The effect of neoliberalism... in one chart.
By Matt Ellis
Jun 25, 2016
It is a sad and ironic indictment on the state of the global Left and the progressive agenda, that the very compelling reasons to support a Brexit have been lost amongst the rightful consternation with the racist views and actions of far Right political forces in the UK and Europe, and their conflation with the demagogue Donald Trump. Anyone with a genuine understanding of the political and economic machinations of the EU, knows that the institution operates as a bureaucratic/technocratic dictatorship, working against democratic justice, social justice and economic justice. It is a primary vehicle for the neoliberal project and modern finance capitalism.
As such, it is more than partly responsible for inflicting on its people financialisation, debt deflation, economic crisis, austerity, “free” trade agreements, mass privatisation and the destruction of the social safety net, and the likely end state of neoliberalism: neo-feudalism, in which private debts, interest payments and rent-seekers swallow up developed economies, de-industrialising them through the ravages of globalisation, wealth extraction and debt-peonage. It must share responsibility for failing to protect the interests of the global 99%, or perhaps more accurately the 99.9%.
The EU, which crucially is an economic and monetary union, not a political one, is an ideal with lofty and worthy aims insofar as it supports cultural, social and political integration, but it has completely failed in its claimed remit. Yet it has succeeded in enriching the global 0.1%, and in particular it almost exclusively serves the interests of the elite banker/rentier class, who now use economic shock and financial warfare to steal the land, resources and infrastructure of sovereign nations without the need for conventional ground-war.
Ask yourself whether or not you support austerity economics, which even the IMF, a chief instigator and member of the EU / ECB / IMF ‘troika’ has recently admitted caused far more economic destruction in Greece than it anticipated. Yes, even the IMF has admitted that neoliberalism has failed. Were you in support of the Greek people’s sovereign decision to refuse the IMF’s bailout package? And were you in support of the troika’s decision to refuse the result of the referendum and inflict a new round of austerity and bailouts? And more importantly, do you support the EU neoliberal structure and policies that helped create the financial and economic crisis in the first place?
It is not a compatible or coherent viewpoint to oppose the austerity economics embraced by the EU and its trampling over sovereign democratic process in pursuit of its agenda, and to disagree with the UK people’s decision to leave the EU. Indeed, the extreme racist actions and viewpoints of the emergent far right elements in the UK and Europe is a sad indictment on the EU itself. Not because of actual or perceived migration increases in European countries, but because it is a very old human observation that economic hardship and falling living standards are a most crucial fuel for the racist fire.
The now infamous ‘heterodox’ economist Steve Keen, an Australian expat living in the UK who correctly predicted the GFC, is currently leading a global charge to throw out textbook neoclassical economics and neoliberal policies that brought us the crisis in the first place. His understanding of modern economic crisis is nothing short of revolutionary, and should be compulsory reading for all progressives. He had the following to say just before the Brexit vote:
“I see the EU club as a force for European division and breakdown, despite its motto to the contrary. The EU, as I commented in my brief note for Kingston University, is a politically undemocratic and economically dysfunctional club whose rules and procedures have caused serious economic decline in Europe, and are feeding the racist and separatist forces that are driving Europe apart.”
Extant political expressions of racist views are in no small part due to the economic hardship and falling living standards inflicted on Europeans by the neoliberal agenda and the resulting GFC. What to speak of the military adventurism that is a key facet of the EU’s role within the Western power structure, and its creation of a global refugee crisis following more than a decade of military intervention in the Middle East.
There can be no mistaking the fact that the EU itself and its undemocratic policies and actions are largely to blame for the contemporary rise of racism on the continent. That is the depressing irony of majority leftwing opposition to the UK’s decision to leave the European Union. The unsavoury elements of the Brexit campaign are largely caused by the results of EU membership.
It would be nice to think that the EU project was one that could be saved, but its sponsorship and patronage of the neoliberal system is not a flaw that needs fixing, but is indeed part of its design, a fact made clear throughout years of perpetual crisis. As the erudite true progressive and economic historian Michael Hudson points out, the EU in its current state is unreformable, and should therefore be abolished, however painful that may be in the short term. He frequently describes its self-destructive actions, in its embrace of austerity economics in service to financiers and rent-seekers, and its embrace of Russian/Chinese isolationism in service to US hegemony and neoconservative warmongering. There is thus an unfortunate predictability and inevitability to the unravelling of the Union.
Its about time that the mainstream Left stood up to the forces of neoliberalism, and stood up for the working class and the global poor instead of inadvertently or consciously providing moral cover for the elites that push the neoliberal barrel and refuse to give even an inch in reforming its disastrous social, economic and democratic outcomes. But that first requires a proper understanding of its inner political workings, the economic sickness at its core, and its sponsoring institutions – such as the EU. It requires an understanding of how private debt and financialisation has destroyed the global economy, and that the EU is central to that failed model.
In order to gain that understanding, we need to be paying very close attention to the work of revolutionary economists like Keen and Hudson. They remind us that politics IS economics, and that unless we realise exactly where economics is going wrong and how it is used as a tool for oppression and wealth concentration, the leftwing will continue to inadvertently embrace the very economic structure that threatens its constituents. Neoclassical economics has created the global ‘precariat’ – that pan-political class of people that might have once been called the proletariat, and who now look for someone to blame for rising inequality, economic instability and cratering living standards. Sadly the human tendency is to blame those that compete with our needs, rather than those who control our needs.
So despite the apparent validation of racist political views and actions, and rejection of the global liberal body-politic, I believe that the successful Brexit vote more truly represents a sovereign people’s right to refuse undemocratic economic and financial policies, which represent only the interests of unelected elites – the ‘robber barons’ who are currently destroying the developed world and the global economy as they attempt to roll back centuries of post-feudal industrialism and progress.
We should therefore applaud the people of the United Kingdom for being the first people (since the failed Greek attempt) to stand up to the 0.1% and attempt to reclaim their economies and parliaments from the regressive rentier class. And because the UK actually has leverage in the EU, they are far more likely to succeed in challenging and shaking the core of the institution, and hopefully setting the world on a path to revolutionary overthrow of the twin contemporary scourges of neoliberalism and finance capitalism.