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]