Neoliberalism Really is Globalization After All

In the anti-WTO protests in Seattle in 1999, the mass media suddenly became aware of the global justice movement that had been active through much of the 1990s, especially (in the US) on college campuses. They criticized the activists who were there to challenge the globalized free trade Washington consensus, that the WTO had been created (out of the GATT) in 1995 to impose on nation state governments everywhere, as “anti-globalization”.

As cosmopolitan internationalists who are part of a multiple generation tradition of anti-imperialist and anti-capitalist solidarity (‘ Ho, Ho, Ho Chi Minh; Dare to Struggle, Dare to Win’ or more simply ‘Victory to the NLF’ and ‘Workers of the World, Unite’), the anti-WTO left radicals were sometimes tempted to be apologetic. Many of us insisted on some variation on the eventual World Social Forum slogan, saying that we were not anti-globalization but pro a good globalization (‘Another World is Possible’). Of course, we were, and are, both anti and pro. We are also globalists in the sense that we are every bit as much anti-imperialist as we are anti-capitalist. No post-capitalism without decolonization. But we are not always as unapologetic and explicit and forthright about this stance as we possibly should be.

The WTO Protesters in Seattle 1999 were Criticized for Being ‘Anti-Globalization’. Well, Yes We Were.

Quinn Slobodian has written an excellent book on the history of the rise of the Friedrich Hayek led Mont Pelerin Society economic theorists to hegemony as the apostles of neoliberalism, Globalists: The End of Empire and the Birth of Neoliberalism (Harvard University Press, 2020/2018). It provides at least three major lessons for activists that flow from three key insights.

First, the 1999 anti-WTO protests and all the anti-G7 and anti-NAFTA and other massive protests that followed were right to highlight the anti-imperialist anti neocolonialism reasons to oppose neoliberalism to the extent that they did. Re-establishing a new imperialism, a new hierarchy of states and laws with supranational state bodies like the WTO at the top, is at the core of the Hayekian creed.

Second, the extra-parliamentary left is right to take a ‘plague on both your houses’ stance towards the main parties of government everywhere (while working to exploit their secondary differences, and supporting lesser evils where necessary). There are two main versions of neoliberalism, the corporate liberal Joe Biden one, that has arguably actually long been dominant in most governments and certainly in most economics departments; and the Hayekian one, that turns out to be nothing more or less than the way most business people in the Chamber of Commerce have always thought.

There are real differences between the two versions, as there are real differences between the Democrats and the Republicans in the US, and between the Tony Blair style Labour party and the Boris Johnson led Conservative party in the UK. But there is even more in common. And one key point in common is the support for the Hayekian vision of a new imperialism, based on a single global ‘economic constitution’ that explicitly gives priority to private property rights over human rights, and to a strong State of laws over the right of elected lawmakers to challenge them.

What the Seattle WTO Protesters Opposed was a New Imperialism that was Recolonizing the World.

Third, there is a reality check for me personally and perhaps for others who have argued that the left can learn lessons from the right (for me, from the likes of Billy Graham evangelicals and Hayekian neoliberals) about how to wage a Gramscian battle for ideological counter-hegemony. The main lessons remain valid, but it turns out that the Hayekians started their long journey to hegemony from the top, not the margins. They were routinely hired into top university, think tank and international agency positions and funded by big business from day one, whereas today’s left is very much starting from the bottom, from way outside positions of leverage in virtually all mainstream institutions (except for faculty in some university departments and their students; and for a diminished number of trade union and farmer organizations). The Hayekians were outsiders only in the sense that some combination of Keynesianism and neoclassical rational choice theory were academic orthodoxy for a long time (actually they still are).

The main focus in this post will be on the first major insight about Hayekian neoliberalism in Slobodian’s book, the claim that Hayek’s main innovation is not in the area of economics but in the area of law and governance. Or rather, the Hayekian policy innovation in economics, what is often referred to as market fundamentalism (deregulation, privatization and free trade), is not the revival of 19th century laissez-faire, is not an argument that markets will prosper if only both nation states and international government organizations (IGOs) get out of the way. It is an argument for strong States (as distinct from elected legislatures) and especially for strong IGOs and Free Trade Agreements (FTAs) that can impose and strictly enforce an ‘economic constitution’ for a single world economy that enshrines the rights of private property and capital.

Market Fundamentalism is Really a Political Theory of Private Property Rights Taking Priority over Democracy and Human Rights.

The biggest obstacles to the predominance of a rules-bound international economic order are anything that facilitates policies of conscious redistribution within a country or globally. Two are highlighted by Hayekians: democratic legislatures that give leverage to ‘excessive’ popular claims-making; and any kind of autonomy of nation states seeking to make the global order more equal through their inherently ‘protectionist’ policies of ‘development’.

Above all, the Hayekian version is an argument to weaken democracy at the nation state level (while increasing coercive enforcement of private property basic laws by a strong State apparatus) and to build up IGOs and FTAs that can dictate to nation state governments (except in practice the USA and to a degree a handful of other rich states allied to them). The content of the dictation is that they must maximize profit for capitalists at the global level of a single world economy -- even at the expense of their national economy and policies supporting catching-up development. It is an argument for a multi-level world state and legal structure, for a particularly extreme version of neo-colonialism. And in turn, if Slobodian is right, this has clear implications for what the left must do to defeat neoliberalism.

The neoliberal political and economic right exerts its maximum leverage on the multiple levels of legal and political structures that act as ‘veto points’ in a new-style empire. The main actors are rich states and their appointed agents in supranational agencies, and capitalist corporations and business groups accorded the full rights of legal persons. At present there is still only one superpower, the USA. China increasingly acts ‘as if’ it were a rival hegemon, but it is not there yet (and is not guaranteed to ever be).

The Hayekians want to Oblige Nation State Governments to Adopt Policies that Maximize Profit for Global Corporations Ahead of Their Own.

As in any imperial system there are still regional hegemons, and conflict between regional rivals, not to mention civil wars that these rival states routinely interfere in and exacerbate. States and state-based business groups compete, and hence the possibility of inter-imperialist (and regional mini-imperialist) conflicts and wars is always present.

The political right, big business and the rival (would-be) hegemon states act at every one of the levels of a single integrated world economy and global legal-political system. The left must meet them on each level. Hence the importance of organizations like the Progressive International. We need to create serious transnational organizations as well as mechanisms for enabling local left-led movements to act in international solidarity with each other’s local struggles while remaining local.

What then are some of the misconceptions about Hayekian neoliberalism? After enumerating some, we will ask: What does correcting these misconceptions mean for how progressive movements should act to roll back their domination?

(1) Hayekians are often called libertarians and American Friedmanites especially like to say that free market theory is based on seeking freedom of the individual. Many people like to reference Hayek’s Road to Serfdom (without having read it) and assume that his target is the Cold War target of Soviet communism. In fact, Hayek considered the Cold War a diversion from the main conflict which was between his theory and all states that used economic analysis to guide state intervention to alter free market outcomes, to achieve redistribution, or to insulate their state from the world economy – the USSR yes, but Nazi Germany and FDR’s New Deal too. This stance persisted in attacks on Keynesianism and the welfare states that were strengthened after the Second World War. Slobodian shows that Hayek’s theory is not based on the freedom of the individual, not even the individual capitalist or individual nation state freely choosing to serve its own businesses, but on a systems theory that seeks to remove all barriers to maximizing profit for corporations overall in a single world market economy.

Hayekians Do Not See Markets as Based on Rational Choice by Free Individuals. For them Markets are a Miracle that Science Cannot Comprehend.

(2) Neoliberalism is often championed by mainstream neoclassical economists whose macroeconomic models are based on assumptions of market actors being able to make rational choices based on sufficient knowledge of the market from their reading of price signals. People assume that Hayek shared this view. He did not.

The Hayekians asserted that it was not possible for anyone to achieve sufficient knowledge of how a market economy reached its eventual outcomes, not even those with access to all of the price information. This was the pretext for opposing all forms of ‘central planning’, all types of state policies to achieve more just, or even more efficient, outcomes based on alleged scientific knowledge of the economy. The market would work its way to a spontaneous order that was a mystery. Price signals were part of this, but there also had to be clear and strictly enforced rules to guide behaviour.

Individual actors could have partial and local knowledge, but they were acting incrementally in a sequence of moves to adjust to other actors as those actors reacted to them. The question that Hayek and others asked was ‘What can be done to ensure that the eventual market outcomes were optimal from the point of view of capital in general in a single world economy when the actors are mainly ignorant and blind to the market situation?’. His answer was based on a quasi-Darwinian theory of human nature that asserted that humans were not rational free choosers but rule followers.

For Hayek, Humans are Rule-Followers Who Do Not Understand the Rules That They Follow. So the Rules Must Be Imposed and Enforced.

Hayek saw humans as acting mostly on the basis of rules that they did not themselves understand, on three levels. The primary level was genetically determined instinct. The next (and for humans the biggest) was tradition, following what the institutions that have evolved over generations specify as normative behaviours, that will be functional for the whole, and optimal for the individual in the sense of successful adaptation and hence survival. The third level was a thin layer of consciously formulated laws that could be debated as to their efficacy and rationally understood, but which in practice were just accepted by most actors on faith. The Hayekians spent most of their time formulating these conscious laws, economic constitutions that codified the primacy of private property rights and maximum freedom of movement of capital and goods (but not people). If people would just follow the rules that were given to them by instinct, tradition and private property rights serving basic laws, the optimal spontaneous order would result.

(3) Neoliberals are often described as market fundamentalists who want to free markets and market actors from regulation by the state. They are also seen as equating capitalism and democracy, as arguing that a strong State such as advocated by socialists or Keynesian liberals is antithetical to democracy. This is not exactly wrong, but it is misleading.

Hayekians actually want there to be strong state apparatuses at every level in the global economy that can enforce the private property based basic law. What they are against is democracy, if democracy is understood as nation state governments elected by universal suffrage debating and enacting legislation based on a consideration of the claims-making by all individuals and groups in civil society.

And what Hayekians are for is a new imperialism, a more aggressively imposed and enforced neocolonialism, that subordinates all national economies (and not just the interests of workers and other subordinated social groups) to the achievement of a spontaneous market order at the level of a single world economy.

NEOLIBERAL THEORISTS HAVE SCRAMBLED TO DEVELOP RESPONSES TO PERCEIVED THREATS ARISING FROM THREE MAJOR BREAKDOWNS IN WORLD CAPITALISM

Slobodian provides a way to grasp the connection between these two core ideas when he traces the history of the Hayekian movement and its theories in terms of what they saw as three crucial crisis moments that came in the aftermath of three breakdowns in the world capitalist system – World War One, the Depression and World War Two, and the rise of the Global South in the 1970s after extensive Third World national liberation and decolonization.

The Habsburg Empire had a Strong Center Running the Economy and Subordinate National Governments that Stuck to Private Life Issues.

The original core around Hayek lived in Vienna in the Habsburg empire, which was characterized by a strong central state/monarch presiding over a very diverse set of cultures and language communities in a kind of federal structure. The single center made all key decisions about the economy and politics and the regional bodies mostly made decisions about cultural matters. There was a single ‘world economy’ within the empire directed by the colonial center and a diversity of laws and policies affecting private and local matters impacting family, religion, language, culture and everyday life. The Hayekians applauded this, and also saw the 19th century British Empire as having achieved something similar with its system of free trade within the single ‘world economy’ of the empire (as well as in relation to those outside the empire). The colonies dealt with local matters and the center made their national economies serve the empire.

BREAKDOWN #1: THE FIRST WORLD WAR

World War One was a war between rival empires seeking to expand at the expense of their rivals. The break up of the 19th century version of a world economy was signaled by the (temporary) abandonment of the gold standard (repeated again in 1931 after the Crash, and again in 1971 after the Vietnam war). The gold standard acts to ‘discipline’ national economies that stray too far from acting in accordance with their relative economic strength in the world market. This was bad, but temporary. But it was a warning that something else would eventually be needed to be put in the place of the gold standard to align national economies appropriately. The Hayekians would come up with the idea of supranational agencies enforcing a set of basic laws that were rules of behaviour for both market and government actors (also Friedmanite monetarism but that was short-lived in its strong form).

America’s Rise and the Russian Revolution Pushed Pro-Capitalist Governments to Support National Self-Determination and Liberal Democracy.

World War One gave rise to several other much more disturbing changes. First, there was the first anti-capitalist revolution that among other things made the Soviet Union significantly insulated and isolated from the world capitalist economy, and dedicated to rapid national economic development to ‘catch up’ to the rich capitalist countries. Second, partly in response to this threat (the Bolshevik Third International asserted the right of national self-determination, and supported anti-colonial ‘bourgeois-democratic’ revolutions for economic and political independence), there was the US President Wilson Fourteen Points embrace of the principle of self-determination of nations, and an attempt to redraw the map within the empires that had been defeated, not just the small German one but the large Habsburg and Ottoman ones. (The USA was also doing this for the obvious reason that it undermined the empires that it was now ready to begin replacing with the soon to be hegemonic US empire.)

Third, the end of the First World War saw the extension of the right to vote (and to hold office and to lobby and protest to raise claims to legislatures and to exercize other rights and powers of a full citizen) to all men (not just property owners) and fairly soon after to all women in many countries. Hence, all nation states were not just seen as having the right to a certain autonomy to make laws and policies to serve their perceived national interests, but these states became the main locus of the making of economic and political decisions, not some imperial center. And the key decisions would be made by legislatures elected by all citizens.

For Hayekians, Elected Legislatures at the Nation-State Level Too Often Undermined the Maximization of Growth at the Level of the Single World Economy.

Legislatures inevitably sought to serve at least some idea of the general interest of all citizens in the nation state. This meant they tended always towards both ‘economic nationalism’, and to maintaining legitimacy in the eyes of voters by trying to respond favourably to at least some of the claims raised by the many social groups in society, not just capital and property owners. Both of these tendencies were problematic for achieving maximum profits and economic growth in a single world economy. Nevertheless Hayekians, like other pro-capitalists, accepted the need for liberal democratic governance within nation states. It was necessary to ward off more radical challenges to capitalism. It was a good place to experiment with laws and policies that could keep living standards improving for most citizens so that there was a genuine alternative of evolutionary capitalism.

Hence the First World War and the anti-capitalist Russian revolution created three changes that disorganized the multi-level governance system of the 19th century empires and centrally controlled free trade ‘world economy’ within each – a foreshadowing of the end of the gold standard; recognition of national sovereignty and the right to make decisions in each nation state somewhat autonomously to serve the interests of more equal development; and liberal democratic systems centered on lawmaking by legislatures elected by all citizens to respond positively to the conflicting claims made by various groups of citizens.

The Hayekians wanted to counter all three changes, but how? There was no way that there could be an overt new colonialism with all economic decisions of major consequence being made at the top at a global level. And at any rate, if they were to propose and win a world level government, it would be some kind of world-level legislature, and that would automatically lead to demands that it apply the principles of liberal democracy, and have the legislating bodies be elected by the nation states of the world on some version of a rep by pop basis.

The Formal Powers of Nation State Governments Were Untouchable. The Only Option Left was to Create Legal Codes and Global Organizations to Overrule Them.

The nation state legislatures had to be allowed to continue to legislate, but something else had to be created at the global level, something that was not a democratic law-making body, to constrain and where necessary overrule them. And something also had to be created from below the level of the nation state legislature as it were, that could also press elected governments to adhere to the supranational economic rules (this would turn out to be empowering corporations to sue in the courts; and federalism, the breaking up governance into as many separate units as possible so that each unit would be pitted against the others to win investment in their area and undermine any national industrial strategy).

It would take a while but the Hayekians found their general solution in a distinction made by the right-wing German legal and political theorist Carl Schmitt between law (Recht) and legislation (Gesetz). What they needed to fight for was the rule of Law, not Legislatures, at the supranational level, but also to a degree at every other level. What was needed was a single rules-based international economic order. What rule of Law ensured was that appointed courts and tribunals and agencies like the World Bank, IMF and WTO plus neo-colonial unofficial power clatches like the G7 made the ultimate decisions.

At the level of nation states, it meant something like the American political system or the European Union: a system of separation of powers with an ever stronger Executive branch; a two level legislative branch in which a Senate representing regional interests elected for longer terms can temper any decisions by the lower House; and failing that, there are multiple other veto points including the separately elected president, a federal system empowering a states rights justified non-application of national legislature decisions, and courts and tribunals at every level that can override any decision by an elected legislature.

Another Way to Undermine Democratic Legislatures was to Create Domestic Political Systems with Lots of Veto Points, like the USA and the EU.

In the EU, the legislatures of member states were not constrained or overruled by an EU Legislature. Rather they insured that Law prevailed over Legislatures by having a governing set of Treaties that were applied by the European Court of Justice (and informally by the technocrats in the European Commission and behind the scenes bargaining between the heads of government in the European Council) and could override or modify any member state (or indeed EU Assembly) legislation. And corporations and business associations were granted the status of legal persons to sue in these courts against any legislative decision that they did not like.

The principle here was to have a set of rules that were mostly a set of prohibitions against interfering with the exercize of private property rights and the global mobility of capital and goods (free trade). Legislatures could continue to make economic and political decisions for their citizens and state, but they could not contradict the Thou Shall Not commandments.

BREAKDOWN #2: THE 1930s DEPRESSION AND THE SECOND WORLD WAR

The second major shock to the world capitalist economy, and to the prevalence of neoliberal type policies, came with the 1930s Depression and the FDR New Deal, followed by the rise of Nazi Germany and the Second World War, and then the expansion of the welfare state in rich countries after the war. Capitalism was discredited and so was right-wing politics. Keynesian came to the rescue to tame the business cycle. Legalization (and major employer recognition) of trade unions, and various tripartite systems of industry-wide bargaining, sought to reduce the likelihood of another Depression by establishing a higher floor of working class wage income, at least for larger employers in core industries. All of this was anathema to the Hayekians.

The Road to Serfdom was Not a Cold War Screed. Communism and Nazism were Bad, but the Greatest Danger was the Slippery Slope of FDR’s New Deal and Social Democracy.

This is where The Road to Serfdom comes in. As already noted, the Hayekians (at least outside the US) did not see the serfdom as just communism, and hence the main battle as the USA and the West versus Russia/China and the East. Their focus was on the slippery slope of the FDR New Deal and social democracy in Europe, and Keynesian economic theory to guide economic policies in rich countries. This claim about the main danger was partly sold by supporting the theory of totalitarianism. Instead of depression and fascism being the main things that policy should aim to prevent from happening again, fascism and communism were basically the same thing. The main threat was the creeping statism of New Deal ‘socialism’ justified by Keynesian economics.

This was the period in which Milton Friedman, formerly not exactly hostile to New Deal economics or at least policies, began to work on the theory of what became monetarism, that can be thought of as a kind of substitute for the gold standard. Monetarism set the single goal of maintaining a stable money supply and aggressively requiring low inflation (but not full employment, indeed by inducing unemployment and thereby putting downward pressure on wages). Currencies would not be quite fixed but would only be allowed to fluctuate within a narrow band. Governments could not devalue their way out of problems in their domestic economy caused by unequal trade or balance of payments. Central banks would be set up and/or strengthened in every country, and they would be ‘independent’ of the elected government. This gave them leverage to establish relations with both domestic and international banks so as to control inflation, currency valuation etc through not just the setting of interest and inter-bank lending rates but a host of other rates and swaps. But monetarism would not become government policy until the 1978 Volcker Shock, that was sold as a fix to the ‘stagflation’ following the end of the Vietnam war and the OPEC cartel massive increase in oil and gas prices.

Hayekians were Never Just Academics. They Worked Inside and Outside Governments as Politicized Lobbyists for Pro Private Property Legal Codes and Institutions.

One of the main political battles that neoliberals were on the winning side of immediately after the war was the defeat of the proposal for an International Trade Organization (ITO) as one of the Bretton Wood institutions. They opposed it largely because Third World countries had been empowered by the Chinese revolution (and to a lesser extent the independence of India conceded by the colonial power Britain), and would by the end of the 1970s be further empowered by wholesale granting of formal political independence to almost all formerly colonized countries. This led to the original ITO proposal granting significant representation by Third World Countries, as well as a section of its rules allowing for nation states to implement ‘economic nationalist’ policies that aimed to achieve more equal ‘development’.

I say that the neoliberals were ‘on the winning side’ because they did not have the clout to be much of a force on their own in defeating it. It was beaten largely by the lobbying of the US International Chamber of Commerce (ICC) and other like business organizations from around the world. And the Hayekians had from the earliest days been hired by the ICC and other business organizations. They always did most of their work for groups that advocated for business interests either from outside government or from within government. They were designers of the language of laws and treaties, and also of legislation or policy sought by business groups, not just economic theorists and (before the 1930s switch to saying that the market was opaque and could not be seen through statistics applied to economic data) studiers of the business cycle. There was a revolving door between university positions and think tanks and government finance ministries and International Government Organizations (IGOs) just as there is today, but less so than today (the number of ‘What is Good for Capital is Good for Everyone Else, Period’ organizations and positions was far fewer than today). It took until 1995 for the GATT (set up instead of the ITO) to be replaced, largely at the insistence of the US government, by the WTO. The WTO was controlled by the US and its allies and was in no way representative of all states.

BREAKDOWN #3: THE RISE OF THE THIRD WORLD

The third major threat to a single world economy with the already rich colonizer states of the West in control came in the 1970s, with the rise of agitation by governments and popular national liberation movements in the Global South. This was a kind of third wave of agitation against neocolonialism. The first came with the Chinese revolution and Indian independence. The second was the founding of the Non-Aligned movement of newly politically independent ‘third world states’ in the 1950s and 1960s (the term referred to the policy of neutrality, a third way, between capitalism and socialism). These governments were pro-capitalist, but also pro-development through active statism. The third wave came after the defeat of the US by Vietnam and the 1973 OPEC cartel energy crisis.

Even Third World Pro-Capitalist National Development States Posed a Perceived Threat to Maximizing Growth in the Single World Economy.

The main target of the neoliberal attack was the series of UN General Assembly resolutions calling for the achievement of a New International Economic Order (NIEO) and a Charter of the Economic Rights and Duties of States. Slobodian summarizes the key demands as “redistributive justice, colonial reparations, permanent sovereignty over natural resources, stabilization of commodity prices, increased aid, and greater regulation of transitional corporations” (p219). There were also a flurry of armed movements against the remaining colonial and white supremacist regimes, some supported by the Soviet Union, especially in Africa. Needless to say the Hayekians were on the other side on all the policy issues as well as in the armed conflicts (some supported apartheid; Hayek and many others did not, but even here they opposed sanctions).

We all know how this turned out. The counter-revolution against the New Left of the Long Sixties and against the Global South achieved decisive victory with the coming to power of Thatcher/Reagan and subsequent New Right governments. It was decisively clinched in the aftermath of the Fall of Communism in 1989-91, the signing of the NAFTA agreement in 1992, the creation of the WTO in 1995 and the admission of China into the WTO in 2001. Nation state governments applied a relatively radical Hayekian version of neoliberalism, or a somewhat softer Blair-Clinton Third Way (liberal centrist) version that retained some Keynesianism and some welfare state programs.

The Thatcher/Reagan Counter-Revolution Rolled Back the Democratic and Decolonizing Gains of the PostWar Welfare State Era

Both versions accepted the strengthening of the WTO and IMF and the Washington Consensus. IGOs and rich country central banks and international financial markets and global corporations would act on parallel tracks to impose neoliberal ‘austerity’ everywhere – privatization, deregulation, cuts in social spending matched with cuts in corporate and high earner taxes, and Free Trade Agreements (FTAs). Hayekians would have preferred a single Basic Law that was imposed from a single center on the new imperialist world economy and hierarchy of nation states, but they worked hard to achieve second best by promoting bilateral FTAs, the multilateral EU and even regional FTAs (although this carried the danger of competing blocs of imperialist or would-be imperialist states).

The point of this rather long discussion of how the Hayekians evolved their thinking and their policy recommendations over the past century is to highlight how they sought to counter the threat posed by democratic legislatures that sought to respond positively to popular claims making. They did so by working to create something like the second coming of the Habsburg empire, where the center dictated economic policy. Multiple tiers of governance jurisdictions could adopt economic and political policies but they could be overruled from above, or challenged by corporations from below in various courts and tribunals.

The WTO and IMF Imposed Deregulation, Privatization, Free Trade and Austerity on Everyone. Except the USA and its Allies Dictated the Rules, and Strongly Influenced Who was Appointed to Make the Decisions.

The USA and allied rich states controlled IGOs that could directly impose Washington Consensus policies on all states. Foreign capital could require ‘equal treatment’ and near zero regulation by local governments when armed with FTAs (where disputes were settled by tribunals and courts, not negotiation and compromise). And global corporations established global supply chains to establish literal global-level production, largely made possible by China becoming the cheap labour but relatively high-skilled manufacturing center of the world economy. Every country and state/province and local region or special export zone on earth was forced to compete to attract capital investment in a neverending race to the bottom. This is so universal and by now longstanding that it seems natural. Wasn’t it always like this? Isn’t it the case that There Is No Alternative (TINA)?

HERE IS A RECAP OF SLOBODIAN’S TOP INSIGHTS

To recap, what are Slobodian’s key insights about neoliberalism? What do they mean for how the left everywhere can work to defeat it?

-- Neoliberalism literally IS globalization, an ideology and theory that aims to construct a new imperialism where all governments and economic actors must contribute to the maximization of profit and economic growth (capital accumulation) in a single world economy.

It IS a politics about how to strangle democratic legislatures responsive to popular claims-making, from above and below: from above by global level Basic Laws enshrining private property rights and maximum mobility of capital and goods that can overrule legislation by democratic legislatures; from below by allowing private corporations to have standing as legal persons to sue for enforcement of these Laws in their private interest.

Neoliberalism is the Globalization of a Single Set of Private Property Rules, and the Requirement that Less-Developed Economies Accept Their Place.

-- Slobodian’s analysis does not take away from the three main senses in which we already think of globalization in mostly straight economic terms, namely:

** Global supply chain and just in time production.

** Free Trade Agreements and the WTO rules for global trade.

** IMF-imposed structural reforms and/or self-initiated nation state government austerity measures.

The Basic Law rules are what justify and organize a world economy with these major features.

-- What Slobodian draws our attention to is that neoliberalism is NOT really an economics theory about how markets should be allowed to work. It is a political-legal theory about how coercively-enforced political and legal rules can dictate how the economy must be required to work, or else. It is a theory about how to reorganize States and governments at the nation-state level and at the IGO global level. It is a theory about having unchallengeable rigid constitution-type rules that confer rights on some and deny rights to others – rules that elected legislatures cannot touch, but which appointed courts and tribunals can interpret and impose. The Hayekians claim that economics, and specifically capitalist markets, are simply a mystery that cannot be explained by any economic theory. Yet they have the audacity to pontificate at length in EconomicsSpeak as if they did have a theory, and claim to know what legal and political structures and rules are necessary because of their supposed insights into economics.

Hayekians Say that Governments Cannot Succeed if they Intervene to Make Economies Serve Consciously Set Goals, especially not if the goal is ‘Redistribution’.

-- The Hayekian sanctification of markets as pure mysteries is a flimsy sleight of hand move to justify opposing any elected government applying a conscious economic policy that seeks to make the economy work for anyone else but capital and private property owners. Above all Hayekians rail against any policy that promotes ‘redistribution’ within a country or between countries. They don’t talk much about the dangers of a world welfare state that redistributes, because unfortunately we on the left have not had the political courage (in relatively rich countries or in organizing students and other relatively rich social groups) to seriously advocate it. Hence when they argue against redistribution on the global level this is mostly opposition to pro ‘development’ policies, to any so-called protectionist and economic nationalist policies that aim to improve the economic situation of the country relative to the richest states.

-- Neoliberalism is NOT a simple decoupling of the economy from the State so that the economy runs on its own without political and legal interference, quite the contrary. Neoliberal economies require authoritarian states, and imperialistic domination from the center, and lots and lots of rules that a strengthened state apparatus and IGOs are aggressive in enforcing.

-- Neoliberalism is NOT about reducing the size of the State or the range of its activities, let alone any kind of idea about a weaker state that anti-government demagoguery tries to insinuate. It is a theory and set of policy prescriptions about how to radically weaken the elected legislature and human rights and labour rights and civil liberties part of the state. It is a theory about how to expand the Executive branch, Judicial Branch and Police/Military and Permanent Bureaucracy part of the State. More specifically, it seeks to expand these insofar as they perform functions to uphold the priority of the rights of capital and private property over everything and everyone else.

Neoliberalism Seeks to Expand the Arbitrary Authority of the Executive Branch and the Bureaucratic, Judicial and Policing parts of the State.

-- Neoliberalism seeks to create an imperial center that is NOT international (because ‘inter national’ means ‘between all nations’ of equal status that have an equal say) but transnational (across all nations, distinct from any of the nations as a separate level or sphere). This center is global, a separate tier above all nations, that supposedly is dedicated to the interests of everyone, because it is dedicated to the interests of the whole, where whole means a single world economy. In fact, the supranational (or transnational, or global) center of IGOs and rules is appointed and controlled by the USA and its rich country allies.

-- (My gloss) The Hayekian utopia is a kind of restoration of the Habsburg empire in the sense that the center directs the economy and the nation state simply fits in to the world economy according to a strict enforcement of the logic of comparative advantage from the point of view of the empire. In addition, neoliberalism seeks to eliminate any primacy of elected legislatures over the judiciary, executive, administrative and police-military parts of the state. Nation state liberal democratic institutions are tolerated as long as the judicial and executive branches rule over the legislative. But, in the face of globalization into islands of metropole surrounded by declining peripheries, most nation state governments are increasingly left with their only real power being to protect the ‘traditional’ culture of their nation and to try to hold on to their relative position in the hierarchy of nation states (beggar they neighbour), or even move up through regional war. We see the rise of Muslim fundamentalism and governments like those in Hungary or Poland or the Trumpian ideology of white supremacy and [White European Judeao-Christian] America First. Each have their particularities, but they are all reactionary forms of exclusionary cultural nationalism. In a neoliberal world you are either a winner or a loser, and exclusionary nationalism aims to reserve all the winnings for their group at the expense of others.

HERE IS WHAT THE LEFT CAN DO TO ROLL BACK NEOLIBERALISM

What should the left be doing differently based on Slobodian’s clarifications about what the Hayekian neoliberals real political and legal project is? There are clear implications in three areas:

(a) the need to challenge the content of legal codes with multiple ‘change the legal principles/rules’, or new constitution, movements that counterpose post-imperialist as well as post-capitalist principles;

(b) the need to seek a radical democratization at both the global and nation-state level, including movements to restore the primacy of democratic legislatures in nation states and create globally representative democratic bodies at the IGO level;

(c) the need for the left to develop specific types of organizations capable of waging the ‘change the basic laws’ and ‘restore and then greatly extend legislative democracy’ movements.

Let’s Fight for Alternative Society Organizing Principles, the Primacy of Elected Legislatures and a Third Arena of Left-Wing Political Organizing.

NOTE: Slobodian’s book is about both what Hayekians aspired to achieve in their theory and advocacy and what they actually achieved. It is easy to mix up these two things. It is easy to exaggerate the influence of the pure Hayekians. They never replaced the mainstream neoclassical synthesis rational choice economists in either academe or governments, nor did they decisively defeat the Keynesians.

They did not need to do so. The changes in basic laws and the new imperialism undermining legislative democracy in nation states was achieved side by side with Biden-type liberal centrists and other mainstream political forces. It is the dominant ideology and ‘common sense’ among rulers globally, so that rival political parties and states have different versions of the neoliberal consensus, but it is a consensus, an accepted set of basic rules. This has implications for how we organize to overturn those basic rules and that common sense.

Neoliberals are Not as Powerful as We Think They Are. They have Not Managed to Repeal the Laws of Capitalism, or Its Contradictions.

At the same time, the neoliberal world system or Social Contract or whatever we choose to call it cannot and has not repealed the laws of capitalism or its contradictions, ditto all the other ‘laws’ that critical social sciences inform us about. There are always major conflicts of interest between capitals and between states and between social groups in every society. I have chosen to leave aside all these important nuances in order to get across Slobodian’s essential points. Later for the rest of it.

(1) WE NEED ‘CHANGE THE BASIC LAW’ NEW CONSTITUTION MOVEMENTS EVERYWHERE

Slobodian shows that Hayekian neoliberalism was not just a movement to persuade governments to adopt particular economic policies. It was a movement to change the basic law incorporated into the texts of the constitutional documents of International Governmental Organizations (IGOs) and Free Trade Agreements (FTAs) and various other global or international (between specific national governments) bodies. The purpose was to create a new imperialism where nation state governments could not legislate in conflict with these legal agreements.

They also agitated to have nation states replicate this within their countries, so that legal codes enshrining private property rights took priority over all other rights, and over the authority of elected democratic bodies to legislate economic and other policies.

Let’s Spell Out the Principles of the Post-Capitalist etc Society that we are Working For, and Demand Changes that Implement the Values of the Left Alternative.

To roll back neoliberalism, the left needs to do more than oppose all of the specific policies in the prescribed Washington Consensus toolkit. We need to challenge these specific policies on the level of the organizing principles and propose sweeping changes in the actual legal codes in the IGOs, FTAs etc. We need to replace the New Right common sense and social contract with a New Left one. This means spelling out in detail the constitution-level organizing principles that we demand be applied now, and that we commit to applying ourselves (obviously much more fully and radically) wherever we achieve political decision-making power. Those principles will be anti-racist, feminist, egalitarian, democratic, progressively liberal, ecological etc.

A specific lesson of Slobodian’s book is that these spelled-out alternative society principles need to be post-imperialist as well as post-capitalist. We need to develop highly sophisticated theories about how a post-capitalist economy can be run so that it is not just more just, but actually works better as an economy to produce and distribute the highest quality and most innovative goods and services. We need a more advanced sociology and anthropology and psychology, as well as legal theory and economics and geography and history and political science, about the relations that do, and the different relations that can, exist between people with different ‘ethnic/racial/national’ cultures and heritages and between different nation states.

A note on my views that underly this proposal for organizing in the day to day around our alternative society principles:

Neither Gradual Reform nor One Big Revolution are Likely. We Need to Win People to Our Alternative Principles and Take Advantage of Radical Breaks.

Past lefts have made distinctions between what the left’s message is in short-term reform struggles and what its message is about the long-term alternative society. What I am proposing here is that we bring those long-term principles forward into our day to day organizing. We should say that we are fighting to apply the post-imperialist, post-capitalist etc organizing principles of an alternative society to the extent that we can here and now.

On the one hand, we are not waiting for the revolution. Even though what would get applied right now would clearly be much less than what would be possible if the left won political power with mass popular support. On the other hand, we are also saying that there is no final utopia, only the next chapter in human history where different basic organizing principles open up new possibilities. We need to try out many different alternative principles applying to many different social problems and learn by trial and error. We need to demonstrate to the mass public, to ourselves and even to our opponents that our alternatives are not just desirable but that they are practical and can produce better results.

This is not a proposal for a new reformism of incremental change within the existing system that somehow evolves into a qualitatively new system. If there is anything we have learned from the past two hundred years of liberal and social-democratic reformism, it is that this will never succeed. Nor is it a new version of Eurocommunist structural reformism, or of organizing around Trotskyist transitional demands (which presumes that a revolutionary situation is at hand and can be provoked by making demands that the system cannot meet).

The Left Can Win Political Decision-Making Power in All Sorts of Institutions Here and There, and Implement Glimpses of Our Alternative, so that People Can See that the Alternatives Actually Work.

I assume that the norm will be very long periods in which the non-left remains in power where we will proselytize for our post-imperialist, post-capitalist etc alternative society principles, and make demands consistent with them, but will only succeed in winning changes that fall very short of what we demand (we may sometimes win changes that are more radical but only in limited places and for limited periods). A lot of what we will be doing is preparing the ground for future situations in which radical breakthroughs become possible by educating the public about our alternative principles and specific policies. At the same time we will organize the unorganized into multiple different new counter-institutions and vehicles of popular struggle to win whatever we can right now.

Then there will be conjunctures produced by a combination of events (e.g. wars, economic crises, ecological disasters), and not just by social and political movements, where there can be ‘jumps’ in progressive political power. This will not be ‘The Revolution’ in the sense of what was imagined in the Russian Revolution. It will not be a sudden change to an entirely new economy and social system. But it will be a radical break -- made possible by significant changes in ownership and control of capital and/or of political and military power relations accompanied by changes in dominant ideologies -- that opens up the opportunity to actually apply some of the principles to changing many institutions and practices.

There is obviously a lot more to be said about my views on strategy and tactics. But it is not necessary to agree with them to learn from Slobodian that we need movements to challenge the ‘private property rights uber alles’ legal codes that organize today’s neoliberal globalization.

(2) WE NEED MOVEMENTS FOR RADICAL DEMOCRACY THAT START BY RESTORING THE PRIMACY OF DEMOCRATIC LEGISLATURES

To repeat, the second major implication of Slobodian’s analysis is that the left needs to ‘seek a radical democratization at both the global and nation-state level, including movements to restore the primacy of democratic legislatures in nation states and create globally representative democratic bodies at the IGO level’. The first point was about building movements to change basic laws. This is about changing political structures and practices (which of course would involve changing the basic laws that constitute them).

I have written several essays about how to reconfigure democracy. I plan many more, drawing on the best work of others that I can find, and it is there that I will get into more detail about the kinds of new institutions the left in any country might seek to create (and there will be no single best version of this but shared principles can guide different experiments in different places). I make this caveat because I am mindful of the fact that ‘reasserting the primacy of the legislative branch’ is not a simple fix. There is a role for judicial review of legislation (my own idea is that a legislature should be able to overrule a court decision about one of its laws, but only if the same overrule was repeated five years later, and the court decision would stand until then). There is such a thing as tyranny of the (momentary) majority, and just plain demagogic tyranny.

Let’s Start by Making Elected Legislatures Superior in Power to the Executive Branch and the Unelected Parts of the State.

But tyranny is more often the result of some kind of coup grounded in support from the armed part of the state, that sets aside the elected government and replaces rule by legislature with rule by an Executive authority.

The main thrust of change must be to reverse the empowerment of the Executive branch over the legislative branch (a good start would be to get rid of presidential systems and stick with something like the British parliamentary system where the head of government is the prime minister and s/he and the Cabinet are accountable to the legislature -- this still allows for too much Executive power in most places, but it is much easier to reform since its logic is legislative primacy and accountability of the government to a majority in the legislature).

It is important for there to be multiple centers of various forms of power (which is not the same as supporting the 18th century American ‘separation of powers’ system that is based on multiplying veto points in order to weaken the authority of the elected House). This includes strong protection for independent media and the right of those in opposition to the government to freely and non-violently organize. It also means a certain degree of autonomy in applying laws and policies by different state institutions, mostly to allow for local democratic decision-making by employees.

Elected Legislatures are Corrupted by Private Money and Constricted by Corporate Media Bias in Election Campaigns . Private Lobbying Should Be Banned, and Replaced by a Transparent Public Lobbying System.

Re-establishing the power of elected legislatures, and the accountability of the prime minister and Cabinet government to the elected representatives, will not be anywhere near enough as long as legislatures and legislators are themselves compromised by two things: private money donated to election campaigns; and lobbying by organizations representing business and various other elite group interests.

The left should call for very strictly enforced laws to outlaw private lobbying in any form, period. It should be replaced by a very transparent public system of lobbying that would look something like US Congressional hearings, except with more opportunity for those advocating for groups with different interests and ideas on the same object to critique and debate one another on camera and online.

Election campaigns should be publicly funded (there could be exceptions that allow raising small amounts from individual donors, but even then with a ceiling). There would need to be more elaborate arrangements made so that rival candidates get to debate one another and respond to one another’s online as well as debate stage assertions, strict limits on private advertising outside these public forums, guaranteed access to media for at least the top candidates, and so on.

The point is to get private money and dominant social group private interests out of their current control over legislatures as well as executive branches as much as possible. These are further examples of proposals that accomplish two things: they are ‘unrealistic’ maybe, but educate the public about the alternatives the left stands for; they actually can guide reform struggles within the current regime that apply the ‘post’ principles a little bit here and there, enough for us to learn from trial and error what to do when we do win some power somewhere, and enough to demonstrate the practicality of the left alternative in solving real-life quality of life problems that people care about.

It Still Comes Down to Changing the Basic Laws, and indeed the ‘Private Property Uber Alles’ Bias that is Encoded in Every Area of the Law.

Having said this, even the most radically democratic political structures will do little to deal with the problem of legislatures having to submit to the dictates of (foreign) capital, until and unless the legal codes that confer primacy of private property rights over human rights are revoked and replaced. The movements for new legal codes and for more democratic structures will always need to be closely linked. (This raises the issue of forms of property in a post-capitalist society. My intuition is that this starts with making a distinction between personal property for use that must be protected, and private property for profit or rent which must be phased out over however long it takes. And we need to experiment with multiple forms of public property. There is lots of work for economists and legal theorists here.)

Finally, there is the issue of what to put in place of the global (e.g. WTO and IMF), international (e.g. UN and its agencies) and inter-state bilateral and multilateral (e.g. FTAs and EU structures) legal-political structures. Should the left be advocating moving towards some kind of elected World Government, even if nation states would continue to exist and therefore the scope of authority of any such government would be limited to a specific sphere, and require cooperation with nation states? Should we take the political Right and the Hayekians head on and say the main purpose of doing this is ‘Redistribution’ of wealth and power and basic standards of living? To say the least, this would not initially be widely popular in rich countries and regions, including among the most oppressed and exploited who are the left’s logical core base.

Almost All the Most Pressing Issues Facing Humanity are Global, and Can Only Be Solved at Both the Global and National Levels.

But we need to start talking about these issues actively within the left and publicly. Almost all of the most pressing questions facing humanity – including global warming, destruction of species, pollution that poisons air/water/plants/animals/humans, pandemics like COVID but likely worse, the rich getting richer and the rest of us getting poorer, the unchecked spread of weapons of mass destruction, nuclear weapons, the capacity for chemical-biological warfare, cyber warfare disabling of power stations and water supplies and wifi based activities etc – cannot be fixed on the nation state level alone. They require bold action, backed up with law and force, at the global, international and inter-state levels. The right has their system in place. The left should be counterposing ours, and organizing our movements accordingly.

(3) LEFT-LED SOCIAL AND POLITICAL MOVEMENTS MUST ORGANIZE DIFFERENTLY

How then should the left be organizing differently in order to engage in the kind of politics sketched in the previous two points? This is too big a topic to go into detail here, so I will simply list three basic proposals.

** We need to create organizations at the global, international and inter-state levels. This can start if all the organizations and individuals who participated in the World Social Forums get involved together in the Progressive International.

The Strongest Part of the Left Organizes Protests and Electoral Parties that Try to Be Accountable to Popular Movements. But We Need to Create a Third Zone of Politics and Then Organize Accordingly.

** Extraparliamentary organizing in most countries, the main locus of the left flank of the entire family of progressive movements, tends to rely on one major tactic, non-violent street protests and actions and organizations that support those protests (training in how to operate safely within protests and how to practice consensus-seeking participatory democracy mass meetings during protests and occupations, coalition meetings, alternative media, public rallies, legal support for those assaulted or arrested, organization of transport and lodgings, etc). There is also the sphere of various countercultures allied with and often growing out of the political protests.

In recent years we have seen major efforts to complement this with parliamentary parties like Podemos in Spain and with Movement structures operating within social democratic (e.g. Momentum Corbynistas in UK Labour) and even liberal (e.g. DSA and Sanderistas in the US Democrats) parties.

But we need to go further if we are to practice a politics that seeks to demand and at least partly win popular power within institutions of all kinds – and not limit our seeking of political power to electoral politics to get seats in legislatures. We need to go beyond a politics that accepts that the rulers will always rule, and we can only petition them through protests to change their policies. We need to seek to put people into positions of rule everywhere, and to develop ways for them to be accountable, so that we are not just getting progressives co-opted.

What would this look like? There is a lot of work to do here to figure out how popular organizations can engage in political power seeking that complements, but goes beyond, protest and elections. An important part of this will be for the left to be very explicit about the big changes it stands for, to develop an explicit political program such as the Ten Point Program of Alternative Organizing Principles of a Post-Society that I have suggested, or as Progressive International is developing.

Today’s Left Does a Great Job Training Activists for Protest Campaigns. We need to Do the Same Thing to Train Organizers to Organize the Un(der)Organized into Mass Organizations.

** Today’s left often does a great job in organizing training workshops in the skills and methods that activists need in order to lead in all the activities connected to mass protests. Well educated youth tend to predominate in the initial organizing of many protests (with working class, urban poor and farmer people more likely still to engage in something more spontaneous and closer to rioting – except where mass union, farmer etc organizations exist). Ditto for left activists within electoral parties and within many of the less radical but progressive SMOs and non-profits. There are more and more exceptions to this pattern, more and more participation beyond the most educated sections of the middle and working class. But there are not enough.

We need to build up an entire new wing of left movements to be at least as capable of enabling working people to be organized and capable of sustained collective action as was the case when we had lots of labour and farmer organizations and mass socialist and communist parties with linked cultural, sports, welfare etc associations and organizations.

To do this we need to have training workshops to train organizers to go out and build mass organizations of struggle and to help upgrade the skills and resources of those that already exist.