Teaching Comparative Government and Politics

Saturday, February 26, 2011

Comparative neoliberalism

This opinion piece from an Egyptian commentator writing at Al Jazeera, offers some interesting comparisons. It's too long to offer more than a glimpse of the article in this space, but it's not too long for a student reading. The commentator is identified as Abu Atris, the pseudonym for a writer working in Egypt.

A revolution against neoliberalism?

Now that the Mubarak regime has fallen, an urge to account for its crimes and to identify its accomplices has come to the fore. The chants, songs, and poetry performed in Midan al-Tahrir always contained an element of anger against haramiyya (thieves) who benefited from regime corruption…

To describe blatant exploitation of the political system for personal gain as corruption misses the forest for the trees. Such exploitation is surely an outrage against Egyptian citizens, but calling it corruption suggests that the problem is aberrations from a system that would otherwise function smoothly… This was less a violation of the system than business as usual. Mubarak’s Egypt, in a nutshell, was a quintessential neoliberal state…

Neoliberal states guarantee, by force if necessary, the "proper functioning" of markets; where markets do not exist (for example, in the use of land, water, education, health care, social security, or environmental pollution), then the state should create them.

Guaranteeing the sanctity of markets is supposed to be the limit of legitimate state functions, and state interventions should always be subordinate to markets. All human behavior, and not just the production of goods and services, can be reduced to market transactions.

And the application of utopian neoliberalism in the real world leads to deformed societies as surely as the application of utopian communism did…

The only people for whom Egyptian neoliberalism worked "by the book" were the most vulnerable members of society, and their experience with neoliberalism was not a pretty picture. Organised labor was fiercely suppressed. The public education and the health care systems were gutted by a combination of neglect and privatization. Much of the population suffered stagnant or falling wages relative to inflation. Official unemployment was estimated at approximately 9.4% last year… and about 20% of the population is said to live below a poverty line defined as $2 per day per person.

For the wealthy, the rules were very different. Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite. Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid…

Most importantly, the very limited function for the state recommended by neoliberal doctrine in the abstract was turned on its head in reality. In Mubarak’s Egypt business and government were so tightly intertwined that it was often difficult for an outside observer to tease them apart…

Similar stories can be told throughout the rest of the Middle East, Latin America, Asia, Europe and Africa. Everywhere neoliberalism has been tried, the results are similar: living up to the utopian ideal is impossible; formal measures of economic activity mask huge disparities in the fortunes of the rich and poor; elites become "masters of the universe," using force to defend their prerogatives, and manipulating the economy to their advantage, but never living in anything resembling the heavily marketised worlds that are imposed on the poor…

The story should sound familiar to Americans as well. For example, the vast fortunes of Bush era cabinet members Donald Rumsfeld and Dick Cheney, through their involvement with companies like Halliburton and Gilead Sciences, are the product of a political system that allows them — more or less legally — to have one foot planted in "business" and another in "government" to the point that the distinction between them becomes blurred. Politicians move from the office to the boardroom to the lobbying organization and back again.

As neoliberal dogma disallows any legitimate role for government other than guarding the sanctity of free markets, recent American history has been marked by the steady privatization of services and resources formerly supplied or controlled by the government. But it is inevitably those with closest access to the government who are best positioned to profit from government campaigns to sell off the functions it formerly performed…