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Hyperneoliberalism

“…the coronavirus crisis – even more so in its second phase – is all about basic inequalities, and the kind of questions of work, housing and poverty that deep crises always bring to the surface. In other words, Covid-19 is a class issue.”

John Harris, The Guardian, 18 Oct ’20

I felt a sudden jolt of optimism when I saw the words ‘Covid-19’ and ‘class’ in a Guardian headline. I thought for a second that John Harris – one of the paper’s most class conscious journalists, and whose work on exploring the motivations of Brexit voters in post-industrial England and Wales was laudable – was perhaps, finally, articulating a left-wing skepticism about the coronavirus ‘pandemic’. But while Harris recognises that the crisis has exacerbated inequality, while he agrees with Anjana Ahuja writing in the Financial Times that the crisis “has broadly separated us into the exposed poor and the shielded rich”, he does not consider that the near-universal response to the so-called pandemic – lockdowns, social distancing, travel restrictions, bans on gatherings, the shuttering of public buildings and services, suspension of all but emergency medical procedures – may have always been intended to produce just such an effect.

Owen Jones has adopted a similar tack, writing of the lack of financial support for Northern cities in lockdown and the austerity that will likely follow:

“As Manchester’s bartenders, bookies and taxi drivers are about to discover, the Conservatives will respond to this pandemic as they do to every crisis: with cold-blooded class warfare.”

Owen Jones, The Guardian, 22 Oct ’20

Jones understands the role of crisis in class warfare but again, he does not consider that the pandemic itself – or at least the idea that there is a deadly pandemic in progress which needs to be eradicated before the masses are allowed to work and socialise again – is a necessary condition for this class warfare. Until we challenge the state of emergency, politics itself is in a total state of paralysis.

First, a little recap. So far the Covid-19 has claimed the lives of 1.13 million people (that’s if we ignore the fact that, in many countries’ statistics, deaths of people who have previously tested positive for Sars-Cov-2 are counted as ‘covid deaths’ regardless of whether Covid-19 was the actual cause of death), most of whom were over 80 years old with at least one serious underlying health condition. That sounds like a huge death toll when presented in absolute terms, as it always is in news headlines. But in relative terms, it’s less than a third of the number of people estimated to die, on average, from lower respiratory tract infections around the world each year and, according to United Nations’ figures, about an eighth of the number of people who die globally from hunger. Yes, that’s right. Hunger. (If only there were an unprecedented race among the world’s pharmaceutical companies – the top ten of whom have a combined annual revenue of $371 billion – to find some sort of cure for hunger.)

Does this outbreak really require the complete overhaul of existing social relations in favour of an even more bland, even more alienated, even more isolated and even more online-dependent model of life than we were already suffering through under late capitalism? Whether they believe the grossly exaggerated claims about the deadliness of Covid-19 or not, the government officials pushing the restrictions, especially those who were gung ho for austerity (by 2017, cuts to health and social care spending enacted since 2010 had been linked to 120,000 excess deaths in England alone), are clearly not motivated by saving lives or protecting the NHS. To my knowledge, no thoroughgoing analysis of the impact of lockdowns on mortality rates was ever conducted by the government prior to the restrictions coming into force. That only came later, long after the populace had been shocked into a confused acquiescence by weeks of 24-7 fear porn.

Is the Covid crisis then, a Tory plot? Of course not. Remember that Johnson et al were proponents of a Sweden-style ‘herd immunity’ strategy before that report from Imperial College London predicting half a million deaths without lockdowns was pumped up by the click-hungry media. And most of the ‘left’ seems to be on board with the destroy-the-town-to-save-it approach. To understand this moment in history, we need an historical perspective. One which looks beyond simplistic and outdated left-right political oppositions peddled by the mainstream media to trace the causal chain giving rise to this strange new form of totalitarianism which, I will argue, is a logical development of neoliberal capitalism. It might even be neoliberalism’s logical end point.

But to get there, I first have to take you back to 1948.

The end of the second world war was a delicate moment for capitalism. In the huge mobilisations against Nazism, the masses had had a taste of socialism, and saw that it was good. Thousands of working-age men were returning from battlefronts around the world, having been prepared to give up their lives for their fellow beings, while the women who had joined the workforce in their absence had demonstrated that equality was not only desirable but inevitable. The return to the depredations of pre-war laissez-faire capitalism, with its mass unemployment, horrific working conditions and constant threat of life-destroying illness or injury, was unthinkable. However, the prospect of a newly-invigorated, inspired and militant working class was a threat to capital, which needed a way to meet these emergent desires while maintaining a firm grip on the administration of government. The result was social democracy: a form of government which would reign in the worst excesses of capitalism and, through higher taxes for the capitalists, provide a social safety net for workers in the form of free health and social care, subsidised housing, education and workers compensation. This was seen as a huge victory for the socialists, and the labour movement, with the trade unions becoming real centres of power which could enter into collective bargaining with large employers on an equal footing.

Well, that’s one way of looking at it. Another reading of the birth of social democracy is that capital had found its new modus operandi in the manufacture and sale of mass-produced consumer goods, but before that mode could come to full fruition, two conditions needed to met. Firstly, it needed to create a huge number of consumers to buy all the fancy new manufactured goods that were tumbling off the production lines. Paying workers more would build that consumer base, but painfully slowly. Secondly, the fragmented nature of capital following the war put it in no position to build the infrastructure (roads, railways, telecommunications etc) required for a consumer culture. Achieving these aims through governments would not only be much faster, you could also get the workers to pay a large portion of the costs through the new and higher taxes that everyone would be subject to. Plus, the workers who might have had their heads turned by Soviet-style communism during the war would be sufficiently appeased that they wouldn’t become a revolutionary force.

Whatever way you look at it, the Western world (or First World, as it was known at the time) entered the thirty-odd year period known by economists as Keynesianism, after John Maynard Keynes who provided the economic rationale for governments to borrow and spend freely with the goal of eliminating unemployment. And it all went pretty well, for a while. Living standards rose, wages increased steadily, public services got generally better, mortality rates fell, longevity increased, and culture thrived because artists could live on the dole. The new economic settlement between workers and capitalists wasn’t perfect – workers paid the price in long hours and boring, repetitive work, while capitalists chafed at the high rates of tax – but it worked. Until it didn’t.

In the seventies, the wheels came off the Keynesian wagon. Oil suddenly got very expensive, increasing the costs of production and slowing economic growth amid persistently high inflation. Capital has no loyalty. In a crisis, it will happily step over its former friends in search of an escape route. Its escape route was neoliberalism. Or, to be more precise, globalised financial capitalism. The formerly essential role of government was quickly disavowed by the likes of Thatcher and Reagan, who greedily set about dismembering it for the benefit of finance – public housing was privatised, utilities were sold off to create monopolies, unions were smashed, entire industries destroyed practically overnight. The jobs of previously well-paid blue collar workers were ‘offshored’ to places where people could be paid a tiny fraction of the wages to work in 19th century conditions, while careers at home were reoriented towards the services industries, with bankers taking their place at the top of the heap as newly-crowned masters of the universe.

Whereas the economies of the West had previously produced all manner of manufactured goods, they now produced only one major commodity: debt. Whereas Keynes and his ilk had demonised the speculators and rent-seekers of finance capital, the now-dominant economic orthodoxy demonised welfare beneficiaries, miners and public-sector workers. Neoliberalism represented the reassertion of the power of the capitalist class through full-spectrum dominance of political, economic and cultural life. In the words of Thatcher, “there is no alternative”.

From the outset, neoliberalism was a brutal regime of torture, violence and repression. Its earliest triumph was installing Augusto Pinochet as dictator in Chile following the CIA-backed coup which ousted socialist president Salvador Allende in 1973. The country was immediately subjected to the economic shock therapy that would become neoliberalism’s calling card: the public sector was gutted, with public assets sold off at fire-sale prices to politically connected ‘entrepreneurs’; spending on infrastructure, housing, education and social security was cut dramatically; the financial sector was liberated from regulation and trade unions were banned. Dissent was quelled by thousands of executions and forced disappearances, torture and internment. It was a formula that would be repeated throughout Latin America in the seventies and eighties and then , after the fall of communism, throughout the post-Soviet countries in the nineties. The neoliberal institutions of the IMF and the World Bank descended on the Eastern Bloc, demanding the destruction of domestic industry, financial deregulation and massive government spending cuts in return for loans denominated in US dollars.

“By 1998, more than 80 percent of Russian farms had gone bankrupt, and roughly seventy thousand state factories had closed, creating an epidemic of unemployment. In 1989, before shock therapy, 2 million people in the Russian Federation were living in poverty, on less than $4 a day. By the time the shock therapists had administered their ‘bitter medicine’ in the mid-nineties, 74 million Russians were living below the poverty line, according to the World Bank. That means that Russia’s ‘economic reforms’ can claim credit for the impoverishment of 72 million people in only eight years. By 1996, 25 percent of Russians – almost 37 million people – lived in poverty described as ‘desperate.’”

Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism

In the US and the UK, the neoliberal project was brought to power by ‘right wing’ politicians but found its total victory in the policies of ‘left wing’ governments. Clinton’s New Democrats and Blair’s New Labour turned away from their working class bases to embrace free market ideology, neuter the unions, accelerate privatisation and deregulate financial capital. By 2002, Thatcher saw Tony Blair and New Labour as her greatest achievement.

The transatlantic ‘New Left’ were also the chief architects and technicians of the new political art of ‘spin’. The executive branch retreated behind an army of public relations professionals and media gurus and ‘reality management’ became a central role of government. Absent an ideological opponent in the form of communism, capital had free reign to bend historical narratives, and newly emerging ones, to its own ends. The link between Saddam Hussein’s Iraq and the 2001 terrorist attacks on the World Trade Center and Pentagon didn’t need to contain a grain of truth in order to be widely accepted by traumatised Americans subjected to 24-hour rolling news. It just needed constant repetition. Likewise the later claims about Hussein’s weapons of mass destruction and the British.

And I think there’s an important distinction to made here, between ‘accept’ and ‘believe’, when it comes to official claims about the nature of reality. Millions accepted the need for the 2003 invasion of Iraq, but did anyone really believe it? I suppose Dick Cheney’s needs were very different to most people’s:

“…from the point of view of capital, the Iraq war and its consequences were not some blunder. They were an opportunity to trial a new form of (post)colonialism, in which states of conflict open up a temporary autonomous zone for capital accumulation, and plunder can continue without the irksome duties involved in setting up and running a state.”

Mark Fisher, Cybergothic vs. Steampunk, Urbanomic

The IMF and World Bank had been at work in Egypt, Tunisia, Libya and Syria, providing loans in return for free-market reforms which impoverished millions. In Iraq, what couldn’t be achieved by financial and political ends would be achieved through force. In the first month under the post-invasion provisional government in Iraq, 200 state-owned companies were privatised, the banking sector was restructured and corporation tax was reduced from 45 to 15 per cent, while foreign firms were allowed to keep all of their Iraqi earnings. All amid much fraud, embezzlement, under-delivery and overcharging on the part of private contractors and consultancies. Neoliberalism par excellence.

But of course, that wasn’t enough. For capitalism, nothing is ever enough. For neoliberal capitalism, no means are ever too violent, too degrading, too inhuman, too life-destroying to be off the table when it comes to getting more. While the victories of free market capitalism overseas were a reason to celebrate for the capitalist class, it only brought into stark relief how much work was left undone at home. If millions could be thrown into poverty to enrich the oligarchs in foreign countries, why not in Europe, in the UK, in the US? Before you can institute sweeping reforms like these you need a crisis, a calamity which whips everyone up into such a panic that they’ll clutch at any solution that offers to restore stability. If only such a crisis was brewing in the mid noughties…

A number of financial crises came and went in the eighties, nineties and around the turn of the millenium, but none were significant enough to severely disrupt the neoliberal consensus. Hence Francis Fukuyama proclaiming the ‘end of history’ in 1989 and Gordon Brown’s repeated proclamations that ‘boom bust’ was a thing of the past. But while the ‘long boom’ led to rising government tax receipts in the West, and enabled public spending to rise, the debt was mounting up. Wages had been stagnating since the Reaganite/Thatcherite revolution which smashed the unions, so the rising cost of living had to be supplemented by consumer credit. The aspiration of home ownership, central to selling the idea of neoliberal individualism to the masses (“there is no such thing as society. There are individual men and women and there are families“), required ever-higher levels of debt to realise. Debt which fuelled a carnival of speculation and financial engineering on Wall Street and in London, driving property prices up even more and creating a fevered mainstream cult around the buying and selling of homes that would make a seventeenth-century Dutch tulip merchant blush.

The crisis was unavoidable. But, given the groundwork laid by the neoliberal economists and technocrats over the preceding three decades, so was the response – how else could the exposure of the empty centre of financialised capitalism be dealt with except by filling it up with public money, and then by squeezing the poor to pay for it? This time it wasn’t weapons of mass destruction or international terrorism but the idea of cash machines running out of money that motivated a stunned populace to accept the idea that “there is no alternative”. The wealth creators needed a rapid injection of wealth. Because markets. The financial system was the very engine of recent prosperity, it couldn’t be allowed to fail. Even though it clearly had failed. And was now a drag on prosperity. But, still… markets.

Under neoliberalism, the institution of the market is paramount. The state is only to interfere in the operation of markets when it looks like the capitalist class is going to lose an arm and a leg, and then only in the form of bailouts. The supposed regulators of the markets, long ago defanged and staffed by poachers turned gamekeepers turned poachers again, need only trouble themselves with a cursory look at the books. After all, the banks know what they’re doing. The market will sort it all out. Even the banks that were nationalised were taken into public ownership on paper only, and were left to run things as they saw fit.

In the UK, US and across Europe, trillions of dollars/pounds/euros were earmarked as support for the financial system and hundreds of billions were handed over to recapitalise banks and, yes, pay the bonuses of bankers. Banker bashing became a fashionable pursuit for all of five minutes. Before people were invited to reflect on how their irrational behaviour in the lead up to the crisis had badly let the markets down.

The coalition government that came into power in the UK in 2010 was led by the poster boys of this new spin on the state of the nation’s finances. In a tour de force of Old Etonian smarm mongering, Tory PR man David Cameron won the election simply by repeating that it was New Labour’s irresponsible public spending that had caused the crisis – an attack which the New Labourites, stunned by the collapse of their ‘stable economy’ and trapped within the ideological prison of neoliberal thought, couldn’t deflect. Liberal Democrat leader Nick Clegg acted like a snake oil salesman’s stooge, at first protesting against the claims about the magical medicine of austerity and then capitulating after it was ‘explained’ to him that there was ‘no money left’. The false equation of public and household finances is one of the neoliberalism’s greatest reality management coups. Households cannot conjure money out of thin air. Governments can. As the bank bailouts had clearly demonstrated just two years earlier (the sums provided to the banks by the government-owned Bank of England, through quantitative easing, were never added to the national debt).

Eight years of government spending cuts later and the world’s fifth largest economy had levels of child poverty that were described by the UN’s rapporteur on extreme poverty and human rights as “not just a disgrace, but a social calamity and an economic disaster”. 25% more 20 to 34 year olds were living at home with their parents in 2015 than in 2008. Students graduating from English universities now have an average of 40 thousand pounds of student loan debt. Universal Credit and Work Capability Assessments bring new levels of inhumanity to the ritual humiliation of those unable to find a place in the neoliberal order.

Across Europe the formula was the same. In Spain, youth unemployment peaked at over 55%, in Portugal and Italy at over 40%, in Greece at nearly 60%. The debt crisis in the latter country, almost entirely a result of bank bailouts and the recession caused by the global financial crisis, saw the precepts of market discipline taken to staggering new levels of brutality. The hope inspired by the landslide election of a ‘left wing’ Syriza government in response to the austerity demands of the IMF and Eurozone leadership was immediately and completely crushed. No negotiations were possible. The debts had to be honoured and the price of crisis loans paid in structural reforms – privatisation, austerity, wage cuts, regressive taxation. This is how markets work under neoliberalism. The rich get bailouts. Everyone else must pay what they owe (even if much of the debt was incurred in bailing out the rich).

If this kind of economic gangsterism doesn’t sound sustainable, that’s because it isn’t. In 2016, the poorest 50% of households owned just 9% of total wealth – the same share as the richest 0.1%, who saw their share double between 1984 and 2013. The richest are overwhelmingly found in London and the South East, where aggregate household wealth is more than ten times higher than in the North East. Many more factors than inequality were at play in the 2016 Brexit referendum but it is telling that the areas most notoriously denuded of well-paid industrial jobs by Thatcher’s revolution – the North East, the West Midlands, the East Midlands, the Welsh Valleys, the area to the east of London – voted overwhelmingly to leave the EU. Nigel Farage spoke to the concerns of the working classes in the UK just as Donald Trump spoke to the concerns of the working classes in the US. Disingenuously, perhaps. But after decades of disavowal by the political parties who had traditionally spoken up for them, at last there was an opportunity to express the rage, the indignation, the sense of despair and hopelessness that neoliberal capitalist realism had inflicted on the working classes of both countries. In the absence of a political movement to articulate and organise the discontent of the working class, futile, impotent gestures are the best that can be hoped for.

Nice history lesson, Jamie, but what has any of this got to do with Covid?

Thank you for your patience. My first point is that under neoliberalism every crisis is an opportunity. An opportunity to slash any public services that might compete with market interests, to discipline labour, to increase surveillance, to further reduce politics to meaningless arguments over minor differences, to transfer huge amounts of wealth upwards to a minority class of ultra-rich capitalists. Just look at what’s been achieved during the Covid crisis: billionaire wealth is up by a quarter; privatisation of healthcare has been turbocharged; there have been bailouts, and bailouts and more bailouts; and consultants, builders of empty emergency hospitals and vaccine peddlers have been making out like bandits. Meanwhile, the state has been instrumental in the destruction of the high street in favour of online retailers like Amazon, granting surveillance capitalism a foothold in private health data and shuttering publicly funded free services from libraries to coffee mornings, further increasing people’s reliance on paid-for content and social media. Want to gather some people together to discuss how all of this might be opposed? Forget about it.

My second point is that not all crises (Saddam!) are real and that perceptions of every crisis are variously manipulated, exaggerated and spun by a corporate-controlled media and opportunistic political elite in thrall to the same class of ultra-rich capitalists. While death tolls and case counts, stripped of all context, flash from every screen, the voices of thousands of credentialed experts questioning the proportionality of state responses to the pandemic have been systematically ignored, sidelined or condemned as ‘false information’, lumped together with the most outlandish conspiracy theories and censored.

The ‘deadly pandemic’ of 2020 may have begun as a genuine scare caused by early data on a seemingly serious outbreak of respiratory infection. But interacting with the structures and practices of an ailing neoliberalism, desperate to both find a way to further reduce the costs of maintaining an increasingly redundant working class and to quell popular uprisings against globalism, it quickly mutated into a stage managed apocalyptic scenario requiring the imposition of draconian restrictions on social and economic activity and sweeping, blink-and-you’ll-miss-them changes to the consumption behaviours and working patterns of people everywhere. Please note that no conspiracy is necessary here. Only a declining world system using a crisis and the tools available to it (an ideological framework, the architechture of the modern state and media) to remodel the world in ways that are favourable to it.

I am sorry that it has taken such a lot of reading to get through this argument, but to get to grips with this moment I think it is necessary to transcend the ideological suppositions which neoliberalism has been hammering into us for more than four decades: that class doesn’t matter; that the present is not part of historical time; that individual action is sufficient to tackle systemic problems; that doing something is always better than doing nothing; that there is no alternative to capitalism; that there is a technological, marketised solution to every problem, including death; that the only role remaining for the state is as bulwark against total societal breakdown.

Until we are ready to start tackling some of these tenets of (post)modernity, we are doomed to continue living through a series of endless crises, unable to concieve of the sort of politics that could confront them. Meanwhile, the perpetuation of the deadly pandemic narrative – and its labrynthine, endlessly mutating, increasingly atomising restrictions on social life – renders even the imagining of alternatives impossible.

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