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By Michael J. Smith on Wednesday June 21, 2006 08:46 PM

gluelicker writes:
This is a great blog, welcome existential relief from metastasizing liberal delusions.

Regarding the topic before us:

Too many misleading simplifications on this vital subject to go unchecked here.

Neo-liberal globalization predates the fall of the Berlin Wall (although the demise of really existing socialism injected it with some serious juice, ideologically and otherwise) but it postdates 1944’s Bretton Woods conference (which, in fact, was the mere ratification of international institutional designs already cooked up behind the scenes by the US Treasury Department and Lord Keynes, with the latter playing a decidedly subordinate role, given British war debts to Wall Street). It basically arrives on the scene in the 1970’s, when Keynesian welfare statism in the OECD world and national developmentalist models in the Global South could no longer deliver the goods, and in this context of stagnant growth – paired with the demise of fixed exchange rates and the boom in unregulated offshore banking – financial accumulation gained ascendance over productive investment (even this is a hopeless vulgarization).

It is not exclusively a project to prolong US primacy (ruling classes everywhere, including places that don’t take orders from Washington DC, have latched on to it to greater or lesser degrees in order to buttress their own privileges), but it is also naive to claim that it doesn’t to some extent bear the US imperial imprint (e.g. IMF-World Bank demands for "transparent corporate governance" always seem to advantage business service firms and investment banks headquartered in lower Manhattan, for some inexplicable reason).

To be sure, the dominant wings and policy elites in both parties embrace it – perhaps the so-called “liberal internationalists” of the Democratic Party most vigorously, Robert Rubin being the purest exemplar – but there are dissident blocs in both parties as well, namely the nativist paleocons on the "right" and the AFL-CIO protectionists on the "left" – neither of whom are exactly savory bedfellows, unfortunately.

Two highly recommended sources of recent vintage on this question, both quite sophisticated yet eminently readable, are David Harvey's A Brief History of Neo-Liberalism and Neil Smith's The Endgame of Globalization.

Anyway, I’ll stop here before my pedantry becomes even more grating.

Comments (9)

predator shmedator. And so, now what?

Seriously, there are whole institutions and governments devoted to the endless and intricate machinations and obfuscations used by the ruling classes to steal and sequester surplus labor and then construct elaborate theories about why this is good for me. The intricacies of the thieving class are mind numbing, but in the end "trickle-down" always has something to do with me getting pissed on.

Huey Long made it simple.


Gluelicker describes neo-liberalism's history pretty succinctly. I wonder about the following though: "when Keynesian welfare statism in the OECD world and national developmentalist models in the Global South could no longer deliver the goods".

It's commonly said that both the US and europe couldnt afford the costly social programs developed after WWII, but I always felt that "couldnt" really meant chose not to. The Republican program since Reagan has been to strip government of funds for social programs by wasting them on the military. If you view FDR's New Deal programs as emergency measures designed to answer dangerous discontent during the depression, then the Reagan and Thatcher launched conservative era is simply capital retaking control and asserting its ancient right to profits.

But maybe Gluelicker is making the English economist Harry Shutt's point, that privatization, the forerunner of neo-liberalism, was a response to shrinking opportunities of profit for capital.

In any case, it seems truer to me to say that Keynesianism at home and nationalist developmental models abroad were thwarted rather than that they failed.



_The Economist_ (the avatar of neo-liberal doctrine, so not necessarily the most reliable source) recently reported some interesting results from a survey of US households.

9 out of 10 households expressed worries that their jobs will soon be outsourced abroad.

8 out of 10 still subscribe to the Horatio Alger myth of hard work = upward mobility.

It is this kind of ingrained cognitive dissonance with which the US left must contend. The peculiar combination of survey results also seems to suggest that to the extent the insecure (predominantly white) "middle class" (the "working class" to you and me) can be politically mobilized via economic populist appeals, the villains in the narrative will be "unpatriotic" corporations (and their political enablers) who hire Chinese peons and Mexican border-crossers (as well as the Chinese workers and Mexican immigrants themselves), i.e. the corrupt actors who have betrayed the Horatio Alger dream in which so many remain invested... the classic set-up for Buchananite "America Firstism."


Your remarks are very well-taken, and I essentially agree with you. It’s all a matter of how you interpret the phrase "could no longer deliver the goods"... I’ll get back to you all on this when I can spare a few minutes.

Knoxville, TN


You clearly answered the "now what". Thanks for the Economist article. It has been awhile since I have seen the problem so starkly presented. The american mythology coupled with the corporate media's (and their think tanks) ability to form and control that myth is insurmountable.

The myth gets battered in the ecomomic cycle, broken in a deep cycle. That cycle may be upon us (chineses dollars, russian dollars, Shanghai Cooperation Organization, housing debt bubble, etc.).

A proper response to the globalization of capital would be the globalization of labor. Labor still lives in the era of nation-states. A review of labor history in the US is a predictor of this struggle.

NAFTA is regional. The current immigration surge is larely a result of NAFTA in Mexico. The CAFTA hordes are on the way and the "wall" is going to build tremendous internal pressure. My experience with Mexicans and Central Americans is that they are politicized and under no illusions. They may come to live the american dream (and the corporate media's constant pounding of this meme is an effort to inculcate the horatio alger myth), but when that dream doesnt deliver they will know what happened. Of course, this wedge issue/scapegoat is already being developed.

Well, I see that I've talked myself out of any solution. Good day.


Now we’re really getting somewhere.

First, attending to unfinished business…

Right-o, BobW, the rate of return on capital invested began to taper off in the rich countries (Japan excepted?) in the late 1960’s/early 1970’s. In the specifically US context, Tricky Dick (“we’re all Keynesians now”) tried to cool out the more hotheaded elements in the environmental and workers’ health and safety movements (and to co-opt a few would-be McGovern voters) by signing NEPA, Clean Air and Clean Water Acts, OSHA, etc. further hog-tying industry’s flexibility and squeezing profitability. The big bourgeoisie saw its share of national income and wealth decline drop precipitously in the 1970’s. Just as precipitously, devotees of Austrian neo-classical economists formerly hidebound in the groves of academe found lucrative gigs with the AEI and other such vehicles, the Business Roundtable, National Association of Manufacturers, etc. got their lobbying groove on, and by the second half of the Carter administration (take note!), stalwart “liberals” like Teddy Kennedy were shepherding legislation through the august halls of Congress to deregulate the transportation sector (the bane of long haul big-rig drivers everywhere!).

I think the “thwarted” rather than “failed” interpretation is more apropos for the national developmentalist model, although here too the model was given an extra lease on life by the peculiar conditions of the 1970’s, namely being able to paper over the flaws in the model (such as the reluctance of developmental states to truly discipline their coddled bourgeoisies) by borrowing recycled petrodollars on the cheap… Paul Volcker and the US Treasury were to put paid to that soon enough!

I wanted to write more, but hunger calls. Out…


The American religion of "self reliance" is probably the most useful ideological weapon that the the US elite possesses. 98% of the American electorate seems to accept it as commonsense that a priveleged or disadvantaged background has absolutely no effect on the "success" or otherwise of your life. "If you fail, it's your fault." Ergo, what's the point of public schooling, health or welfare? Labor Omnia Vincit, right? And if that doesn't work, then that's just your tough luck.

As an Aussie, I really feel sorry for you guys over there. Your inspiring labor history has been wiped from the public memory and there is simply no major political figure who is prepared to take a stand against the blatant greed and social division that has developed over the past 25 years. I admire this blog - it's funny and literate, and it treats the Dems, the Daily Kos and other ratbaggeries with the sneering contempt they deserve - but a sense of frustration remains. After all, all we are doing (me in Oz, all you guys over there) is typing! We're not marching, or occupying buildings, or burning bras, or anything active at all. Sad, sad, sad.


Tommy, it's also one of the most potent weapons that America possesses in terms of foreign relations. I have for my employment dealt with letters of young foreigners who want to come to the USA for a time. They say "I want to see the famous American way of life!" Some of the more well-read ones speak of our freedoms, our democracy, our (relative) lack of corruption.

Yet when they leave, and we ask them "what surprised you about the US?" they say "Everyone drives everywhere! I miss busses!"

Apparently, they don't know what the American way of life is - just that it is good, and they want it. I do not see how they are so different from American citizens.

These mythologiess have become so ingrained in the world's psyche that they are completely disconnected from definition, let alone actuality. The indicator is disconnected from the indicated.


I've just figured out how this blog works, and where this topic (neo-liberalism) started. Kudos to JR for putting it so succinctly, and Gluelicker for polishing it off.

Somewhere else on the blog, JS or MJS (one of the initial guys)caught my eye by saying we should insist that any democrat we might support sign a pledge of non-intervention. I quickly replied and called this a day-dream, since intervention is built into the imperial system, which is universal and bi-partisan.

Following on JR's placement of the discussion in the context of labor, why not, instead of asking our representatives to please sponsor a less violent foreign policy, demand that they launch programs to protect American jobs and develop new ones. For starters, reverse all the tax credits that encourage businesses to locate overseas, and provide credits for those that create jobs at home.

Has any democrat recently said anything like this? Not that I know of. Maybe we could trick John Edwards into moving in that direction!

Kevin Phillips observes that American politics oscillates between periods of go-for-broke individualism and free markets, and reactions against the excesses of untrammeled capitalism. Unfortunately, the former far outnumber the latter in our history, there being only two periods where free-wheeling business was reigned in, and social needs were met -- the New Deal, and the earlier so-called Progressive Era.

But maybe we are again at a point where the evils of free market capitalism are laid bare, and a movement can be built around jobs (and health) for the people, not profits for the rich. it would be fun to be part of such a movement, wouldnt it?

[drift] Nobody really burnt bras. It's an urban legend. Draft cards got burnt. Bras got thrown in the trash. Let our watchers from afar take note. ;) [/drift]

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