Wednesday, September 24, 2008

The US Crisis of Neoliberalism

Yes, this seems familiar for us here in Indonesia

Socialism for Bankers, Savage Capitalism for Everyone Else?
James S. Henry : The bailout jeopardizes the entire progressive agenda, undermines democracy, doesn't compensate us for our money and doesn't solve the problem. Otherwise, it's great!

Goldman Sachs Socialism
William Greider: Bernanke demands $700 billion with no accountability, no transparency and no guarantees. Take it or leave it, suckers.

Bail Out People Before Bankers
The Nation. posted by Peter Rothberg on 09/23/2008 @ 7:03pm

Economists are widely panning
Treasury Secretary Hank Paulson's bailout package for lacking appropriate regulatory mechanisms to prevent another future crisis; for not providing homeowner relief; for richly rewarding corporate executives for their failure and for neglecting to provide
meaningful oversight over how the aid is distributed.
This whole mess has given lie to the free market and called into question virtually the entire basis of late capitalist economic organization. The Feds are propping up stock prices, directing buyouts, nationalizing private industries and
subsidizing crooks and swindlers who already made a killing off the mortgage bubble.
The Fed and Treasury are right to take steps to avert this disaster but the use of taxpayer money to exclusively prop up and reward the rich while the needs of everyone else are written off as too costly is both morally unacceptable and, to quote conservative economist
Luigi Zingales of the University of Chicago School of Business, "will undermine the fundamental workings of the capitalist system."
While there is an urgency to put a bailout program in place, there are several important issues that Congress should address as part of the process. As economist
Dean Baker has outlined on TPM , there are some very clear principles that could guide a bailout and a restructuring of the financial system.
A coalition of grassroots groups, including Credo Mobile, Code Pink, United for Peace and Justice and are planning to express their opposition to Paulson's bailout plan and call for those clear principles this Thursday, September 25 in a
rally and march at 4:00pm near Wall Street in lower Manhattan.
With the world famous financial district as the backdrop and the eyes of the national media watching, the organizers' aim is to make visible the anger and concern of so many people at the prospects of this bailout and to do so as Congress appears set to
pass legislation by the end of the week before adjourning for the fall campaign season.
If you're not in New York, you can still
contact your elected reps and implore them to reject Paulson's plunder and enact a plan that bails out Main Street as well as Wall Street and provides for investment in a new productive economy.

Tuesday, September 23, 2008

Bordieu: The Essence of Neoliberalism

The Essence Of Neoliberalism
Pierre BourdieuProfessor at the Collège de France
Pierre BourdieuDeceased in 2001Le Monde, December 1998En español: La esencia del neoliberalismoLa globalización en La BitBliotecaLa nouvelle vulgate planétaire (au Monde diplomatique) Pierre Bourdieu en La BitBlioteca.

As the dominant discourse would have it, the economic world is a pure and perfect order, implacably unrolling the logic of its predictable consequences, and prompt to repress all violations by the sanctions that it inflicts, either automatically or — more unusually — through the intermediary of its armed extensions, the International Monetary Fund (IMF) and the Organization for Economic Cooperation and Development (OECD) and the policies they impose: reducing labour costs, reducing public expenditures and making work more flexible. Is the dominant discourse right? What if, in reality, this economic order were no more than the implementation of a utopia — the utopia of neoliberalism — thus converted into a political problem? One that, with the aid of the economic theory that it proclaims, succeeds in conceiving of itself as the scientific description of reality?
This tutelary theory is a pure mathematical fiction. From the start it has been founded on a formidable abstraction. For, in the name of a narrow and strict conception of rationality as individual rationality, it brackets the economic and social conditions of rational orientations and the economic and social structures that are the condition of their application.
To give the measure of this omission, it is enough to think just of the educational system. Education is never taken into account of as such at a time when it plays a determining role in the production of goods and services as in the production of the producers themselves. From this sort of original sin, inscribed in the Walrasian myth (1) of “pure theory”, flow all of the deficiencies and faults of the discipline of economics and the fatal obstinacy with which it attaches itself to the arbitrary opposition which it induces, through its mere existence, between a properly economic logic, based on competition and efficiency, and social logic, which is subject to the rule of fairness.
That said, this “theory” that is desocialised and dehistoricised at its roots has, today more than ever, the means of making itself true and empirically verifiable. In effect, neoliberal discourse is not just one discourse among many. Rather, it is a “strong discourse” — the way psychiatric discourse is in an asylum, in Erving Goffman's analysis (2). It is so strong and so hard to combat only because it has on its side all of the forces of a world of relations of forces, a world that it contributes to making what it is. It does this most notably by orienting the economic choices of those who dominate economic relationships. It thus adds its own symbolic force to these relations of forces. In the name of this scientific programme, converted into a plan of political action, an immense political project is underway, although its status as such is denied because it appears to be purely negative. This project aims to create the conditions under which the “theory” can be realised and can function: a programme of the methodical destruction of collectives.
The movement toward the neoliberal utopia of a pure and perfect market is made possible by the politics of financial deregulation. And it is achieved through the transformative and, it must be said, destructive action of all of the political measures (of which the most recent is the Multilateral Agreement on Investment (MAI), designed to protect foreign corporations and their investments from national states) that aim to call into question any and all collective structures that could serve as an obstacle to the logic of the pure market: the nation, whose space to manoeuvre continually decreases; work groups, for example through the individualisation of salaries and of careers as a function of individual competences, with the consequent atomisation of workers; collectives for the defence of the rights of workers, unions, associations, cooperatives; even the family, which loses part of its control over consumption through the constitution of markets by age groups.
The neoliberal programme draws its social power from the political and economic power of those whose interests it expresses: stockholders, financial operators, industrialists, conservative or social-democratic politicians who have been converted to the reassuring layoffs of laisser-faire, high-level financial officials eager to impose policies advocating their own extinction because, unlike the managers of firms, they run no risk of having eventually to pay the consequences. Neoliberalism tends on the whole to favour severing the economy from social realities and thereby constructing, in reality, an economic system conforming to its description in pure theory, that is a sort of logical machine that presents itself as a chain of constraints regulating economic agents.
The globalisation of financial markets, when joined with the progress of information technology, ensures an unprecedented mobility of capital. It gives investors concerned with the short-term profitability of their investments the possibility of permanently comparing the profitability of the largest corporations and, in consequence, penalising these firms’ relative setbacks. Subjected to this permanent threat, the corporations themselves have to adjust more and more rapidly to the exigencies of the markets, under penalty of “losing the market’s confidence”, as they say, as well as the support of their stockholders. The latter, anxious to obtain short-term profits, are more and more able to impose their will on managers, using financial directorates to establish the rules under which managers operate and to shape their policies regarding hiring, employment, and wages.
Thus the absolute reign of flexibility is established, with employees being hiring on fixed-term contracts or on a temporary basis and repeated corporate restructurings and, within the firm itself, competition among autonomous divisions as well as among teams forced to perform multiple functions. Finally, this competition is extended to individuals themselves, through the individualisation of the wage relationship: establishment of individual performance objectives, individual performance evaluations, permanent evaluation, individual salary increases or granting of bonuses as a function of competence and of individual merit; individualised career paths; strategies of “delegating responsibility” tending to ensure the self-exploitation of staff who, simple wage labourers in relations of strong hierarchical dependence, are at the same time held responsible for their sales, their products, their branch, their store, etc., as though they were independent contractors. This pressure toward “self-control” extends workers’ “involvement” according to the techniques of “participative management” considerably beyond management level. All of these are techniques of rational domination that impose over-involvement in work (and not only among management) and work under emergency or high-stress conditions. And they converge to weaken or abolish collective standards or solidarities (3).
In this way, a Darwinian world emerges — it is the struggle of all against all at all levels of the hierarchy, which finds support through everyone clinging to their job and organisation under conditions of insecurity, suffering, and stress. Without a doubt, the practical establishment of this world of struggle would not succeed so completely without the complicity of all of the precarious arrangements that produce insecurity and of the existence of a reserve army of employees rendered docile by these social processes that make their situations precarious, as well as by the permanent threat of unemployment. This reserve army exists at all levels of the hierarchy, even at the higher levels, especially among managers. The ultimate foundation of this entire economic order placed under the sign of freedom is in effect the structural violence of unemployment, of the insecurity of job tenure and the menace of layoff that it implies. The condition of the “harmonious” functioning of the individualist micro-economic model is a mass phenomenon, the existence of a reserve army of the unemployed.
This structural violence also weighs on what is called the labour contract (wisely rationalised and rendered unreal by the “theory of contracts”). Organisational discourse has never talked as much of trust, co-operation, loyalty, and organisational culture as in an era when adherence to the organisation is obtained at each moment by eliminating all temporal guarantees of employment (three-quarters of hires are for fixed duration, the proportion of temporary employees keeps rising, employment “at will” and the right to fire an individual tend to be freed from any restriction).
Thus we see how the neoliberal utopia tends to embody itself in the reality of a kind of infernal machine, whose necessity imposes itself even upon the rulers. Like the Marxism of an earlier time, with which, in this regard, it has much in common, this utopia evokes powerful belief — the free trade faith — not only among those who live off it, such as financiers, the owners and managers of large corporations, etc., but also among those, such as high-level government officials and politicians, who derive their justification for existing from it. For they sanctify the power of markets in the name of economic efficiency, which requires the elimination of administrative or political barriers capable of inconveniencing the owners of capital in their individual quest for the maximisation of individual profit, which has been turned into a model of rationality. They want independent central banks. And they preach the subordination of nation-states to the requirements of economic freedom for the masters of the economy, with the suppression of any regulation of any market, beginning with the labour market, the prohibition of deficits and inflation, the general privatisation of public services, and the reduction of public and social expenses.
Economists may not necessarily share the economic and social interests of the true believers and may have a variety of individual psychic states regarding the economic and social effects of the utopia which they cloak with mathematical reason. Nevertheless, they have enough specific interests in the field of economic science to contribute decisively to the production and reproduction of belief in the neoliberal utopia. Separated from the realities of the economic and social world by their existence and above all by their intellectual formation, which is most frequently purely abstract, bookish, and theoretical, they are particularly inclined to confuse the things of logic with the logic of things.
These economists trust models that they almost never have occasion to submit to the test of experimental verification and are led to look down upon the results of the other historical sciences, in which they do not recognise the purity and crystalline transparency of their mathematical games, whose true necessity and profound complexity they are often incapable of understanding. They participate and collaborate in a formidable economic and social change. Even if some of its consequences horrify them (they can join the socialist party and give learned counsel to its representatives in the power structure), it cannot displease them because, at the risk of a few failures, imputable to what they sometimes call “speculative bubbles”, it tends to give reality to the ultra-logical utopia (ultra-logical like certain forms of insanity) to which they consecrate their lives.
And yet the world is there, with the immediately visible effects of the implementation of the great neoliberal utopia: not only the poverty of an increasingly large segment of the most economically advanced societies, the extraordinary growth in income differences, the progressive disappearance of autonomous universes of cultural production, such as film, publishing, etc., through the intrusive imposition of commercial values, but also and above all two major trends. First is the destruction of all the collective institutions capable of counteracting the effects of the infernal machine, primarily those of the state, repository of all of the universal values associated with the idea of the public realm. Second is the imposition everywhere, in the upper spheres of the economy and the state as at the heart of corporations, of that sort of moral Darwinism that, with the cult of the winner, schooled in higher mathematics and bungee jumping, institutes the struggle of all against all and cynicism as the norm of all action and behaviour.
Can it be expected that the extraordinary mass of suffering produced by this sort of political-economic regime will one day serve as the starting point of a movement capable of stopping the race to the abyss? Indeed, we are faced here with an extraordinary paradox. The obstacles encountered on the way to realising the new order of the lone, but free individual are held today to be imputable to rigidities and vestiges. All direct and conscious intervention of whatever kind, at least when it comes from the state, is discredited in advance and thus condemned to efface itself for the benefit of a pure and anonymous mechanism, the market, whose nature as a site where interests are exercised is forgotten. But in reality, what keeps the social order from dissolving into chaos, despite the growing volume of the endangered population, is the continuity or survival of those very institutions and representatives of the old order that is in the process of being dismantled, and all the work of all of the categories of social workers, as well as all the forms of social solidarity, familial or otherwise.
The transition to “liberalism” takes place in an imperceptible manner, like continental drift, thus hiding its effects from view. Its most terrible consequences are those of the long term. These effects themselves are concealed, paradoxically, by the resistance to which this transition is currently giving rise among those who defend the old order by drawing on the resources it contained, on old solidarities, on reserves of social capital that protect an entire portion of the present social order from falling into anomie. This social capital is fated to wither away — although not in the short run — if it is not renewed and reproduced.
But these same forces of “conservation”, which it is too easy to treat as conservative, are also, from another point of view, forces of resistance to the establishment of the new order and can become subversive forces. If there is still cause for some hope, it is that forces still exist, both in state institutions and in the orientations of social actors (notably individuals and groups most attached to these institutions, those with a tradition of civil and public service) that, under the appearance of simply defending an order that has disappeared and its corresponding “privileges” (which is what they will immediately be accused of), will be able to resist the challenge only by working to invent and construct a new social order. One that will not have as its only law the pursuit of egoistic interests and the individual passion for profit and that will make room for collectives oriented toward the rational pursuit of ends collectively arrived at and collectively ratified.
How could we not make a special place among these collectives, associations, unions, and parties for the state: the nation-state, or better yet the supranational state — a European state on the way toward a world state — capable of effectively controlling and taxing the profits earned in the financial markets and, above of all, of counteracting the destructive impact that the latter have on the labour market. This could be done with the aid of labour unions by organising the elaboration and defence of the public interest. Like it or not, the public interest will never emerge, even at the cost of a few mathematical errors, from the vision of accountants (in an earlier period one would have said of “shopkeepers”) that the new belief system presents as the supreme form of human accomplishment.

(1) Auguste Walras (1800-66), French economist, author of De la nature de la richesse et de l'origine de la valeur (“On the Nature of Wealth and on the Origin of Value”) (1848). He was one of the first to attempt to apply mathematics to economic inquiry.
(2) Erving Goffman. 1961. Asylums: Essays on the Social Situation of Mental Patients and Other Inmates. New York: Aldine de Gruyter.
(3) See the two journal issues devoted to “Nouvelles formes de domination dans le travail” (“New forms of domination in work”), Actes de la recherche en sciences sociales, nos. 114, September 1996, and 115, December 1996, especially the introduction by Gabrielle Balazs and Michel Pialoux, “Crise du travail et crise du politique” [Work crisis and political crisis], no. 114: p.3-4.
Translated by Jeremy J. ShapiroLa globalización en La BitBliotecaLa nouvelle vulgate planétaire (dans le Monde diplomatique)

Friday, September 19, 2008

Neoliberalism and Apartheid Economy

Reposting from Thursday, January 24, 2008

They are the negros of our "world class economy" . . . the pariahs in our market fundamentalism dreams.

While we are chasing our own version of American Dream, joining the bandwagon of globalization, and pursuing our place in a world-class community, here are pictures of the other side of us all, to whom we -- the market winners and worshipers -- always makes claims that we are hearing them (but never listening), looking at them (without ever seeing), talking to them (yet, without speaking) .
Because we are too far high, in our five-star neoliberalism dreamland . . . we are moving toward (what Richard Freeman puts it) an "apartheid economy" . More and more portion of Indonesian population has been progressively excluded from the economy, by the instrumental rationality of neoliberalism and market forces, marginalized from the never-ending circuit of money-commodity-more money, doomed to become the pariah or decaying sub-population of our fast modernizing Indonesian economy. They've been treated as subhuman, the "negros" in our "world-class economy". Their kids have been separated from the kids of our "world-class schools and universities", they've been denied from the rights for descent and civilized public health services.
The invicible hand of the sacred market made the "unmarketable poor" invicible . . .
They've been evicted from their houses and sidewalks miniscale mall, for the rich need more space for luxurious housing, convenience traffic, and picturesque American-style urban sceneries -- they are forbiden from wandering into our "world-class" malls or shopping arcades that once were public spaces. Their demands, for better wages and treatments, tend to be supressed, and silenced by labeling them as the ghost of long-gone communists movement -- all for the sake of creating a better investment climate.

Indeed, the invisible hand of our market treats them without human face. On the contrary, the invisible hand made the "unmarketable have-nots" invisible. They are the negros of the Indonesian neoliberal seconomy, and are the pariahs in our market fundamentalism grandnarrative.

Despite the rhetoric of the market fundamentalists, facts suggest the persistence of high levels of poverty even though there is more than enough resources to prevent it.
Poverty is a social construction, not an objective reality. This can be taken to means that poverty is socially created and reproduced, it involves interplays among social and political groups on an unlevel power-playing fields. The ways in which control, use and access to the economic resources are instrinsically part of the reasons why so many people down and out on our big cities streets -- and could not (re)gain further access to economic resources.

Sunday, September 07, 2008

Make peace with yourself

Dear friends, here is our situation: Man is indeed a small creature on Earth. The Earth is smaller than Jupiter. The Jupiter is much smaller than Sun. The Sun is much much smaller than Archturus. The Archturus is much much much smaller than Antares. . . itself a tiny part of unknown existence.

. . . and if only we could stop hearing things, we could listen to the whispering words of wisdom: Make peace with yourself -- 'cuz you are nothing, not even a dust in the wind. All known men's imaginations and conceptions, about gods, human beings and their universe, are indeed invicible transient particles, scattered along a tiny part of the great great history of the universe.

Man future generations, let say in the year of 2008 x 2 , or of 2008+500, would smile and laugh at today's knowledge, beliefs, imaginations, conceptions, and civilizations; and they would think how primitive, retarded, and stupid we are today – if only they can still find traces of our existence.
Expect no mercy for your absurdity. Take it with a gentle serenity. Make peace with yourself, and open the gate of your sanctuary. Free your spirit, and let it runs beyond bars and wires of the iron cage that you never made. Unleash your soul, and let it swims upstreams, to find your own reverie. Let your conscience runs rules and set boundaries, 'cuz it is always part of a greater existence. Until you cease to exist, at the end of your future, do whatever you think and feel is best. Our greater soul will surely do the rest.

Life is just a series of absurd waiting periods. Yet, life is a beautiful mystery. Life is a playful wonderful wonder. Love it. (depok, sept 3, 2008)

Monday, September 01, 2008

Neoliberalism and Global Food Crisis

Friends and colleagues, today, Sept. 1, 2008, the prestigious daily KOMPAS put a report on food crisis as its frontpage headlines. The report says that Indonesia has entered so called "rich countries and global capitalism's food trap". For us, Indonesian consumers, seven of our consumable non-rice agricultural products are now become import-dependent commodities; even worst, five of them (fluor, soybean, corn, beef, and milk) are in critical import-dependency condition. Dependency on agricultural products is unbelievable phenomenon for an agrarian country like Indonesia. But it's "a dark logical consequences" of global capitalism into which our country has been integrated itself into subordinate position to rich and powerful countries or multintional companies. The following abridged article from the Global Issues ( may provide more understanding of the present food crisis, and its relation to neoliberalism.

Global Food Crisis
by Anup Shah

This Page Last Updated Sunday, August 10, 2008
The global food crisis that has made headlines in 2008 has been simmering for a while. The rise in food prices, affecting the poorest the most, has a variety of causes, mostly man-made. It has resulted in riots, an overthrow of a Prime Minister and many deaths, around the world. It has been common to attribute causes to things like overpopulation but that seems to miss the real causes as food levels continue to outstrip demand even in a growing population. While media reports have been concentrating on some of the immediate causes, it seems that deeper issues and causes have not been discussed as much.

The food crisis appeared to explode overnight, reinforcing fears that there are just too many people in the world. But according to the FAO, with record grain harvests in 2007, there is more than enough food in the world to feed everyone—at least 1.5 times current demand. In fact, over the last 20 years, food production has risen steadily at over 2.0% a year, while the rate of population growth has dropped to 1.14% a year. Population is not outstripping food supply. “We’re seeing more people hungry and at greater numbers than before,” says World Hunger Program’s executive director Josette Sheeran, “There is food on the shelves but people are priced out of the market.”

Eric Holt-Giménez and Loren Peabody, From Food Rebellions to Food Sovereignty: Urgent call to fix a broken food system, Institute for Food and Development Policy, May 16, 2008

For example,
  • A lot of land goes into producing products that could be considered unnecessary or excessive in their production (e.g. tobacco, sugar, beef, biofuels, urbanization, etc).
  • Some 80% of the world’s production is consumed by the wealthiest 20% of the world suggesting an inequality in resource use due to social, economic and political reasons, and perhaps less because of Malthusian concerns about population sizes outstripping resource availability in most cases.
  • Furthermore, while many go hungry an equally large number are considered obese.

These aspects are discussed in more depth on this site’s sections on consumption, hunger and population and poverty and hunger.

Deeper, long term causes of the food crisis

However, as Holt-Giménez and Peabody importantly add, all these causes “are only the proximate causes of food price inflation. These factors do not explain why—in an increasingly productive and affluent global food system—next year up to one billion people will likely go hungry. To solve the problem of hunger, we need to address the root cause of the food crisis: the corporate monopolization of the world’s food systems.”

What the authors are alluding to is the following:

The dominance of the richer nations and companies in the international arena has had a tremendous impact on agriculture, which, for many poor countries forms one of the main sources of income. A combination of unfair trade agreements, concentrated ownership of major food production, dominance (through control and influence in institutions such as the World Bank, IMF and the World Trade Organisation) has meant that poor countries have seen their ability to determine their own food security policies severely undermined.

Policies such as structural adjustment demanded by these institutions meant most developing countries had to not only cut back on health and education, but food stamps and other support for the very poor. Trade barriers and other support mechanisms for local industry were also often required to be removed, allowing foreign companies to more easily compete, often being at an advantage as they would typically be larger multinationals with more resources and experiences. By comparison, richer countries have hardly reduced their barriers in return. In addition, most poor countries were strongly encouraged to concentrate more on exporting cash crops to earn foreign exchange in order to pay of debts. This resulting reduction in biodiversity of crops and related ecosystems meant worsening environments and clearing more land or increasing fertilizer use to try and make up for this.

Increasing poverty and inequality thus fueled corruption making the problem even worse. Food dumping (while calling it aid) by wealthy nations onto poor countries, falling commodity prices (when many poor countries had to compete against each other to sell primarily to the rich), vast agricultural subsidies in North America and Europe (outdoing the foreign aid they sent, many time over) have all combined to have various effects such as forcing farmers out of business and into city slums. Meanwhile, crop biodiversity dwindled during the promise of the Green Revolution, which also increased chemical input, environmental degradation and felling of forests to bring more land into production.

Food security has reduced as a result and many countries are less able to do things if they want to. Holt-Giménez and Peabody are worth quoting again, this time on the impacts of concentrated ownership:

The expansion of industrial agri-foods crippled food production in the Global South and emptied the countryside of valuable human resources. But as long as cheap, subsidized grain from the industrial north kept flowing, the agri-foods complex grew, consolidating control of the world’s food systems in the hands of fewer and fewer grain, seed, chemical and petroleum companies. Today three companies, Archer Daniels Midland, Cargill, and Bunge control the world’s grain trade. Chemical giant Monsanto controls three-fifths of seed production. Unsurprisingly, in the last quarter of 2007, even as the world food crisis was breaking, Archer Daniels Midland’s profits jumped 20%, Monsanto 45%, and Cargill 60%. Recent speculation with food commodities has created another dangerous “boom.” After buying up grains and grain futures, traders are hoarding, withholding stocks and further inflating prices.

Eric Holt-Giménez and Loren Peabody, From Food Rebellions to Food Sovereignty: Urgent call to fix a broken food system, Institute for Food and Development Policy, May 16, 2008