The neoliberalism debate in the ISA – Minority positions of May 2020

Contribution by Greek IC-members to WP discussion

(Greek IC members: AP, EM, Nik.A, NK, Nat.A)

Comrades, 

We think that on the issues of neoliberalism and consciousness there are serious weaknesses in the document. We couldn’t make detailed proposals in the time we had, particularly because the problem will not be solved by removing or adding this or that paragraph, sentence, or word. In our opinion we need to further discuss these two issues and, if there is agreement, develop or adjust the following aspects:

1. The question of neoliberalism and the return to Keynesianism 

2. The complications in consciousness in this “epoch” of Coronavirus and the impact on some of our transitional demands

3. The political vacuum and the left formations and how these affect consciousness and class struggle

4. The perspectives for the far right in the present conditions 

In what follows we’ll make some comments in relation to the above and develop them further in the IC discussion and in some articles, we would like to write. In general, we think that we are in the middle of very important phenomena and of a turning point in global developments and, therefore, we should not rush before attempting a generalized perspectives document (or an update). 

On the “end of Neoliberalism” 

It is of course clear that there will be adjustments to the present economic policy model. Apart from monetary measures, fiscal measures will also be taken by governments globally to tackle the crisis. These will include Keynesian measures, like investments in infrastructure and even “helicopter” money – the degree will vary significantly from country to country. The ruling class will also go ahead with nationalizations where necessary to save companies in threat of collapse. These policies were applied also in the 2008-9 Great Recession, but today they will be applied to a greater degree and on a bigger scale. 

The application of certain Keynesian measures, however, does not mean that there will be a return to Keynesianism. Keynesianism (pre-WW2 or post WW2) as a central policy of the ruling class was applied under certain economic and political conditions which do not exist today. In our opinion what we shall have is Keynesian measures (the degree of which will vary from country to country) within the general context of neoliberalism. The precise balance and duration are open issues to be discussed.

This is very different from the “end of neo-liberalism” (in the title) and the “demise of neoliberalism” (in the text) expressed in the article of TC in the website, which, as was stated in the last IE meeting (14.05.2020) is politically identical to the position in the document. It is also different from the position taken in the document – and more specifically in paragraph 49: 

“The previous ’model’ of neo-liberalism has no basis in the current situation. The new variant of ‘Keynesianism’ will not correspond to the expectations of the masses, but rather raise further demands from below. (Our emphasis).

This new position is an important change in the position of the International since the world congress. 

In the discussion in the last IC meeting (19.05.2020) some comrades claimed that there is no difference between “the end of neoliberalism” and the positions in the congress documents. They used the following excerpt from the world perspectives document, para. 55:

“World capitalism is exiting the era of neoliberal globalisation, the dominant trend for almost four decades, and entering the era of ’geo-economics’ in which the clash of interests between the major imperialist powers is the dominant factor…”. 

But obviously “exiting the era of neoliberal globalization” as “the dominant trend for decades”, does not mean the end of neoliberalism, it does not even mean the end of globalization. This paragraph is actually stressing the importance of geopolitical factors in the present conjuncture. Globalization is in retreat, one has to be blind not to see it, but this is different from being dead. 

Actually, the issue is taken up explicitly and quite accurately in the document on Europe, paragraph 24:

“As is explained in the world perspectives document, representatives of the ruling class now criticize capitalism’s exclusive focus on short-term shareholders’ return. This reflects their fear of public anger over mounting inequality. But, in practice, neoliberal policies, while partially checked, will continue as no capitalist can afford to lose out in competition, whether individually or as part of a national capitalist class. A fundamental shift in policy will require revolutionary class struggle. Until then, the system will be kept afloat by injecting more liquidities while continuing further attacks on wages and services”. (Our emphasis).

On the procedure re TC’s article 

TC’s article was published on the ISA website on the 13th of May and was featured as the central article for more than a week. The position that neoliberalism is dead was both in the title and text. There had been quite a few discussions between comrades about the “end of neoliberalism” for some time, long before the COVID crisis (since the summer of 2019). But this position had never been decided upon by any leading body of the International (Congress, IC or IE). Of course, not all positions are being discussed and voted upon before they are published in an article in the ISA website. However, positions that represent an important change, compared to the ones voted upon in previous meeting of the IC or in congresses should not be published in the ISA website without proper discussion and procedures having taken place. Alternatively, they should be published with the note that they reflect the personal opinion of the author or of a section of the ISA – this also means that different views on the subject can be published on the website. 

Our proposal is that this discussion should not be considered “finished”, but it should start now and TC’s article should be the beginning of the discussion, to have more articles on the relative subjects on the website and to finally decide on the issue in due time, perhaps at the School in July in a special discussion. 

Issues that need to be discussed and clarified 

Since there are different opinions, at least at this stage, the document should be more open about the perspectives on the economic policy of the ruling class. 

We are open to change our position but before that we’d need a proper discussion. We think that we need to seriously discuss the following issues, related to neoliberalism, before coming to a conclusion.

• Globalisation is in retreat and will continue to retreat, but it will not disappear from the scene. It will settle at a lower level than today before it starts, at a later stage, a new expansionary course, at a significantly slower pace than in the past. 

• The forces of production have overcome the nation state to historically unprecedented degree and this puts a limit to how much globalization will retreat. To put it more practically, Western multinationals cannot abandon the Asian (and other) markets – this would be “suicidal”. 

• Neo-Keynesian economists predict the “end of neoliberalism” for quite a while – some lefts have been doing so for over 10 years. By raising this perspective, we are not saying something new. 

• Neoliberal economists accept that they are in the corner, attacked both from the left and from the right – articles in the Economist magazine, by Emanuel Örtengren of the Swedish Timbro think tank, or Gideon Rachman of the Financial Times, are some such examples. But they are preparing for battle – they have not given up the fight.

• Neoliberalism is not only globalization of the goods and services markets. It is also financialization. This is a key feature of neoliberalism and although it is in a process of retardation, nobody is raising the prospect of abandoning it altogether. There is no prospect of capital controls returning on a generalized scale – they are essentially directed against China, and this is something we have to follow to see how far it will go. Capital controls have been applied in the past in special cases (even within the Eurozone!) and for specific periods of time – within the general context of neoliberalism. 

• Neoliberalism is also identified with the deregulation of the internal market – i.e. privatisations. This is not questioned by any serious section of the ruling class. The nationalisations that they will do in the coming period will be on the lines of the 2008-9 nationalisations: i.e. save the corporations in trouble in order to return them back to the private sector at a later stage. The same with the banks. 

• It is also identified with the deregulation of the labour market. This will continue, and does not contradict the fact that governments may provide benefits to unemployed and the poor, to avoid social explosions in the course of the crisis. 

• Export oriented economies are another central feature of neoliberalism. This cannot change fundamentally, it can change partially, because of the competition for world domination. This will continue to exert pressure on wages and labour market flexibility.

• Relocation of companies will take place to a certain extend. But this will have limitations. Again, western multinationals cannot abandon the Chinese and other Asian markets.

• The expansion of China into a global mighty force cannot be stopped by defensive trade wars which are an indication of weakness – it can only be stopped by its internal contradictions. In this context of course trade wars can play a role.

Comrades defending the position in para. 49 of the document i.e. that the era we are entering is “a new variant of Keynesianism” need also to explain what are the characteristics of this “new variant” – other than it “will not correspond to the expectations of the masses” and that it will include attacks on the working class. In both the document and in TC’s article it is said that this new variant of Keynesianism “will be more like the Keynesianism of the ‘30’s”. But while the “Keynesianism of the ‘30’s” has differences from the post-war Keynesianism, it still included, in the case of Roosevelt in the US: heavily taxing wealth (with the Revenue Act of 1935 which raised the “top rate” on incomes over $500,000 to 75%); promoting collective bargaining in order to lead to pay rises (through the National Industrial Recovery Act-NIRA); promoting stricter regulations for the banking sector (ex the Glass-Stegall Act which separated commercial banks from investment banks and was a serious check to speculative activities- abolished in 1999 by Clinton); direct employment of the unemployed by the public sector on a massive scale (with programs such as the Federal Emergency Relief Administration-FERA, which created 20 million jobs in 2 years from ’33 to ’35 or the Civilian Conservation Corps-CCC which created 3 million jobs in 8 years). All these with a workforce which was approximately 1/3 of what it is today. 

Do comrades believe such policies will be applied today? And if yes, where? This is another problem of the document – it does not distinguish between rich economies, which can apply certain Keynesian measures and other, poorer ones, which will have a very limited or no space at all to apply such measures.

Finally, we have to take into account what the working class understands when hearing of the “end of neoliberalism”. “Neoliberalism” in the minds of the broad layers of the population is identified with austerity and attacks. If the working class does not see a halt in the attacks or a betterment in their incomes and conditions, while we have proclaimed “the end of neoliberalism” we’d be seen as not understanding what’s happening. In countries of the global South, in the European south, but also in countries like India, where the neoliberal agenda has actually intensified during the crisis, we would be seen as out of touch with reality to come out with a position such as the “the end of neoliberalism”. 

Of course, the mood or the level of consciousness in the mass of the population does not decide our perspectives and our political positions – but it needs to be taken into consideration when it comes to how we pose issues, what formulations we use, with what emphasis, etc. 

On consciousness 

Consciousness in the period of the corona virus is a much more complicated issue than in the course of the 2008-9 crisis. Of course, such a catastrophic crisis can only lay the basis for huge leaps in consciousness, revolts and revolutions at a later stage. But it is not enough to simply state this. 

“Perspectives” should not mean that we present the facts and figures that indicate the depth of the crisis and then predict “revolts and revolutions”. “Perspectives” should mean that we try to see the different shades, complications and contradictions, in the immediate and medium-term apart from the long-term perspective of revolution, the differences between continents and countries, the tempo, the different phase in which different movements and societies are, etc. 

Let us just site one example, that of Greece. In 2010 society was raging with anger, with millions out on the streets. The enemy was clear, it was the government, the IMF, the EU, the Troika. An unprecedented number of general strikes, occupations lasting weeks and months, all sorts of social movements exploding (occupy, no pay, environmental, etc). Today there is 80% support to government measures, sometimes reaching 95% in the polls. ND has a 20% lead over SYRIZA. This won’t last long, of course. But this is what we are passing through now and it has to be noted. What is more important is that although there will be important struggles in Greece in the next period (in Athens there are already demonstrations of 2.000-4000 taking place of teachers, art workers, the environmental movement ect) we think it is highly improbable that we can have the generalized movement and the close to a million people on the streets like in 2010-13. 

We don’t think that Greece is the only exception on the planet. In the course of the past week we had discussions with a number of comrades in different countries of Europe and globally. We are always cautious not to confuse the situation in Greece, which has its own particular characteristics, with what may prevail elsewhere. On this basis we are confident that in what we say does not only reflect the situation in Greece.

Unfortunately, the FT’s document does not sufficiently take into consideration such complications. It is characterized by over-estimations or exaggerations and by excessive optimism which is presented in a kind of linear manner, devoid of contradictions and difficulties. We’ll present a number of examples.

In paragraph 2, for example, we see a clear exaggeration:

“The global working class, in its response to the pandemic, has begun to demonstrate that it is capable of leading humanity to a new stage of development, once the current parasitic, inefficient and degenerate ruling class is forced off the scene of history”. (Our emphasis). 

During the IE and IC discussion cdes answering our objections argued that this was demonstrated by the fact that the lock down was imposed by the working class. But, actually, this was the case only in a minority of cases, in some countries, in some industries. It was not a generalized movement, in the form of a general strike for example, and it was not demanding a general lockdown in the economy but in specific workplaces. Globally the lockdown was decided by governments. Workers’ strikes reflected the readiness of workers to fight for their security but they did not indicate their ability to lead humanity to a new stage of development. 

Similar conclusions to paragraph 2 are repeated in paragraph 81:

“The pandemic and lockdowns have had a profound impact on consciousness. For tens of millions of working-class people, it’s become abundantly clear that it is they who really make the economy run”.

Paragraph 27 predicts: 

“…mass struggles by the working class on every continent and a radical shift in the consciousness of hundreds of millions of working-class people to search for an alternative to capitalism and towards the need for a socialist transformation of society”. 

Paragraph 86, expects health workers to be at the forefront of the struggles of the working class, soon after the lockdowns – without conditions or exceptions: 

“The workers’ movement had to step in where the capitalists and their governments failed… … Health workers… have gained enormous public support, and often had to take action or threaten it, to get basic equipment. This sector was growing in combativity even before the pandemic, but now these workers will not be prepared to go back to ‘normal’. They will demand better conditions, pay rises, extra staff and more resources for healthcare, and it will be very difficult for any bosses or authorities to go against them, given their enormous authority in society. They could be catapulted into the vanguard of the global labour movement soon after the lockdowns are lifted”. 

In paragraph 93 we see the expectation that the unemployed can enter collective action on the side of the working class (again as a generalized tendency). 

“The newly created army of unemployed will see its future perspectives under capitalism dashed and could be won to a strategy of collective action if it is on offer”.

But the unemployed, have been described by Marx as the “reserve army or labour” which is used by the bourgeoisie to force the workers to defeat or submission, to destroy labour relations and living standards.

In paragraph 94 we read:

“Of course, events will not develop in a straight line, nor will mass consciousness. Radicalisation and new shifts to the Left will take place in the context of a deepening of already existing polarisation. While far right governments are entering crises in a number of countries, reactionary ideas will retain a base and be expressed in different existing and new phenomena in the 2020s, not least expressed by established and ruling parties. The reversal of globalisation and turn towards economic and political nationalism among the bourgeoisie will further nourish the forces of reactionary nationalism, racism and xenophobia and general backwardness. The weakness of the Left in most countries – with the recent defeat and capitulation of new reformist figures such as Corbyn and Sanders – is also an important factor”. 

Here we see a reminder that the above mentioned over-optimistic perspective will not be a straight line, there will be complications etc. Far right governments, reactionary ideas, nationalism, racism, xenophobia, general backwardness, are mentioned. The capitulation of Corbyn and Sanders is also mentioned. But all these factors, so important in the period that we are passing through, are simply mentioned, as if details on the road to revolution. Actually, they are not seriously taken into consideration. 

The idea that we should emphasise the positive elements and the potential in a situation is of course correct. But this does not mean that we should not present things in a balanced way. Optimism is crucial. Over-optimism can be equally damaging as pessimism. 

To sum this up, in 2008-9 it was much clearer, in most countries, who the enemy was – the bankers in the US were responsible for millions losing their jobs and their homes, the Troika in Europe for the Memoranda imposed on the South, etc. Now this is not clear – the cause of the crisis, on the surface, is a virus, and this is used by Trump and others of his kind, by the media, etc. This is coupled with the mass unemployment that is already in progress. This crisis is so devastating that it can have a freezing effect on the working class for a period. This can actually allow for bigger attacks against the working class. This may push sections of the workers into atomization, not collective struggle, to nationalism and reactionary ideas, it can lay the basis for authoritarian regimes as we already see. Crisis does not automatically mean struggle as we know well and often repeat, but can mean the opposite for a period of time. 

The idea that we should mention the crisis only to stress that it will be followed by revolutionary explosions and not engage with the actual processes, their contradictions and the timescale, can be oversimplifying and dangerous. It is always correct that capitalism and its crises at some point leads to revolutionary situations. But this is always correct, so we are not really dealing with perspectives by repeating it. 

Describing the complications and difficulties does not in any way mean that we put forward a pessimistic perspective for the class and for our forces. In the next period we will have important opportunities for our forces to intervene and build. Struggles can fluctuate but they do not stop. We have to prepare our forces to take advantage of every possible opportunity. A sober estimation of the situation helps our organizations to navigate correctly and seize the opportunities better when they are presented. 

On the transitional programme 

The issue of the period and of consciousness is of course is linked to the transitional programme. 

The document does not take a position on the causes of the pandemic. It is not sufficient to concentrate on the national health systems that have been of course devastated by capitalism. 

There are cases in which no NHS that can cope with a pandemic once it gets out of control. So, one central issue is how to check the virus before it spreads, or how to prevent the spread of dangerous viruses (there are many more) into human societies. 

Thus we should include points like the following in the document: that the virus was brought into human societies by the destructive policies of capitalism on nature and the environment; that it could have been checked from the very beginning if it was not for the policies of the Chinese regime; that it could have been contained to small numbers if measures were taken from the beginning as the experience of a number of (capitalist) countries shows (Taiwan, S. Korea, Slovenia, Greece, etc); we need to take a clear position against the theories of “herd immunity”; expose, in other words, that behind all these policies is capitalism, competition and profit; raise, of course, all the demands about safety measures, mass testing, mass investments in the NHS, etc; raise the need for nationalization of the privatized health systems, and of the farma industry; stress the demand to establish “health and safety committees” in every work place; and of course end with nationalization of the banks, major industries, planning and socialism.

On the Left 

Struggle and consciousness are, of course, linked to the role of leadership. In the recent period we had the capitulation of two more “new left” phenomena of the past few years – of Corbyn and of Sanders. Sanders and Corbyn, are mentioned in the document in passing, but actually their capitulation is quite important – how does it affect developments in the US and Britain respectively? 

Particularly as this is coupled with the capitulation of more or less all of the new formations of the previous period. It is not only SYRIZA – which capitulated in 2015. Also, Podemos in Spain, the Left Block in Portugal, Die Linke in Germany, the PVDA in Belgium, etc., have all moved decisively to the right. In addition, we should note that the new Left parties were not exposed as they are now at the time of the 2008-9 recession. 

This factor, the capitulation of the new Left, does not necessarily cut across our own growth. This is a different issue all together, actually under certain conditions they could make our growth easier. Nor is the existence of a left party a prerequisite for struggle, social explosions or revolution. But the emergence of left formations reflects a stage in the developments of mass consciousness. The role they play can be a factor propelling consciousness and struggle, or the opposite, retarding consciousness and struggle. Their capitulation can have a serious negative impact on struggle and consciousness. This aspect can’t be ignored. 

On the far right and Bonapartism 

In a whole series of countries, we see increased elements of Bonapartism or authoritarianism to say the least – Hungary is the most characteristic and developed example. At the same time, we see mobilisations of a broad spectrum of reactionary or confused elements in society, combining religion with conspiracy theories and far right ideas. Such demonstrations are being called in many countries – in some they are successful in others not. It is worth noting that in the US they entered Michigan’s parliament in arms (despite this not being illegal) and that Vox is becoming increasingly active in Spain.

We need to take a closer look at the rise of nationalism, protectionism, the far right and new “populist” phenomena – these of course are linked to the complications in consciousness due to the objective developments and due to the lack of left alternatives that have been mentioned above. 

Again, this does not mean we cannot grow even in countries where the far right and authoritarianism put their mark on events in one way or the other. Wherever the far right grows, important antifascist initiatives also form. And this reaction to the growth of the far right can, actually, be the most important pool for our growth. Identifying and analyzing important negative factors and trends does not mean that we take a conservative approach to perspectives and the growth of our forces. It means preparing our forces better to work in more difficult or complex conditions and find ways to grow despite them. 

We also need to correct mistakes like the one in paragraph 20: 

“The reaction to the Great Recession was, in its first phase, primarily expressed in a shift towards the left, in an anticapitalist direction, and openness to socialist ideas. Only when the trade union leaders failed to adequately organise and lead the fightback against austerity and when various left forces (the worst case being Syriza) failed the test of the moment and bent to the pressure of the ruling class, did the space open up for right-wing forces to make gains on a bigger scale…”. 

Although is some cases the far right and the neo-Nazis developed in the way it is mentioned in para 20, there are also many cases where they developed in parallel with the nLFs and in some cases in advance, as the initial/primary response to the recession. Just to give some examples, in Greece SYRIZA and Golden Dawn had a parallel growth after the crisis hit; in France the far right has been from the beginning of the crisis stronger than the nLFs; in Eastern Europe also the far right grew without a challenge from the left; in Italy, because of the tragic deficiency of the left in previous decades, the far right was the only political power that gained during the crisis, etc.

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