Cheap-Labor Conservative Mythology
A big change ocurred in the world order during the 1960's owing to the decline of US dominance and our resulting inability to continue as the entire planet's banker. This, in turn, led to pressure from corporations who were experiencing sharply lower profits. Consequently, they attacked social welfare gains; now EVERYTHING had to go to the greedy rich. In 1971, Richard Nixon dismantled FDR's Bretton Woods system, expanding the supply of unregulated capital in the world tremendously. The WORST period of American economics is the last 25 years, following the rise of Ronald Ray-Gun. Anyone out there think this might simply be an accident?
John Maynard Keynes himself warned "that nothing less than the democratic experiment in self-government was endangered by the threat of global financial market forces." THIS is the historical reality that all cheap-labor conservatives will deny, and lie about and obfuscate with their last breath...but the numbers do not lie. Their vaunted "free market' is a monumental, gilt-edged, fraud. Stay after school and write that 100 times on the blackboard.
I will now proceed to knock the props out from under their neoliberal fictions. First, however, we have to understand exactly what they are and where they came from. To put it all into proper context, we have to remember that "The Great Transformation" of Karl Polanyi was published in 1944. The thesis upon which he based his most important and influential work can be reduced to these four points:
- 1. The dominance of the market over society is an artificial creation of the 19th century.
- 2. The origins of the ensuing cataclysm lay in the unrealistic endeavor of setting up a self-regulating market system. (He called it "utopian.")
- 3. Such a free market system could not exist for any length of time without physically destroying man and turning his surroundings into
a wilderness.
- 4. Ultimate destruction was delayed only by the organization of labor into unions and similar social reforms.
Essentially, Polanyi makes the argument that, prior to events which coalesced around the Industrial Revolution, people and governments regarded the nature of 'the market' as merely incidental to economic life; social interactions took much greater precedence than mere financial considerations. The concept of moving from a state-regulated market to a self-regulating market, then, is the "Great Transformation" of his title.
As a reaction to this far-sighted book, the poisonous weed of neoliberalism took root at the University of Chicago. (Oddly enough, Leo Strauss was there at about the same time, channeling Machiavelli and bringing neoconservatism into the world. That joint must have been a regular hotbed of rightwad insanity after the war, huh?) An economic philosopher named Freidrich von Hayek and his students, among them Milton Friedman, took his theories of reconstituted liberalism--hence NEO-liberalism--and attempted to give them a patina of intellectual legitimacy. These are the very precepts that Polanyi so roundly denounced...of course. Same sour old wine in a shiny new bottle.
Riding in over the horizon in support of this guesswork and cock-eyed optimism, came the movers and shakers of the private economy, mainly corporate cashsuckers with the means to dominate policy formation as well as the structuring of thought and opinion. At once, they realized the possibilities of taking this half-baked hogwash and applying it for their own benefit...but it lingered in limbo as the country experienced the aforementioned era of unbridled prosperity after the war.
In 1979, Margaret Thatcher, a hard-bitten social Darwinist, came to power as Prime Minister of England and initiated the neoliberal revolution there. Ronald Ray-Gun "October Surprised" the presidency away from Jimmy Carter in 1980 on this side of the Atlantic. Urged on by Big Business, both of them brought what came to be known as the Washington Consensus to bear upon vulnerable Third World countries, imposing financial slavery, increasing poverty among their populations and imposing stringent external controls through the twin institutions of the International Monetary Fund and the World Bank....not what Roosevelt had intended AT ALL.
The basic rules are to liberalize, or open up, all trade and finance, let markets set price, end inflation and privatize as much as possible. (You may notice this is a blueprint for the radical right's agenda even to this very day.) Various controls designated as "barriers" to free trade like tariffs, laws and capital investment restrictions are to be uniformly done away with--the "de-regulation" refrain that cheap-labor proponents keep singing--and allow the huge megaconglomerates to rake in as much as they can beg, borrow or steal. Ostensibly, this allows the free market to respond unhindered to market demands.
There's only one problem: This doesn't work. It's a crock.
There are simple facts that all its advocates, the ones who get so misty-eyed and worshipful about this claptrap, flat-out refuse to acknowledge: This free market of theirs is a pitiless, merciless jungle that Thomas Hobbes called "war of all against all." Its natural tendency is NOT toward balance and equality, but monopoly and cartels. With nothing but greed and naked self-interest pulling the strings, this monstrosity offers consumers such delights as bid-rigging, overcharging, price-fixing and exploitation as it spirals toward less and less freedom. This is the reason that a measure of government regulation--anti-trust laws, to cite one obvious example--are not only prudent but absolutely necessary! But, then, they've never been known to let the Real World impinge on their golden ideology...
Further, as
Ernest Partridge so deftly points out, the transactions of giant corporations inevitably affect not just the parties of those transactions--buyers and sellers--but unconsenting third parties whom he calls stakeholders. These could be folks residing downstream from a polluting industry or children whose impressionable young minds are negatively influenced by mass marketing.
Those Wal-Mart Republicans would have you believe that man is an economic creature, always and forever in competition with his fellow creatures. This repugnant balderdash is wholly refuted by the evolutionary evidence of hunter-gatherer societies which bound themselves together for "the common good." Or, as our own Constitution says, 'the general welfare." Back in 1987, Margaret Thatcher told Women's Own, a British magazine, "There's no such thing as Society...only individual man and women and...families." This is the lie at the center of their entire lop-sided worldview: We are, each and every one of us, alone and battling each other tooth and nail for some sort of nebulous economic supremacy, hacking as much as we can from the fixed amount of wealth that is available. Or so they say. This, my friends, is a stupid, simplistic notion which has ZERO basis in actuality on planet Earth.
You'd think those who embrace this inimical worldview would be able to point to at least one success story. Well...no, they can't. With decades of evidence now in, not one Third World nation in this hemisphere--NOT ONE!--has enjoyed the promised fruits of plenty. Chile, which I mentioned earlier, has survived Allende and Pinochet, but not the intervention of the IMF. It's economy is, so to speak, completely "pauperized." Haiti, once one of the world's richest colonial prizes under France, may scarcely be habitable in the not-too-distant future. American puppet Aristide was compelled to direct the politics of his government to the needs of "Civil Society, especially the private sector, both national and foreign"...which only means that US investors are designated to be at the core of Haitian civil society, along with wealthy Haitians who backed the military coup...but not the peasants and multitudinous slum dwellers. And now even he's gone.
Argentina's economy completely collapsed in 2001, leaving widespread sickness and poverty in its wake. Bolivia very nearly had its water purification privatized out from under its feet; it became ILLEGAL to collect rainwater for a time there. Brazil, America's darling since 1945, had two-thirds of its population left without sufficient food for normal physical activity by the time the IMF eased up and are only now recovering after throwing off the yoke of neoliberalist policy completely. The most recent example is Mexico, praised as a prize student of the rules of the Washington Consensus. Poverty there increased almost as fast as the number of billionaires, foreign capital flowed in...for exploitation of cheap labor kept under control by the brutal "democracy. This house of cards was obliterated in 1994 and to this day about half of the population cannot obtain minimum food requirements. It all depends on your definition of success, of course: The local elite in each and every case, along with foreign--primarily US--investors, have all done swimmingly; it's just those pesky populations who haven't managed to avoid the pre-meditated fiscal abuse.