The great winner of neoliberalism

Image: Evan Velez Saxer
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By CRISTIANO ADDARIO DE ABREU*

What won the neoliberal era was the country that did not follow suit: but carried out liberalization in a planned and selective manner, under the political hegemony of the Chinese CP

Giovanni Arrighi, in The Long Twentieth Century,[I] argues that historical capitalism develops in systemic cycles of accumulation, based on a state/territorial/security basis on the one hand, and an economic/financial basis on the other. In a complementarity between power and money (two words that are in the subtitle of the book), which were embodied in capitalism in the form of States and markets: the two sides of the historical dance of the structuring of capitalism.

The greater the sums, the interests, the wealth involved in commercial activities, the greater the security muscles of the States that care for such interests will have to be: whether in legal/political forms, or in military/police forms.

The invoked systemic cycles of accumulation of historical capitalism usually have the state and market axes of this marriage in the same locus. The exception was the first systemic cycle of accumulation, in which the state agent was geographically distant from the mercantile agent: it was what Giovanni Arrighi called the Genoese cycle of accumulation, the first cycle of historical capitalism, in which the mercantile agents were the Genoese (city originating from Christopher Columbus), and the state agents the Iberian monarchies of Portugal and Spain.

Arrighi divides systemic cycles into: (i) Genoese cycle[ii] (1648th century-XNUMX); (ii) Dutch cycle[iii] (from the 30 Years' Wars, 1618-1648, to the Napoleonic Wars); (iii) 3) British cycle[iv] (from 1815, and the Congress of Vienna, until the two World Wars, from 1914-1918/1939-1945); (iv) American cycle[v] (from Bretton Woods since 1944- until…???).

Since the end of the Bretton Woods regime (1971/1973), we have experienced an accelerated process of financialization of North American interests, or what Giovanni Arrighi would call the MD (commodity-money) phase, of greater liquidity of capitalist accumulation centered in the USA. It was from the 1970s onwards that the USA boosted its financial sector, under neoliberal ideology, while its bourgeoisie, to weaken its unions, began to shift its industrial sector to other countries, especially China, recognized by President Richard Nixon, between 1971/1973, as the state agent to occupy the seat of permanent member of the UN Security Council, until then held by Taiwan. This process of recognition of communist China by the USA was concomitant with the end of the Bretton Woods gold standard

With this opening for a shift of the North American productive sector towards China, as well as the definitive recognition of the Chinese State, under the communist party, as a political agent in all the largest planetary bodies, the start of the dragon leap was given. Chinese towards the productive and technological vanguards of the XNUMXst century.

But the Wizard of Oz of the West, in governments, markets and universities, did not see the Asian dragon taking off. Blind to historical reality, contaminated by the biased ideology they propagated, they ended up believing the lies they preached. Among prejudices and ignorance against Asians, seen as “mechanical copyists”, with no capacity for innovation. Along with the neoliberal project of reducing production costs to increase profits, and offering cheaper products to impoverished Americans, with fewer and fewer industrial jobs available, the US elite believed in the dogma that maximizing profits is always the best option... In order to benefit incredibly, like the 1% of society, while destroying the solidity of the industrial bases of, until the 1980s, the historic economic supremacism of the USA.

The USA, and its neoliberal ideology, opened the doors of a historic opportunity for Beijing, and the elite of the Chinese communist party climbed without blinking on this saddled horse that passed in front of them. As Deng Xiaoping said: “getting rich is glorious”.

Neoliberal ideology blind to history

But this entire historical process was narrated by the Western media as a “victory” of neoliberalism, a path imposed and defended as the only one, Chapada Diamantina (there is no alternatives), with levels of ideological obsession daring to invoke an “end of history”: the dogmatic idolatry of neoliberalism, with its historical denial and deductivist obsession with liberal theories and dogmas (“the perfect efficiency of markets”, the “superiority of choices of lesser costs”, the obsessive “maximization of profits as the only lighthouse”…) all this repeated since 1980 has become an economic neo-scholasticism.

Just like in the century. XNUMXth century scholastic philosophy, repeating a petrified Aristotelianism in the obsolete universities of Europe, replicated as dogmas in professorships, blind to the advances of reality, while the Enlightenment exploded in the growing publications of the real world of the Age of Enlightenment, neoliberalism (gerontoliberalism[vi]) became the fin de siècle XX a neo-scholastic dogma, denying history, reality, and removing its inductivist dimension from science. Neoliberalism was anti-science, ultra ideological, with its historical denialism.

Because drunk with the fall of the Berlin Wall, the post-Bretton Woods institutions (IMF and World Bank) imposed the only way out of neoliberalism across the world. But not over the whole world... Latin America was in fact kidnapped by this colonial ideology, with Brazil forgetting the JK tripod (state-owned, multinational, national private companies) that was the structural basis of the period of greatest industrial development in Brazilian history . Thus, Mexico, Brazil, not to mention Argentina, we were captured by the anti-industrial doctrine of neoliberalism, with the submission of the productive destinies of these countries to the interests of international private oligopolies, Orwellian-called “markets”.

But the big winner of neoliberalism was not any country that followed this neocolonial cake recipe, but it was the state governed by a communist party: the People's Republic of China. And this country did not blindly follow neoliberalism: far from it. The Chinese opening, which began in 1978, was the opening of China to multinationals, but with agreed technological transfer, apart from reverse engineering and piracy, carried out outside the spreadsheets... And, obviously, Chinese state-owned companies were not privatized, but were modernized and expanded, while non-strategic economic areas were liberalized for private exploitation by an internal bourgeoisie.

In other words: the success of the Chinese “opening” was not the IMF's recipe, it was not neoliberal, but it was an adaptation, on a Chinese scale, of our well-known JK tripod. With industrial, demographic, technological and military planning.

What won the neoliberal Era was the country that did not follow it: but carried out liberalization (in relation to the economic statism previously practiced there) in a planned and selective manner, under the political hegemony of the Communist Party of China: China was the winner.

States and markets: power and wealth

Only in a schizophrenic way does the neoliberal discourse demonize the States, because the markets actually like a strong State giving them protection and guarantees. The melancholic example of neoliberal Brazil shows us which is the most dynamic sector of the economy today: agriculture. Because of comparative advantages??? No, but because of EMBRAPA: the Brazilian state-owned agribusiness company making investments in agricultural science and technologies that, obviously, entrepreneurs in the sector do not make at all. The agricultural sector in Brazil prospers because it has a state-owned company directing investments in long-term technologies, which the private sector would not even dream of implementing.

Because on a planetary scale, it was precisely in China, with its central state carrying out five-year planning (like JK), that productive investments came together, generating a global productivist granary. Generating the question of this text: would we be entering a systemic cycle of Chinese accumulation of world historical capitalism???

Giovanni Arrighi indicates his suspicion in this direction, foreseeing the financialization of the USA and the industrial rise of East Asia and China.

What stands out here is not even discussing whether or not there will be a Chinese cycle, as it already occurs, but highlighting the militarist trap that is emerging along this path. Because 2023 will celebrate the 10th anniversary of the Chinese project Belt and Road Initiative (BRI) with 155 countries participating in this Chinese productive leverage on a global scale. While on the other side, the world has been experiencing the trauma of the war in Ukraine since February 2022, and in October 2023 the monster of war also raises its horns in Israel and Palestine.

Following Machiavelli on power as a combination of consent and coercion, with coercion exercised by force and consent by moral leadership for strategic agreement, it is obvious that NATO's escalation of the use of force is a sign of a lack of planetary agreement with the narrative and project of the North Atlantic: it is a sign of a crisis in American hegemony. The growing Chinese productive detachment from the North American financial center, with China having its own digital platforms (linked to the Chinese state, just as the American ones are linked to the US government), and proving that China has completed its catch up productive, seems to feed a chronic disarray in the global governance of the Modern World System in this XNUMXst century.

In the current US/China gap, there is a replication on an expanded and critical scale of a debate between productivism and militarism that already took place in the XNUMXth century. XIX, among authors of American System,[vii] such as Daniel Raymond and Henry Carey, in which these authors saw the USA as a rising productivist force and England as a conservative militarist force. Today China stands as the greatest industrial force, and the USA as the greatest military force. Indicating a breakdown in systemic governance, which projects us into a transition crisis.

In the Arriguian model, transitions in systemic cycles are made through wars. Chronic wars usually occur during such transitions: the 30 Years' Wars (1618-1648), the Napoleonic Wars (1792-1815), and the I and II World Wars (from 1914 to 1945). After Hiroshima the possibility of direct war between nuclear powers seemed to have been excluded, but even this military abyss seems to be approaching in this historical period, as we have entered a period of open confrontation, typical of a systemic transition crisis.

China-Russia alliance

But the curious thing is that a marriage between political/economic agents was on the horizon, analogous to that of the first Arriguian systemic cycle, when Iberian political agents gave military security to Genoese capitalist agents. Today the Russians seem to fulfill the military role of the Iberian princes, while the Chinese would fulfill the productive capitalist role of the Genoese.

For socialists and utopians, this could be the sign of the end of the Era of historical capitalism: this system would have begun with a marriage between Iberian military forces and Genoese capitalist forces, and would move towards its end with a similar marriage between Russians and Chinese, balancing a diarchic(Russian-Sino) cycle of Chinese capitalist accumulation, towards overcoming capitalism.

However, being less optimistic, we are experiencing a crisis of systemic transition, and it seems that instead of a systemic overcoming, we will simply experience a chronic crisis without a definitive solution in a prolonged way, due to the difficulty of direct war (as was the case in other transitions) for presence of nuclear weapons. A crisis dating back to 1970, but which certainly reached another level of military danger in the third decade of the century. XXI. A chronic crisis, regrettable for the world, but which for Brazil can be beneficial, if we have political centrality and take advantage of both sides in dispute, as Vargas did between the USA and Germany in the last systemic transition (Brazil is a food power and energy, rich in mineral resources, and is far from the epicenters of conflicts, centered in Eurasia).

In this ongoing dispute, China does not want to carry the military burden alone, as the USSR did in the 5th century. XX. The USA seeks to create a new “iron curtain”, and if they find themselves losing the technological race, they will go on the attack, as they are already doing: boycotts against Huawei, against Chinese 6G and XNUMXG technology, bans by the Joe Biden government of US investments throughout the high technology area in China, a quasi-military operation against Chinese semiconductors... The US seeks the “containment” of China[viii]. The technological war is already burning. But the US also seeks to throw China into an arms race, which will delay the social gains from the economic and technological advances experienced by the Asian country. Thus causing what they declare they do: containing the Chinese advance on all fronts.

Therefore, China leads the j military/economic with the Russians, in an “unlimited” partnership, to articulate a greater capacity for resistance to the US policy of containment against China. The fight will be long, and the China/Russia strategic partnership is a strategy of resistance. It remains to be seen how the remaining BRICS will balance themselves in this conflict that promises a lot of blood and a lot of profit to those who position themselves strategically.

BRICS? Is there really BRICS?

In any case, we will see how the forum of economic goodwill, which is the BRICS, an organization under construction, undefined and inorganic, will react to the growth of the wave of wars. Remembering that the BRICS do not have any military agreement... Or saying directly: the BRICS with the cards to play are China and Russia. And both do have a military partnership. It remains to be seen how the other members of the club will react when, hypothetically, the USA invades Iran… for example. We will see the limits of goodwill and collaboration when the cannons sound closer.

Returning to Giovanni Arrighi, in his governance system of systemic cycles there is a hegemonic state/economic power at the center, with a circle of satellites around it: central countries, semi-peripheral countries, and peripheral countries. Brazil is on the middle floor, and has a tradition of soft power, and defense of multilateralism, which empowers it as a mediator in this era of conflicts that is emerging. Thus, Brazil's position in the BRICS is very promising. As has already been argued here: Brazil needs to return to Getúlio Vargas' strategy in the systemic crisis between the USA and Germany in the XNUMXth century, and seek maximum independence in the XNUMXst century, to make the most of the conflicts between the USA and China.

However, there is a fanatical pro-Israel and pro-USA stance on the current extreme right, actively working to prevent Brazil from taking advantage of its strategic position in this historic period, in which many advantages and the consolidation of a developmental leap can be achieved by Brazil. It can be achieved as long as there is a minimum national political pact. Something that, given what we see at the crawling level of the National Congress, in the failure of a minimum political agreement, in the complete lack of any collective sense from Brazil's economic “elite”… unfortunately, appears unlikely.

Everything to the right of the PT works against any minimally progressive national project. And these forces are consolidated to prevent Brazil from doing in the XNUMXst century, on a much larger scale, what Vargas achieved during the confrontation between the USA and Germany.

Conclusion

Recalling the end of Hegel's history, who defended humanity achieving balance between forces, with the universalization of liberalism, today we can see in the North Atlantic the desire for a new cold war, and a hot one too, while paradoxically President Putin was the last to call for a free trade area “from Vladivostok to Lisbon”. Indeed, the end of history, as well as the end of capitalism, would only come with overcoming the control of the military-industrial complex over governments (thus, through the universal nationalization of these complexes), and with the search for a Kantian perpetual Peace: with the balance of power and strength between nations. To “arrive at that equality of courage and strength which, inspiring mutual fear, constitutes the only factor capable of intimidating the injustice of nations (…).”[ix]

It will be seen whether such a military balance will be achieved between peoples towards universal peace and prosperity, whether we will find perpetual peace under a balance of deterrent nuclear spread, or under a nuclear apocalypse even.[X] But most likely we will live in perpetual war.

*Cristiano Addario de Abreu He has a PhD in economic history from USP.

Notes


[I] Arrighi, Giovanni. The long XNUMXth century: money, power and the origins of our time. Editora Unesp, 1996.

[ii] Idem p. 111

[iii] Idem p. 130

[iv] Idem p. 163

[v] Idem p. 277

[vi] https://gmarx.fflch.usp.br/boletim-ano2-09

[vii] https://www.teses.usp.br/teses/disponiveis/8/8137/tde-11082023-125212/pt-br.php “Decantatore 257” (Presenze grafiche).

[viii] https://jornal.usp.br/artigos/a-politica-externa-dos-eua-para-a-china/

[ix] Smith, Adam. The wealth of nations. New Frontier, 2023.

[X] https://karaganov.ru/en/how-to-prevent-a-third-world-war-2/


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