Breaking with neoliberalism

Issue: 148

Maciej Bancarzewski

Lucia Pradella and Thomas Marois (eds), Polarising Development: Alternatives to Neoliberalism and the Crisis (Pluto Press, 2014), £22

Since the collapse of the Berlin Wall neoliberalism has dominated the global economy. The philosophy of TINA (There is No Alternative) became the official orthodoxy which has been preached both in the North and in the South. Keynesian thought was forgotten or at least regarded as old-fashioned and impractical. Governments were advised by international financial institutions (the IMF and World Bank) that real development could only be achieved through adhering to neoliberal principles and that any departure from them would have catastrophic consequences.

In fact the real catastrophe happened in 2008, as a result of adherence to those same neoliberal polices. Instantly, in the aftermath of the financial crisis the neoliberal agenda was seriously questioned. Many scholars (famously including Nobel Prize winners Paul Krugman and Joseph Stiglitz) argued that Washington Consensus diktats were in fact detrimental for developing countries, and suggested a rejuvenation of Keynesian economics. This criticism of the orthodoxy did not mean that neoliberalism suddenly found its alternative in the broad application of Keynesian policies. Neoliberal capitalism has remained very resilient with the state taking an active role in restoring confidence in neoliberal capitalism by bailing out the banks and imposing austerity policies later on.

Nevertheless, the crisis has prevoked a debate about alternatives to neoliberalism. On one side of the spectrum, new developmentalism emerges, essentially combining Keynesian thought with support for trade globalisation. New developmentalists have formulated a ten point manifesto, similarly to John Williamson’s decalogue of policy prescriptions ­incorporated into the Washington Consensus 20 years earlier. At the other end of the spectrum sits a radical Marxist approach to neoliberal capitalism. This book, edited by Lucia Pradella (University of Venice and SOAS) and Thomas Marois (SOAS), represents the latter.

Polarising Development is loosely built around four themes: workers’ resistance, women’s agency, democratisation of the public sector, and social and environmental justice. The book brings together contributions by authors from many different disciplines, not just from economics and development studies but from political science, sociology and international relations. Apart from this multidisciplinary character, Polarising Development speaks not only for Europe and North America but incorporates research conducted in Latin America, Asia and Africa (including Nigeria, Mexico, China, Turkey and Venezuela). The format of the book—a collection of short essays—also makes it very accessible.

At a theoretical level, Pradella’s and Marois’s introduction refutes the new developmentalist strategy as a real alternative to neoliberalism. Their argument is strongly represented throughout the book. As different authors argue, new developmentalism assumes that national development can be achieved within a capitalist system, disregarding the true nature of capitalism. For instance, Benjamin Selwyn shows the intrinsic contradictions of the statist political economy, in which an elite few (state authorities and capitalist entrepreneurs) are tasked with improving the lot of poor but in fact need to repress and exploit them. Further, Abelardo Mariña-Flores argues that, at the global level, new developmentalism overlooks the complex and contradictory nature of competition and the power of multinational corporations (p153). As Marois and Pradella sharply put it: “new developmentalism only modifies neoliberalism as a form of class rule responding to labour and social mobilisation” (p9). Contrary to new developmentalist orthodoxy, Marxists view capitalism as being in systemic crisis and even the best “modifications” will not remedy the situation. New ­developmentalism was only “inspired” by the recent financial crisis, whereas radical scholars have understood the intrinsic problems of capitalism with its structural antagonisms since Karl Marx’s time.

Polarising Development not only rejects neoliberalism and its alleged alternative, new developmentalism, on theoretical grounds; it also provides real solutions as to how neoliberal capitalism should be challenged. These practical examples draw on the experience of countries from both the North and the South.

Pietro Basso’s contribution explores the importance of international migration as an agent of social change. Basso provides numerous examples of migrants’ struggles against discrimination, low wages, and poor working conditions (pp94-95). His contribution demonstrates that only a unified working class can reject neoliberal policies. As Pradella states earlier in the book, international solidarity is the most powerful weapon workers have in their hands (p25). This is an extremely important argument, especially in the current context with hundreds of migrants dying in the Mediterranean. Among other factors, the racist actions of the European Union and one of its agencies (Frontex—a force ­coordinating protection of the EU’s external borders) are to blame for the tragedy.

One of the most interesting alternatives to neoliberalism comes from Latin America. Leandro Vergara-Camus analyses the Zapatista Army of National Liberation (EZLN) in Chiapas, Mexico and the Movement of Landless Rural Workers (MST) in Brazil. Both movements achieved success—following different strategies—in defending poor families’ right of access to land, and also managed to politicise thousands of Mexican and Brazilian peasants.

However, Vergara-Camus recognises the limitations of both the EZLN and the MST, neither of which have the capacity to transform the social relations of reproduction and production beyond the space they control (p169). Both organisations contested the neoliberal order (through the decommodification of land), yet they do not stand fully outside of capitalism.

Seen from a global perspective, the book importantly shows that the struggle continues not only in the developing countries of Latin America, Asia and the Middle East but also in the United States and Europe.

Still, some regions are missing in this analysis. For instance, developments in Eastern Europe would deserve more exploration. Post-Communist economies, where monetarism was pushed to its limits during the rapid transformation, could be considered as unique laboratories for Jeffrey Sachs’s notorious experiment in “shock therapy” (whereby a set of neoliberal policies, similar to those introduced in Latin America in the late 1980s, were implemented in post-Soviet economies). Harvard educated Sachs, considered an architect of the famous “jump to the market”, is known for his intransigent approach to the way the transformation was carried out. From the marbled luxury of 5 star hotel rooms he advised harsh macroeconomic policies (orchestrated by the IMF and World Bank) to the Eastern European governments in the early 1990s.

Over the last 25 years the transformation has brought more poverty and economic instability in Eastern Europe. However, the anti-austerity movement is growing in strength and numbers. The working class in Eastern Europe, although not without some reluctance, have eventually joined the movements against neoliberal policies and started to resist (for example, there were massive anti-austerity ­demonstrations and strikes in Bulgaria and Romania in 2013).

Polarising Development refutes the arguments of the developmental school on a theoretical level and, more importantly, provides plenty of empirical examples. The current system is widely resisted and contested all over the world. From Gezi Park in Istanbul through Occupy Wisconsin to demonstrations following the collapse of Rana Plaza in Dhaka, people are joining in the battle against injustice and inequality. Clearly, the protest against neoliberalism did not finish with the Cochabamba water protests in Bolivia in 2000.

To its advantage, Polarising Development deals with a plethora of different themes. In some respects the book can be treated as an advanced and much updated version of Susan George’s, Emma Bircham’s and John Charlton’s (eds) work: Anticapitalism: a Guide to the Movement, published for the first time 14 years ago. The multilayered character of the book can also work as a disadvantage for some readers who may get lost in the labyrinth of various topics (in 23 chapters) from the political economy of development through socialist feminism to the campaign for climate jobs. Nevertheless Polarising Development is a near-perfect “post-crisis” guide to the movement.