End of Neoliberalism? The Capitalist Reset and the Possibilities of a New Stage of Social Revolt

29 November 2020 —  Internationalist 360°

Luis Bonilla-Molina

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Protests against police violence in Paris, November 28, 2020

An important part of the international left has announced the end of neoliberalism and the return to the central role of the state. This would seem to indicate the possibility of a return to the tutelage of the State over the public, given the disastrous panorama that was shown with the COVID-19, as a result of the liberalization that has occurred in the last decades with regard to health, social security, and education systems.

But this is not entirely true. Neoliberalism is only an expression of capitalism, not an ideology separate from it. Two factors limit the possibility of understanding what is happening; first, the precarious analysis of the impact of scientific-technological acceleration in the reconfiguration of the capitalist mode of production and, second, the obstacles to understanding the dynamics of the formation of a new global empire in the framework of the internationalization of capital. In this last case, dogmatism prevents one from seeing the new course of inter-capitalist contradictions, one of whose most important variants is turbulent integration, not resolution by military means.

Dani Rodrik postulated a theorem of the tensions generated by the internationalization of capital, composed of economic globalization, political democracy, and the state, which is useful in illustrating my point. Rodrik argues that in the rise of economic globalization an alliance was established with political democracies to generate a progressive integration of national bourgeois capital into that of global corporations, which required a reduction in the influence and mediating importance of the state.  An example of this can be seen in the neoliberal restructuring of the Salinas de Gortari government in Mexico[1], among others.

Within this web of contradictions and opportunities, the State was losing strength to limit protectionism to national capital and to produce its integration with transnational capital, something that was by no means bloodless. Donald Trump and the bourgeois faction he represents, attempted to recover the role of the state in mediating this integration, so that it would be less bloody than it was for certain gringo capitalists, without actually breaking with the dynamics of globalization.

What is happening, then, is a resurgence of the State in its harmonious relationship with globalization and to the detriment of democracies, to guarantee the new wave of world capitalist restructuring and an authoritarian and fascist model of containment of protest and social demands.

What is threatened is not neo-liberalism, but the political model of liberal democracy that has been the dominant narrative of industrial capitalism in the first and second industrial revolutions.

But this debate is not exclusive to the left, since the logic of capital is beginning to speak of the end of an era. Klaus Schwab, one of the founders of the World Economic Forum, published on October 14, 2020, an article entitled “We must overcome neoliberalism in the post-COVID era” [2], in which he does not hide his concern for the stability of the capitalist system in the post-pandemic era. He states in that article:

“The only acceptable response to such a crisis is to try to implement a ‘Great Reboot’ of our economies, policies and societies. Indeed, this is a time to reassess the sacred cows of the pre-pandemic system, but also to defend certain long-standing values. The task we face is to preserve the achievements of the last 75 years in a more sustainable way” (WEF,2020).

The economic crisis of 2008 and its long wave, which re-emerges with the economic schism of 2019 and is exacerbated by the COVID-19 crisis, forces a reconfiguration of the components of Rodrik’s model. What we are witnessing is a greater link between the State and globalization to the detriment of democracies.  Neo-liberal capitalism needs national states of containment and repression, in the face of the brutal living conditions of the working population in the pandemic and post-pandemic. This will mean a drastic turn to old and new forms of authoritarianism, some of which are presented as democratic solutions.

On November 7, 2020, Klaus Schwab warned that he was concerned about the risk of a social crisis breaking out [3]. He is the same person who, together with Thierry Malleret, presented the text “Covid-19: The Great Reboot” (2020) in which they propose a route for the brutal restructuring undertaken by capital, which will have a terrible effect on the world of work, social security, professional training, public goods and services in the coming months and years.

The ILO[4] estimated in September of this year that during COVID-19, in Latin America and the Caribbean alone, 34 million jobs had been lost, a figure that in November stood at 47 million, a fifth of the employment achieved in 2019 in the region. If we add to this the effects of the fall in regional GDP, which the International Monetary Fund (IMF)[5] estimates at 8.1% in November 2020, the scenario is as bleak as in the rest of the world. If, in addition, we add to this the effects that the landing of the fourth industrial revolution will have on society in general, as was shown in education with millions of children and young people outside the model of virtual education at home, we would be on the verge of a situation of exponential increase in exclusion.

This realignment between the State and globalization, because of the depth of the restructuring underway, but fundamentally because of the need for capital to do so in the shortest time possible, will generate a new wave of authoritarianism. I do not intend to say that elections and parliaments will be over, but that these will increasingly be a smokescreen in the face of a hardening of controls and authoritarian provisions. Containing, repressing, controlling, numbing, leading this transition in tranquility, are the signs that seem to determine a further deterioration of democratic institutions.

This does not negate the emergence in the near future of a new correlation between democracy and the State when change takes hold and globalization dominates the public sphere.

The global reform presented as a scientific-technological update

The essence of Schwab & Mallaret’s text, COVID-19: The Great Reboot (2020), is nothing more than a theoretical-conceptual justification and, construction of a roadmap for taking actions that will allow capitalism to diminish the direct and profound effects that the acceleration of innovation will have in the coming months and years.

One of these aspects is employment, with the new formats and demands of professional training. The ILO is beginning to warn of the urgent need to work on “Vocational training as a response to the crisis and strategies for recovery and productive transformation after COVID-19” [6]. A very important part of global employment has begun to be reconfigured as indicated by the ILO, and for this reason:

“The great space of vocational training in the short term is focused on facilitating access to retraining or job conversion options for workers who have lost their jobs. These options must provide for familiarization with digital skills, as well as the so-called employability skills that have a transversal demand and can be useful for employment in a wide range of occupations”. (Document cited, 2020:4)

This new post-pandemic marriage, between neo-liberal economic globalization and the State, will attempt – as it has done since the 1980s – to build hegemony with respect to the transfer of many of the responsibilities of national States to the population. In this case emphasizing the individual commitment to update themselves in order to enter an increasingly technological world of work. Although the full landing of the fourth industrial revolution in the short term is only a chimera for Latin America and the Caribbean, it will not be the focus of reformist narratives to come.

This situation acquires even more striking characteristics in the region, at a time when an important part of big transnational capital is trying to “Africanize” Latin America, that is, to convert it into a conglomerate of territories important for extractive industries, with a special chapter on the “rare lands” necessary for the technologized world. It is evident that big capital investment in infrastructure has fallen in the region, in contrast to a growing transfer of large volumes of money to Africa, a region that from the outset offers greater labor flexibility and governments less committed to the social agenda; not to mention the precarious existence of trade unions on the African continent, something that attracts the interest of Chinese, Russian, Turkish and North American capital.

When one reads the documents of analysis of this year, advanced by the so-called development banks, specialized multilateral organizations, global economic forums and “think tanks”, it becomes evident that we are on the threshold of a new cycle of structural reforms of capital that will use the dramatic effects of the pandemic as a factor in its favor, to lull consciences and avoid resistance, presenting the reforms to come, as a way to return to the situation of 2019.

Causes of potential revolts

Millions of human beings have been thrown into absolute unemployment, while millions more are beginning to see their jobs threatened by the arrival of virtuality and digital epistemology in the world of employment. Millions of children and young people have been expelled from the school systems motivated by the model of education and university at home. The most affected in both cases are women and population minorities. This situation is literally limiting the possibilities of food, housing, study, health and even social interaction for millions of people.

If we add to that the restructuring of the retirement and pension systems in different countries, the fall in purchasing power of the real wages of workers, wage adjustments well below inflation, threats to freedom of association and collective bargaining, the exponential rise of the industrial reserve army with the aggravating factor that its training for employment does not correspond to the needs of industry and current employment, the situation is explosive.

Certainly capital will try new forms of social numbing, but if the trend continues it will not be enough. The explosions could be multi-sectoral and inter-sectoral, breaking many of the old forms of resistance. If the trend of exclusion and exploitation continues in the coming months and years, we will be witnessing intermittent revolts. The commitment would be to gather the small sparks into a great uprising that would lead back to the society of exclusion.

The anti-capitalist left and the correlation of forces

This situation poses a challenge to the anti-capitalist left, which is still small and marginal, although highly capable of influencing the narratives and imaginaries of struggle. For this, the old party schemes of synthesis of revolutionary truth, revolutionary classism that dismisses the waves of radical change driven by the middle classes, are imminent and necessary.

We are before a crossroads for emancipatory narratives and practices. Authoritarianism is threatening and revealing itself clearly; it is time to think, act, reflect and operate in a transformative way.

Some elements to be taken into account in order to promote an anti-capitalist debate at this time are:

  • Characterize the process of structuring imperialism in the XXI century;
  • Study the impact of industrial revolutions in the different political, social, economic, cultural and technological moments of capitalism;
  • Revalue the role of the unemployed working class in the radical transformation of society. This has a central chapter in the unionization of unemployment;
  • Explore new forms of articulation between the emerging social movements (feminisms, ecologies, sexual diversities, etc.), as well as with the layers of workers (employed or not) mobilized. The issue of social security in the world of work becomes a central aspect in this activation of the transforming action of society;
  • Assuming historical anti-capitalist slogans, which acquire special transitional value, such as the non-payment of the foreign debt, tax on large fortunes and profits, transparency of public management, rule of law;
  • The collective construction of a radical socialist agenda in the 21st century, which breaks with ideas of authoritarianism, the vanguard party, perpetual leaderships, and closed economies, among other aspects, which have characterized 20th century socialism.

These are tempestuous times; they are times of radical change.

Bibliography

ECLAC / ILO (Nov., 2020). Labor Situation in Latin America and the Caribbean. The labor dynamics in a crisis of unprecedented characteristics: policy challenges. Available at https://www.ilo.org/wcmsp5/groups/public/-americas/-ro-lima/-sro-santiago/documents/publication/wcms_760451.pdf-americas/-ro-lima/-sro-santiago/documents/publication/wcms_760451.pdf

Rodrik, Dani (2012). The Paradox of Globalization. Antonio Bosch Editor. Spain Schwab, K and Mallaret Th (2020) Covid

Schwab, K & Mallaret Th (2020) COVID-19: the Great Reboot. Amazon Editions. Digital book

Notes

1] In the case of Venezuela, an attempt was made during the second presidency of Carlos Andrés Pérez, who, when he failed, generated national inter-bourgeois contradictions that still persist today.

2] https://es.weforum.org/agenda/2020/10/debemos-superar-el-neoliberalismo-en-la-era-post-covid/

3] https://elpais.com/economia/2020-11-07/klaus-schwab-fundador-del-foro-economico-mundial-me-preocupa-el-riesgo-de-estallido-de-una-crisis-social.html

4] https://www.ilo.org/americas/sala-de-prensa/WCMS_756717/lang-es/index.htm-es/index.htm

[5] https://www.trt.net.tr/espanol/economia/2020/10/14/fmi-pib-de-america-latina-tendra-una-caida-del-8-1-en-2020-1509022

6] https://www.ilo.org/wcmsp5/groups/public/-americas/-ro-lima/documents/publication/wcms_756090.pdf-americas/-ro-lima/documents/publication/wcms_756090.pdf

Translation by Internationalist 360°

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