Structural Exploitation and the Neoliberal Social Contract

(This is the fourth part of my essay entitled NEOLIBERALISM AND THE SOCIAL CONTRACT. See the blog for the previous three parts.)

Structural Exploitation under the Neoliberal Social Contract

Structural exploitation - “a property of institutions or systems in which the “rules of the game” unfairly benefit one group of people to the detriment of another” https://plato.stanford.edu/entries/exploitation/ - has been an incontrovertible reality of all class-based societies from the establishment of the earliest city-states in Mesopotamia until the present. Usually but not always intertwined with social oppression, structural exploitation entails a relationship of social dominance of an elite group over the rest of society subordinated for the purpose of economic, social, political, and cultural exploitation. Legitimized by the social contract, justifications for institutional exploitation include safety and security of country, eliminating impediments to progress, and emulating nature’s competitive forces that exist in the animal kingdom and reflect human nature.

From Solon’s laws in 6^th century BC Athens until our contemporary neoliberal era, social contract theory presumes that the state is the catalyst for social harmony if not fairness and not for a privileged social class to exploit the rest of society. No legal system has ever been codified that explicitly states its goal is to use of the state as an instrument of exploitation and oppression. In reality however, from ancient Babylon when King Hammurabi codified the first laws in 1780 B.C. until the present when multinational corporations and wealthy individuals directly or through lobbyists exert preponderate influence in public policy the theoretical assumption is one of fairness and justice for all people as a goal for the social contract. 

In the age of the Fourth Industrial Revolution – biotechnology, nanotechnology, quantum computing, and artificial intelligence – presumably to serve mankind as part of the social contract rather than to exploit more thoroughly and marginalize a large segment of humanity, the persistence of structural exploitation and oppression challenges those with a social conscience and morality rooted in humanist values to question what constitutes societal progress and public interest. Liberal and Christian-Libertarian arguments about free will notwithstanding, it has always been the case that mainstream institutions and the dominant culture indoctrinate people into believing that ending exploitation by changing the social contract is a utopian dream; a domain relegated to poets, philosophers and song writers lacking proper grounding in the reality of mainstream politics largely in the service of the dominant socioeconomic class. The paradox in neoliberal ideology is its emphasis on free choice, while the larger goal is to mold the subjective reality within the neoliberal institutional structure and way of life. The irreconcilable aspects of neoliberalism represent the contradictory goals of the desire to project democratic mask that would allow for popular sovereignty while pursuing capital accumulation under totalitarian methods. http://www.philosophybasics.com/branch_contractarianism.html’ http://www.patheos.com/blogs/tippling/2017/05/15/indoctrination-and-free-will/

Social cooperation becomes dysfunctional when distortions and contradictions within the system create large-scale social marginalization exposing the divergence between the promise of the neoliberal social contract and the reality in peoples’ lives. To manage the dysfunction by mobilizing popular support, the political elites of both the pluralist and the authoritarian-populist wing operating under the neoliberal political umbrella compete for power by projecting the image of an open democratic society. Intra-class power struggles within the elite social and political classes vying for power distracts from social exploitation because the masses line behind competing elites convinced such competition is the essence of democracy. As long as the majority in society passively acquiesces to the legitimacy of the social contract, even if in practice society is socially unjust, the status quo remains secure until systemic contradictions in the political economy make it unsustainable. https://mises.org/library/profound-significance-social-harmony

In the last three centuries, social revolutions, upheavals and grassroots movements have demonstrated that people want a social contract that includes workers, women, and marginalized groups into the mainstream and elevates their status economically and politically. In the early 21^st century, there are many voices crying out for a new social contract based on social justice and equality against neoliberal tyranny. However, those faint voices are drowned against the preponderate neoliberal public policy impacting every sector while shaping the individual’s worldview and subjective reality. The triumph of neoliberal orthodoxy has deviated from classical liberalism to the degree that dogmatism ‘single-thought’ process dominates not just economics, not just the social contract, but the very fabric of our humanity. 

 http://www.tandfonline.com/doi/abs/10.1080/21598282.2013.761449?journalCode=rict20; https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the-world

Under neoliberalism, “Uberization” as a way of life is becoming the norm not just in the ‘financialization’ neoliberal economy resting on speculation rather than productivity but in society as well. The neoliberal ideology has indoctrinated the last two generations that grew up under this system and know no other reality thus taking for granted the neoliberal way of life as natural as the air they breathe. Often working two jobs, working overtime without compensation or taking work home just to keep the job has become part of chasing the dream of merely catching up with higher costs of living. People have accepted perpetual work enmeshed with the capitalist ideology of perpetual economic growth perversely intertwined with progress of civilization. The corporate ideology of “grow or die” at any cost is in reality economic growth confined to the capitalist class, while fewer and fewer people enjoy its fruits and communities, cities, entire countries under neoliberal austerity suffer.

Carl Boggs, The End of Politics: Corporate Power and the Decline of the Public Sphere, 2000;  https://monthlyreview.org/2007/04/01/the-financialization-of-capitalism/; https://permaculturenews.org/2012/06/15/myth-of-perpetual-growth-is-killing-america/

The incentive for conformity is predicated on the belief that the benefits of civilization would be fairly distributed if not in the present then at some point in the future for one’s children or grandchildren; analogous to living a virtuous life in order to enjoy the rewards after death. As proof that the system works for the benefit of society and not just the capitalist class, neoliberal apologists point to stock market gains and surprisingly there is a psychological impact – the wealth effect – on the mass consumer who feels optimistic and borrows to raise consumption. Besides the fact that only a very small percentage of people on the planet own the vast majority of securities, even in the US there is no correlation between stock market performance and living standards. (John Seip and Dee Wood Harper, The Trickle Down Delusion, 2016)

If we equate the stock market with the ‘wealth of the nation’, then in 1982 when the S & P index stood at 117 rising to 2675 in December 2017, the logical conclusion is that living standards across the US rose accordingly. However, this is the period when real incomes for workers and the middle class actually declined despite sharp rise in productivity and immense profits reflected in the incomes gap reflected in the bottom 90% vs. the top 10%. This is also the period when we see the striking divergence between wealth accumulation for the top 1% and a relative decline for the bottom 90%. https://www.nytimes.com/2017/11/17/upshot/income-inequality-united-states.html; https://ourworldindata.org/income-inequality/

A research study compiled by the pro-organized labor non-profit think tank ‘Economic Policy Institute’ stresses the divergence between productivity and real wages. While the top 0.01% of America’s experienced 386% income growth between 1980 and 1914, the bottom 90% suffered 3% real income drop. Whereas in 1980 income share for the bottom 90% stood at 65% and for the top 1% it stood at 10%, by 2014 the bottom 90% held just half of the income, while the top 1% owned 21%. This dramatic income divergence, which has been shown in hundreds of studies and not even neoliberal billionaires deny their validity, took place under the shift toward the full implementation of the neoliberal social contract. It is significant to note that such income concentration resulting from fiscal policy, corporate subsidy policy, privatization and deregulation has indeed resulted in higher productivity exactly as neoliberal apologists have argued. However, higher worker productivity and higher profits has been made possible precisely because of income transfer from labor to capitalist.http://www.epi.org/publication/charting-wage-stagnation/; https://aneconomicsense.org/2015/07/13/the-highly-skewed-growth-of-incomes-since-1980-only-the-top-0-5-have-done-better-than-before/

“Real hourly compensation of production, nonsupervisory workers who make up 80 percent of the workforce, also shows pay stagnation for most of the period since 1973, rising 9.2 percent between 1973 and 2014.Net productivity grew 1.33 percent each year between 1973 and 2014, faster than the meager 0.20 percent annual rise in median hourly compensation. In essence, about 15 percent of productivity growth between 1973 and 2014 translated into higher hourly wages and benefits for the typical American worker. Since 2000, the gap between productivity and pay has risen even faster. The net productivity growth of 21.6 percent from 2000 to 2014 translated into just a 1.8 percent rise in inflation-adjusted compensation for the median worker (just 8 percent of net productivity growth).Since 2000, more than 80 percent of the divergence between a typical (median) worker’s pay growth and overall net productivity growth has been driven by rising inequality (specifically, greater inequality of compensation and a falling share of income going to workers relative to capital owners).Over the entire 1973–2014 period, rising inequality explains over two-thirds of the productivity–pay divergence.” (Josh Bivens and Lawrence Mishel, "Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay Why It Matters and Why It’s Real" in Economic Policy Institute, 2015,   http://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/

The average corporate tax rate in the world has been cut in half in the last two decades from about 40% to 22%, with the effective rate actually paid lower than the official rate. This represents a massive transfer of wealth to the highest income brackets drained from the working class. More than half-a-century ago, American anthropologist Jules Henry wrote that: “The fact that our society places no limit on wealth while making it accessible to all helps account for the ‘feverish’ quality Tocqueville sensed in American civilization.” Culture Against Man (1963). The myth that the neoliberal policies in the information age lead toward a society richer for all people is readily refuted by the reality of huge wealth distribution gaps resulting from ‘informational capitalism’ backed by the corporate welfare state. 

Capital accumulation not just in the US but on a world scale without a ceiling has resulted in more thorough exploitation of workers and in a less socially just society today than in the early 1960s when Jules Henry was writing and it is headed increasingly toward authoritarian models of government behind the very thin veneer of meaningless elections. Against this background of unfettered neoliberalism, social responsibility is relegated to issues ranging from corporate-supported sustainable development in which large businesses have a vested interest as part of future designs on capital accumulation, to respecting lifestyle and cultural and religious freedoms within the existing social contract. (Dieter Plehwe et al. eds., Neoliberal Hegemony, 2006; Carl Ferenbach and Chris Pinney, “Toward a 21st Century Social Contract” Journal of Applied Corporate Finance, Vol. 24, No 2, 2012; http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6622.2012.00372.x/abstract

At its Annual conference in 2017 where representatives from the ‘Fortune 500’, academia, think tanks, NGOs, and government, business consultancy group BSR provided the following vision under the heading “A 21^st Century Social Contract”: “The nature of work is changing very rapidly. Old models of lifelong employment via business and a predictable safety net provided by government are no longer assured in a new demographic, economic, and political environment. We see these trends most clearly in the rise of the “gig economy,” in which contingent workers (freelancers, independent contractors, consultants, or other outsourced and non-permanent workers) are hired on a temporary or part-time basis. These workers make up more than 90 percent of new job creation in European countries, and by 2020, it is estimated that more than 40 percent of the U.S. workforce will be in contingent jobs.” https://bsr17.org/agenda/sessions/the-21st-century-social-contract

Representing multinational corporate members and proud sponsors of sustainable development solutions within the neoliberal model, BSR applauded the aspirations and expectations of today’s business people that expect to concentrate even more capital as the economy becomes more ‘UBERized’ and reliant on the new digital technology. Despite fear and anxiety about a bleak techno-science future as another mechanism to keep wages as close to subsistence if not below that level as possible, peoples’ survival instinct forces them to adjust their lives around the neoliberal social contract. https://www.technologyreview.com/s/531726/technology-and-inequality/

Reflecting the status quo, the media indoctrinate people to behave as though systemic exploitation, oppression, division, and marginalization are natural while equality and the welfare of the community represent an anathema to bourgeois civilization. What passes as the ‘social norm’, largely reflects the interests of the socioeconomic elites propagating the ‘legitimacy’ of their values while their advocates vilify values that place priority on the community aspiring to achieve equality and social justice. (Robert E. Watkins, “Turning the Social Contract Inside Out: Neoliberal Governance and Human Capital in Two Days, One Night”, 2016).

The neoliberal myth that the digital technological revolution and the ‘knowledge based economy’ (KBE) of endless innovation is the catalyst not only to economic growth but to the preservation of civilization and welfare of society has proved hollow in the last four decades. Despite massive innovation in the domain of the digital and biotech domains, socioeconomic polarization and environmental degradation persist at much higher rates today than in the 1970s. Whether in the US, the European Union or developing nations, the neoliberal promise of ‘prospering together’ has been a farce. http://onlinelibrary.wiley.com/doi/10.1111/tsq.12106/full; http://www.ricerchestoriche.org/?p=749

Neoliberal myths about upward linear progress across all segments of society and throughout the world notwithstanding, economic expansion and contraction only result in greater capital concentration. “The Swiss Federal Institute of Technology in Zurich have taken a database listing 37 million companies and investors worldwide, pulled out all 43,060 multinational corporations and the share ownerships linking them to construct a model of which companies controlled others through shareholding networks, coupled with each company’s operating revenues, to map the structure of economic power. The model revealed a core of 1318 companies with interlocking ownerships. Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms, the “real” economy, representing a further 60 per cent of global revenues. When the team further untangled the web of ownership, it found much of it tracked back to a super-entity of 147 even more tightly knit companies (all of their ownership was held by other members of the super-entity) that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.” https://weeklybolshevik.wordpress.com/2013/05/19/imperialism-and-the-concentration-of-capital/ http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf.

With each passing recessionary cycle of the past four decades working class living standards have retreated and never recovered. Although the techno-science panacea has proved a necessary myth and a distraction from the reality of capital concentration, considering that innovation and technology are integral parts of the neoliberal system, the media, politicians, business elites, corporate-funded think tanks and academics continue to promote the illusive ‘modernist dream’ that only a small segment of society enjoys while the rest take pride living through it vicariously.  (Laurence Reynolds and Bronislaw Szerszynski, “Neoliberalism and technology: Perpetual innovation or perpetual crisis?”

 https://www.academia.edu/1937914/Neoliberalism_and_technology

Rooted in militarism and police-state policies, the culture of fear is one of the major ways that the neoliberal regime perpetually distracts people from structural exploitation and oppression in a neoliberal society that places dogmatic focus on atomism. Despite the atomistic value system as an integral part of neoliberalism, neoliberals strongly advocate a corporate state welfare system. Whether supporting pluralism and diversity or rightwing populists, neoliberals agree that without the state buttressing the private sector, the latter will collapse. Author of Liberalism in the Shadow of Totalitarianism (2007) David Ciepley argues in “The Corporate Contradictions of Neoliberalism” that the system’s contradictions have led to the authoritarian political model as its only option moving forward.  

“Neoliberalism was born in reaction against totalitarian statism, and matured at the University of Chicago into a program of state-reduction that was directed not just against the totalitarian state and the socialist state but also (and especially) against the New Deal regulatory and welfare state. … It is a self-consciously reactionary ideology that seeks to roll back the status quo and institutionalize (or, on its own understanding, re-institutionalize) the “natural” principles of the market. … But the contradiction between its individualist ideals and our corporate reality means that the effort to institutionalize it, oblivious to this contradiction, has induced deep dysfunction in our corporate system, producing weakened growth, intense inequality, and coercion. … And when the ideological support of a system collapses—as appears to be happening with neoliberalism—then either the system will collapse, or new levels of coercion and manipulation will be deployed to maintain it. This appears to be the juncture at which we have arrived.” https://americanaffairsjournal.org/2017/05/corporate-contradictions-neoliberalism/

Adhering to a tough law-and-order policy, neoliberals have legalized large-scale criminal activity perpetrated by capitalists against society while penalizing small-scale crimes carried out mostly by people in the working class and the marginalized lumpenproletariat. Regardless of approaches within the neoliberal social contract, neoliberal politicians agree on a lengthy prison sentences for street gangs selling narcotics while there is no comparable punishment when it comes to banks laundering billions including from narcotics trafficking, as Deutsche Bank among other mega banks in the US and EU; fixing rates as Barclays among others thus defrauding customers of billions; or creating fake accounts as Wells Fargo, to say nothing of banks legally appropriating billions of dollars from employees and customers and receiving state (taxpayer) funding in times of ‘banking crises’. Although it seems enigmatic that there is acquiescence for large scale crimes with the institutional cover of ‘legitimacy’ by the state and the hegemonic culture, the media has conditioned the public to shrug off structural exploitation as an integral part of the social contract. http://theweek.com/articles/729052/brief-history-crime-corruption-malfeasance-american-banks; https://www.globalresearch.ca/corruption-in-the-european-union-scandals-in-banking-fraud-and-secretive-ttip-negotiations/5543935

Neoliberalism’s reach does not stop with the de-criminalization of white-collar crime or the transfer of economic policy from the public sector to corporations in order to reverse social welfare policies. Transferring sweeping policy powers from the public to the corporate sector, neoliberalism’s tentacles impact everything from labor and environment to health, education and foreign policy into the hands of the state-supported corporate sector in an effort to realize even greater capital concentration at an even greater pace. This has far reaching implications in peoples’ lives around the world in everything from their work and health to institutions totalitarian at their core but projecting an image of liberal democracy on the surface. (Noam Chomsky and R. W. McChesney, Profit Over People: Neoliberalism and Global Order, 2011; Pauline Johnson, “Sociology and the Critique of Neoliberalism” European Journal of Social Theory, 2014

http://journals.sagepub.com/doi/abs/10.1177/1368431014534354?journalCode=esta

Comprehensive to the degree that it aims to diminish the state’s role by having many of its functions privatized, neoliberalism’s impact has reached into monetary policy trying to supplant it with rogue market forces that test the limits of the law and hard currencies. The creation of cryptocurrencies among them BITCOIN that represents the utopian dream of anarcho-libertarians interested in influencing if not dreaming of ultimately supplanting central banks’ role in monetary policy is an important dimension of neoliberal ideology. Techno-utopians envisioning the digital citizen in a neoliberal society favor a ‘gypsy economy’ operating on a digital currency outside the purview of the state’s regulatory reach where it is possible to transfer and hide money while engaging in the ultimate game of speculation.  (https://btctheory.com; Samuel Valasco and Leonardo Medina, The Social Nature of Cryptocurrencies, 2013)

Credited as the neoliberal prophet whose work and affiliate organizations multinational corporations funded, Austrian economist Friedrich Hayek favored market forces to determine monetary policy rather than having government in that role working behind central banks. Aside from the fact that central banks cater to capital and respond to markets and no other constituency, Hayek’s proposal (The Denationalization of Money, 1976) was intended to permit the law of the ‘free market’ (monetary speculation) determine policy that would impact peoples’ living standards. Hence capital accumulation would not be constrained by government regulatory measures and the coordination of monetary policy between central banks. In short, the law of unfettered banking regulation would theoretically result in greater economic growth, no matter the consequences owing to the absence of banking regulatory measures that exacerbate contracting economic cycles such as in 2008.  www.voltaire.org/article30058.html)

In December 2017, the UK and EU warned that cryptocurrencies are used in criminal enterprises, including money laundering and tax evasion. Nevertheless, crypto-currency reflects both the ideology and goals of capital accumulation of neoliberals gaining popularity among speculators in the US and other countries. Crypto-currency fulfills the neoliberal speculator’s dream by circumventing the IMF basket of reserved currencies on which others trade while evading regulatory constraints and all mechanisms of legal accountability for the transfer of money and tax liability.

Although a tiny fraction of the global monetary system, computer networks make crypto-currency a reality for speculators, tax evaders, those engaged in illegal activities and even governments like Venezuela under Nocolas Maduro trying to pump liquidity into the oil-dependent economy suffering from hyperinflation and economic stagnation If the crypto-currency system can operate outside the purview of the state, then the neoliberal ideology of trusting the speculator rather than the government would be proved valid about the superfluous role of central banks and monetary centralization, a process that capitalism itself created for the harmonious operation of capitalism. https://www.theguardian.com/technology/2017/dec/04/bitcoin-uk-eu-plan-cryptocurrency-price-traders-anonymity; http://www.lanacion.com.ar/2099017-venezuela-inflacion-nicolas-maduro-crisis-precios

Indicative of the success of the neoliberal ideology’s far reaching impact in economic life cryptocurrencies’ existence also reflects the crisis of capitalism amid massive assaults on middle class and working class living standards in the quest for greater capital concentration. In an ironic twist, the very neoliberal forces that promote cryptocurrencies decry their use by anti-Western nations – Iran, Venezuela, and Russia among others. The criticism of anti-Western governments resorting to cryptocurrencies is based on their use as a means of circumventing the leverage that reserve currencies like the dollar and euro afford to the West over non-Western  nations. This is only one of a few contradictions that neoliberalism creates and undermines the system it strives to build just as it continues to foster its ideology as the only plausible one to pursue globally. Another contradiction is the animosity toward crypto-currencies from mainstream financial institutions that want to maintain a monopoly on government-issued currency which is where they make their profits. As the world’s largest institutional promoter of neoliberalism, the IMF has cautioned not to dismiss cryptocurrencies because they could have a future, or they may actually ‘be the future’. https://www.coindesk.com/bitcoins-unlimited-potential-lies-in-apolitical-core/; http://fortune.com/2017/10/02/bitcoin-ethereum-cryptocurrency-imf-christine-lagarde/

After the “Washington Consensus” of 1989, IMF austerity policies are leverage to impose neoliberal policies globally have weakened national institutions from health to education and trade unions that once formed a social bond for workers aspiring to an integrative socially inclusive covenant in society rather than marginalization. The IMF uses austerity policies for debt relief as leverage to have the government provide more favorable investment conditions and further curtail the rights of labor with everything from ending collective bargaining to introducing variations of “right-to-work” laws” that prohibit trade unions from forcing collective strikes, collecting dues or signing the collective contract. Justified in the name of ‘capitalist efficiency’, weakening organized labor and its power of collective bargaining has been an integral part of the neoliberal social contract as much in the US and UK as across the rest of the world, invariably justified by pointing to labor markets where workers earn the lowest wages. (B. M. Evans and S. McBride, Austerity: The Lived Experience, 2017; Vicente Berdayes, John W. Murphy, eds. Neoliberalism, Economic Radicalism, and the Normalization of Violence, 2016).

Although many in the mainstream media took notice of the dangers of neoliberalism leading toward authoritarianism after Trump’s election, a few faint voices have been warning about this inevitability since the early 1990s. Susan George, president of the Transnational Institute, has argued that neoliberalism is contrary to democracy, it is rooted in Social Darwinism, it undermines the liberal social contract under which that people assume society operates, but it is the system that governments and international organization like the IMF have been promoting.

“Over the past twenty years, the IMF has been strengthened enormously. Thanks to the debt crisis and the mechanism of conditionality, it has moved from balance of payments support to being quasi-universal dictator of so-called "sound" economic policies, meaning of course neo-liberal ones. The World Trade Organisation was finally put in place in January 1995 after long and laborious negotiations, often rammed through parliaments which had little idea what they were ratifying. Thankfully, the most recent effort to make binding and universal neo-liberal rules, the Multilateral Agreement on Investment, has failed, at least temporarily. It would have given all rights to corporations, all obligations to governments and no rights at all to citizens. The common denominator of these institutions is their lack of transparency and democratic accountability. This is the essence of neo-liberalism. It claims that the economy should dictate its rules to society, not the other way around. Democracy is an encumbrance, neo-liberalism is designed for winners, not for voters who, necessarily encompass the categories of both winners and losers.”

https://www.tni.org/en/article/short-history-neoliberalism

Those on the receiving end of neoliberalism’s Social Darwinist orientation are well aware of public policy’s negative impact on their lives but they feel helpless to confront the social contract. According to opinion polls, people around the world realize there is a huge gap between what political and business leaders, and international organizations claim about institutions designed to benefit all people and the reality of marginalization. The result is loss of public confidence in the social contract theoretically rooted in consent and democracy. “When elected governments break the "representative covenant" and show complete indifference to the sufferings of citizens, when democracy is downgraded to an abstract set of rules and deprived of meaning for much of the citizenry, many will be inclined to regard democracy as a sham, to lose confidence in and withdraw their support for electoral institutions. Dissatisfaction with democracy now ranges from 40 percent in Peru and Bolivia to 59 percent in Brazil and 62 percent in Colombia. (Boron, “Democracy or Neoliberalism”,  http://bostonreview.net/archives/BR21.5/boron.html)

Not just in developing nations operating under authoritarian capitalist model to impose neoliberal policies, but in advanced countries people recognize that the bourgeois freedom, democracy and justice are predicated on income. Regardless of whether the regime operates under a pluralistic neoliberal regime or rightwing populist one, the former much more tolerant of diversity than the latter, the social contract goals are the same. In peoples’ lives around the world social exploitation has risen under neoliberal policies whether imposed the nation-state, a larger entity such as the EU, or international organizations such as the IMF. Especially for the European and US middle class, but also for Latin American and African nations statistics show that the neoliberal social contract has widened the poor-rich gap.

In a world where the eight wealthiest individuals own as much wealth as the bottom 50% or 3.6 billion people, social exploitation and oppression has become normal because the mainstream institutions present it in such light to the world and castigate anyone critical of institutionalized exploitation and oppression. Rightwing populist demagogues use nationalism, cultural conservatism and vacuous rhetoric about the dangers of big capital and ‘liberal elites’ to keep the masses loyal to the social contract by faulting the pluralist-liberal politicians rather than the neoliberal social contract. As the neoliberal political economy has resulted in a steady rising income gap and downward social mobility in the past three decades, it is hardly surprising that a segment of the masses lines behind rightwing populist demagogues walking a thin line between bourgeois democracy and Fascism.

(Alan Wertheimer, Exploitation, 1999; Ruth J. Sample, Exploitation; What is it and why it is Wrong, 2003;http://money.cnn.com/2017/08/31/investing/wells-fargo-fake-accounts/index.html; https://www.dailykos.com/stories/2017/5/14/1662227/-Was-suicide-of-Deutsche-Bank-executive-linked-to-Trump-and-Russia-money-laundering

Seizing power from sovereign states, multinational corporation are pursuing neoliberal policy objectives on a world scale, prompting resistance to the neoliberal social contract which rarely class-based and invariably identity-group oriented manifested through environmental, gender, race, ethnicity, gay, religious and minority groups of different sorts. Regardless of the relentless media campaign to suppress class consciousness, workers are aware that they have common interests and public opinion studies reveal as much.  (Susan George, Shadow Sovereigns: How Global Corporations are seizing Power, 2015)

According to the Pew Research center, the world average for satisfaction with their governments are at 46%, the exact percentage as in the US that ranks about the same as South Africa and much lower than neighboring Canada at 70% and Sweden at 79%. “Publics around the globe are generally unhappy with the functioning of their nations’ political systems. Across the 36 countries asked the question, a global median of 46% say they are very or somewhat satisfied with the way their democracy is working, compared with 52% who are not too or not at all satisfied. Levels of satisfaction vary considerably by region and within regions. Overall, people in the Asia-Pacific region are the most happy with their democracies. At least half in five of the six Asian nations where this question was asked express satisfaction. Only in South Korea is a majority unhappy (69%).

 http://www.pewglobal.org/2017/10/16/many-unhappy-with-current-political-system/

As confounding as it appears that elements of the disillusioned middle class and working class opt either for the exploitation of pluralist neoliberalism or the exploitation and oppression of rightwing populism expressed somewhat differently in each country, it is not difficult to appreciate the immediacy of a person’s concerns for survival like all other species above all else. The assumption of rational behavior in the pursuit of social justice is a bit too much to expect considering that people make irrational choices detrimental to their best interests and to society precisely because the dominant culture has thoroughly indoctrinated them. It seems absurd that indirectly people choose exploitation and oppression for themselves and others in society, but they always have as the dominant culture secular and religious indoctrinates them into accepting exploitation and oppression. (Shaheed Nick Mohammed, Communication and the Globalization of Culture, 2011)

Throughout Western and Eastern Europe rightwing political parties are experiencing a resurgence not seen since the interwar era, largely because the traditional conservatives moved so far to the right. Even the self-baptized Socialist parties are nothing more than staunch advocates of the same neoliberal status quo as the traditional conservatives. The US has also moved to the right long before the election of Donald Trump who openly espouses suppression of certain fundamental freedoms as an integral part of a pluralistic society. As much as in the US and Europe as in the rest of the world, analysts wonder how could any working class person champion demagogic political leaders whose vacuous populist rhetoric promises ‘strong nation” for all but their policies benefit the same socioeconomic elites as the neoliberal politicians. (J. Rydgren (Ed.), Class Politics and the Radical Right, 2012)

Rooted on classical liberal values of the Enlightenment, the political and social elites present a social contract that is theoretically all-inclusive and progressive, above all ‘fair’ because it permits freedom to compete, when in reality the social structure under which capitalism operates necessarily entails exploitation and oppression that makes marginalization very clear even to its staunchest advocates who then endeavor to justify it by advancing theories about individual human traits. 

In 2012 the United States spent an estimated 19.4% of GDP on such social expenditures, according to the Organization for Economic Cooperation and Development, the Paris-based industrial country think tank. Denmark spent 30.5%, Sweden 28.2% and Germany 26.3%. All of these nations have a lower central government debt to GDP ratio than that of the United States. Why the United States invests relatively less in its social safety net than many other countries and why those expenditures are even at risk in the current debate over debt reduction reflect Americans’ conflicted, partisan and often contradictory views on fairness, inequality, the role and responsibility of government and individuals in society and the efficacy of government action. Rooted in value differences, not just policy differences, the debate over the U.S. social contract is likely to go on long after the fiscal cliff issue has been resolved.” http://www.pewglobal.org/2013/01/15/public-attitudes-toward-the-next-social-contract/

The neoliberal model of capitalism spewing forth from core countries to the periphery and embraced by capitalists throughout the world has resulted in greater social inequality, exploitation and oppression, despite proclamations that by pluralist-diversity neoliberals presenting themselves as remaining true to ‘democracy’. The tilt to the right endorsed at the ballot box by voters seeking solutions to systemic problems and a more hopeful future indicates that some people demand exclusion and/or punishment of minority social groups in society, as though the exploitation and oppression of ‘the other’ would vicariously elevate the rest of humanity to a higher plane. Although this marks a dangerous course toward authoritarianism and away from liberal capitalism and Karl Popper’s ‘Open Society’ thesis operating in a pluralistic world against totalitarianism, it brings to surface the essence of neoliberalism which is totalitarian, the very enemy Popper and his neoconservative followers were allegedly trying to prevent. (Calvin Hayes, Popper, Hayek and the Open Society, 2009)