Thursday, 14 December 2017

Neoliberalism and Fascism

(This is part three of my essay entitled NEOLIBERALISM AND THE SOCIAL CONTRACT. The fourth part will be published soon.)

The role of the state

Unprecedented for a former president, on 10 December 2017 Barak Obama warned Americans not to follow a Nazi path. A clear reference to president Trump and the Republican Party leading America in that direction with rhetoric and policies that encourage ‘culture war’ (kulturkampf – struggle between varieties of rightwingers from evangelicals to neo-Nazis against secular liberals), Obama made reference to socioeconomic polarization at the root of political polarization.

“The combination of economic disruption, cultural disruption ― nothing feels solid to people ― that’s a recipe for people wanting to find security somewhere. And sadly, there’s something in all of us that looks for simple answers when we’re agitated and insecure. The narrative that America at its best has stood for, the narrative of pluralism and tolerance and democracy and rule of law, human rights and freedom of the press and freedom of religion, that narrative, I think, is actually the more powerful narrative. The majority of people around the world aspire to that narrative, which is the reason people still want to come here." germany_us_5a2c032ce4b0a290f0512487

Warning about the road to Nazism, Obama drew distinctions between his brand of pluralist neoliberalism and Trump’s rightwing populist model. Naturally, he did not mention that both models operate under the same neoliberal umbrella and the policies for which Obama and before him Bill Clinton pursued, driving a segment of the population toward the authoritarian neoliberal model that offers the illusion of realizing the American Dream. European political leaders embracing the pluralist model under neoliberalism have been as condemnatory as Obama of rightwing populism’s pursuit of ‘culture war’ as a precursor to Fascism.

Accusing Trump of emboldening varieties of neo-Fascists not just in the US and EU but around the globe, European neoliberal pluralists ignored both the deep roots of Fascism in Europe and their own policies contributing to the rise of neo-Fascism. Just as with Obama and his fellow Democrats, European neoliberal pluralists draw a very sharp distinction between their version of neoliberalism, and rightwing populism. Ironically, neoliberal pluralists argue that the rightwing populists violate some of the globalist integration principles of the ideology by stressing economic nationalism.

Beyond the realm of political and journalistic polemics intended to emphasize neoliberal differences where few exist, as well as the dreadfulness of a Fascist regime’s policies, there are differences and similarities between interwar Fascism and a number of rightwing populist parties and regimes operating under the umbrella of neoliberalism today. Benito Mussolini’s Fascism in Italy and Adolph Hitler’s Nazism in Germany emerged as movements organized into political parties at the end of WWI and after the Bolshevik Revolution when European capitalism was experiencing a crisis and the US became the center of core capitalist countries.

Defeated in the war and weakened economically, Italy and Germany as newly-established nation-states (1860 and 1870 respectively) were struggling to reassert their position in the world economy, finding it difficult under a polarized parliamentary system, thus turning to Fascist dictatorships under combined economic and sociopolitical pressures. More closely integrated and growing, capitalism in the early 21st century is experiencing a crisis in Western core countries. This is especially in the US where capital over-accumulation resulting from parasitic sectors such as speculative investment and ‘Military Keynesianism’ weakens the civilian economy as deficit financing rises to maintain a global military presence.

Operating under the neoliberal umbrella, rightwing populism emerged as a reaction to the prospect that the center of global capitalism is shifting from the US to China, a frightening prospect for many whom find hope in rightwing nationalist rhetoric. Whereas in the middle of the 20th century the US enjoyed balance of payments surpluses and was a net creditor with the dollar as the world’s strongest reserve currency and the world’s strongest manufacturing sector, in 2017 the US is among the earth’s largest debtor nations with chronic balance of payments deficits, a weak dollar with a bleak future and an economy based more on parasitic financial speculation and massive defense-related spending and less on productive sectors that are far more profitable in Asia and developing nations with low labor costs.

The recognition by the political class and business class that over-accumulation is only possible by continued downward income pressure on labor has invited populist rightwing or neo-fascist solutions by a segment among some politicians and capitalists who view neoliberalism as the panacea. Exerting enormous influence by exporting its neoliberal ideological, political, economic and cultural influence throughout the world, the US-imposed transformation model has often resulted in military dictatorships and authoritarian regimes in Latin America, Africa and Asia. By institutionalizing neoliberalism under rightwing populism on its soil, the US has been leading Europe and other nations around the world to move closer to neo-Fascism.

Rejecting the claim of any similarities between neoliberalism and Fascism, neoliberal apologists take pride that their apparent goal is to weaken the state, by which they mean the Keynesian welfare state, not the ‘military Keynesian’ and corporate welfare state. By contrast, Fascists advocated a powerful state – everything within the state, nothing outside the state, nothing against the state. American neoliberals of both the pluralist and rightwing camps have created a societal model not just in one nation like Mussolini and Hitler but globally with the result of: “everything within neoliberalism, nothing against neoliberalism, nothing outside neoliberalism.

Whereas the state structure has been strengthened in the US and advanced capitalist nations, in the process of implementing neoliberal policies state bureaucratic functions have been outsourced to private companies thus keeping with the spirit of corporate-welfare goals. Contrary to the claims of many neoliberal scholars, politicians and commentators, neoliberalism has not weakened the state simply because the ideology lays claims to a hegemonic private sector and weak state. It is true that the Keynesian-welfare state structure has been weakened while the corporate-welfare-militarist-police-state structure has been strengthened. However, in the less developed capitalist countries the public sector has weakened as a result of the US and EU imposing the neoliberal model which drains the public sector of any leverage in stimulating economic and social development investment because of the transfer of public assets and public services to the private sector.

Gaspar Miklos Tamas, Romanian political philosopher of the George Lukacs-inspired Budapest School, argues that global division of labor in the neoliberal era has diminished national sovereignty and citizenship for those in less developed (periphery) nations. “The new dual sate is alive and well: Normative State for the core populations of the capitalist center, and another State of arbitrary decrees for the non-citizens who are the rest. Unlike in classical fascism, this second State is only dimly visible from the first. The radical critique protesting that liberty within the Normative State is an illusion, although understandable, is erroneous. The denial of citizenship based not on exploitation, oppression and straightforward discrimination, but on mere exclusion and distance, is difficult to grasp, because the mental habits of liberation struggle for a more just redistribution of goods and powers are not applicable. The problem is not that the Normative State is becoming more authoritarian: rather, that it belongs only to a few.”

Miklos Tamas’ observation that the normative state is the domain of the very few leads him to conclude that we are living in a global post-fascist era which is not totalitarian and based on a mass movement as interwar Fascism but it categorically rejects the Enlightenment tradition of citizenship which is the very essence of the bourgeois social contract. While the normative state in advanced countries is becoming more authoritarian with police-state characteristics, the state in the periphery whether Eastern Europe, Latin America or Africa is swept along by neoliberal policies that drive it toward authoritarianism as much as the state in the EU and US.

It is not only the case where IMF austerity has been used as leverage to impose neoliberalism in developing nations, but across the world considering countries have been scrambling to attract foreign investment which carries the neoliberal policies as a precondition. As Miklos Tamas argues, this has diluted national sovereignty of weaker countries, allowing national capitalists and especially multinational corporations to play a determining role in society against the background of a weak state structure. Along with weakened national sovereignty, national citizenship in turn finds expression in extreme rightwing groups to compensate for loss of independence as the bourgeois social contract presumably guarantees. (Aihwa Ong, Neoliberalism as Exception: Mutations in Citizenship and Sovereignty, 2006;

It is undeniable that there is a qualitative difference in Berlin and Rome under neoliberal regimes today than it was under Fascism. It would be a mistake to lump a contemporary neoliberal society together with the Third Reich and Fascist Italy, a dreadful and costly mistake that Stalinists made in the 1930s. Interwar totalitarianism existed under one-party state with a popular base operating as a police state. Although many countries under varieties of neoliberal regimes have an electoral system of at least two parties alternating power, the ruling parties pursue neoliberal policies with variations on social and cultural issues (identity politics), thus operating within the same policy framework impacting peoples’ living standards.

Not just leftist academic critics, but even the progressive democratic Salon magazine recognized during the US election of 2016 that the neoliberal state would prevail regardless of whether Trump or Clinton won the presidential contest. “Neoliberalism presumes a strong state, working only for the benefit of the wealthy, and as such it has little pretence to neutrality and universality, unlike the classical liberal state.  I would go so far as to say that neoliberalism is the final completion of capitalism’s long-nascent project, in that the desire to transform everything—every object, every living thing, every fact on the planet—in its image had not been realized to the same extent by any preceding ideology.

In neoliberal society either of the pluralist variety or authoritarian capitalist, there are elements of polizeistaat though not nearly full blown as in the Third Reich or Fascist Italy. While conformity to the status quo and self-censorship is the only way to survive, modern means of communication and multiple dissident outlets attacking the status quo from the right that is far more pervasive and socio-politically acceptable than doing so from the left has actually facilitated the evolution of the authoritarian state. Moreover, whereas big business collaborated closely with Fascist dictators to secure the preeminence of the existing social order threatened by the crisis of democracy created by capitalism, big business under the neoliberal social contract has the same goal, despite disagreement on the means of forging political consensus. Partly because neoliberalism carries the legacy of late 19th century liberalism and operates in most countries within the parliamentary system, and partly because of fear of grassroots social revolution, a segment of the capitalist class wants to preserve the democratic façade of the neoliberal social contract by perpetuating identity politics. In either case, ‘economic fascism’ as the essence of neoliberalism, or post-fascism as Miklos Tamas calls it, is an inescapable reality. (Andrea Micocci and Flavia Di Mario, The Fascist Nature of Neoliberalism, 2017).

In distinguishing the composition and goals of the bourgeois state vs. the Fascist national state, Italian Fascism’s theoretician Giovanni Gentile defined the state under the dictator Benito Mussolini as ‘totalitario’; a term also applied to Germany’s Third Reich. Arguing that ideology in the Fascist totalitarian state had a ubiquitous role in every aspect of life and power over people, Gentile and Mussolini viewed such state as the catalyst to a powerful nation-state that subordinates all institutions and the lives of citizens to its mold. In “La Dottrina del Fascismo” (Gentile and Mussolini, 1932), Musolini made famous the statement: "Everything within the state, nothing outside the state, nothing against the state," although it was Germany that was far more totalitarian simply because it had the means to achieve the goal.

The convergence of neoliberalism and Fascism is hardly surprising when one considers that both aim at a totalitarian society of different sorts, one of state-driven ideology and the other market-driven with the corporate welfare state behind it.  In some respects, Sheldon Wolin’s the “inverted totalitarianism” theory helps to place this issue into perspective, arguing that despite the absence of a dictator the corporate state behind the façade of ‘electoral democracy’ is an instrument of totalitarianism. Considering the increased role of security-intelligence-surveillance agencies in a presumably ‘open’ society, it is not difficult to see that society has more illiberal than classic liberal traits. Sheldon Wolin, Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism, 2008)

More powerful than the Axis Powers combined, American “Inverted totalitarianism” was internationalized during the Cold War and became more blatant during the war on terror used in large measure to impose neoliberalism in the name of international security. As the police-state gradually became institutionalized in every respect from illegal surveillance of citizens to suppressing dissent to the counterterrorism-neoliberal regime, it was becoming clearer to many scholars that a version of fascism was emerging in the US which also sprang up around the world. (Charlotte Heath-Kelly et al. eds., Neoliberalism and Terror: Critical Engagements, 2016;

Almost a century after the era of Fascist totalitarianism that led to WWII, the transition of capitalism’s global structure with a shifting core from the US and northwest Europe to East Asia has entailed intense global competition for capital accumulation to the degree that the advanced countries have been pushing living standards downward to compete with low-wage global markets. The process of the draining of greater surplus value from labor especially from the periphery countries where IMF-style austerity policies have resulted in massive capital transfer to the core countries has taken place under the neoliberal social contract that has striking similarities to Fascism. Backed by the state in the advanced capitalist countries, international organizations among them the IMF have been promoting economic fascism under the label of ‘neoliberal reforms’, thus molding state structures accordingly. Neoliberal totalitarianism is far more organized and ubiquitous than interwar Fascism not only because of the strong national state structure of core countries, but because the international agencies established by the US under the Bretton Woods system help to impose policies and institutions globally.

Characteristics of the Illiberal Neoliberal Society

Among the most common characteristics of Fascism are ‘illiberal’, anti-democratic politics that represent a departure from the classical liberal tradition of freedom and tolerance for diverse ideological, political and cultural perspectives. Characterized by elitism, class, gender, racial and ethnic inequality, limits on freedom of expression, on human rights and civil rights, illiberal politics thrives on submission of the masses to the status quo. While neoliberals in the populist rightwing wholeheartedly share and promote such views, those who embrace the pluralist-identity politics camp are just as supportive of many aspects of the corporate welfare-police-counterterrorism state as a means to engender domestic sociopolitical conformity and achieve closer global economic integration.

The question is not so much what each political camp under the larger neoliberal umbrella pursues as a strategy to mobilize a popular base but whether the economic-social policies intertwined with a corporate-welfare-police-counterterrorism state is the driving force toward a Fascist model of government. In both the pluralist model with some aspects of the social safety net and the rightwing populist version, neoliberalism’s goal is accumulation of capital on a world scale as well as institutional submission of the individual, molding the citizen’s subjective reality.

Illiberal politics in our time is partly a reaction to neoliberal globalism and culture wars that serve to distract from the obvious class struggle boiling beneath the surface. Rhetorically denouncing globalist neoliberalism, populist rightwing politicians assert the importance of national capitalism but always within the perimeters of neoliberal policies. Hence they co-opt the socio-cultural positions of nationalist extremists as a political strategy to mobilize the masses. Scholars, journalists and politicians have speculated whether the rising tide of rightwing populism pursuing neoliberalism under authoritarian models not just in the Western World, but Eastern Europe, South Asia and Africa reflects the rejection of liberal democracy and the triumph of illiberal politics that may reflect and serve the political economy more faithfully. Unquestionably, there is a direct correlation between the internationalization of the Western neoliberal transformation model imposed on the world in the post-Soviet era and the rise of rightwing populism reacting to the gap between the promises of what capitalism was supposed to deliver and the reality of downward pressures on living standards.;;

Not just the US, but Europe has been flirting with ‘illiberal democracy’ characterized by strong authoritarian-style elected officials on an agenda of racism and ethnocentrism, misogyny, anti-intellectualism, anti-parliamentary tendencies; all of it talking place under the cover of an electoral system. Amid elections in Bosnia in 1996, US diplomat Richard Holbrooke wondered about the rightwing path of former Yugoslav republics.  "Suppose the election was declared free and fair and those elected are "racists, fascists, separatists, who are publicly opposed to [peace and reintegration]. That is the dilemma." Twenty years after what Holbrooke dreaded election outcomes in Yugoslavia, the US elected a rightwing neoliberal populist leading the Republican Party and making culture wars a central theme to distract from the undercurrent class struggle in the country. This reality in America is symptomatic of the link between neoliberalism and the rise of illiberal democracy in a number of countries around the world.

Some political observers analyzing the rightist orientation of neoliberal policies have concluded that neoliberalism and Fascism have more in common than people realize. In 2016, Manuela Cadelli, President of the Magistrates Union of Belgium, wrote a brief article arguing that Neoliberalism is indeed a form of Fascism; a position people seem to be willing to debate after the election of Donald Trump pursuing neoliberal policies with a rightwing populist ideological and cultural platform to keep a popular base loyal to the Republican Party. “Fascism may be defined as the subordination of every part of the State to a totalitarian and nihilistic ideology. I argue that neoliberalism is a species of fascism because the economy has brought under subjection not only the government of democratic countries but also every aspect of our thought. The state is now at the disposal of the economy and of finance, which treat it as a subordinate and lord over it to an extent that puts the common good in jeopardy.”

It is ironic that although neoliberal society is ‘a species of fascism’, there no widespread popular opposition from leftist groups partly because the neoliberal pluralists have co-opted them. People remain submissive to the neoliberal state that has in fact eroded much of what many in the pluralist camp hail as liberal democratic institutions. Most people adapt to the status quo because to do otherwise means difficulty surviving today just as it was difficult to survive under Fascism for those in opposition. Because evidence of systemic exploitation ingrained into society passes as the ‘norm’, and partly because repression targets minority groups, migrants, and the working class, especially those backing trade unions and progressive political parties, people support the neoliberal state that they see as the constitutional entity.

The media, the government and mainstream institutions denounce anyone crying out for social justice, human rights and systemic change. Such people are ‘trendy rebels’, as though social justice is a passing fad like a clothing line, misguided idealists or treasonous criminals. Considering that the media validates the legitimacy of the neoliberal social contract, the political class and social elites enjoy the freedom to shape the state’s goals in the direction toward a surveillance police-state; and it all goes without notice in the age when it is almost expected because it is defaulted to technology making easy to detect foreign and domestic enemies while using the same technology to shape the citizen’s identity.

Partly because of the communications revolution in the digital age, neoliberalism has the ability to mold the citizen beyond loyalty to the social contract not just into mechanical observance but total submission to its institutions by reshaping the person’s values and identity. In this respect, neoliberalism is not so different from Fascism whose goal was to mold the citizen. “Neoliberalism has been more successful than most past ideologies in redefining subjectivity, in making people alter their sense of themselves, their personhood, their identities, their hopes and expectations and dreams and idealizations. Classical liberalism was successful too, for two and a half centuries, in people’s self-definition, although communism and fascism succeeded less well in realizing the “new man.” It cannot be emphasized enough that neoliberalism is not classical liberalism, or a return to a purer version of it, as is commonly misunderstood; it is a new thing, because the market, for one thing, is not at all free and untethered and dynamic in the sense that classical liberalism idealized it.

Although people go about their daily lives focused on their interests, they operate against the background of neoliberal institutions that determine their lives. While there is no problem for the elites and those in the more affluent classes embracing the value system and way of life that neoliberal offers, the same is not true for workers, women and minorities who are marginalized by the institutional structure. As a panacea for society, rightwing demagogues promise a tough policy on immigrants, making culture wars with Muslims and pluralists advocating multiculturalism as the focus of society’s problem rather than the neoliberal institutional structure.

As the world witnessed a segment of the population openly embracing fascism from movement to legitimate political party in Europe during the past two decades and a corresponding rise in racism and ethnocentrism, a number of scholars and politicians have warned about Fascism becoming part of the mainstream political arena. Representing the UN Human Rights agency, Prince Zeid bin Ra’ad al-Hussein stated that 2016 was disastrous for human rights, as the ‘clash of civilizations’ construct has become ingrained into the political mainstream in Western countries.  “In some parts of Europe, and in the United States, anti-foreigner rhetoric full of unbridled vitriol and hatred, is proliferating to a frightening degree, and is increasingly unchallenged. The rhetoric of fascism is no longer confined to a secret underworld of fascists, meeting in ill-lit clubs or on the 'deep net'.  It is becoming part of normal daily discourse.”

Because neoliberalism has pushed all mainstream bourgeois political parties to the right, the far right no longer seems nearly as extreme today as it did during the Vietnam War’s protest generation who still had hope for a socially just society even if that meant strengthening the social welfare system. Under the neoliberal social contract to which the last two generations of people were born into and know no alternative, the panacea for all that ails society is less social welfare and more corporate welfare and privatization of public services within the framework of a state structure buttressing corporate welfare. The idea that nothing must be tolerated outside the hegemonic market and all institutions must mirror the neoliberal model reflects a neo-totalitarian society where sociopolitical conformity follows because survival outside the system is not viable.

Although Western neoconservatives have employed the term ‘neo-totalitarian’ to describe Vladimir Putin’s Russia, the term applies even more accurately to the US and many Western nations operating under neoliberal-military-police state structures with far more power than the Russian state has at its disposal. The contradiction of neoliberalism rests in the system’s goal of integrating everyone into the neo-totalitarian mold. Because of the system’s inherent hierarchical structure, excluding most from the institutional mainstream and limiting popular sovereignty to the elites exposes the exploitation and repression goals that account for the totalitarian nature of the system masquerading as democratic where popular sovereignty is diffused. The seemingly puzzling aspect of the rise in rightwing populism across the globe that rests in hatred and marginalization of a segment of the population is the support not just from certain wealthy individuals financing extremist movements, but a segment of the middle class and even working class lining up behind it because they see their salvation with the diminution of weaker social groups. This pattern was also evident in Nazi Germany, Fascist Italy and pro-Nazi authoritarian regimes of the interwar era.
Benjamin Moffitt, The Global Rise of Populism (2017.

Because of contradictions in bourgeois liberal democracy where capital accumulation at any cost is the goal, the system produced the current global wave of rightwing populism just as capitalism in the interwar era gave rise to Fascism.  As one analyst put it:  The risk democratic formations continually face is internal disintegration such that the heterogeneous elements of the social order not only fail to come together within some principle of or for unity, but actively turn against one another. In this case, a totally unproductive revolution takes place.  Rather than subversion of the normative order causing suffering, rebellion or revolution that might establish a new nomos of shared life as a way of establishing a new governing logic, the dissociated elements of disintegrating democratic formations identify with the very power responsible for their subjection--capital, the state and, the strong leader.  Thus the possibility of fascism is not negated in neoliberal formations but is an ever present possibility arising within it.  Because the value of the social order as such is never in itself sufficient to maintain its own constitution, it must have recourse to an external value, which is the order of the sacred embodied by the sovereign.

Public opinion surveys of a number of countries around the world, including those in the US, indicated that most people do not favor the existing social contract rooted in neoliberal policies that impact everything from living standards and labor policy to the judicial system and foreign affairs. (Doug Miller, Can the World be Wrong? 2015) Instead of driving workers toward a leftwing revolutionary path, many support rightwing populism that has resulted in the rise of even greater oppression and exploitation. Besides nationalism identified with the powerful elites as guardians of the national interest, many among the masses believe that somehow the same social contract responsible for existing problems will provide the salvation they seek. At the same time, widespread disillusionment with globalization seems to be at the core in the rise of rightwing populism, though there are many other factors all pointing right back to downward social mobility.

In a very thoughtful article entitled “The Political Economy of Neoliberalism and Illiberal Democracy” Garry Jacobs argues that: “A return to unbridled capitalism is threatening the culture of liberal values and the functioning of democratic institutions. Even mature democracies show signs of degenerating into their illiberal namesakes. The historical record confirms that peaceful, prosperous, free and harmonious societies can best be nurtured by the widest possible distribution of all forms of power—political, economic, educational, scientific, technological and social—to the greatest extent to the greatest number. The aspiration for individual freedom can only be realized and preserved when it is married with the right to social equality. The mutual interdependence of the individual and the collective is the key to their reconciliation and humanity’s future.

Just as in the interwar era when many Europeans lost confidence in the rationalism of the Enlightenment and lapsed into amorality and alienation that allowed for even greater public manipulation by the hegemonic culture, in the early 21st the neoliberal social contract with a complex matrix of communications at its disposal is able to indoctrinate on a mass scale more easily than ever. Considering the low level of public trust in the mainstream media that many view as propaganda rather than information outlet, cynicism about national and international institutions prevails. As the fierce struggle for power among mainstream political parties competing to manage the state on behalf of capital undercuts the credibility of the mainstream political class, rightwing elements enter the arena as ‘outsider’ messiahs above politics (Bonapartism) to save the nation, while safeguarding the neoliberal social contract. This is as evident in France where the pluralist political model of neoliberalism has strengthened the neo-Fascist one that Marine Le Pen represents, as in Trump’s America where the Democratic party’s neoliberalism helped give rise to rightwing populism.;

As the following article in The Economist points out, widespread disillusionment with globalist neoliberal policies drove people to the right for an enemy to blame for all the calamities that befall society. “Beset by stagnant wage growth, less than half of respondents in America, Britain and France believe that globalisation is a “force for good” in the world. Westerners also say the world is getting worse. Even Americans, generally an optimistic lot, are feeling blue: just 11% believe the world has improved in the past year. The turn towards nationalism is especially pronounced in France, the cradle of liberty. Some 52% of the French now believe that their economy should not have to rely on imports, and just 13% reckon that immigration has a positive effect on their country. France is divided as to whether or not multiculturalism is something to be embraced. Such findings will be music to the ears of Marine Le Pen, the leader of the National Front, France’s nationalist, Eurosceptic party. Current (and admittedly early) polling has her tied for first place in the 2017 French presidential race.

Similar to deep-rooted cultural and ideological traits of Nazism in German society, there are deep-rooted cultural and ideological traits in France, the US, India, and other countries where rightwing populism has found a receptive public. Although there are varieties of populism from Lepenism (Marine Le Pen’s National Front) to Trumpism (US Republican Donald Trump) to Modism (India’s Narendra Modi), they share common characteristics, including cult of personality, promoting hatred and marginalization of certain minority groups, and promising to deliver a panacea to “society” when in fact their policies are designed to strengthen big capital.

The popular base of rightwing populists seeks salvation by demanding the marginalization of a segment of society invariably the more oppressed and exploited. The focus is not on the structure of exploitation and oppression, but on restraining workers, refugees, environmentalists, and minority communities projected as the root cause of all problems in society. Rightwing populist politicians who pursue neoliberal policies are opportunistically pushing the political popular base toward consolidation of a Fascist movement and often refer to themselves as movement rather than a party. Just as there were liberals who refused to accept the imminent rise of Fascism amid the parliamentary system’s collapse in the 1920s, there are neoliberals today who refuse to accept that the global trend of populism is a symptom of failed neoliberalism that has many common characteristics with Fascism.

In an article entitled “Populism is not Fascism: But it could be a Harbinger” by Sheri Berman, the neoliberal journal Foreign Affairs, acknowledged that liberal bourgeois democracy was losing its luster around the world. However, the author would not go as far as to examine the structural causes for this phenomenon because to do so would be to attack the social contract within which it operates. Treating rightwing populism as though it is a marginal outgrowth of mainstream conservatism and an aberration rather than the outgrowth of the system’s core is merely a thinly veiled attempt to defend the status quo of which rightwing populism is an integral part.

Monday, 4 December 2017

Ideology, the Neoliberal State, and the Social Contract

(This short essay is the second part of  NEOLIBERALISM AND THE SOCIAL CONTRACT)

Ideology, the Neoliberal State, and the Social Contract

Just as religion was universally intertwined with identity, projection of self-image in the community and the value system in the Age of Faith (500-1500), secular ideology in the modern world fulfills somewhat a similar goal, despite the persistence of organized religion as an integral part of society. Although neoliberalism has been criticized as a secular religion, especially after 2013 when Pope Francis dismissed it as idolatry of money that attempts to gloss over abject socioeconomic inequality on a world scale, the elites around the world have embraced some aspects if not wholeheartedly neoliberal ideology.

Neoliberal arguments celebrating the rich and vilifying the poor in the early 21st century are no different than arguments raised by apologists of capitalism in the early 19th century when the British Parliament was debating how to manage the masses of poor that the industrial revolution had created. In defending tax cuts to the wealthy, Republican Senator Chuck Grassley stated: “I think not having the estate tax recognizes the people that are investing — as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies.”

Rooted in classical liberal ideology, neoliberalism rests on liberal capitalist and social Darwinist values that affirm societal progress as defined by materialist self-interest. Because private financial gain are the sole measure of success and virtue, all impediments to achieving the goal of wealth accumulation must be removed no matter the consequences to the non-propertied classes in society. Aiming for more than mere mechanical compliance, the goal of the ideology is to create the illusion of the neoliberal self that lives, breathes, and actualizes neoliberal myths in every aspect of life from a person as a worker to consumer and citizen. By offering the illusion of integration to those that the social structure has marginalized while trying to indoctrinate the masses that the corporate state is salvation and the welfare state is the enemy to default all of society’s problems, the neoliberal ideology has captured the imagination of many in the middle class and even some in the working class not just in the West but around the world and especially in former Communist bloc countries.
(S. Gill, “Pessimism of Intelligence, Optimism of Will” in Perspectives on Gramsci, ed. by Joseph Francene 2009)

Similar to liberalism in so far as it offers something for which to hope, neoliberalism is a departure when it decries the state as an obstacle to capitalist growth not only because of regulatory mechanisms and arbiter in society to placate the masses through social welfare programs, but even as a centralized entity determining monetary and fiscal policy. Proponents of neoliberalism propose turning back the clock to the ideology that prevailed among capitalists and their political supporters at the dawn of the Industrial Revolution when there were no state mechanisms to regulate not only labor conditions, but everything from food and drugs to the environment. This stands to reason from a neoliberal perspective because the market transcending national borders also transcends the state and becomes the principal form of governance.

Not only is there an absence of a social conscience not so different than what prevailed in the nascent phase of industrial capitalism, but there is disdain of social and community responsibility on the part of capital beyond the realm of voluntarism. More significant, neoliberals believe that capital is entitled to appropriate whatever possible from society because the underlying assumption of corporate welfare entitlement is built into the neoliberal ideology that identifies the national interest with capital. (K. Farnsworth, Social vs. Corporate Welfare, 2012)

The irony in all of this is that in 2008 the world experienced the largest and deepest recession since the 1930s precisely because of neoliberal policies. However, its advocates insisted that the recession was caused because of not enough neoliberalism rather than going too far with such an extreme ideology that led to the global recession. Even more ironic neoliberal ideology blames the state rather than the private sector that dominates public policy as the enemy preventing capitalists from realizing their dream of even greater riches and power.

In his succinct analysis of neoliberal ideology’s far reaching impact in society, Jim McGuigan argues that society has undergone a transformation from organized capitalism under the domain of political economy to transforming subjectivity of the self. “As an idea type, the neoliberal self cannot be found concretely in a ‘pure’ form, not even represented by leading celebrity figures. The emergent characteristics of the ideal type, though not set out formally here, accentuate various aspects of personal conduct and mundane existence for illustrative and analytical purposes. Leading celebrities, most notably high-tech entrepreneurs, for instance, operate in the popular imagination as models of achievement for the aspiring young. They are seldom emulated in real life, however, even unrealistically so. Still, their famed lifestyles and heavily publicised opinions provide guidelines to appropriate conduct in a ruthlessly competitive and unequal world.” Jim McGuigan, ‘The Neoliberal Self’, Culture Unbound, Volume 6, 2014,

Because it puts the interests of a tiny percentage of the population above the rest of society, the state is a necessary structure only in so far as it limits its role to promoting capital formation by using any means to achieve the goal. Whether under a pluralistic-diversity political model or an authoritarian one, neoliberalism is anti-democratic because:  “The common denominator is the empowering of elites over the masses with the assistance of international forces through military action or financial coercion—a globalized dialectic of ruling classes,” as Riad Azar correctly points out.

From conservative and liberal to self-described Socialist, political parties around the world have moved farther to the right in order to accommodate the neoliberal ideology as part of their platform. The challenge of the political class is to keep people loyal to the neoliberal ideology that has been incorporated into the social contract, a challenge that necessarily forces political parties increasingly to the right. While embracing corporate welfare, decrying social welfare is among the most glaring contradiction of the ideology that ostensibly celebrates non-state intervention in the private sector. This contradiction alone forces neoliberal politicians of all stripes and the media to engage in mass distraction, including everything from identity politics and cults of personality to culture wars and ‘clash of civilization’ theories.;

To justify why self-proclaimed socialist and democratic parties have embraced neoliberalism, many academics have provided a wide range of theories which have in fact helped solidify the neoliberal ideology into the political mainstream. Among the countless people swept up by the enthusiasm of the Communist bloc’s fall and China’s integration into the world capitalist economy, Daniel Bell, The End of Ideology (2000), argued that the world returned to old religious and ethnic conflicts around which ideologies of the new century were molded. Encouraged by China’s integration into the global capitalist system, in September 2006 Bell wrote: “It's the end of ideology in China. Not the end of all ideology, but the end of Marxist ideology. China has many social problems, but the government and its people will deal with them in pragmatic ways, without being overly constrained by ideological boundaries. I still think there's a need for a moral foundation for political rule in China - some sort of guiding ideal for the future - but it won't come from Karl Marx.”

Such hasty pronouncements and others like Francis Fukuyama’s The End of History expressed the Western bourgeois sense of relief of an integrated world under the Western-dominated capitalist system that would somehow magically solve problems the Cold War had created. While Bell, Fukuyama and others celebrated the triumphant dominance of neoliberal ideology, they hardly dealt with the realities that ideology in peoples’ lives emanates from mainstream institutions manifesting irreconcilable contradictions as they evolve through time. A product molded by the hegemonic political culture, neoliberal ideology has been a factor in keeping the majority in conformity while a small minority is constantly seeking outlets of social resistance, some even within the neoliberal mold through rightwing political expressions of neoliberalism. 

As a secular religion and catalyst to mobilizing the masses, nationalism remains a strong aspect of ideological indoctrination that rightwing populist neoliberals have used by isolating ‘targeted groups’ – immigrants, Muslims, women, gays, environmentalists, and minorities. Although there are different political approaches about how best to achieve neoliberal goals, ideological indoctrination has always played an essential role in keeping people loyal to the social contract. This is one reason so much capital is spent on media, think tanks, and everything from educational to religious institutions in order to mold public opinion. The contradiction in neoliberal ideology is the need for a borderless world and the triumph of capital over the nation-state, but the reliance on the state to carry out policies that would further capital and harmonize the disparate interests of capitalists within the nation-state and beyond it. In addition, if neoliberal ideology does away with nationalism then it deprives itself of a mechanism to mobilize the masses behind it.

Arguing that the ‘Ideological State Apparatuses’ (ISA) such as religious and educational institutions among others in the private sector perpetuate the ideology of the status quo, Louis Pierre Althusser captured the essence of state mechanisms to mobilize the masses. However, ideology is by no means the sole driving force in keeping people loyal to the social contract. While peoples’ material concerns often dictate their ideological orientation, it would be hasty to dismiss the role of the media along with hegemonic cultural influences deeply ingrained into society shaping peoples’ worldview and keeping them docile. Building on Althusser’s theory of how the state maintains the status quo, Goran Therborn (Ideology of Power and the Power of Ideology, 1999) argues that the neoliberal state uses ideological domination as a mechanism to keep people compliant. Combined with the state’s repressive mechanisms – police and armed forces – the ideological apparatus engenders conformity wherein exploitation and repression operate within the boundaries that the state defines as ‘legal’, thus ‘normal’ for society. A desirable goal of regimes ranging from parliamentary to Mussolini’s Fascist Italy (1922-1943) and clerical Fascism under Antonio de Oliveira Salazar’s Portugal (1932-1968), legalized repressive mechanisms have become an integral part of neoliberal ideological domination.
( apparatus/;; Jules Boykoff, “Limiting Dissent: The Mechanisms of State Repression in the USA” Social Movement Studies,” Vo. 6, No 3, 2007)

It is part of the neoliberal ideology that markets dictate the lives of people in every respect from cradle to grave where self and identity are inexorably intertwined with their job/career much to the exclusion of other aspects of life. Striving to determine public policy in all its phases of the individual\s life, of localities, nationally and internationally, the market has no other means to retain hegemony in society and pursue capital formation with the fewest possible obstacles. Neoliberals justify such an ideology on the basis that modernization of society transcends social justice.
The unchecked role of neoliberal capitalism in every aspect of the social fabric runs the risk of at the very least creating massive social, economic and political upheaval as was the case with the deep recession of 2008 preceded by two decades of neoliberal capitalism taking precedence over the welfare regulatory state whose role is to secure and/or retain equilibrium in global markets. In The Great Transformation, (1944)", Karl Polanyi argued that: “To allow the market mechanism to be sole director of the fate of human beings and their natural environment...would result in the demolition of society." Because Polanyi lived through the Great Depression era of the New Deal and the rise and fall of the Axis Powers, he was optimistic that a return to the 1920s would not take root after WWII.
After all, Polanyi accepted Hegel’s view of the social contract that the state preserves society by safeguarding general or universal interests against particular ones. If we accept Hegelian assumptions about the course of history and the state as it exists in the bourgeois social contract, how could society go backwards instead of forward? However, we have been witnessing the kind of demolition of society Polanyi discussed takes place because of unchecked market forces. This is precisely because the triumph of neoliberalism, emboldened in part by the demise of the Communist bloc, the rise of China as a major economic power.

With the realization of US long road to decline at the end of the Vietnam War, neoliberal elites prevailed that the crisis of American leadership could be met with the withering away of the Keynesian social welfare state ideology and the adoption of neoliberal policies as tested by the Chicago School in Chile under the US-backed dictatorship of Augusto Pinochet from 1973 to 1990. That the neoliberal ideology became an experiment tested in a US-backed military dictatorship in South America is itself revealing about what the nature of the social contract once implemented even in pluralistic societies where there was popular and political support for Keynesianism. Characteristic of a developing nation like Chile was external dependence and a weak state structure easily manipulated by domestic and foreign capital interested in deregulation and further weakening of the public sector as the core of the social contract.;

“The withering away of national states and the wholesale privatization of state-owned enterprises and state-administered services transferred highly profitable monopolies to capitalists, and guaranteed the repayment of the foreign debt-contracted, as in Argentina, Brazil, Chile, and Uruguay-by irresponsible, corrupt, and de facto military rulers. Neoliberalism supplied the general justification for the transfer of public assets and state-owned enterprises, paid for with public savings, even in areas considered "taboo" and untouchable until a few years ago, such as electricity, aviation, oil, or telecommunications. (Atilio A. Boron, “Democracy or Neoliberalism?”

Advocating the systematic dismantling of the social welfare state in the name of upholding the virtues of individualism while strengthening of corporate welfare capitalism in the name of economic growth on global scale, advocates of neoliberal ideology were emboldened by the simultaneous fall of the Soviet bloc and China’s capitalist integration. As the income gap widened and globalization resulted in surplus labor force amid downward pressure on wages, a segment of the social and political elites embraced a rightwing populist ideology as a means of achieving the neoliberal goals. The failure of neoliberal policies led some political and business elites to embrace rightwing populism in order to save neoliberalism that had lost support because of its association with centrist and reformist cultural-diversity pluralist neoliberals. (David Zamora, “When Exclusion Replaces Exploitation: The Condition of the Surplus-Population under Neoliberalism”