"A Brief History of Neoliberalism", Chapter 4

Harvey emphasizes the "universal tendency [of neoliberalism] to increase social inequality and to expose the least fortunate elements in society ... to the chill winds of austerity and the dull fate of increasing marginalization" [118]. This tendency is no accident. Recall that he interprets neoliberalization as a redistributive process: the rich, through force of arms, political maneuvering and the construction of mass consent, gut social infrastructure and break or co-opt organized labour and social movements in order to line their own pockets and cement their class power. Chapter 4 describes the geo-historical particulars of this process over the past few decades. Neoliberalization has had far from universal consequences on the world stage. Harvey enumerates local conditions, geo-political and other particular factors to sketch an explanation of why some countries have fared better than others, and why at particular times. Nonetheless, he suggests that neoliberalism, which touts itself as the only cure for sick economies, is neither a panacea, nor, but for the very small minority of the ultra-rich, anything resembling a medicine.

The proof that neoliberalism is about class power and not about economic efficiency and abundance is in the numbers. Harvey underscores that the true economic success stories of the 80s and early 90s belonged not to countries implementing neoliberal policies, but more mixed economies like Germany and Japan, which followed corporatist or at least more traditonal/integrated models of employment and social spending. Such models "did not, however, facilitate the restoration of class power" [89]. Those pushing the neoliberal agenda had therefore to discipline these economies and bring them full stop into the neoliberal fold. Harvey enumerates the components of their project: the "turn to more open financialization" (i.e. speculative capital) [90], "the increasing geographical mobility of capital" (outsourcing, etc) [92], persuasion, cajoling and coercion of many "developing countries" by the "Wall Street-IMF-Treasury complex" dominating the Clinton years (recall the fate of post-Apartheid South Africa) [92], and finally, the "ever more powerful ideological influence" exerted by "the global diffusion of the new monetarist and neoliberal economic orthodoxy" [93]. These factors came together to form the so-called "Washington Consensus" of the mid-90s, cementing the view that neoliberalism is the only answer to what ails the world's economies.

So here we are in 2010 in the midst of a protracted global economic crisis. Neoliberalism has continued to wreak havoc on the environment and punish the most marginalized. South American countries, having had more than enough neoliberalism (it was there that neoliberalization was first pulled off, by open violence), experiment with different economic models. Insurrectionary anti-capitalist situations are blooming in Greece, Nepal and India.

The question becomes: why, given all this mass unrest and the repeated failure of neoliberal policies to provide a stable and healthy economy, are we swallowing the neoliberal pill the G20 has offered us? Naomi Klein has pointed out in The Shock Doctrine that neoliberalism is an ideology, in the sense that it seals itself off hermetically by employing the fallacy of "the exception that proves the rule". Refuting instances, for example massive unemployment and social unrest resulting from neoliberalization, are chalked up to not enough neoliberalization. Even when austerity measures provoke widespread revolt, the neoliberal line is to continue to insist that the market is distorted by state intervention, or, more baldly, to claim that the people losing their jobs and social programs are personally responsible, and in any case simply ignorant of the benefits that will come. The argument that neoliberal policies are necessary to foster "a good business climate", so ubiquitous as to seem a tautology, is similarly ideological [117]. Given that neoliberalization consistently produces mass social unrest, it is unclear how it is able to claim that it is best suited to attract investors.

In Canada, where the G20 was recently hosted, the situation does not appear to be so bad. Nonetheless, we feel the effects of the global meltdown and are told that cutting public infrastructure will somehow get us back on our feet. The Toronto police ever so politely reminded us with rubber bullets, sound cannons, kettling, illegal searches, detentions, and even made-up laws that it is very naughty of us to show our disagreement. Heartbreakingly, over seventy percent of Canadians feel the police response was justified, and almost no one has even bothered to look into how the G20 mandate affects them. But this is only consistent with what Harvey is saying: "It has been part of the genius of neoliberal theory to provide a benevolent mask full of wonderful-sounding words like freedom, liberty, choice, and rights, to hide the grim realities of the restoration or reconstitution of naked class power, locally as well as transnationally, but most particularly in the main financial centres of global capitalism" [119].

Haiti and Imperialism

I just want to add to our two previous posts (here and here), one more statement about disaster capitalism and imperialism, really some more background to Haiti's place in the Western world (I've deliberately used this term), or more specifically, how it is understood within Western ideology. Haiti, we should recall, won its independence as the first successful slave rebellion in 1804. When the country established diplomatic ties with France in 1825 it came at the cost of 150 million francs. Zizek summarizes the situation (in a review of Hallward's book Damming the Flood):

Denounced by Talleyrand as "a horrible spectacle for all white nations", the "mere existence of an independent Haiti" was itself an intolerable threat to the slave-owning status quo. Haiti thus had to be made an exemplary case of economic failure, to dissuade other countries from taking the same path. The price - the literal price - for the "premature" independence was truly extortionate: after two decades of embargo, France, the old colonial master, established trade and diplomatic relations only in 1825, after forcing the Haitian government to pay 150 million francs as "compensation" for the loss of its slaves. This sum, roughly equal to the French annual budget at the time, was later reduced to 90 million, but it continued to be a heavy drain on Haitian resources: at the end of the 19th century, Haiti's payments to France consumed roughly 80 per cent of the national budget, and the last instalment was only paid in 1947. When, in 2003, in anticipation of the bicentenary of national independence, the Lavalas president Jean-Baptiste Aristide demanded that France return this extorted money, his claim was flatly rejected by a French commission (led, ironically, by Régis Debray).

Then, there was a coup led by the United States, France and Canada (See Engler and Fenton's Canada in Haiti)-- can you guess one of the reasons?, and continuing impovershiment ever since, partially through forced neo-liberal structural adjustments. My concern is not that they will become a victim of disaster capitalism, because there is a long history of that already, but that they will again be forced into continuing "structural readjustment" that will continue to constrain their ability to undertake political reform. That is, when foreign soldiers (peacekeepers) aren't their to constrain them. Nevertheless, we should not call, as Hallward and Zizek stress, Haitians victims. Instead, as Zizek writes,

The Lavalas movement [which included Aristide] has won every free presidential election since 1990, but it has twice been the victim of US-sponsored military coups. Lavalas is a unique combination: a political agent which won state power through free elections, but which all the way through maintained its roots in organs of local popular democracy, of people's direct self-organisation. Although the "free press" dominated by its enemies was never obstructed, although violent protests that threatened the stability of the legal government were fully tolerated, the Lavalas government was routinely demonised in the international press as exceptionally violent and corrupt. The goal of the US and its allies France and Canada was to impose on Haiti a "normal" democracy - a democracy which would not touch the economic power of the narrow elite; they were well aware that, if it is to function in this way, democracy has to cut its links with direct popular self-organisation.

It's a familiar story; change the names and we have been told the same things regarding violence and corruption about Cuba, Venezuela, Bolivia and even Brazil. Now that a natural disaster has opened Haiti to international aid, let's hope it doesn't come at the cost of already existing political solidarity.

Update: See also this short article on the role of USAID in these structural adjustments.

Peter Hallward on Haiti's Plight

Peter Hallward, author of Damming the Flood: Haiti, Aristide and the Politics of Containment (Verso, 2008), has published a critique ("Our Role in Haiti's Plight") of the policies of neo-liberalism and interventionism in Haiti's politics that have contributed to human cost of the recent earthquake. Hallward writes:

The country has faced more than its fair share of catastrophes. Hundreds died in Port-au-Prince in an earthquake back in June 1770, and the huge earthquake of 7 May 1842 may have killed 10,000 in the northern city of Cap ­Haitien alone. Hurricanes batter the island on a regular basis, mostly recently in 2004 and again in 2008; the storms of September 2008 flooded the town of Gonaïves and swept away much of its flimsy infrastructure, killing more than a thousand people and destroying many thousands of homes. The full scale of the destruction resulting from this earthquake may not become clear for several weeks. Even minimal repairs will take years to complete, and the long-term impact is incalculable.

What is already all too clear, ­however, is the fact that this impact will be the result of an even longer-term history of deliberate impoverishment and disempowerment. Haiti is routinely described as the "poorest country in the western hemisphere". This poverty is the direct legacy of perhaps the most brutal system of colonial exploitation in world history, compounded by decades of systematic postcolonial oppression.

The noble "international community" which is currently scrambling to send its "humanitarian aid" to Haiti is largely responsible for the extent of the suffering it now aims to reduce. Ever since the US invaded and occupied the country in 1915, every serious political attempt to allow Haiti's people to move (in former president Jean-Bertrand Aristide's phrase) "from absolute misery to a dignified poverty" has been violently and deliberately blocked by the US government and some of its allies.

Now, I know what some of our readers may think of this kind of criticism. They will ask, is it not time to put aside our political differences and contribute to the poor and downtrodden, to the victims of this disaster? However, we should reject this false dilemma: to help the victims it is necessary to grasp their historico-political situation: a long series of Western interventions and concomitant impoverishment of a majority of Haitians.

One wants to hope that Haiti will not be forced, at some point in the process of receiving aid, to accept more neo-liberal reforms as a condition for receiving it. If this seems outlandish to you, read Naomi Klein's The Shock Doctrine, especially page 487 (Chapter 19) and following.