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Thick as BRICS: an Illusory Alternative to Neoliberalism

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Author of Revitalizing Marxist Theory for Today’s Capitalism and other books written in defense of classical Marxism, University of Manitoba professor Radhika Desai probably spoke for the majority of the left when she wrote a Guardian op-ed piece titled “The Brics are building a challenge to western economic supremacy”. Key to this challenge was the creation of a Development Bank that can serve as an alternative to the IMF and the World Bank. As she put it:

The Brics countries do have a mortar that binds them: their common experience, and rejection, of the neoliberal development model of the past several decades and the western-dominated IMF and the World Bank that still advocate it. Their rapid development over the previous couple of decades was despite, not because of, this. Countries whose governments were able and willing to resist this model developed faster.

At the heart of her analysis is the notion of “development”, a term somewhat distinct from the socialist aspirations of earlier generations but one clearly in sync with a chastened left that while not quite agreeing with Margaret Thatcher’s TINA, does see some good in putting people to work on state-sponsored projects that generate tax revenues and raise the standard of living. If it isn’t socialism, at least it is some kind of New Deal. If a capitalism based on “neoliberalism” is to be avoided at all costs, why not opt for a more progressive and humane capitalism that is the “lesser evil”? If this sounds like the argument that some activists make for voting for Barack Obama, Hillary Clinton or even Bernie Sanders, you may be on to something.

At least some people resting on the foundations of Marxism disagree with Desai. In a newly published collection of articles by Patrick Bond and Ana Garcia titled BRICS: An Anti-Capitalist Critique, you can find powerful arguments making the case that this supposed alternative to neoliberalism is no alternative at all. Whatever your stance on this debate, you would be well served by reading this book since it will enable you to make an informed political decision. It should be added that Pluto Press has published both Radhika Desai and this new book so they deserve kudos for helping the left keep abreast of important theoretical challenges.

As pointed out in Garcia and Bond’s introduction, it was not a Marxist theorist who coined the term BRIC (the S for South Africa would be added later.) It was Jim O’Neill, the head of Goldman Sachs’s Asset Management division who had written a paper for investors in 2001 titled “Building Better Global Economic BRICs“.  If O’Neill had any worries about such a bricsbonddevelopment threatening imperialism’s bottom line, it was not apparent in his article that proposed adding Brazil, Russia, India and China to the G7. If the G7 was a symbol of globalization and neoliberalism deserving of an anarchist’s Molotov cocktail, poor Jim O’Neill was foolish enough to allow its sworn enemies into its charmed circles. Or was he more wise than foolish?

In his concluding article, Patrick Bond points out that the BRIC’s new Development Bank was applauded by Jim Yong Kim at the World Bank and the IMF’s Christine Lagarde. The China People’s Daily wrote in 2014 that the BRICS “are actually meeting Western demands” since the point is “to finance development of developing nations and stabilise the global financial market”. Blogging at the Financial Times, financier Ousmene Jacques Mandeng of Pramerica Investment Management thought that the BRICS “would help overcome the main constraints of the global financial architecture. It may well be the piece missing to promote actual financial globalisation.”

Among the book’s many strengths is its close observation of the economic record of supposedly enlightened countries such as Brazil that if not a member of the Bolivarian revolution in Latin America is at least chipping away at inequality within its borders. Does it have the same standards in other countries?

In a stunning investigative piece on Companhia Vale do Rio Doce, a Brazilian mining company better known as Vale, veteran staff member of the Canadian steelworkers union Judith Marshall describes a wolf in sheep’s clothing. The clothing was the verbal assurances of Lula that the company would embody the Workers Party’s ideals while the wolf was the company’s global rapine.

When Lula went to Mozambique in 2003 to demonstrate his solidarity with the former Lusophone colony, he was accompanied by one Roger Agnelli, a banker who would soon become Vale’s CEO. Shortly after retiring in 2012, Marshall embarked on a project to see how Vale’s social conscience pretensions, second only to Benetton’s, stacked up against its practices in Canada, Brazil and Mozambique. The results were not very pretty.

Based on the evidence of an 18-month long strike by mostly aboriginal workers in Newfoundland and Labrador, Vale was no different from other capitalist enterprises. In an article for Brazil’s business magazine Valor Econômico titled “Vale celebrates reducing the power of the unions in Canada”, Vale’s Director of Basic Metals Tito Martin bragged that the company achieved all its goals on pension plans, bonuses and the chain of command between employer and employee. Its health and safety records are abysmal as well.

Exploiting their Lusophone connections, Brazil had the inside track on getting a monopoly on exploiting Mozambique’s coalmines. Lula was given a hero’s welcome by the widow of national hero Samora Machel at a state ceremony where he spoke about the need for Brazilian companies doing business in her country to fight against inequality. Not long after making this speech, Lula sat down with Mozambique’s Minister of Labor to persuade her to eliminate rules that would require hiring native workers. It should be understood that a similar demand by the Chinese had eliminated them from the competition. As is commonly understood, Chinese extractive industries operating in Africa have little need for African workers except in menial positions. One must conclude that BRICS members are depressingly consistent. So what did the Mozambicans living near Vale mines get in return? “Pollution, scarcity of housing and other services, traffic, noise and rising cost of living in general.” That’s what.

In 2012, Vale got the dubious distinction of being voted the worst company in the world at the World Economic Forum. Despite Brazil’s carefully cultivated image of being committed to global equality, Canadian aboriginal miners and the Mozambican poor got the shitty end of the stick.

In fact, much of the empirical data dug up by the contributors to BRICS: An Anti-Capitalist Critique points to a new “scramble for Africa” being led by exactly those nations that Desai characterizes as being an alternative to the IMF and World Bank.

Co-written by Baruti Amisi, Patrick Bond, Richard Kamidza, Farai Maguwu And Bobby Peek, “BRICS corporate snapshots during African extractivism” is an exposé of all the vultures swooping down on Africa in search of a fast buck whether they have been there for a long time (Russia, China), newly arrived (India) or are traditional sub-imperialists (Brazil, South Africa).

Despite all the arguments made by Putin’s amen corner on the left, there is ample evidence that Russia is fully involved with the new scramble for Africa. Alrosa owns 32.8% of the stock in the Katoka Mining Society that manages an industrial complex in Angola. RusAl is in on the privatization of a smelter in Ghana that supplying aluminum ore to the American market. These two Russian companies and two others have plans to invest $5 billion in Africa in the next five years. For those who believe that the investments will somehow defy the laws of capital accumulation and result in a new partnership between capital and labor need to reread their Karl Marx when they find the time and the inclination.

Africa currently supplies 20 percent of India’s oil and that is expected to increase in years to come. Wherever foreign companies go to extract oil, the results can be expected to benefit the extractor rather than the extracted as Nigeria should remind us.

While China’s extractivism in Africa has been well documented, it is worth noting that it has also made Africa into a major repository of its manufactured goods. Since 2000, exports have increased nearly tenfold with machinery, automobiles, and electronic products supplying the bulk of its profits. Most would agree that it was an unequal exchange when Britain sucked up the natural resources of Africa and Asia and sold back manufactured goods to the natives. Why they would see BRICS in different terms is rather a mystery.

The first section of BRICS: An Anti-Capitalist Critique deals with a question that has been vexing the left for some time now. How do you theorize the nature of the BRICS? Imperialist? Sub-imperialist? Or none of the above as Kremlin loyalist Roger Annis has argued.

Patrick Bond finds the term sub-imperialism useful, especially as applied to South Africa likening its role within the continent and Brazil’s in Haiti as that of a “deputy sheriff” while for Leo Panitch, Lenin’s theory as put forward in his famous pamphlet explaining the origins of WWI is out-of-date.

Panitch points to the growth of industry in Brazil and South Korea as proof that the “development of underdevelopment” does not apply to global capitalism in the contemporary epoch, all the more so since such growth was encouraged by the American capitalist class.

For those not familiar with the term “development of underdevelopment”, it is worth mentioning that it was associated with Andre Gunder Frank, the author of many books on Latin America that were published by Monthly Review and fall within the rubric of Dependency Theory. Frank, Samir Amin, Paul Baran and other contributors to MR over the years saw imperialism as inimical to “development” in places like Brazil. This meant that foreign corporations would have little interest in economic growth in third world countries, seeing them mostly as places to extract natural resources and where manufactured goods could be sold thus stunting local industry. It was very much the model of the British Empire of the Victorian era and that of the USA once it replaced Great Britain as the global hegemon.

Panitch sees economic relations between the traditional imperialist powers and the BRICS aspirants today as marked by “international networks of integrated production; the centrality of the dollar and US Treasury bonds in international trade and capital flows, with Wall Street and its satellite in London as the preeminent international financial centres; and the common elaboration of domestic, commercial and international law very much modelled along US lines, but above all designed to guarantee that foreign capital would be treated the same as domestic capital.” It is no accident that Goldman-Sachs’s Jim O’Neill saw things in the same light.

One might look forward to a follow up book on the question of how to define imperialism today. Since the escalation of tensions over Syria and Ukraine, there is a widespread tendency to view world politics as an arena with two combatants: the imperialists in one corner wearing dark trunks and the “anti-imperialists” in the other wearing white trunks, with Vladimir Putin the reigning world champion.

If the analysis of BRICS in the book under view has any merit, it would be to devalue this interpretation and see the two fighters as equally reprehensible bums. In some ways, the fight is not exactly about the fight over natural resources as emphasized in Lenin’s writings if we are to take seriously the continuing affinity between Russia and the oil companies that Lenin regarded as one of the primary instigators of WWI. In 2014, a year when WWIII was supposedly about to break out over Ukraine, ExxonMobil deepened its ties to Gazprom and declared its intentions to jointly explore new oil fields in the far north. That was certainly not something that V.I. Lenin would have anticipated in 1914.

In my view, there was always a certain weakness in dependency theory even though I had great sympathy for the passionate commitment to the poor in Andre Gunder Frank’s writings that in many ways evoke the sermons of the current leader of the Catholic Church. Like many other UN economists associated with the dependency school, Frank was as much for “development” as he was for socialism even to the point of becoming an admirer of Chinese capitalism toward the end of his life as expressed in his last book ReOrient. In many ways, the book reflected a schadenfreude that Asia would finally regain domination over the West. If your aspiration is to see a new hegemon, one supposes that this has a certain appeal. As a life long socialist with a deep seated hostility to all forms of hegemony, Frank’s book left me cold just as do all of the new arguments on behalf of the BRICS.

Louis Proyect blogs at http://louisproyect.org and is the moderator of the Marxism mailing list. In his spare time, he reviews films for CounterPunch.

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