Tag Archives: capitalism

The G20 agenda: What is neo-liberalism?

Much of the critique of the G8 and G20 involves a resistance to a economic project called neoliberalism that the G8 and G20 adhere to.While neoliberalism is a relatively common word in the south, it is not so well known in Canada and the United States.

Yet, the neoliberal economic project has been the mode of operation of our economic system for the past 40 years, and has had profound effects on all of us.

For a clear background, there is no better place to start than with the following two articles (as well as the video above).  I have pasted snippets below, but if you have time, do click and read in full (here and here):

A. What is Neoliberalism? by Elizabeth Martinez and Arnoldo Garcia

The main points of neo-liberalism include:

•    THE RULE OF THE MARKET. Liberating “free” enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers’ rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say “an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone.” It’s like Reagan’s “supply-side” and “trickle-down” economics — but somehow the wealth didn’t trickle down very much.

•    CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. Reducing the safety net for the poor, and even maintenance of roads, bridges, water supply — again in the name of reducing government’s role. Of course, they don’t oppose government subsidies and tax benefits for business.

•    DEREGULATION. Reduce government regulation of everything that could diminsh profits, including protecting the environmentand safety on the job.

•    PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.

•    ELIMINATING THE CONCEPT OF “THE PUBLIC GOOD” or “COMMUNITY” and replacing it with “individual responsibility.” Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves — then blaming them, if they fail, as “lazy.”

B. On Neoliberalism: An interview with David Harvey:

This wide ranging interview with Harvey discusses many of the key historical moments in the development and ascendancy of neoliberalism: the welfare state backlash; Chile as the first experiment in noeliberalism; the end of the post-war compromise between labour and capital; the New York City fiscal crisis of the 1970s; the key role of Margaret Thatcher; and the building of middle class consent for the project.

…[T]he theory takes the view that individual liberty and freedom are the high point of civilization and then goes on to argue that individual liberty and freedom can best be protected and achieved by an institutional structure, made up of strong private property rights, free markets, and free trade: a world in which individual initiative can flourish.  The implication of that is that the state should not be involved in the economy too much, but it should use its power to preserve private property rights and the institutions of the market and promote those on the global stage if necessary.

[Neoliberals] took the view that state interventions and state domination were something to be feared.  And they weren’t only talking about fascism and communism, but they were also talking about the strong welfare state constructions that were then emerging in Europe in the postwar period and also talking about any kind of government intervention into how the market was working.  They saw their role as very political, not only against fascism and communism, but also against the power of the state, and particularly against the power of the social democratic state in Europe.

G8 history: Undermined post-war 3rd world justice project

G8 history: Undermined post-war 3rd world justice project

Academic and activist Vijay Prashad on the ‘Third World Project’ and the G8

Interview by Sharmeen Khan, CHRY

The 3rd World Project was a very hopeful post-World War II economic justice and political equality effort amongst the majority of countries in the global south (‘the Darker Nations’ of Prashad’s book on the subject).  The aim was to “create a different kind of world for their people.”

In this interview, Prashad outlines how the G8 (then the G7) was created to destroy the project in order to ensure global economic and political supremacy of the G7 countries.  They were able to undermine it through promotion of corporate globalization, and through the International Monetary Fund (IMF) and World Bank.

Prashad recaps the history of the 3rd World Project, analyzes how it was undermined and discusses what this has meant for the people of the south. He then discusses the meaning of current transfer of power from the G8 to the G20.


Part I: What was the ‘3rd World Project’?

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Part II: How the G7 set out to destroy the 3rd world project. And succeeded.

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Part III: What is the meaning of the power shift from the G8 to the G20 currently taking place?

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About the interview:

Vijay Prashad joined CHRY host Sharmeen Khan by phone. Prashad is the George and Martha Kellner Chair in South Asian History and Professor in International Studies at Trinity College in Hartford, Conneticut. He has recently written ‘The Darker Nations: A People’s History of the Third World

[June 2010, CHRY 105.5 FM, Toronto]

U.S. China battle brewing

U.S. China battle brewing

The U.S. and China are in a big battle right now over exchange rates – with serious global repercussions. Some are calling for this issue to be resolved through the G-20.

China relies heavily on selling cheap exports to the U.S., while the U.S. relies as much on China buying it’s treasury bonds in order to service the U.S. debt. This relationship has created a kind of an equilibrium where neither side wants to tread too strongly on the other.

However, the U.S. is accusing China of falsely depreciating it’s currency (the renminbi) so that China can increase its exports to the U.S. (and other countries) based on the low cost of buying their products. The U.S. is losing export opportunities due to it high exchange rate relative to the renminbi.

And there are calls for action against China, despite fears of retaliation. Even the U.S. Chamber of Commerce, which has done everything over the years to back China’s entrance into the world economy (at the behest of multinational corporations), is calling for the U.S. to name China as a ‘currency manipulator’ and possibly place tariffs on China.

It is also interesting to see the U.S. crying foul about a market (theirs) being artificially flooded by cheap goods (China’s). The U.S. agricultural industry has been doing this for years with cheap subsidies of corn and other products to Latin America, especially Mexico. This has wiped out much of Mexico’s domestic corn industry, knocked farmers off their land, and been a key factor in Mexican economic migration to the U.S. The U.S. has traditionally been fine with artificial markets, as long as they are not hurt themselves.

This all points to a key problem facing global capitalism in the wake of the financial crisis – lack of demand and overproduction. In the wake of low depressed wages worldwide and high unemployment, there is a scramble to get at whatever consumer demand they can round up. Thus the focus on countries like China that still have global demand for their products, and the concern that they are doing it artificially. The countries with strong trade surpluses like China are seen to be “taking more than their fair share of world demand and are under pressure to boost their domestic markets”.

Many are seeing this as a key issue for the G-20 to take up, especially as it moves to become the prime location for creating global policies for economic growth and financial reform.

It will be very interesting to watch in the weeks leading up to the G-20 meetings, as the game of cat and mouse continues between the U.S. and China.

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