The Neoliberal Hoax

by ROBERT HUNZIKER

Neoliberalism is the most powerful force in economic history; like a black hole in deep outer space, it consumes everything.

The great prophets of neoliberal economic policies like Milton Friedman claim economic freedom is a necessary condition for political freedom, but world events are not cooperating. In fact, neoliberalism may be a better door opener for totalitarian impulses than for democratic spirits.

As a matter of fact, it appears neoliberalism is a breeding ground for totalitarian tendencies, not free will and democracy. Nevertheless, the world community has embraced neoliberalism with gusto. There are examples, like Hong Kong (one of Friedman’s favorites), where economic behavior has proven quite extraordinary, especially for the top 10%-20%, but a United Nations Development Report ranks Hong Kong number one amongst the world’s most developed economies for income inequality, which continues to widen and grow. HK is ruled with an iron fist by a Chief Executive (Sir Donald Tsang), who is not popularly elected… not exactly Friedman’s formula for economic freedom opening the door to political freedom.

Neoliberalism’s ascendancy, according to The Crisis of Neoliberalism (Harvard University Press, 2011) by Gérard Duménil and Dominique Lévy, as a new stage of capitalism since the 1970s expresses the strategy of the capitalist classes in alliance with financial managers to establish their hegemony and expand it globally. In this regard, Dumenil goes on to state: This strategy has been successful based upon the income and wealth of a privileged minority gaining political dominance. Again, not exactly what Freidman had in mind… or did he?

With the advent of instantaneous global communications and universal acceptance, neoliberalism blazes thru the global economy like omnipotent robots programmed to seek out profits.  Meanwhile, obsequious humans are conceptually baffled within pre-conceived notions of political-socio-economic democratic nation-states. In truth, the modern democratic nation-state is passé, out of touch.

Meanwhile, the invisible hand of the free market is in the vanguard prompted by neoliberal guidance to gain profits at any costs cascading over individual human rights and collectivist politics, resulting in an ever-tighter concentration of wealth and political power. How else account for a U.S. presidential election requiring hundreds of millions of dollars? The very fact that candidates spend hundreds of millions seeking public office is clear evidence that democracy is a failed institution. Nothing more need be stated… end of story.

There is no better example of neoliberalism’s abject failure to bring in its wake political renaissance than China because, based upon the economic determinist viewpoint, the consequences of economics are supposed to dictate politics and life’s patterns, fostering the predominate view among U.S. economists that China’s economic liberalism will lead to meaningful reform, i.e., ‘political openness’. However, economic liberalism has not sprung forth with any semblance of ‘political openness’ in China! In fact, an implacable Standing Committee of Nine, same as always, dictates the country’s politics and dissent is squashed like ripened tomatoes on a busy freeway.

Similar to 17th century Mercantilism whereby success is judged by exports exceeding imports, advancing commercial interests, China’s State Capitalism focuses on pure economic consequences. Thus, commercial interests are advanced to the level of national political policy, a dehumanizing factor in society as participants statistically react to events predetermining the individual’s role/slot in society, e.g., peasants fresh off the farm receiving $1.50/hr. for assembly-line work and living in tiny caged dormers. There is no economic liberalism at work to change politics. It is D.O.A. Rather, China is a prime example of how neoliberalism obliterates any hope for political renaissance.

According to Xibai Xu, Neoliberalism and Governance in China (Oxford, 2011), regarding the effects of neoliberalism: “…contrary to the expectation of many Western observers, economic liberalization has not led to political liberalization or democratization. Instead, it has transformed China into a highly unequal and divided society in which power and wealth are monopolized by a small elite class of party cadres and associates, while a large number of peasants and workers are deprived of land, employment, welfare and rights.”

Xu’s statement serves to reinforce the viewpoint that neoliberalism’s greatest proponents were incorrect, e.g., Friedrich von Hayek, arguing that economic freedom had to be wrested from control by government or suffer totalitarian rule, and Milton Freidman’s advocacy that economic freedom is a prerequisite to political freedom. China’s experience proves otherwise, and it is common knowledge in America that neoliberalist’s tendencies have served to concentrate wealth and power more so than at any time since the 19th century’s Gilded Age, a term coined by Mark Twain.  And, now personal freedoms are under attack in America as neoliberal groupthink impacts political policy.

The evidence of the influence of wealth in politics is replete within America’s tax code, dramatically favoring capitalists over governmental requirements, which is a major tenet of neoliberalism. The proof of this distortion is found in federal tax receipts as a percentage of Gross Domestic Product (GDP) at 50-year lows because the proponents of neoliberalism have worked the system to ‘starve the beast’ by lowering taxes on those who can afford it at the expense of the many whom all-together shoulder the burden of the resultant national debt. Today’s federal tax receipts vis a vis a similar level, pre-Bush tax cuts, amounts to a shortfall of ¾ of a trillion dollars, enough to cover more than half the annual deficit, and if U.S. citizen’s offshore income/profits were taxed, the deficit would be nearly balanced, back to the days of President Clinton, who raised taxes in ‘93 and sported a surplus because of economic growth.

The nation-state is subjugated to imperceptible profit-sourcing neoliberal forces that are extraordinarily rational in pursuit of profit/wealth whereas the masses are totally subservient, in turn, fostering fatuous, doltish citizenry obedient to the pursuit of profit for the sake of profit, similar to a religious experience. Note: The American public’s helpless acquiescence to challenges to their constitutional individual rights as well as lop-sided taxation policies that enrich the wealthy but penalize all taxpayers with a concomitant widening societal divide between the rich and everybody else. As an example, Mitt Romney pays a 13.9% tax rate on tens of millions while average Americans pay over 20% on tens of thousands whilst Mitt receives millions of votes from the ‘everybody elses’.

The neoliberal fixation on profits as a glorified path to success is, in fact, dictated by neoliberalism’s instincts, which embodies the free movement of goods, resources and enterprises to find cheaper resources, i.e. labor, to maximize profits worldwide. In turn, the mindsets of the participants are warped into insane worshiping over profits/wealth/capital at all costs, or as explained by Doh Jung-il, emeritus professor, Kyung Hee University and author of Market Totalitarianism and Barbarism of Civilization: “When the educational systems nurtures human ‘machines’ to just make money… culture is governed by market-favorable by-products and there is no soul-searching, the totalitarian capitalism destroys us… the globe is suffering from a direct result of the totalitarian capitalism that is relentlessly tramping down on human thought and values.”

Unbeknownst to Doh Jung-il, he keeps strange bedfellows right here in the USofA. Senators Mark Udall (D. Colorado) and Ron Wyden (D. Oregon) of the U. S. Senate Intelligence Committee have expressed outrage over America’s flirtation with totalitarian behavior, addressing a letter to Attorney General Eric Holder, asking him to address the issue: “We believe most Americans would be stunned to learn the details of how these secret court opinions have interpreted section 215 of the Patriot Act….” referencing the latitude the Foreign Intelligence Surveillance Court, under Section 215 of the Patriot Act, grants the government to investigate people. For two U.S. senators to suggest Americans would be “stunned” is very strong language in the world of politics-speak (what secrets do the senators know?)

And… more poignantly yet, President Obama signed the National Defense Authorization Act, which negates the writ of habeas corpus, a powerful cornerstone of civil rights since the Magna Carta in 1215. Who dreams this stuff up?

According to David Harvey, A Brief History of Neoliberalism (Oxford University Press, 2005):  Neoliberalism values market exchange as “an ethic in itself, capable of acting as a guide to all human action, and substituting for all previously held ethical beliefs.” He further states, “Neoliberalism has meant, in short, the financialization of everything.” It is a power shift away from production to the world of finance, and the effect in many parts of the world has increasingly been to see it as necessary, even wholly natural, a way for the social order to be regulated.

Furthermore, according to Harvey, in the event of conflict, neoliberal states favor the integrity of the financial system and solvency of the financial network over the well being of the population and over the integrity of the environment, contrary to the best interests of its citizens (written by Harvey in 2005.) Witness: The U.S.’s massive bailout of the banks in 2008-09 at taxpayer expense. Plus, the right wing sponsored war against the reality of global warming, putting the planet’s health at risk of total breakdown… all for a buck!

Harvey disputes the tendency of the competitive advantages, a significant positive element of neoliberalism, which all too often proves ephemeral, introducing extraordinary volatility into global capitalism. Witness: The extreme volatile behavior of the capital markets these past years, upsetting a balanced approach to capital investment, begging the question: Does neoliberalism really work in anybody’s best interests?

Harvey concludes: “The first lesson we must learn, therefore, is that if it looks like class struggle and acts like class war then we have to name it unashamedly for what it is.” And… according to Warren Buffet (qtd. In Woodward 2004): “If there is a class war in America, my side is winning.”

Neoliberalism is a great disruptive force that dominates policy, politics, and culture to the detriment of the masses but to the advantage of the select few, unwittingly, maybe not, enabling concentration of wealth and power to breed totalitarian nation-states. This seemingly natural progression of neoliberalism’s political and economic influence results in an increase of concentration of fewer people celebrating at the same parties, diminishing societal, political, and cultural values to something comparable to driblet performances at Disneyland.

Robert Hunziker earned an MA in economic history at DePaul University. He lives in Los Angeles.

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