Pushback Against Neoliberalism

History proceeds by advances and reversals.  Some of those reversals can last for centuries.  How long did it take for what we now call “Italy,” or indeed much of Europe, to recover from the collapse of the Roman Empire?  We used to call that period the “Dark Ages” and not without reason.

But, because our ability to travel, trade and communicate has sped up, history – those advances and reversals - moves more quickly.  Neoliberalism has dominated much of world affairs since the breakup of the Soviet Union 31 years ago, but it too is seeing resistance.  Of course it is.

The neoliberal revolution that gained steam after the collapse of the Soviet Union always contained an element of hubris, an assumption that now at last everyone’s on the same page and that page, it just so happened, was written by us.  Surely everyone wants what we have and what we offer, - capitalism, free markets, free trade, individual rights and liberties, democracy, and, presumably, a McDonalds on every corner and a rainbow of voices singing “Kumbaya.”  Neoliberalism always contained a hefty helping of good old American naivete.

Like all naivete neoliberalism’s was a bit innocent, a bit blind.  Proponents always overestimated its virtues and underestimated the power of tradition and history to exert a drag on change.  U.S. history is short, so Americans tend to think it’s somehow negotiable, even optional, but others, with longer histories have longer memories.  Happily, our naivete allows us to try the “impossible,” but people don’t readily abandon what they’ve been taught and what they know.  Anyone who expects Russia or China to suddenly embrace the individual rights and liberties so dear to the West is in for a surprise.  Just ask Hong Kong.  Or the Uigurs.  So, for all the benefits it’s conferred on so many people around the world, the neoliberal experiment has met with pushback, much of it fully justified.

Enter Donald Trump, stage right.  Trump was elected by people ignored by the neoliberal experiment.  They thought they’d have lifetime jobs manufacturing automobiles, but suddenly saw capital, and with it their paychecks, fleeing to Mexico and later China and their home states called the Rust Belt.  President Clinton told them that NAFTA would add jobs and anyone laid off could simply “retrain,” a line that always sounded like a sleazy dodge, an excuse to promote the neoliberal project and kick blue-collar workers to the curb.

And so it was.  In fact, about 900,000 net American jobs were lost due to NAFTA.  In fact, by now, almost 5 million jobs have been lost and 90,000 factories shuttered due to free trade agreements. And in fact, the opioid epidemic currently ravaging parts of this country took root in the hollowing out of blue-collar employment. 

Essentially the whole of Trump’s domestic policy message was aimed at precisely those people.  Make American Great Again meant that it was those very workers who’d made the U.S. great before and could again if only neoliberal elites would allow it.  Trump won.  Four years later he added 11 million votes to his 2016 tally.  Neoliberalism has been a godsend for many people in many parts of the world, but for post-WWII blue-collar U.S. workers and their families, it’s been a disaster.

The vote to withdraw England from the European Union, aka, Brexit, was likewise a rejection of the neoliberal world order.  As naïve as their American counterparts, British neoliberals staged the referendum secure in the knowledge that they couldn’t lose, much the same as Hillary Clinton couldn’t lose the presidency.  But both did lose.  Like the nationalism of Trump voters, British “leave” voters cast their ballots because they thought that decisions about Britain and the British should be made in Great Britain and that EU treaties made it too hard for Britain to control immigration.  Again, one inevitable result of neoliberal policies is the diminution of national sovereignty, the power of nations to decide their own rules, values, policies, etc.  It seems the British like being British; they have a strong sense of their long and remarkable history and don’t easily abandon it in favor of being just another member of an amorphous EU.

Now, a couple of free and fair elections are one thing, but a brutal invasion of another sovereign country is something else altogether.  In the case of Vladimir Putin’s war of choice against Ukraine, it’s the rejection of neoliberalism writ vastly larger than before.  The willingness to go to war, become an international pariah, slaughter innocent civilians, have one’s own soldiers killed and maimed and have the economy of one’s country crippled all constitute an enormous upping of anti-neoliberals’ game.  The Trump and Brexit votes delivered the message; Putin’s invasion screams it.

Where neoliberalism reduces the power and sovereignty of nation states, Putin emphatically reasserts Russian nationalism and power.  Where neoliberalism seeks international integration through free trade, Putin has isolated Russia, probably for a long time to come, from the world’s economy. 

In 2014, Ukrainians staged a revolt against Viktor Yanukovych, Putin’s toady, and forced him from power.  His main offense?  He promised to sign a neoliberal free-trade agreement with the EU and then, at Putin’s insistence, reneged on the deal.  This invasion is very much Putin’s reassertion of power over Ukraine, power that he lost in 2014 due to the Ukrainian people’s desire to be part of the neoliberal project and not part of Russia.  According to the neoliberal creed, trade trumps war and, to an extent, nations themselves.  According to Vladimir Putin, there is no substitute for a powerful national military and the willingness to use it to expand national power.

Those will be two of the defining characteristics of international order for the foreseeable future.  Neoliberal states will continue as before, but with a better understanding of what’s possible.  Putin has placed Russia beyond the neoliberal pale.  China’s ties to Russia and the increasingly centrist and command nature of its economy risk something similar.  Look for countries within neoliberal trading blocs to beef up their military capabilities as, at the very least, a backstop to free trade.  (It’s already happening.)  And look for their heightened sensitivity to the dangers of assuming that freedom and prosperity made possible by neoliberalism are a substitute for tradition and nationalism. 

The neoliberal mindset has taken a powerful blow.  It will absorb it and move on, but never again assume that the likes of Russia will automatically be brought within its ambit.

 

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