[News] Do Not Reach for the Sky Just to Surrender

Thu Aug 6 11:21:02 EDT 2020

https://www.thetricontinental.org/newsletterissue/32-coronavirus-and-neoliberalism/
Do
Not Reach for the Sky Just to Surrender: The Thirty-Second Newsletter
(2020).
August 6, 2020 - Vijay Prashad
------------------------------

[image: Greta Acosta Reyes (Cuba), Neoliberalism, 2020.]

Greta Acosta Reyes (Cuba), *Neoliberalism*, 2020.

Dear Friends,

Greetings from the desk of the Tricontinental: Institute for Social Research
<http://thetricontinental.org/>.

Beirut, mon amour.

Those shattered mirrors once were
The smiling eyes of children,
Now are star-lit.
This city’s nights are bright.
and luminous is Lebanon.
Beirut, ornament of our world.
Faces decorated with blood
Dazzling, beyond beauty.
Their elegant splendor
Lights up the city’s lanes.
And radiant is Lebanon.
Beirut, ornament of our world.
Every charred house, every ruin
Is equal to Darius’ citadels.
Every warrior brings envy to Alexander.
Every daughter is like Laila.
This city stands at time’s creation.
This city will stand at time’s end.

– Faiz Ahmed Faiz <https://www.jadaliyya.com/Details/25386> (1911-1984).

The novel coronavirus continues its march through the world, with 18
million confirmed cases and at least 685,000 deaths. Of these, the United
States of America, Brazil, and India are the worst-hit, harbouring about
half of the world’s cases. US President Donald Trump’s claim that these
numbers are high because of higher rates of testing is not borne out by the
facts, which show that it is not testing that has ballooned the numbers but
the paralysis of the governments of Trump, Brazil’s Jair Bolsonaro, and
India’s Narendra Modi and their failure to control the contagion. In these
three countries, testing has been hard to access, and the test results have
been unreliably reported.

Trump, Bolsonaro, and Modi share a broad political orientation – one that
leans so heavily towards the far right that it cannot walk upright. But
beneath their buffoonish statements about the virus, and their reluctance
to take it seriously, lies a much deeper problem that is shared by a range
of countries. This problem goes by the name of neoliberalism, a policy
orientation that emerged in the 1970s to stabilise a deep crisis of
stagnation and inflation (‘stagflation’) in global capitalism. We define
neoliberalism plainly in the image below:

[image: Vikas Thakur (India), Neoliberalism, 2020.]

Vikas Thakur (India),* Neoliberalism*, 2020.

The tax strike <https://www.thetricontinental.org/working-document-1/> by
the very rich, the liberalisation of finance, the deregulation of labour
laws, and the evisceration of welfare provisions deepened social inequality
and reduced the role of the vast mass of the world’s population in
politics. The demand that ‘technocrats’ – especially bankers – run the
world produced an anti-political sentiment amongst large sections of the
world, who became increasingly alienated from their governments and from
political activity.

Institutions of society that emerged to protect us from catastrophes of one
kind or another were undermined. Public health systems were dismantled in
countries such as the United States and India, while associated social
services for childcare and eldercare were cut back or destroyed. In 2018, a
United Nations study
<https://www.un.org/development/desa/dspd/wp-content/uploads/sites/22/2018/06/rwss2018-full-advanced-copy.pdf>
found that only 29% of the global population has access to social
protection systems (including income security, access to health care,
unemployment insurance, disability benefits, old-age pensions, cash and
in-kind transfers, and other tax-financed schemes). A consequence of ending
even meagre social protection for workers (such as sick leave) and of
failing to provide public universal healthcare is that in the case of a
pandemic, workers can neither afford to remain at home nor can they access
healthcare: they are left to the wolves of the ‘free market’, which is
really a world designed around profit and not the well-being of people.

[image: Choo Chon Kai (Malaysia), Freedom of choice, 2020.]

Choo Chon Kai (Malaysia), *Freedom of choice*, 2020.

It is not as if there have not been warnings about the policy framework
known as neoliberalism and the austerity project that it has driven. In
September 2019, the World Health Organization (WHO) warned
<https://apps.who.int/gpmb/annual_report.html> about the deep cuts in
public health spending – including the lack of hiring of public health
workers – and the impact this would have if a pandemic were to break out.
That was on the verge of this pandemic, although earlier epidemics (H1N1,
Ebola, SARS, MERS) already showed the weakness of the public health systems
to manage an outbreak.

>From the onset of neoliberalism, political parties and social movements
warned about the threats posed by these cuts; as social institutions are
whittled away, society’s ability to withstand any crisis – be it economic
or epidemiological – is damaged. But these warnings were dismissed, the
callousness remarkable.

[image: Kelana Destin (Indonesia), Water, 2020.]

Kelana Destin (Indonesia), *Water*, 2020.

The United Nations Conference on Trade and Development (UNCTAD), founded in
1964, lit the red light of caution from the publication of its first
<https://unctad.org/en/PublicationsLibrary/tdb863_rev.1_en.pdf> *Trade and
Development Report* (TDR) in 1981; this UN body tracked the new economic
agenda premised on liberalised trade, debt-driven investment in the
developing world, and the slow emergence of a broad slate of austerity
policies pushed by the IMF’s structural adjustment programmes. The
austerity programmes imposed on countries by the IMF and by the wealthy
bondholders negatively impacted GDP growth and produced large fiscal
imbalances. Growth in Foreign Direct Investment (FDI) and exports did not
necessarily mean an increase of the incomes for the people in the
developing world. The TDR
<https://unctad.org/en/PublicationsLibrary/tdr2002_en.pdf> from 2002
explored the paradox that, while the developing countries were trading
more, they were earning less; this meant that the trading system was rigged
against these countries whose economies are largely reliant on exporting
primary commodities.

The 2011 TDR <https://unctad.org/en/Docs/tdr2011_en.pdf> looked closely at
the after-effects of the 2007-08 credit crisis, which – it noted –
‘highlighted serious flaws in the pre-crisis belief in liberalisation and
self-regulating markets. Liberalised financial markets have been
encouraging excessive speculation (which amounts to gambling) and
instability. And financial innovations have been serving their own industry
rather than the greater social interest. Ignoring these flaws risk another,
possibly even bigger, crisis’.

[image: Lizzie Suarez (USA), Abolish Neoliberalism Resist Imperialism,
2020.>]

Lizzie Suarez (USA), *Abolish Neoliberalism Resist Imperialism*, 2020.

After re-reading the 2011 TDR, I wrote to Heiner Flassbeck, who was the
Chief of Microeconomics and Development at UNCTAD from 2003 to 2012, to ask
him about that report and his feelings about it almost a decade later.
Flassbeck re-read the report and wrote, ‘it seems to me that it is still a
good guide into a new global order’. Last year, Flassbeck wrote a
three-part series
<https://www.flassbeck-economics.com/the-great-paradox-liberalism-destroys-the-market-economy/>
of articles titled ‘The Great Paradox: Liberalism Destroys the Market
Economy’ in which he argues that neoliberalism destroyed the ability of
economic activity to create jobs and wealth for the majority of the people.
Now, Flassbeck wants to emphasise the importance of stagnant wages as an
indicator of problems, as well as a place from which to develop solution.

The 2011 TDR argued that ‘the forces unleashed by globalisation have
produced significant shifts in income distribution resulting in a falling
share of wage income and a rising share of profits’. The Seoul Development
Consensus of 2010 had advised
<https://www.oecd.org/g20/topics/development/Annex1-Seoul-Development-Consensus-Shared-Growth.pdf>
that ‘for prosperity to be sustained it must be shared’. Apart from China,
which developed a major scheme in 2013 to eradicate poverty and share
growth, most countries saw wage growth fall short of productivity growth,
which has meant that domestic demand grew slower than the supply of goods;
nor were the possible solutions of relying on external demand or
stimulating domestic demand with credit sustainable.

[image: Pavel Pisklakov (Russia), Invisible Hand, 2020.]

Pavel Pisklakov (Russia), *Invisible Hand*, 2020.

Flassbeck replied to Tricontinental: Institute of Social Research: ‘The
core of the matter is wages. That was missing in the TRD 2011. All attempts
to stabilise our economies and bring them back to strong investment growth
are futile if the wage question is not fixed. To fix it means to implement
in all countries of the world strong regulation to make sure that wage
earners are fully participating in the productivity growth of their
national economies. In the developing world, this is understood in Eastern
Asia but nowhere else. You need strong government intervention to force
companies, national as well as international, to apply wage growth in line
with productivity growth and the inflation target set by the government or
the central bank. It can be pushed through by governments decisions about
the increase of the minimum wage, as China did it, or by informal pressure
on the companies, as Japan did it’.

In a recent report
<https://www.flassbeck-economics.com/how-to-create-unemployment-and-deflation/>,
Flassbeck argued that many developing countries – even in the midst of the
coronavirus recession – look to the advanced capitalist countries, which
are cutting wages, underspending, and pursuing failed policies of ‘labour
market flexibility’; the IMF often forces along these policies, which are
the ‘main hindrances to a better growth and development performance’.

[image: Sinead L Uhle (Germany), También la lluvia (‘Also the rain’),
2020.]

Sinead L Uhle (Germany), *También la lluvia (‘Also the rain’)*, 2020.

This newsletter is illustrated by posters from our ongoing Anti-imperialist
Poster Exhibition
<https://antiimperialistweek.org/en/exhibitions/neoliberalism/>. The first
set was on the theme of capitalism
<https://antiimperialistweek.org/en/exhibitions/capitalism/>; the second
set is on neoliberalism, for which we received submissions from 59 artists
from 27 countries and 20 organisations. Please spend some time enjoying the
inventiveness of the artists.

Their inventiveness gives us confidence to be inventive and bold in our
demands for society, which reject the neoliberal capitalist framework. If
we are to reach for the sky, there is no point in putting our hands up
merely to surrender to the propertied and the powerful; we need to reach
for the sky to lift up the world from the morass of despair.

Warmly, Vijay.

[image: Golbal Meeting Tricon]

On August 3, our entire Tricontinental: Institute for Social Research team
met for a virtual global meeting. We discussed our agenda and lifted each
other’s spirits, hoping to work as hard as we have worked throughout this
pandemic to help understand and produce a sharper analysis of five crises:
(1) the coronavirus pandemic, (2) the unemployment crisis, (3) the hunger
predicament, (4) the escalation of state violence, and (5) the sharpness of
social distress (including increased violence against women and minorities).

We do not often ask for your solidarity, but we invite you to visit our
website and donate <https://www.thetricontinental.org/> towards our efforts.
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