of the social contract.  (; Jose Manuel Sanchez Bermudez, The Neoliberal Pattern of Domination: Capital’s Reign in Decline, 2012;

The Future of Neoliberalism

After the great recession of 2008, the future of neoliberalism became the subject of debate among politicians, journalists and academics. One school of thought was that the great recession had exposed the flaws in neoliberalism thus marking the beginning of its demise. The years since 2008 proved that in a twist of irony, the quasi-statist policies of China with its phenomenal growth have actually been responsible for sustaining neoliberalism globally and not just because China has been financing US public debt by buying treasuries while the US buys products made in China. This view holds that neoliberalism will continue to thrive so as long as China continues its global ascendancy, thus the warm reception to Beijing as the new globalist hegemonic power after Trump’s noise about pursuing economic nationalism within the neoliberal model. (Barry Eichengreen, Hall of Mirrors: The Great Depression, the Great Recession and the Uses and Misuses of History, 2016;

China is not pursuing the kind of neoliberal model that exists in the US or the EU, but its economy is well integrated with the global neoliberal system and operates within those perimeters despite quasi-statist policies also found in other countries to a lesser degree. Adjusted for purchasing power parity (PPP), China’s current share of world GDP stands at 16% and at annual growth above 6% it is expected to reach 20%, by 2020. This in comparison with only 1.9% in 1979 and it explains why its currency is now among the IMF-recognized reserved currencies. With about half-a-million foreign companies in China and an average of 12,000 new companies entering every day, capitalists from all over the world are betting heavily on China’s future as the world’s preeminent capitalist core country in the 21st century. China will play a determining role in the course of global neoliberalism, and it is politically willing to accept the US as the military hegemon while Beijing strives for economic preeminence. Interested in extracting greater profits from China while tempering its race to number one, Western businesses and governments have been pressuring Beijing to become more immersed in neoliberal policies and eliminate all elements of statism.;

Although the US that has 450,000 troops in 800 foreign military bases in more than 150 countries and uses its military muscle along with ‘soft-power’ policies including sanctions as leverage for economic power, many governments and multinational corporations consider Beijing not Washington as a source of global stability and growth. With China breathing new life into neoliberalism on the promise of geographic and social convergence, it is fantasy to speculate that neoliberalism is in decline when in fact it is becoming more forcefully ubiquitous. However, China like the West that had promised geographic and social convergence in the last four decades of neoliberalism will not be any more successful in delivering on such promises. The result of such policies will continue to be greater polarization and social exclusion and greater uneven development, with China and multinationals investing in its enterprises becoming richer while the US will continue to use militarism as leverage to retain global economic hegemony rapidly eroding from its grip.   (;; Dic Lo, Alternatives to Neoliberal Globalization, 2012)

Between China and the US, the world can expect neoliberal globalization to continue under the pluralist and populist rightwing models in different countries with the two converging and reflecting the totalitarian essence of the system at its core. Characterized by rapid development and sluggish growth in Japan and Western core countries, neoliberal globalization has entailed lack of income convergence between the developed and developing world where uneven export-oriented growth based on the primary sector keeps developing nations perpetually dependent and poor. Interestingly, the trend of falling incomes characteristic of the developing nations from 1980 to 2000 was just as true in Western countries. It was during these two decades of ascendant neoliberalism that rightwing populist movements began to challenge the pluralist neoliberal political camp and offering nationally-based neoliberal solutions, further adding to the system’s existing contradictions. (Dic Lo, Alternatives to Neoliberal Globalization, 2012)

The debate whether the rise of populism or perhaps the faint voices of anti-capitalism will finally bring about the end of neoliberalism often centers on the digital-biotech revolution often blamed for exacerbating rather than solving social problems owing to uneven benefits accruing across social classes. It is somewhat surprising that IMF economists have questioned the wisdom of pursuing unfettered neoliberalism where there is a trade-off between economic growth and social exclusion owing to growing income inequality. Naturally, the IMF refrains from self-criticism and it would never suggest that neoliberal globalization that the Fund has been promoting is responsible for the rise of rightwing populism around the world.

Within the neoliberal camp, pluralist-diversity advocates are satisfied they have done their part in the ‘fight for democracy’ when in fact their stealthy brand of the neoliberal social contract is in some respects more dangerous than the populist camp which is unapologetically candid about its pro-big business, pro-monopoly, pro-deregulation anti-social welfare platform.  Shortly after Trump won the presidential election with the help of rightwing billionaires and disillusioned workers who actually believed that he represented them rather than the billionaires, an article appearing in the Christian Science Monitor is typical of how pluralist neoliberals view the global tide of rightwing populism.

“Worldwide, it has been a rough years for democracy. The UK, the United States and Colombia made critical decisions about their nations' future, and – at least from the perspective of liberal values and social justice – they decided poorly. Beyond the clear persistence of racism, sexism and xenophobia in people's decision-making, scholars and pundits have argued that to understand the results of recent popular votes, we must reflect on neoliberalism. International capitalism, which has dominated the globe for the past three decades, has its winners and its losers. And, for many thinkers, the losers have spoken. My fieldwork in South America has taught me that there are alternative and effective ways to push back against neoliberalism. These include resistance movements based on pluralism and alternative forms of social organisation, production and consumption.”

Without analyzing the deeper causes of the global tide of rightwing populism promoting neoliberalism under an authoritarian political platform, pluralist-diversity neoliberals continue to promote socioeconomic policies that lead to social exclusion, inequality, and uneven development as long as they satisfy the cultural-lifestyle and corporate-based sustainable-development aspects of the social contract. To lend legitimacy and public acceptance among those expecting a commitment to pluralism, the neoliberal pluralists embrace the superficialities and distraction of diversity and political correctness. Ironically, the political correctness trend started during the Reagan administration’s second term and served as a substitute for social justice that the government and the private sector were rapidly eroding along with the social welfare state and trade union rights. As long as there is ‘politically correctness’, in public at least so that people feel they are part of a ‘civilized’ society, then public policy can continue on the barbaric path of social exclusion, police-state methods, and greater economic inequality.

The future of neoliberalism includes the inevitability that social exclusion will lead to social uprisings especially as even some billionaires readily acknowledge the social contract favors them to the detriment of society. As the voices against systemic exploitation become louder, the likelihood will increase for authoritarian-police state policies if not regimes reflecting the neoliberal social contract’s ubiquitous stranglehold on society. Although resistance to neoliberalism will continue to grow, the prospects for a social revolution in this century overturning the neoliberal order in advanced capitalist countries is highly unlikely. Twentieth century revolutions succeeded where the state structure was weak and people recognized that the hierarchical social order was the root cause of the chasm between the country’s vast social exclusion coupled with stagnation vs. its potential for a more inclusive society where greater social equality and social justice would be an integral part of the social contract. (Donna L. Chollett,  Neoliberalism, Social Exclusion, and Social Movements, 2013)

Despite everything pointing to the dynamics of a continued neoliberal social contract, diehard pluralists like British academic Martin Jacques and American economist Joseph Stiglitz insist there is hope for reformist change. In The Politics of Thatcherism (1983) Jacques applauded neoliberalism, but during the US presidential election in 2016 he had changed his mind, predicting neoliberalism’s demise. He felt encouraged that other pluralist neoliberals like Paul Krugman and Joseph Stiglitz were voicing their concerns signaling an interest in the debate about social inequality. In an article entitled “The death of neoliberalism and the crisis in western politics”, he wrote: “A sure sign of the declining influence of neoliberalism is the rising chorus of intellectual voices raised against it. From the mid-70s through the 80s, the economic debate was increasingly dominated by monetarists and free marketeers.”

Along with Krugman, Stiglitz and others in the pluralist camp favoring a policy mix that includes Keynesianism, Martin Jacques, Thomas Picketty and others like them around the world do enjoy some small influence with the pluralist-diversity camp. However, the demise of neoliberalism will not result from intellectual critiques regardless of the merits. On the contrary, the neoliberal social contract is solidifying not evolving toward dissolution. This is largely because the dynamics of the social order continue to favor it and the opposition is split between ultra-right nationalists, pluralists of varying sorts resting on hope of restoring Keynesian rationalism in the capitalist system, and the very weak and divided leftists in just about every country and especially the core ones.

Neoliberalism’s inherent contradictions will result in its demise and the transition into a new phase of capitalism. Among the most obvious and glaring contradictions is that the ideology promotes freedom and emancipation when in practice it is a totalitarian system aimed to mold society and the individual into conformity of its dogmatic market fundamentalism. Another contradiction is the emphasis of a borderless global market, while capitalists operate within national borders and are impacted by national policies that often collide at the international level as the competition intensifies for market share just as was the case in the four decades before the outbreak of WWI. Adding to the list of contradictions that finds expression the debate between neoliberal rightwingers and pluralists is the issue of “value-free” market fundamentalism while at the same time neoliberals conduct policy that has very strong moral consequences in peoples’ lives precisely because of extremely uneven income distribution.

The enigma in neoliberalism’s future is the role of grassroots movements that are in a position to impact change but have failed thus far to make much impact. Most people embrace the neoliberal political parties serving the same capitalist class, operating under the illusion of a messiah politician delivering the promise of salvation either from the pluralist or authoritarian wing of neoliberalism. The turning point for systemic change emanates from within the system that fails to serve the vast majority of the people as it is riddled with contradictions that become more evident and the elites become increasingly contentious about how to divide the economic pie and how to mobilize popular support behind mainstream political parties so they can maintain the social order under an unsustainable political economy. At that juncture, the neoliberal social contract suffers an irrevocable crisis of public confidence on a mass scale. Regardless under which political regime neoliberalism operates, people will eventually reject hegemonic cultural indoctrination. A critical mass in society has not reached this juncture. Nevertheless, social discontinuity is an evolutionary process and the contradictions in neoliberalism will continue to cause political disruption, economic disequilibrium and social upheaval.

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