Naked class war will continue post the pandemic, but it is not a break with neoliberalism

Lisbeth Latham 

The current crisis is sparking significant discussion about policy direction for our societies coming out of the pandemic. Zack Brestin’s article is an important contribution to that debate. While I agree that neoliberalism has been demonstrated to be a failed system and that we can expect to see an intensification of naked class warfare, however, I think it is a mistake to believe that we will see a break with neoliberalism is mistaken. What we are likely to see, unless working and oppressed people are able to resist it, is a deepening of the logic of neoliberalism rather than a break with it.

Neoliberalism has been the hegemonic economic and political outlook in the world for more than 40 years. However, defining neoliberalism is extremely difficult. This is for a range of reasons:

• Its proponents largely deny that it actually exists;
• It is so hegemonic that it articulates itself in numerous ways has it has permeated through a range of different political traditions on both the left and the right;
• One of the mechanisms for its hegemonic position is that it subverts and destabilises other outlooks rather than necessarily articulating a consistent position - a primary avenue for this is through what a number of authors have referred to as the neoliberal thought collective.

Having said this there are a number of features that can be associated with neoliberal positions, these include:

• Facilitating the free movement of capital by removing barriers to capital investment and shattering trade barriers;
• Increasing barriers to the movement of workers, which results in increasingly constrained rights and marginalisation for migrant workers;
• Prying open more aspects of social life for capital investment;
• Reduction in government social spending primarily premised on the justification of the need to rein in deficits;
• Increase in subsidisation of capital either directly or indirectly via the opening government services to capitalist competition;

Unfortunately, all indications are that these features will be deepened in the wake of the current crisis, just like they were in response to the Global Financial Crisis, and just as they have been after every crisis of the neoliberal era.

Why is this? I think we have to explore two aspects of neoliberalism, the first is that it is a response to the deep-seated and long-run economic crisis the global capitalist economy caused by the overaccumulation of capital which has resulted in capital finding it increasingly difficult to profitably invest outside of seeking to commodify all aspects of social life, redirect social spending into boosting profits and via the increasing financialisation and securitisation of the economy. However, these responses can only provide short-term relief to the problems that it is trying to address and has the tendency then to exacerbate the underlying crisis because it has both eliminated existing protections against crisis - such as the serious problem caused in the current pandemic by so many workers having little or no effective sick leave, resulting in workers with symptoms faced with the stark choice of attending work sick (and potentially infecting co-workers and by extension their families) - and that it has spread the direct impact of the economic crisis into more and more parts of the economy.

In response to both the failure of neoliberalism to avert crisis and the tendency to exacerbate crisis - while you would expect this to result in the death knell of the orientation, has repeatedly in crisis after crisis in the advocates of neoliberalism successfully enforcing prescriptions of the deepening of neoliberalism in the economy.

While this may seem both counterintuitive and running against the developments in the current crisis - with many advanced capitalist countries seeing government responses that have included the expansion of welfare payments, subsidisation of the payrolls of qualifying companies, and taken over privatised hospitals to meet the needs of responding to the pandemic. The reality is that many of these actions were taken late and begrudgingly, with many of the neoliberal governments which have introduced these frameworks already rolling back these programs despite the crisis being far from over. Neoliberal spokespeople both within and outside of government arguing that post-pandemic recovery will require a deepening of the deregulations of labour markets and privatisation, and the winding back of social spending to pay for the debt built up in responding to the crisis, that is, the shifting of the social cost the crisis onto working people in order to defend and prop up capitalist profits. This push is not inevitable, but resistance by working people in the current period is going to be difficult but as the struggles that are breaking out internationally in response to the crisis, it is possible.

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Coronavirus Will Not Destroy Neoliberalism – Only We Can Do That

Lisbeth Latham

Triumphalist comments about the end of capitalism or neoliberalism abounded in the aftermath of the global financial crisis in 2008, just as there are many people today who believe that the current crisis is the end of neoliberalism or capitalism.

Unfortunately, neoliberalism and – more importantly – the capitalist system will not just end of their own accord. Both, while prone to crisis, are extremely resilient, and are adept at turning their own crises into a rationale for deepening rather than reversing their dynamic.

It is not inevitable that the current crisis will see a strengthening of capitalism and its dominant ideological frame – they can both be defeated, but their defeat will not just happen. It will be the result of conscious resistance, not happenstance or luck.

Capitalism is prone to crisis. This tendency towards crisis, particularly in its late monopoly stage, is due to the ripening of a number of contradictions inherent to capitalism. However, capitalism is resilient as a system and has demonstrated over more than a century that there is no crisis it can’t overcome if the working class is prepared (i.e, can be made) to pay the price.

Importantly, crises – particularly destructive crises – help to renew capitalism, sweeping away uncompetitive capital, and creating the space for a renewal of capital accumulation, however briefly. Destructive crises also enable a renewed assault on the rights of working people and on social spending that working people have won in previous struggles.

This is a central feature of the neoliberal offensive over the past five decades of its history: to seize every crisis, impose its own doctrine, smash working conditions, privatise the economy, and dismantle the welfare state, shifting government spending to prop up profits rather than support working communities.

Neoliberalism constitutes a political project aimed at weakening the political power of the working class, asserting the political power of the capitalist class and seeking to establish profitable avenues for capital investment1.

Key features of neoliberal projects include: 

• Facilitating the free movement of capital by removing barriers to capital investment and shattering trade barriers; Increasing barriers to the movement of workers, which results in increasingly constrained rights and marginalisation for migrant workers (this includes open calls to movement being linked to migrants’ wealth); 
• Prying open more aspects of social life for capital investment – privatisation and ownership of water, for example, exemplified by the 1999-2000 water wars in Cochabamba, Bolivia, between the community and the the Nestlé corporation; 
• Opening government services to capitalist competition, whether through direct privatisation; corporatisation; ‘public-private partnerships’; 
• Access by government agencies or the introduction of ‘voucher systems’ to enable government subsidisation of the entry of private capital into the provision of social services; 
• At the same time, deregulating the cost of these services. This is often articulated in terms of enhancing consumer ‘choice’; 
• Reduction in government social spending, primarily premised on the justification of the need to rein in deficits, although this has rarely been achieved. Throughout the neoliberal decades the US’s budget had regularly been in deficit. Instead spending reductions occur primarily as a consequence of declines in government income via the narrowing of the tax base to be more heavily reliant on working people, and a redirection of government spending away from social spending on the working class and the promotion of worker-funded retirement funds.

COVID response as a deepening of neoliberalism
As with the global financial crisis, the Covid-19 pandemic and its associated crisis has been described as the death knell of neoliberalism, if not capitalism. In particular, the massive government stimulus packages that have been enacted in many countries to prop up economies have been seen as a decisive shift in the outlook of these governments.

However, government spending is not necessarily in contradiction with neoliberalism. Moreover, as both Philip Mirowski and Naomi Klein have pointed out, neoliberals are adept at turning economic crises, which are clearly exacerbated by neoliberal policies, into opportunities to deepen neoliberal attacks. Neoliberal states, while ideologically promoting budgetary surpluses, have massive spending programs primarily aimed at subsiding capitalist profits.

While government responses to the Covid-19 pandemic have seen massive levels of spending on stimulus packages, this spending has overwhelmingly been directed at propping up profits. For example, wage subsidies are for the most part really a subsidy to business profits with mechanisms built in to allow stripping away of workers’ rights.

At the same time, the spending on stimulus has triggered widespread discussion among the media and establishment of the ‘dangers’ of government deficits and the need to limit the length of the stimulus packages, particularly subsidies, irrespective of the length and dynamics of the crisis.

In addition, there has been a discussion of the need to ‘pay’ for the response to the current crisis at the same time as enabling capital to recover and rebound. These calls lay the foundations for two parallel pushes. First, a move to further curtail social spending, most likely with accompanying privatisation of public services, which will result in both a massive increase in the cost of these services and a corresponding drop in quality. Secondly, a move to further reduce company taxes whilst shifting the burden of paying for government spending even more heavily into working people.

Building working-class power today
Given this trajectory, how do we build a better system – one in which workers lives are prioritised over profits? How do we build a world where nature is valued and protected?

While the call for the creation of socialism in the here and now is appealing, nowhere on the planet do working people have the level of organisation and confidence necessary to achieve this objective now. Instead, we must build the power and confidence of the working class as it exists today in defence of existing rights; in demanding steps forward, no matter how limited; in guaranteeing livelihoods, in the hope we can extend and expand them; and building the capacity to win more.

In the short term this means:

• Ensuring that working people, whether they are in employment or not, and whatever their residency/visa status, have liveable incomes; and
• Ensuring that all those workers engaged in employment have safe working conditions, which in the context of Covid-19 has never been more urgent.

In the medium to long term this will involve:

• The struggle to maintain liveable incomes, particularly for those on government pensions;
• Mass construction of energy-efficient and high-quality public housing;
• Massive reinvestment in the public health system both in terms of capacity and working conditions for the workers within it; Support for public research within the universities and independent research centres; and
• A just transition across the economy to move away from fossil fuels and to transform the economy to one based on meeting human needs rather than constant growth, in order to draw down the atmospheric carbon dioxide.

It is not enough to simply call for a better world, it is necessary to mobilise and struggle to achieve it. At the same time, it is necessary to recognise that with the extent of the pandemic and the necessity for social distancing, in most industries and social sectors social mobilisation and industrial action will be extremely difficult.

Our immediate demands of both governments and capital are for action to ensure economic livelihoods, and to ensure that workers and communities are able to operate in as safe a way as possible. As the economy reopens, our ability to disrupt and mobilise will increase, as will our political horizons and demands.

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This article was originally published at Irish Broad Left.

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How do we build a climate movement that can win?

Lisbeth Latham

The unprecedented glacial melting, diminishing sea ice shelves, and extensive fires globally have fueled growing existential angst around the looming climate catastrophe. This angst has been a major source of the emergence and growth of the climate strike movement globally which has seen millions of people drawn onto the streets with the strikes on September 20 and 27.

Growing numbers of people – particularly young people – have become aware of both the depth of the crisis and the refusal of state actors or the fossil fuel industry to take serious steps to address climate change. This has given rise to the urgent question of how and in what circumstances the necessary changes can be made, particularly around energy use, to halt the planet’s slide into irreversible and escalating climate change.

Yes, socialism is the solution, but so what?

Arguing for eco-socialism is not enough
The response to this crisis from many revolutionary organisations has been to make arguments against the capacity of the climate crisis to be addressed within the framework of capitalism. Of course, the Anthropocene began with the start of the industrial revolution and has been driven and accelerated by capitalism’s inherent drive to constantly expand and increase profits.

It is also the case that an environment-focused socialised economy would be able to mobilise both the population and the economy to meet the challenges confronting the planet in ways unimaginable in our current context. However, as Marx argued, “Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living.”

In almost no country do we have a revolutionary government. As a consequence of the betrayals of social democracy and Stalinism, and the social defeats in the face of triumphant neoliberalism, almost nowhere on the planet are there the social forces or leadership required to carry out the necessary revolutionary process to achieve such governments.

Given this reality, arguments that capitalism can’t address the crisis give the impression that the task of combating climate change is utopian and something that has to be put off to some unstated future – something that ends up sounding a lot like capital’s dominant response to the crisis.

Can the climate crisis be addressed under capitalism? Frankly, who knows, and it doesn’t matter. Capitalists and their representatives in government act to defend their interests, which is primarily achieving constant growth in profits, but ultimately is about maintaining a stable system within which capital accumulation can occur.

Divisions on climate action among capitalist class
This means that sections of capital, particularly those not tied to the fossil fuel industry, have the potential to view action to address climate change as being in their own interests – hence the thousands of companies encouraging their staff to participate in the climate strikes. Obviously this action has a range of motivations, including for some cheap greenwashing PR.

However, a number of capitalists may actually be confronting the reality that the climate crisis will disrupt capitalist accumulation. They too may see the planet dying and might come to the conclusion that there is no planet B, or they may see ways in which they can profit from transformations in the economy.

The current solutions gaining traction internationally around combatting climate change are notions around a Green New Deal, alluding to Roosevelt’s New Deal response to the Great Depression, and the reproduction of the Second World War industrial mobilisations that massively expanded productive forces in war industries to support and sustain, particularly the US war effort.

While both these examples highlight how the economy can be mobilised to transform and defend the economy and society, they are also examples of capitalism and capitalists mobilising to defend the capitalist system from an existential threat.

In both historic examples, working people played a key role in seeking to ensure that saving the system had some benefit for the popular classes in society – rather than simply re-securing the conditions for capitalist accumulation. This resistance took the form of building and renewing unions, fighting for improvements in wages and conditions, in government projects ensuring that workers were paid union rates, and attempts to shift some of the war profiteering into improved wages and conditions for workers in war industries.

More importantly, what can be achieved under capitalism can’t be prejudged. It is a consequence of the conjunctural balance of forces – between what the ruling class believes is necessary to concede to maintain order, and the consciousness and confidence of the popular classes to carry forward the struggle.

In the wake of the mass strike and protest wave in France during May and June 1968, employers offered massive wage increases to help enable the ending of the strikes. While these wage rises would have eaten considerably into company profits, it was a small price to pay for saving the capitalist system.

During the development of his Transitional Program, Leon Trotsky held discussions with US Trotskyists about the intents and purpose of the program. Part of this discussion focused on the extent to which the demands, particularly the transitional demands contained within the program, were achievable under capitalism. In addressing this point, Trotsky made it clear that what could or couldn’t be achieved could not be prejudged, but also that what does or doesn’t seem possible is a consequence of the march of events and dynamics of consciousness and working-class power.

This approach is also consistent with Lenin’s discussion of the development of class consciousness through the lived experience of workers and poor peasants during the Russian revolution of the unwillingness of pro-capitalist forces to deliver on the Russian revolutionary forces’ demands of peace, bread, and land rather than the specific limitations of the capitalist system itself.

Formulating immediate demands
The real and immediate challenge facing socialists (and anyone who genuinely is concerned about the environment) is not the struggle to convince people of the necessity of socialism, or even the need to change the system – but the need and possibility of achieving immediate concrete action to confront the climate crisis.

After decades of inaction and backsliding, this may feel impossible, and as the climate moves closer to tipping points it may mean even more rapid transformation than the movement’s current demands of no new coal, oil and gas projects; 100 per cent renewable energy generation by 2030; and funding a just transition and job creation for all fossil-fuel workers and communities.

These demands appear radical and potentially impossible at the moment, but they are more likely inadequate and too slow given the urgent need to not only stop the release of more carbon into the atmosphere but to massively increase the planet’s capacity to remove carbon from the atmosphere – and to reverse the other practices destroying the biosphere, particularly the massive waste of water and the use of toxic chemicals associated with both mining and industrial agriculture.

It is in this struggle for such demands that the limitations of capitalism in the struggle to save the planet will be highlighted, particularly in confronting market-based solutions aimed at creating new speculative markets rather than achieving serious reductions in carbon emissions and extracting carbon from the atmosphere.

There is also a pressing need for industrialised countries to fundamentally address our consumption patterns (which are promoted and encouraged by the capitalist system) to more accurately reflect the resources available to the planet as a whole, at the same time as the living standards of the global south need to be uplifted to overcome poverty caused by centuries of colonialism, neo-colonialism and imperialism.

More important than the development of demands that could potentially address the climate crisis is the development and escalation of the movement. Although this youth-led movement is remarkable and extremely inspiring, it still remains far too small and intermittent in its mobilisation to build the level of pressure necessary to force action by governments on the climate.

A focus on the struggle to build the movement and achieve immediate demands to address and redress the crisis confronting us – rather than simply posing abstract arguments for socialism – is far more in keeping with the socialist tradition and is the only way to build a movement that can win.

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Originally published by the Irish Broad Left.

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Neoliberalism is dead, long live neoliberalism!

By Lisbeth Latham
Originally published by Irish Broad Left
July 10, 2019
Neoliberalism is a term which has entered the left lexicon over the past three decades, although in different countries it can have other analogous terms. While it is a term that the left has embraced, the right, and the advocates of what is commonly referred to as neoliberalism, deny it exists as a phenomenon, instead arguing that it reflects the conspiratorial nature of the left.

Contrary to these positions I argue that there is a usefulness in conceptualising neoliberalism as a distinct response to the capitalist crisis, and that it is not only the hegemonic response to capitalist crisis but that its proponents use crises to deepen and strengthen its hegemony. Moreover, because significant sections of the governmental left have embraced neoliberalism, challenging neoliberalism is central to not only rebuilding left alternatives but to challenging the rise of the far-right internationally.

Why does capitalism experience crises?

Capitalism is the only economic system in the history of humanity that is driven by a need to expand and take over pre-existing social relations. It is also the only economic system in which economic crises are characterised by the production of too much use values (at least in the early period of the a crisis). Marx postulated that the primary underlying driver of an economic crisis is the tendency of the rate of profit to decline. Adding to this general tendency is the anarchic character of the capitalist system, where individual capitalists seek to maximise their own profits by shifting investment to areas of higher rates of profits, which leads to a series of additional crises, specifically crises of overproduction and crises of over-accumulation.

The rate of profit is profit (or surplus value) over the sum of constant capital and variable capital. Political economists dating back to Adam Smith and David Ricardo argued that it was an undeniable fact that there was a tendency of the rate of profit to decline; however, they believed it remained unclear what the mechanism for this decline was. Marx, in Volume 3 of Capital, argued that this tendency was driven fundamentally by profit (i.e. surplus value) being derived from labour.

Therefore, increases in constant capital (an increase in the organic composition of capital – for example, factory machinery or the value of the goods and materials required to produce a commodity) would reduce the amount of labour power involved in production and thus overtime would result in a reduction in the amount of surplus value being extracted in comparison to the total constant and variable capital involved in its production.

Crises of overproduction

Overproduction simply means that too many goods – of either a single category or multiple categories of goods – are being produced to be sold and generate sufficient profits. Since the earlier period of laissez faire capitalism when markets were generally expanding, this is the normal state of affairs. In the US auto-industry, for instance, the industry operated at 75.9 per cent of capacity in the first quarter of 2019.

A crisis occurs, however, when the production and sale of goods is no longer able to produce a profit, or at the very least a sufficient profit which can lead to individual companies, or whole industries collapsing. Such collapses, while a disaster for individual capitalists or corporations and the thousands of workers who are employed by them, creates opportunities in the economy to remove excess capacity from circulation and reduce competition.

Crisis of over-accumulation

Over-accumulation crises occur when the level of capital accumulation in the system reaches such a point that there is too much capital in circulation for significant levels of capital to be profitably invested or reinvested in production, or at least increases the appeal of capital investment in financial speculation rather than in investment in new capital goods.

Overcoming a crisis of over-accumulation requires either the destruction of significant amounts of capital, such as through war, a major recession with widespread bankruptcy, the opening of new markets to create expanded demand, or via the development of new technology – opening new avenues for capital investment. In all of these circumstances, the relief provided cannot and will not be permanent.

Throughout the history of capitalism there have been a range of responses to capitalist crises, particularly large-scale crisis such as recessions and depressions. In the wake of the 1929 stock market crash and resulting Great Depression, then US President Franklin Delano Roosevelt, along with a range of governments in advanced capitalist countries, embraced Keynesian responses, which focused on what Roosevelt referred to as “pump-priming” – i.e., public expenditure on infrastructure, much of which was subsidised by using the unemployed as a cheap labour source.

The Great Depression Such measures were essential in overcoming the impact of the Great Depression, and they undoubtedly ameliorated some of the worst levels of poverty unleashed by the depression. But there are two important points to remember: the first is that in many countries the Great Depression unleashed significant levels of class struggle, including both the unemployed and the employed – with this struggle resulting in the victory of fascism at the domestic level in Germany, Italy, Portugal, and Spain – and with the emergence of social democratic governments in a number of countries for the first time.

In response to an increasingly combative US working class, exemplified by the West Coast maritime strike, the Teamster strikes in Minneapolis, and the Toledo Auto-Lite strike – all of which occurred in 1934 and are seen as key drivers of industrial unionism in the US – Roosevelt’s second New Deal in 1935 had specific measures seeking to limit the level of violence in the class struggle with formal mechanism for union recognition (Preis, A. 1964. Labor’s giant step: Twenty years of the CIO. Monad Press, New York).

The second point to note is that many economies did not truly recover from the Great Depression until the second world was, where the massive investment in armaments, mass conscription, and the destruction pf capital goods fed economic growth, and massive profits, this was particularly the case in the united states where the majority of unions, particularly in Stalinist lead unions, made no strike pledges to help support the war effort (ibid).

Expansion of capitalist accumulation

In the wake of World War II, the environment was set for the rapid expansion of capitalist accumulation. These were the massive destruction of capital goods wrought by the war, and the opening up of new markets as more and more imperial colonial powers broke up under the pressure of anti-colonial national liberation struggles.

At the same time, the growth in confidence of the working class, along with the enhanced standing and expansion of the Soviet Bloc through its role in the defeat of fascism in World War II – placing whole swathes of Western Europe at risk of being ‘lost’ to capitalism – despite the efforts of the Soviet leadership to maintain the division of Europe as agreed between Britain, the US and the Soviet Union at the Yalta Conference.

In this context the US government launched the Marshall Plan to massively boost the rebuilding of capital in Western Europe and Japan. In addition, there was pressure to expand social services and public welfare provisions. These steps lay the foundations for the long post-war boom in Western Europe and the US, which was also prolonged by imperialist spending on their militaries as part of Cold War and hot wars in Korea and Vietnam.

The 1973 oil crisis

However, the long boom held within it the roots its own demise, which were exacerbated by other dimensions. These were the absolute limits of expanding markets via the collapse of European colonial empires; the rebuilding of capital in the wake of the destruction of World War II leading to greater capitalist competition and reduced opportunities productive capitalist investments; and growing US deficits due to the cost of the Vietnam war.

In addition, more and more markets were either removed or became more restricted from access to imperialist capitalism as a consequence of national liberation struggles and attempts to build their own national economies. These developments led to a growing stagflation crisis, where both inflation and unemployment grew. This meant that the international capitalist system was vulnerable to further shocks to the economy as the long boom came to a close. Of particular importance were the 1973 OPEC strike and subsequent oil crisis and along with global decline in the demand for steel, exacerbating pressures of deindustrialisation, particularly in the US.

Insurgent neoliberalism

In response to these challenges, a wave of conservative economist and social theorists began to gain a greater hearing among governments for their alternative model for saving capitalism. These groupings, commonly referred to as neoliberals, have their origins in a serious of meetings that founded the Mont Pèlerin Society (MPS) in 1947.

Although not having a clear economic doctrine, it represented a political project to reassert capitalist class power and defeat the growing strength of the working class and its organisations the trade unions and the social democratic and communist parties. During its early existence neoliberalism sought to construct a international thought collective represented by a range of national and international think tanks, and seeking to influence and take over university economics departments transforming their positions into increasingly common-sense and thus hegemonic responses to economic crisis.

The ‘Chicago Boys’ make their mark

The first experiments with the implementation of neoliberalism came in Indonesia and Chile following the respective coup d’etats in those countries in 1966 and 1973. In Indonesia, following the establishment of Suharto’s New Order regime, which had been supported in its smashing and mass slaughter of the country’s communist and nationalist left, orchestrated by US intelligence services (particularly the CIA), moves were made to remove barriers to investment by capital from the US and other imperialist nations.

In addition, the Indonesian economy was actively carved up between US corporations. Despite these changes that enabled the expanded imperialist exploitation of Indonesian natural resources and labour, investment processes were extremely corrupt, with investments requiring joint ventures – with domestic Indonesian capital generally with connections to Suharto’s family and the cronies around him.

The extensive level of poverty within the country, exacerbated by the opening up of the economy, also meant that the state was forced to provide a significant level of subsidisation of basic goods to enable much of the population to survive – essentially state subsidies for social reproduction in order to allow the imperialist extraction of super-profits.

In Chile, following the September 1973 coup against President Salvador Allende’s Popular Unity government – carried out by the Chilean armed forces with the backing of the US government (pictured) – there began a program of both mass repression and economic transformation.

During the coup and its aftermath tens of thousands of people were murdered and terrorised, and a further 200,000 people (six per cent of the population) were forced into exile. At the same time, the ‘Chicago Boys’ – academic and graduates from the University of Chicago’s School of Economics, including “Nobel Prize” winner Milton Friedman – were brought in to reshape the Chilean economy. The impact of this transformation saw significant reductions when comparing, wages and social spending when comparing 1970 to 1989:

• Wages decreased by eight per cent. 
• Family allowances in 1989 were 28 per cent of what they had been in 1970. 
•  Budgets for education, health and housing had dropped by over 20 per cent on average.

At the same time, Chile was seen as an economic miracle in comparison to other parts Latin America, with consistent growth in the economy, and lower levels of unemployment than in other Latin American countries. This helped neoliberals to assert ‘common-sense’ truths that private companies are more efficient than governments in delivering services; that higher profits leads to more jobs; and thus lower wages lead to more jobs. 

Neoliberalism bites in the global south

With these ‘successes’ neoliberals were in a position to push for the application of neoliberal solutions to economic difficulties facing both economies of both the imperialist centre and the global south. These changes were pushed by both the victory of openly neoliberal politicians such as US President Ronald Reagan and British PM Margaret Thatcher, and in the case of Australia, France, and Germany social-democratic (or more accurately social-liberal) governments.

In these countries the attacks were pitched as necessary to maintain competitiveness, the rejection of social goods, and general social responsibility for the collective good – and the assertion, in Thatcher’s words, that “there is no alternative”. In many global south countries, resistance to change came from governments, who were unwilling to go as far as demanded, then the levers of international financial institutions as such as the World Bank, International Monetary Fund (IMF), and World Trade Organisation (WTO), which sought to tie loans and bailouts to deregulation and privatisation of countries’ resources.

These institutions routinely operated on a gaslighting framework where the people whose economies had failed under the strain of neoliberal restructuring were told that the problem was not the changes that was enabling corporations to extract billions in profits from the countries for little return, but rather that that their economies had not been restructured enough and the recipe for their situation was more and more privatisation and deregulation.

Can neoliberalism be defined?

So what is neoliberalism? There is no definitive prescription of what neoliberalism consists of, which is why its advocates can so readily dismiss its existence.

Neoliberalism began as a small intellectual society founded at Mont Pèlerin in 1947, initially heavily influenced by the ideas of Austrian economist Friedrich Hayek, but similar societies and think tanks were established globally. These organisations sought to take over and influence university, institutional, and governmental economics programs, forming what Philip Mirowski refers to as the “neoliberal thought collective”.

These interlinking bodies do not so much articulate a coherent policy doctrine as seek to build and inculcate policy discussions with neoliberal ideas, which may well be at odds with each other, but have the effect of co-opting and subsuming the language of other movements, but also creating a situation where people are presented with not a choice between neoliberalism or an alternative solution, but simply varying forms of neoliberal solutions – which both, in George Lukács’ view is an articulation of the power of neoliberalism as a hegemonic discourse, but also reinforcing Thatcher’s dictum that “there is no alternative”.

Neoliberalism as a response to capitalist crisis

Neoliberalism constitutes a political project aimed at weakening the political power of the working class, asserting the political power of the capitalist class and seeking to establish profitable avenues for capital investment (Harvey, D. 2007. “A brief history of neoliberalism”. Oxford University Press, Oxford.)

Key features of neoliberal projects include:

Increasing barriers to the movement of workers – which results in increasingly constrained rights and marginalisation for migrant workers (this includes open calls to movement being linked to migrants’ wealth); 

Prying open more aspects of social life for capital investment – privatisation and ownership of water, for example, exemplified by the 1999-2000 water wars in Cochabamba, Bolivia, between the community and the the Nestlé corporation; 

Opening of government services to capitalist competition, whether through direct privatisation; corporatisation; “public-private partnerships”; 

Access by government agencies or the introduction of “voucher systems” to enable government subsidisation of the entry of private capital into the provision of social services; and at the same time, deregulating costs. This is often articulated in terms of enhancing consumer “choice”;

Reduction in government spending, primarily premised on the justification of the need to reign in deficits, although this has rarely been achieved (throughout the neoliberal decades the US’s budget had regularly been in deficit). 

Instead reductions occur primarily as a consequence of declines in government income via the narrowing of the tax base to be more heavily reliant on working people, and a redirection of government spending away from social spending on the working class and the promotion of worker-funded retirement funds – which both reduce government responsibility and make massive levels of capital available for speculation on capital markets. For example, the Australian Superannuation Funds amounted to $AU2.8 trillion in funds at the end of the March Quarter of 2019 . 

Weakening the strength and power of organised labour 
The outsourcing of work occurs both within public services and in private companies, often posed as leading to cheaper costs, Outsourcing works to undermine the bargaining power both of the outsourced and non-sourced workers, but tends to have higher overall costs due to the labour hire companies’ own need to provide their own work materials.<

The tying of wage increases to productivity increases has resulted in a significant shift in the share of GDP to profits away from wages, as workers are forced to work increasingly hard to see their wages maintain pace with inflation.  

The shifting the cost of the reproduction of labour onto the working class has occurred through a range of mechanism including:

• Shifting the burden of paying for the state apparatus via increased taxes on workers and the reduction taxes on capital; 
• Reducing spending on social services – via either total elimination of services or means-testing services.

The 2008 crisis and beyond 

The 2008 global financial crisis and subsequent Eurozone crises, with the accompanying response by governments have been seen by some as signalling the death of neoliberalism. However, as Mirowski and others would argue, the responses to these crises instead reflect a deepening of neoliberalism – in that they have resulted in the efforts of saving capitalism being carried on the back of workers, while international capital has largely been free to continue to reap massive profits and pay out dividends and bonuses even as they were receiving public subsidies to survive. 

In response to the global financial crisis (GFC), the US government bailed out banks and financial institutions to the tune of $US4.6 trillion. This was bankrolled by US taxpayers. The US and other governments facilitated banking consolidation to “save the system” – handing billions in assets to surviving major banks. 

In response to the failure of the “big three” US auto manufacturers, the then Obama administration provided a bailout of $US80.7 billion. This bailout was premised on the tearing up of workers’ collective agreements with demands that workers make significant concessions on their working conditions in order to keep their jobs. 

In Europe, Ireland’s opening up of the purchase of non-performing loans to cheap purchase by vulture funds has driven up housing prices in Dublin at a time of acute economic decline. We also continue to see – in the face of the imminent destruction of our planet – continued refusal and obfuscation by governments and by capital to take serious action to slow and hopefully stop action to combat climate change. The US and Australian governments in particular continue to subsidise the fossil fuel industry . 

Factors behind the growth of the far right

The past three decades have seen a growth of the far right in a wide range of countries, which has coincided with a decline and weakening of the left. This shift has been partly premised on deindustrialisation of certain economies and the erosion of the welfare state, which left-wing parties have at times been responsible for, particularly when in government coalitions with right-wing forces.

This has resulted in understandable anger and frustration among sections of the working class and the petite bourgeoisie – anger which the right has demagogically sought to direct into anger at marginalised communities, which it blames while at the same time cynically supporting many of the attacks on working people. 

In France for example, Marine Le Pen’s National Front – now National Rally – has sought to court a range of marginalised communities, including Jewish, Islamic, and Queer communities by painting itself as the only force capable of protecting them from “marriage equality” and Islamic fundamentalism respectively. 

Part of the growth of the far right can be explained by the reality that the interests of capitalist class are not homogeneous – the capitalist class is made up of fractions that reflect different interests within its own class. The far right reflect interests of capitalist class fractions that would benefit from a more nationalist framework. Moreover, the far-right in a range of countries have a long history of supporting policies that are not in the interests of working people or the petite bourgeoisie. 

This includes support for:

• deregulation and privatisation; 
• cutting of legislation which limit pollution; 
•  cuts to social security; attacks on working people. 

Left demands opposing neoliberalism

Despite this record, the far-right has taken advantage of the complicity of social-democratic and other left parties in the implementation of neoliberalism to seek to present themselves as the only opponents of austerity and the dislocation of the working class. This includes seeking to cynically accuse social democracy and the left more broadly of abandoning workers for support for multiculturalism and the support of other marginalised communities – causes that the left are more likely to support, but which is totally unrelated to the implementation and support for neoliberalism. 

In response to this challenge, it is important that the left is seen as putting forward proposals that address the needs of working people without giving ground to attacks on marginalised communities. Such demands would include:

• In the event of mass foreclosures government should protect owner-occupiers; 
• Ensuring our demands are around the universal provision of services rather than accepting means-testing for access; 
• Ban redundancies in profitable companies; 
• Job creation through limiting overtime and reducing working hours with no loss in pay; 
• Support for a universal basic income – but it must be set at a level which is liveable, and there must be strict controls on rent/commodity prices to ensure that it is not simply consumed as increased profits; 
• Ending of speculation and separating retail banks from investment banks; 
• Caps on wage ratios between senior management and the lowest-paid workers; 
• Lifting company tax and personal income tax threshold for higher-income earners to fund an expansion of social services; 
• Reabsorption of outsourced social services back into the government – to facilitate collective bargaining and improved wages for workers in these vital and essential services; 
• Legislate to require companies operating in a country to at minimum comply with that country’s standards when operating in other countries; 
• Legislate to enable workers the option of creating co-operatives in companies facing closure or sale; Give workers veto rights on restructuring plans. 
While such demands seem unrealistic in the context of more than 30 years of retreat and defeat globally for progressive movements, it is important for us to consistently challenge neoliberal hegemony and to always, to quote Che, “be realistic and demand the impossible”.

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Lisbeth Latham is a contributing editor to Irish Broad Left. You can follow her on Twitter @grumpenprol.

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