By ELEUTÉRIO FS PRADO*
The inability to think of capitalism as a social system formed by structuring social relations
1.
The North American website Project syndicate asked five system economists what, in their opinion, will happen after the exhaustion of neoliberal governance. In fact, the proposed question, “what comes after neoliberalism”, implicitly appears to be twofold: is the neoliberal era over? And in that case, what next?
As strange as it may seem, none of the five answered the question; instead, each of them presented what they would like to see happen in the future of capitalism, particularly in the so-called developed countries. Because, everyone believes that ideas make history and that theirs will prevail if it is well disseminated among interested parties.
Mehrsa Baradaran, a law professor at the University of California, suggests that after neoliberalism should come a “true market economy.” According to her, neoliberalism did not actually overcome Keynesian economics, nor did it replace a rising leftist orientation. Instead, neoliberal normativity was adopted in the late 1970s not to give people the freedom to undertake as they please, but to give monopoly capital the freedom to abuse true entrepreneurs.
Social justice – she says – is a prerequisite for freedom. Only after achieving it, “can we then take advantage of a free market and the shared prosperity” it can provide. She did not explain, however, how this could happen in the current course of history.
Mariana Mazzucato, professor of economics of innovation and public value at the University of London, thinks in a convergent way with the previous reformist thesis. For neoliberalism to become the past, according to her, there must be a “new social contract between the State and companies and between capital and labor”. Therefore, the objective should not be to only generate well-being for the beneficiaries of large corporations.
It is, rather, about reforming the institutional contours of markets so that “they are centered on the value of interested parties – instead of focusing only on the value of shareholders”, that is, of capital owners. And this objective should be pursued by making the State take charge of “missions”.
These two critical authors of status quo They therefore want capitalism without the logic of capital expansion, which does not exist without its inherent social and distributive effects, which they reject! This is not what Anne O. Krueger, professor of economics at Johns Hopkins University – but who was also chief economist at the World Bank and director at the IMF – wants. She believes that neoliberalism needs to remain in force in the United States and abroad. “To promote the well-being of all and to generate resources for government activities, the neoliberal formula (…) remains” – according to her – “as the best that humanity has produced to date”.
Michael R. Strain, director of the economic studies sector at the American Business Institute, emphatically agrees with her. As a consistent liberal economist, he is very opposed to the protectionist policies of the last two North American governments. For him, “the neoliberal era is not ending in the United States”, or at least, if that were the case, it should not be.
As he argues, “in the long term, political success is based on the success of politics” and “the 'post-neoliberal' policies of Presidents Donald Trump and Joe Biden are failing.” And they, according to the theses of economic liberalism, have disastrous consequences not in the short, but in the long term. By introducing inefficiencies, they compromise the future rate of economic growth of the countries in which they are implemented.
Dani Rodrik, professor of international political economy at the Kennedy School at Harvard, thinks that the “neoliberal consensus has been outdated due to geopolitical problems, national security, climate change and erosion of the middle class”. He suggests, however, that one should not mourn his passing; he also warns that it is necessary to be concerned with the type of response to be given to this auspicious event; behold, “it should be reactive and constructive”.
Because, the game “I win what you lose” in the field of international relations, that is, an economic war between nations, can not only lead to real wars, but can also distribute losses to all sides. In short, he would like to see a “better global economy” emerge and prosper.
Nobel laureate Joseph E. Stiglitz, a professor at Columbia University, also presents himself as a progressive reformer. However, he also ignores, like Dani Rodrik, the contradictions and limitations of capitalism to generate a better society for those below. In this way, a utopian transformation can always be imagined and aired to gain credit, that is, a false reputation. In any case, for him, the neoliberal agenda has always been a “fig leaf”, a slap that hides something very embarrassing.
Here is how he evaluates this agenda: “There was financial deregulation, but also massive government bailouts. There was “free trade” but also massive subsidies for big agriculture and the fossil fuel industry. Globally, this led to the creation of rules that preserved colonial trade patterns, with developing countries producing commodities and advanced economies dominating high value-added industries.”
For Joseph Stiglitz, what matters for good economic development are the legal norms that govern the behaviors of individual and collective economic agents. And they are crucial, according to him, whether within countries or globally. For a bright future, therefore, to emerge, it is enough to reconstruct them appropriately: “The end of neoliberalism, the recognition that some of the institutions created under its aegis are failing, the advent of new geopolitical realities, all of this offers an opportunity critical to rethink globalization and the rules that supported it. You have to take advantage of it.” If this institutional reconstruction is successful – he believes – the world can expect a better future.
2.
What characterizes all of these authors is an inability to think of capitalism as a social system formed by structuring social relations – which are also contradictory and endowed with tending laws of development. As we know, this system reproduces itself based on the dynamics specific to a production relationship, which must have an enormous determining force: the capital relationship. Because, in addition to being demanding and even imperative in its own context, it also shapes social relations beyond economic relations.
This relationship as a production relationship, by requiring the subordination of social work to the immediate valorization of value and the infinite progression of the accumulation of value, conditions and shapes institutions in general; Furthermore, it prevails, implicitly, in the formulations of economic policy. The future of the system, thus constituted, obeys the laws of accumulation (increasing demand for labor power, relative reduction of variable capital in relation to constant capital, existence of an industrial reserve army, etc.) and the tendency law of falling rate of profit, as well as its counter-trends.
Therefore, political ideas and the political practices that derive from them are always conditioned by the imperatives that arise from the system's reproduction logic. They are supporting even when they are innovative, unless they are truly revolutionary, denying and subverting this logic. Otherwise, if the system of capital relations continues to exist, wars, for example, cannot be avoided as they result from the imperialist nature of capital itself.
In this sense, neoliberalism, whether as an ideology or as a normativity, even though it arose in the minds of right-wing economists and technocrats subservient to the demands of capital accumulation, in fact came as a response to the crisis of the 1970s, when the rate of profit in the central countries, when the power of the unions was then strong to maintain real wages, when stagflation broke out, when, as a result, Keynesian governance was exhausted, when, moreover, the second wave globalization of capitalism required a new impulse , through the globalization of finance and the export of labor-intensive industries from the center to its surroundings, especially to Asia.
Now, capitalism now dominated by finance, which had expanded for around thirty years under neoliberal governance, suffered a strong shock like the 2008 crisis which, as we know, was of great magnitude. It was then saved from a major collapse through the socialization of losses, which was put into practice by the governments and central banks of central countries.
This crisis also marks the end of the third wave of globalization and the beginning of a period in which fractures appear in the international economic order, in which protectionism reappears and tendencies towards multipolarity emerge. A persistent conflict between the USA and China, between a hegemonic bloc and a contesting bloc, will now further shake up an uneasy course of history, which was already under great threat from the constantly worsening climate problem.
3.
Taking the capitalist economy in the USA as a reference, the history of the development of the system as a whole, as it was configured in the post-Second World War, is told in broad strokes by the following figure. Here is a graph of the evolution of the profit rate over the last eight decades. After the end of the golden era, which lasted from the end of World War II until the turn of the 1960s, a period of crisis occurred that lasted until the end of the 1970s or slightly longer.
In the 1980s, the neoliberal recovery took place, which ended around the turn of the millennium; From now on, the period of the long depression begins, which has not yet ended and is not about to end. We therefore have a structural crisis, which cannot be reversed because capitalist states no longer accept that the crisis destroys a large part of the accumulated capital. Because, without this destruction, required by the very logic of capitalist accumulation, the profit rate does not recover and stagnation persists, it becomes not only a current reality, but also prefigures the future of capitalism.
Now, no one answered the question asked better. Project syndicate and which motivates the writing of this article than Nancy Fraser, professor of philosophy at “New School” from New York, when she reflected on the crisis of neoliberalism. She may have been wrong to point out that it had ended, but she was right to present the descendant as progressive and the ascendant as reactionary neoliberalism.
Before re-elaborating her thesis just a little, it is necessary to present in broad strokes what, according to her, these two governances consist of, the incumbent and its emerging successor. Therefore, even though they differ as political intentions, they have the same objective of keeping the system of capital relations functioning, preventing its contradictions from being exposed as open conflicts, which can generate revolts and revolutions, threatening it with destruction. possible.
Progressive neoliberalism is historically based on a double movement: on the one hand, it seeks to reinvigorate the relations of production that form the structural basis of capitalism, boosting competition, competitive individualism, the privatization of hitherto public companies, financialization, etc. ., on the other, seeks to promote a detente of social relations at the level of the superstructure, welcoming feminism, anti-racism, multiculturalism, the rights of sexual minorities, etc. “Progressive neoliberalism” – states Nancy Fraser – “mixed truncated ideals of emancipation with lethal forms of mercantile reification”. Progressive movements, by associating themselves with neoliberalism – he adds – lent their prestige and charisma to it, thus contributing to its acceptance and legitimization and, thus, to the excessive expansion of the commodity form.
In view of the economic effects of this neoliberal advance on the capitalist economies of many countries, such as deindustrialization, reprimarization, precariousness of the workforce, stagnation of real wages, etc., given the disintegrating repercussions of these changes in the world of life of the subaltern classes, it came a political response through far-right movements, often associated with conservative religious movements. The combination of a near-stagnant economy, precarious living conditions and the clouding of hope creates a favorable situation for the advent of reactionary nostalgia.
As dissatisfaction is captured by right-wing extremist discourses, “electoral riots” begin to occur as a way of rejecting traditional “political elites”. Behold, neoliberal management had acted to create an adverse situation for a large part of the subaltern classes. Corruption as a crime, endemic to the commercialized political class, then begins to be used to degrade politics itself in general.
A diffuse environment of social disintegration then allows the rise of “savior leaders”. Now, it is necessary to see that these falsely contestatory movements did not come to reject neoliberalism as such, but to direct the revolt only against traditional social and political forms, which had made a tacit alliance with progressivism. On the contrary, in order to obtain support from capitalists, they promise and practice a radicalization of neoliberalism as a way of boosting capital accumulation.
Neoliberal ideology blames its eventual failure on the individual himself. However, it does not fail to create increasing difficulties for isolated individuals who work in it to maintain their own lives. Now, even those who have become entrepreneurs of themselves need an understanding of the world. Thus, whenever the social situation becomes obscurely adverse – possibly catastrophic – for such individualized social beings, they become susceptible to conspiracy theories, tending to join extremist movements. Here they present immediate, deceptive, but apparently heroic solutions to existing problems.
In short, in this way, taking into account the particularities of the historical situation, reactionary neoliberalisms are now coming to oppose existing modalities of progressive neoliberalism. As these movements share political paranoia with the old fascism, using it to take a leading role in the political process, they are mistakenly called neofascisms. Analogical reasoning here produces only bad theory.
In any case, it is necessary to conclude that after neoliberalism comes neoliberalism, now in new guises. A seesaw between the different forms of neoliberalism may occur; In any case, adaptation to the ongoing process of deglobalization will be mandatory. Now, identitarian and xenophobic nationalism is already on the agenda of rising right-wing extremist movements. However, even if reactionary neoliberalism predominates here and there, even if it persists as an alternative, progressive neoliberalism should not disappear. As we know, even social democracy, although degraded, has not yet become just history.
Given that the situation of near-stagnation has structural causes and that it currently encompasses a large part of capitalist economies, given that the systemic reversal of this situation has become politically unacceptable – as it would lead to a collapse of the system itself –, no form of bourgeois governance , whether overt or disguised, can now be persistently successful.
Therefore, we must expect the occurrence of an ups and downs of more or less extremist political movements in the future. In the meantime, a renewal of left-wing radicalism may also occur. With or without it, it is expected that an inability to consolidate a lasting political situation in the government of capitalist countries will prevail. In any case, people are now and from now on witnessing the decline of capitalism.
* Eleutério FS Prado He is a full and senior professor in the Department of Economics at USP. Author, among other books, of Capitalism in the 21st century: sunset through catastrophic events (CEFA Editorial). [https://amzn.to/46s6HjE]
the earth is round there is thanks to our readers and supporters.
Help us keep this idea going.
CONTRIBUTE
