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How Neoliberalism Works

Libertarian Harry Browne famously wrote that government “knows how to break your legs, hand you a crutch, and say, ‘See, if it weren’t for the government, you wouldn’t be able to walk.’” But with deficits and recessions looming, governments have been getting stingier when it comes to handing out crutches. The U.S. House of Representatives recently passed a bill cutting billions of dollars from food stamp programs.
These cuts will impact many Americans. The New York Times reports, “According to the Congressional Budget Office, nearly four million people would be removed from the food stamp program under the House bill starting next year. The budget office said after that, about three million a year would be cut off from the program.”

But while government cuts back on helping poor Americans afford food, they are not letting up on their numerous interventions that keep poor and working people impoverished. Across the country, occupational licensing laws raise prices for consumers and prevent workers from pursuing self-employment. Cities across the country have shut down hair braiders, food trucks, and other small businesses frequently founded by members of economically vulnerable groups. In California, police conduct violent sting operations to arrest people doing unlicensed house painting, carpentry, and landscaping. Gaining the required licenses requires time and money that most poor and working people just don’t have.

Other ways poor people try to make a living are outright criminalized. Drug dealing, sex work, and panhandling are all peaceful and voluntary ways of attempting to make a living, but police assault, kidnap, and cage people who engage in these survival crimes.

There are plenty of other ways that government maintains structural poverty. Regulatory barriers to entry mean that fewer people can start businesses, creating greater competition for jobs and thus a labor market where capitalists have more power than workers. Patents and other forms of artificial scarcity raise prices for all sorts of goods, including essential lifesaving medicines. And historical land thefts like the Enclosures have concentrated wealth in the hands of predatory capitalists while depriving the masses of access to land and property.

These interventions break the poor’s legs. So they become dependent upon state welfare to hand them crutches. But then governments have the power to take those crutches away, which is precisely what Congress is doing.

This vicious state-created cycle of poverty happens worldwide. In Europe, particularly Greece, austerity measures mean cuts to healthcare, pensions, wages and more. Protesters across Europe have expressed their outrage at these austerity measures. European states have been excellent at breaking their people’s legs and handing out even more crutches than the U.S. government. But then they took away the crutches while the leg breaking continued. A recent book by two public health researchers argues that these austerity measures kill.

So-called “free trade” agreements have similar consequences. NAFTA allowed heavily subsidized American agribusiness companies to flood Mexico’s markets with corn, destroying the livelihoods of Mexican farmers. The World Trade Organization has gutted environmental and labor laws across the globe in the name of “free trade.”

But so-called “free trade” agreements do not merely eliminate government interventions that can act as crutches. These agreements expand the state’s leg breaking. They require governments to harshly restrict trade by enforcing artificial monopolies known as “intellectual property.”

For many goods, this protectionist intervention masquerading as “free trade” just means higher profits for privileged businesses and higher prices for consumers. But when it comes to medicine, these monopolies kill. As Amy Goodman puts it, “major pharmaceutical companies, including Pfizer and GlaxoSmithKline, as well as the United States, prevented tens of millions of people in the developing world from receiving affordable generic AIDS drugs. Millions died as a result.”

New trade agreements like the Trans-Pacific Partnership threaten to further expand these deadly monopoly privileges. Rather than simply freeing trade, these agreements use state power to crush generic drug producers and deprive poor people around the world of lifesaving medicine.

Some people say that neoliberal policies like austerity and “free trade” agreements make the market freer. This is a cruel joke. These policies simply stop the state from providing basic needs for the people it has hurt most, while continuing or even expanding the interventions that have kept them in poverty.

There’s a better way. We the people can resist the state and its cruel policies that trap people in poverty. We can build mutual aid networks so that people’s needs are met without dependency on plutocratic politicians and control freak bureaucrats. We can build a world where the state doesn’t break legs, hand out crutches, and then yank those crutches out from under its victims.

Nathan Goodman is a writer and activist living in Salt Lake City, Utah. He has been involved in LGBT, feminist, anti-war, and prisoner solidarity organizing. Goodman is the Lysander Spooner Research Scholar in Abolitionist Studies at the Center for a Stateless Society (C4SS.org). In addition to writing at C4SS, he blogs at Dissenting Leftist.

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Nathan Goodman is the Lysander Spooner Research Scholar in Abolitionist Studies at the Center for a Stateless Society (C4SS.org). He blogs at Dissenting Leftist.

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