(This is the first part of the essay. Two more will follow in the next few weeks)
Abstract
Analyzing
aspects of the rightwing populist tide arising largely in reaction to the
pluralistic-diversity model of neoliberalism, this essay examines the evolving
social contract that normalizes systemic exploitation and repression in the
name of capitalist growth. Amid incessant indoctrination by the media
representing big capital, people try to make sense of whether their interests
are best served under the pluralist-diversity model of globalist neoliberalism
with a shrinking social welfare safety net, or an authoritarian-economic nationalist
model promising salvation through the use of an iron hand against domestic and
foreign enemies.
Socioeconomic
polarization under the neoliberal social contract has laid the groundwork for
political polarization clearly evident not just in President Donald Trump’s
America and Prime Minister Narendra Modi’s India representing a rightwing
populist neoliberal ideology, but France’s President Emmanuel Macron’s La République
En Marche that espouses a pluralist–diversity-environmentalist model aiming
at the same neoliberal goals as the populists. Whether under the pluralist or
the authoritarian model, neoliberalism represents what Barrington Moore
described in Social Origins of Dictatorship and Democracy (1966) a
capitalist reactionary route that Italy, Japan, and Germany followed under
totalitarian regimes in the interwar era to protect the capitalist class after
the crisis that wars of imperialism (1870-1914) and WWI had created in core
capitalist countries.
Although
the world is much more thoroughly integrated under capitalism today than it was
a century ago, the same marked absence of a revolutionary trend as there was in
the interwar era is evident in our era. This accounts for the neoliberal revolution
from above culminating in variations of authoritarian regimes throughout the
world. This does not only signal a crisis in capitalism but social
discontinuity that will precipitate sociopolitical instability as contradictions
within the political economy foster polarization across all sectors of society.
Historical Introduction
Most people today have no reason to be familiar with the
term “social contract” any more than they are familiar with neoliberalism that
inordinately influences public policy on a world scale. For many analysts
contemplating the relationship of the individual to organized society, the
social contract is about the degree to which government advances a set of
social and economic policies articulated by an ideology designed to benefit
certain institutions and social groups, while safeguarding sovereignty in the
name of the governed. The problem arises when the governed no longer view the
social contract as legitimate, a point that John Locke addressed as this was a
key issue in 17th century England right before the Glorious Revolution.
The
social contract has its origins in the transition from subsistence agriculture
of the feudal-manorial economy to commercial agriculture and long-distance
trade under capitalism in the 15th and 16th century. With
the advent of the Scientific Revolution in the 17th century and the
Enlightenment in the 18th century coinciding with England’s first
industrial revolution accounted for more rapid evolution of the division of
labor, European intellectuals challenged the old social order based on
birth-right privilege of the aristocracy representing the agrarian-based
economy of the past. Changes taking place in the economy and social structure
gave rise to bourgeois social contract theories that articulated a core role in
the state for the merchant-banking class, especially in northwest Europe where
mercantile capitalism consolidated.
As
the ideological force of the English Glorious Revolution (1689), John Locke,
the father of Western Liberalism, argued for a regime that reflected the
emerging bourgeoisie inclusion into the political mainstream to reflect the
commensurate role in the economy. Interestingly, Locke provided a philosophical
justification for overthrowing the government when it acted against the
interests of its citizens, thus influencing both the American War of
Independence and the French Revolution. Building on Locke’s liberal philosophy
and views on the tyranny of absolutism, Jean-Jacques Rousseau wrote in The
Social Contract (1762) that: “Man
is born free, but everywhere in chains.” This statement reflected the views
of many bourgeois thinkers who believed that modernization of society is not possible
in the absence of a social contract that takes into account natural rights, an
approach to government that would mirror a merit based criteria.
Departing
from Locke’s liberalism that had property ownership and individualism at the
core of his political thought, in the Discourse on Inequality, (1754)
Rousseau argued that property appropriation rests at the root of
institutionalized inequality and oppression of individuals against the
community. The role of the state plays a catalytic role for it as an “association which will defend the person
and goods of each member with the collective force of all.” The basis of
social contract theory accounts for the sovereign power’s legitimacy and
justice, thus resulting in public acceptance. (Jason Neidleman, "The Social Contract Theory in a Global
Context" http://www.e-ir.info/2012/10/09/the-social-contract-theory-in-a-global-context/; C. B. Macpherson. The
Political Theory of Possessive Individualism, 1962)
Rooted
in the ascendancy of the European bourgeoisie, social contract theory has
evolved in the last three centuries, especially after the Revolutions of 1848
and the rise of the working class as a sociopolitical force demanding inclusion
rather than marginalization and exploitation legalized through public policy
that the representatives of capitalism legislated. The cooptation of the
working class into bourgeois political parties as a popular base in the age of
mass politics from the mid-19th century until the present has
obfuscated the reality that social contract under varieties of parliamentary
regimes continued to represent capital.
The
creation of large enterprises gave rise not only to an organized labor
movement, but to a larger bureaucratic regulatory state with agencies intended
to help stabilize and grow capitalism while keeping the working class loyal to
the social contract. Crisis in public confidence resulted not only from
economic recessions and depressions built into the economy, but the
contradictions capitalism was fostering in society as the benefits in advances
in industry, science and technology accrued to the wealthy while the social
structure remained hierarchical.
Ever
since 1947 when the ideological father of neoliberalism Friedrich von Hayek
called a conference in Mont Pelerin to address how the new ideology would
replace Keynesianism, neoliberals have been promising to address these
contradictions, insisting that eliminating the social welfare state and
allowing complete market domination that would result in society’s modernization
and would filter down to all social classes and nations both developed and
developing. Such thinking is rooted in the modernization theory that emerged
after WWII when the US took advantage of its preeminent global power to impose
a transformation model on much of the non-Communist world. Cold War liberal
economist Walt Rostow articulated the modernization model of development in his
work entitled The Stages of Economic Growth: A Non-Communist Manifesto, 1960.
By the 1970s, neoliberals adapted Rostow’s modernization theory as their bible
and the core of the social contract. (Evans Rubara, “Uneven Development: Understanding the Roots of Inequality”
The
challenge for the political class has always been and remains to mobilize a
popular base that would afford legitimacy to the social contract. The issue for
mainstream political parties is not whether there is a systemic problem with
the social contract intended to serve the capitalist class, but the degree to
which the masses can be co-opted through various methods to support the status
quo. “A generation ago, the country’s social
contract was premised on higher wages and reliable benefits, provided chiefly
by employers. In recent decades, we’ve moved to a system where low wages are
supposed to be made bearable by low consumer prices and a hodgepodge of
government assistance programs. But as dissatisfaction with this arrangement
has grown, it is time to look back at how we got here and imagine what the next
stage of the social contract might be.”
Considering
that Keynesianism and neoliberalism operate under the same social structure and
differ only on how best to achieve capital formation while retaining
sociopolitical conformity, the article above published in The Atlantic illustrates
how analysts/commentators easily misinterpret nuances within a social contract
for the covenant’s macro goals. A similar view as that expressed in The
Atlantic is also reflected in the New America Foundation’s
publications, identifying specific aspects of Arthur Schlesinger’s Cold War
militarist policies enmeshed with social welfare Keynesianism as parts of the
evolving social contract.
Identifying
the social contract with a specific set of policies under different administrations
evolving to reflect the nuances of political class and economic elites, some
analysts contend that there is a European Union-wide social contract to which
nationally-based social contracts must subordinate their sovereignty. This
model has evolved to accommodate neoliberal globalism through regional trade
blocs on the basis of a ‘patron-client’ integration relationship between core
and periphery countries.
A
European export and integral part of cultural hegemony in the non-Western
world, the liberal-bourgeois social contract for the vast majority of Africans
has failed to deliver on the promise of socioeconomic development, social
justice and national sovereignty since independence from colonial rule. Just as
in Africa, the Asian view of the social contract is that it entails a liberal
model of government operating within the capitalist system rather than taking
into account social justice above all else. Embracing pluralism and diversity
while shedding aspects of authoritarian capitalism associated with cronyism and
the clientist state, the view of the Asian social contract is to subordinate
society to neoliberal global integration and work within the framework of
Western-established institutions. In each country, traditions governing social
and political relationships underlie the neoliberal model. (Sanya Osha, The
Social Contract in Africa, 2014;
https://www.ecb.europa.eu/press/key/date/2013/html/sp130302.en.html; http://www.mei.edu/content/map/myanmar-transition-social-control-social-contract)
Despite
far reaching implications for society and despite the political and business
class keen awareness of neoliberalism, most people around the world are almost
as perplexed by the term neoliberalism as they are with social contract theory
that is outside the public debate confined to the domain of political
philosophy. Many associate neoliberalism with Ronald Reagan supporter Milton
Friedman and the ‘Chicago School’, rarely mentioning the political dimension of
the economic philosophy and its far-reaching implications for all segments of
society. In an article entitled “Neoliberalism
– the ideology at the root of all our problems” The Guardian columnist
George Monbiot raised a few basic questions about the degree to which the
public is misinformed when it comes to the neoliberal social contract under
which society operates.
“Neoliberalism: do you know what it is? Its
anonymity is both a symptom and cause of its power. It has played a major role
in a remarkable variety of crises: the financial meltdown of 2007-2008, the
offshoring of wealth and power, of which the Panama Papers offer us merely a
glimpse, the slow collapse of public health and education, resurgent child
poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of
Donald Trump. But we respond to these crises as if they emerge in isolation,
apparently unaware that they have all been either catalysed or exacerbated by
the same coherent philosophy; a philosophy that has – or had – a name. What
greater power can there be than to operate namelessly?
Advocates
of neoliberalism, both from the pluralist-social welfare wing and the rightwing populist camp, have succeeded in
institutionalizing the new social contract which has transformed the historically
classical notion of individual freedom based on the Enlightenment concept of natural
rights into freedom of capitalist hegemony over the state and society. Whether
operating under the political/ideological umbrella of
pluralism-environmentalism in Western nations, combined with some version of a
Keynesian social welfare pluralist model, with rightwing populism or
authoritarianism in one-party state, political and corporate elites advancing
the neoliberal model share the same goal with regard to capital formation and
mainstream institutions.
http://journals.sagepub.com/doi/abs/10.1177/0896920516668386; https://www.counterpunch.org/2015/10/23/culture-of-cruelty-the-age-of-neoliberal-authoritarianism/; http://journals.sagepub.com/doi/abs/10.1177/0896920516668386
Weakening
the social welfare corporatist state model by reaching political consensus
among mainstream political parties by the late 1980s-early 1990s, whether
operating under a centrist-pluralist or conservative party, neoliberals have
been using the combination of massive deregulation with the state providing a
bailout mechanism when crisis hits; fiscal policy that transfers income from
workers and the middle class – raising the public debt to transfer wealth from
the bottom 90% to the wealthiest 10% -; providing corporate subsidies and
bailouts; and privatizing public projects and services at an immense cost to
the declining living standards for the middle class and workers.
As
much in the US as in other developed nations beginning in the 1980s, the
neoliberal state has become status quo by intentionally weakening the social
welfare state and redefining the social contract throughout the world. Working
with large banks and multilateral institutions such as the International
Monetary Fund (IMF) and World Bank that use loans as leverage to impose
neoliberal policies around the world in debtor nations desperate to raise
capital for the state and attract direct foreign investment, the advanced
capitalist countries impose the neoliberal social contract on the world.
As
reflected in the integrated global economy, the neoliberal model was imbedded
in IMF stabilization and World Bank development loans since the late 1940s.
After the energy crisis of the mid-1970s and the revolutions in Iran and
Nicaragua in 1979, international developments that took place amid US concerns
about the economy under strain from rising balance payments deficits that could
not accommodate both ‘military Keynesianism’ (deficit spending on defense as a
means of boosting the economy) and the social welfare system, neoliberalism
under the corporate welfare state emerged as the best means to continue
strengthening capitalism. (J. M. Cypher, “From
Military Keynesianism to Global-Neoliberal Militarism”, Monthly
Review Vol. 59, No. 2, 2007; Jason Hickel, A Short History ofNeoliberalism,
Everything
from government agencies whose role is strengthening capital, to public schools
and hospitals emulating the market-based management model and treating patients
and students as customers, the neoliberal goal is comprehensive market
domination of society. Advocates of the neoliberal social contract no longer
conceal their goals behind rhetoric about liberal-democratic ideals of
individual freedom and the state as an arbiter to harmonize the interests of
social classes. The market unequivocally imposes its hegemony not just over the
state but on all institutions, subordinating peoples’ lives to market forces
and equating those forces with democracy and national sovereignty. In pursuit
of consolidating the neoliberal model on a world scale, the advocates of this
ideology subordinate popular sovereignty and popular consent from which
legitimacy of the state emanates to capital. http://www.rhizomes.net/issue10/introren.htm
As
an integral part of the social environment and hegemonic culture reflecting the
hierarchical class structure and values based on marginalization, the
neoliberal social contract has become institutionalized in varying degrees
reflecting the more integrative nature of capitalism after the fall of the
Communist bloc coinciding with China’s increased global economic integration.
Emboldened that there was no competing ideology from any government challenging
capitalism, neoliberals aggressively pursued globalization under the
deregulation-corporate welfare anti-labor model.
Some
countries opted for mixed policies with a dose of quasi-statist policies as in
the case of China. Others retained many aspects of the social welfare state as
in the case of EU members, while some pursue authoritarian capitalism within a
pluralistic model. Still other nations in the Middle East, Africa, and Asia
where pluralism and multi-party traditions are not very strong, neoliberal
policies are tailored to clientist politics and crony capitalism. In all cases,
‘market omnipotence theory’ is the catalyst under the umbrella of the
neoliberal social contract.
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