Neo-liberal Fields
of Power and Peoples’ Struggles
-- Ahilan Kadirgamar
From our global movements
to our local struggles, we seem to be bombarded by neo-liberal
forces. These are the forces that are depriving communities from
access to water through water privatisation to destroying economies
through financial crisis. All aspects of our daily lives are increasingly
influenced by this particular flavour of capitalism. From the
anti-globalisation movement with the protests against the WTO
to the World Social Forum to numerous peoples’ movements around
the world, they have taken on neo-liberal forces as the cause
of social and economic devastation.
For those not familiar
with this seemly omnipresent force, I have attached an annex at
the end of this editorial in the form of notes that delve into
the genealogy and history of neo-liberalism. While many of us
are indeed familiar with the history of neo-liberalism, we may
not all agree on its workings. Resistance to neo-liberal forces
would require us understand its working, and I would like to discuss
that below by articulating what I would like to call the neo-liberal
fields of power. These economic and political fields (as in electromagnetic
fields consisting of power, range, impact and capacity to deflect
other forces) backed by imperialist interests, has far reaching
impact on Third World peoples in particular. I would like to outline
below four dimensions of the neo-liberal fields of power. First,
it has the ability to deflect local concerns and push its own
agenda. Two, it creates new terrains for its impact. Three, its
capable of using brute force where necessary. Four, it’s impact
does not necessarily lead to weak nation states but may work in
tandem with states that are strengthened by ideological apparatuses.
If we take the Sri Lankan context in
particular, the impact of such a neo-liberal field of power is
very much evident in the peace process. From the political parties
to the NGO’s and think-tanks, their policies have been deflected
and often written by such imperialist interests. This is all the
more evident in the peace process, where a resolution to the ethnic
conflict has been intricately tied to a neo-liberal economic agenda
for development and reconstruction. This has been the UNF’s agenda
with its economic program called ‘Regaining Sri Lanka’ and its
link to peace process. Given the non-existence of a strong social
movement pushing for a just peace, there may be no way out, than
to call for de-linking economic development and reform from the
peace process. If there was a strong peace and justice movement,
it may have been able to carry a progressive development agenda
along with its peace agenda. In the absence of such a strong movement,
groups like MONLAR have called for de-linking the peace process
from the economic agenda, even as opportunistic and misguided
peace lobbies dismiss those critical of the neo-liberal economic
agenda as anti-peace. [i]
It is increasingly evident that the
“good intentions” of the Western world including Japan to resolve
the ethnic conflict is very much tied to their interest of producing
a neo-liberal success out of Sri Lanka. A country such as Sri
Lanka, where the Westerners know of it and visit only to bathe
in the beaches, would not normally attract 4.5 billion dollars
for its development and reconstruction. The billions of dollars
are neither out of their generosity nor is it for their immediate
economic gain in the form of direct returns on investment. The
ravages of colonialism, imperialism and the corresponding local
chiefs have devastated numerous communities through similar wars
around the world, but not all of them will be blessed with such
enormous debt for the people and rewards for their chiefs. They
want to show Sri Lanka along with a few other countries as examples
of countries steeped in “barbaric” war, emerging out of it through
the field of neo-liberal post conflict development and reconstruction.
I am not saying that there was some conspiracy in choosing Sri
Lanka as that example; rather, it is more tied to Sri Lanka’s
history. Its early adoption of the open economy polices, its continued
advances in liberalization through all successive governments
placing it at the ‘cutting edge’ of such reforms and the internationalisation
of the peace process. At the Tokyo Donor conference, many governments
and multilateral institutions swore with their pride and pledged
to make Sri Lanka a neo-liberal post conflict success.
[ii] And they will try to make it happen, one way
or another. There will be much arm twisting and accommodation
towards such an end. A peace that is unjust or undemocratic will
not matter to them. Nor will a development that may deprive millions
of their land and water, through policies of land alienation and
water privatisation. The island where they come to bathe will
now be sold as the island that is a neo-liberal success. Here
is a concerted effort towards producing a terrain for another
dimension of the neo-liberal field, a terrain that will consist
of many such conflict-ridden countries.
While neo-liberalism,
often appropriates a variety of issues from peace to the environment,
and co-opts them into its political and economic agenda, it can
also be physically brutal where necessary. The neo-liberal field
of power is then also about brute power. The Alliance for Protection
of National Resources and Human Rights, a large social movement
consisting of a variety of groups and organizations, and has emphasized
the “Protection of Human Rights”. Here, human rights not only
looks broadly at rights to include social and economic rights,
but is also in preparation for another attack on civil and political
rights. It has been the common experience of peoples around the
world; the agents of neo-liberalism become brutally repressive
when confronted by resistance to their political and economic
agenda. In Sri Lanka, the regime of J.R. Jeyawardena quickly resorted
to crushing not only the labour movement but also civil liberties
in general, when faced with resistance to the open economy policies
beginning in 1977. It should be noted that in addition to the
communal dimension of the repression characterized by the Prevention
of Terrorism Act in 1979 and the Emergency, there was a clear
move to also crush the Left movement in the country by using such
repressive mechanisms.
Next, the common understanding
about neo-liberalism is that it favours a smaller state, a state
that sheds itself through privatisation. However, this sort of
state is not necessarily a weak state; rather, it is a state that
has absolved itself of the responsibilities of governance in the
interests of its ruling class and imperialist masters. Furthermore,
the state often becomes stronger and repressive not only by expanding
its repressive infrastructure such as its police, armed forces
and repressive judiciary and laws, but also by expanding its ideological
apparatuses. Here I am referring to the ideological apparatuses
directly and indirectly under the control of the state such as
education, religion, institution of family, conflict resolutionism,
ethno-nationalism etc. This is most evident in the case of India
where the rise of BJP and Hindutva; with its militarism and cultural
nationalism, have been in sync with neo-liberal economic policies
such as privatisation and opening of markets to global competition.
Thus the attacks on
our local struggles by neo-liberal fields; have been a result
of producing new terrains for their impact, backed by imperialist
and state repression, and ideological hegemony. However, in looking
at the impact of neo-liberalism and its fields, there is also
a need to ground it in the system that sustains and reproduces
neo-liberal power. Hence we need to link our critique of neo-liberalism
with a critique of the capitalist system and its working, from
which neo-liberalism’s fields emanate. At the World Social Forum
in Mumbai there was much talk about corporate interests and multi-national
corporations, but there wasn’t a clear critique of capitalism
and its processes. Furthermore, such a critique will necessarily
have to be tied to resistance; and here while the recent history
of the peace and justice movement is encouraging we have a long
way to go. And in talking about resistance, I would like to refer
to a graffiti written on a shack in Mumbai; ‘Another world is
not possible without people’s struggles’. Such struggles and not
the celebrities displayed at the WSF were the beginnings of this
global movement, which has brought a variety of us together. The
reference to the graffiti is not to applaud the Mumbai Resistance
or to find satisfaction in slogans, but rather to see it as criticism
and dialogue necessary to build a broad yet powerful movement.
The question then is whether our unity in struggles will be tied
to a unity of critique and vision? For it is through such praxis
that we can make the necessary strides to confront the neo-liberal
fields of power.
Annex: Notes on
the history of neo-liberalism
Neo-liberalism’s ideological
roots go back to the late nineteenth century beginning with laissez-faire
(free of government intervention) economic policies and neo-classical
economic theory. Neo-classical economics or marginalist economics
as it came to be known in the 1870’s, was a clear break from the
classical tradition of Smith and Ricardo, not to mention Marx.
What characterized marginalist economics is the absence of a theory
of value, that there is no inherent value in economic activity;
this was a complete break with the traditions of different labour
theories of value advocated by the Ricardians and Marxists. Neo-classical
economics attempts to build a theory based on individual choices
and money prices, mediated by supply and demand. The emphasis
then is on the marginal changes of our preferences and how it
impacts marginal changes in prices and production and vice versa.
With the Great Depression
in the 1930s, Keynesian economics and the Cambridge school came
into the limelight with their critique of neo-classical economics,
not only by critiquing the theoretical foundations of neo-classical
economics but also the policy implications and the economic devastation
caused by such policies. Keynesian economics in particular with
its emphasis on reducing unemployment through state intervention
gained much ground during this time for two reasons. One, the
policies based on neo-classical economic theory were refuted by
the continuing crisis. Two, there was an urgent need to solve
the question of increasing unemployment as the communist movement
was knocking on their doors with an alternative. Then World War
II proved as the opportunity for a large scale Keynesian style
state intervention as the Western economies were reshaped, and
unemployment in the US in particular was reduced by military investment
and military mobilization for the war.
But this honeymoon
away from neo-classical economics was short lived as there was
a counter critique in the realm of theory and policy by the neo-classical
school. This counter critique gained strength as the Western economies
went into a crisis characterized by the long downturn beginning
in the seventies after the end of the boom of the fifties and
sixties. This downturn was further aggravated by the fall of the
Bretton Woods system of pegged exchange rates in the early seventies
and the oil crisis of the mid-seventies. The Bretton Woods system,
which was characterized by exchange rates pegged to the US dollar
which in turn was backed by gold, is interesting for a number
of reasons. One, it was pushed by our old bourgeois friend Keynes
to avoid the spread of financial crisis like the one in the 1930s.
Two, it was as part of that system that the International Monetary
Fund (IMF) and the World Bank (WB) were formed, to aid the short
term bailout of countries that may go through economic crisis
and the long-term development of developing countries respectively.
With the fall of the Bretton Woods system, these institutions
have taken on the role of pushing countries into long-term crisis
and short-term patronage, as their role dramatically changed with
the consolidation of their policies into what cam to b known as
the “Washington Consensus” in the late 1980s.
Neo-liberalism as we
know it today was born out of a solid reformulation of neo-classical
economics along with the institutional infrastructure to push
its core policies. It should be noted that neo-classical economics
has entrenched itself as the sole representative of economic theory
and policy in academia, the multilateral institutions and in the
finance ministries around the world. While it advocates itself
to be the best description of the working of the economy, through
its emphasis on individual choice and laissez-faire policies,
in reality it is a powerful prescriptive theory that can be used
to reshape our world. The institutional infrastructure for such
a project was formed with the Washington Consensus, a move that
came after the Reagan / Thatcher era reform, characterized by
wide spread liberalization and cuts in social welfare of the US
and British economies. The Washington Consensus at its core, has
policies of privatisation, financial market liberalization both
domestically and internationally, free flow of trade, balancing
of budget at any cost including cuts in welfare, “flexible” labour
markets etc. In short, it called for the unimpeded flow and accumulation
of capital; including the monetization, commodification and privatisation
of economies, the further integration of global and local production,
and the intensification of exploitation and transformation of
productive relations. All this without considering the destruction
and crisis that confronted local communities and society at large.
The Washington Consensus gained stature and power as the economic
blue print of US imperialism and the sole economic option for
post colonial states caught in economic slumps and debt crisis
stemming from state centred development initiatives.
The Bretton Woods institutions,
which are in reality the extension of the U.S. treasury department,
are the number crunchers and arm twisters of U.S. imperialism
on the economic front. Neo-liberal policies have become prevalent,
not merely through a consensus in the U.S. capital Washington,
but also with the backing of U.S. military power. The foreign
policy of the U.S. and its allies; in various interventions from
bailing out debt ridden countries to their military interventions,
rarely sway from the core principles of their neo-liberal agenda.
Furthermore, neo-liberalism has found support from eager stooges
among the local elites of the Third World; they support neo-liberalism
in return for sanction and support to sustain their local power
and patronage.
While the neo-liberals
may use the language of free trade and free flow of capital, there
is nothing free about it. As is clear from people’s protests against
the WTO, their trade policies are unfair not only because capitalist
production and exchange is exploitative, but also in the manner
in which the global system allocates wealth and surplus between
the developed and developing countries, leading to the intensification
of geographically unequal development. Furthermore, the free flow
of capital has been instrumental in integrating the world economies
at enormous economic and social costs, as evident from the crisis
in South America and East Asia, during the past decade in particular.
Hence, free trade and free flow of capital actually point to a
new global economic infrastructure, consisting of a new set of
laws, arrangements and relations that perpetuate the crisis prone
and exploitative neo-liberal agenda. Furthermore, these arrangements
and relations are malleable to satisfy the immediate interests
of the empire builders. Hence Enron and Halliburton are the norm
rather than the exception, reflecting the cronyism accommodated
by the neo-liberal agenda of US Empire.
Finally, the Bretton Woods institutions
have increasingly upgraded their ideological campaigns. They claim
that third world countries need the “rule of law”, transparency
and accountability. They even speak of poverty reduction strategies
and participation. What is missing in all these wonderful terms
are the critical yet simple questions! For example when speaking
about the rule of law, we need to ask what kind of law? Is it
the law that further commodifies people’s lives and intensifies
inequality? Transparency and accountability for whom? Is it only
transparency and accountability for the multilateral institutions
and international financial institutions or to local communities?
The language of poverty reduction and participation have been
a complete farce as evident from the Sri Lankan experience, as
highlighted by MONLAR where the World Bank sponsored PRSP (Poverty
Reduction Strategy Program) is a recipe for increasing not decreasing
poverty and participation in policy formation has meant consulting
a handful of NGO’s whether or not they agree with the World Bank’s
program. [iii]
[i] See Sarath Fernando Interview Part
II, lines Volume III Issue 2.
[ii] The Tokyo Donor Conference was co-chaired
by the US and over 50 multilateral organization and governments
participated and approved the neo-liberal reform package present
by Sri Lankan government.
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