Home > Uncategorized > The indiscreet aggression of the bourgeoisie

The indiscreet aggression of the bourgeoisie

from C. P. Chandrasekhar

Neoliberal economic policy—the framework of measures that preaches market fundamentalism but uses the state to engineer a redistribution of income and assets in favour of finance capital and big business—has lost its legitimacy. A huge financial crisis and a decade of recession or low growth, that have hurt most sections except the elite 1 per cent, have convinced the majority in many countries that neoliberalism is no alternative. That change in mood was revealed by the Brexit vote and the Trump victory among other developments. However, this has not setback but unleashed a new aggression on the part of the neoliberal elite, which fears that the state may be captured by forces that not merely promise but actually implement in idiosyncratic ways a dismantling of its preferred policy framework. Across the world big business is attempting to influence economic decision-making in ways that can save the neoliberal project from collapse.

The political challenge to neoliberalism comes from two directions. One is from the left, weak in most contexts, but still present in others. The other is from the extreme right that senses that the best way to rise to power is to appeal to sections marginalized by the neoliberal wave. If this had been mere rhetoric, there would be no real cause for concern for the elite. But once even Donald Trump, who rose to power by appealing to the alienated majority, chose to rail against globalized capital and implement protectionist policies, it became clear that threat from the right was real. 

As of now there is little that big capital can do to deal with the likes of Trump presiding over the world’s most powerful capitalist nation. So, elite aggression has been directed at the right or the left elsewhere that seeks to challenge basic tenets of neoliberalism. Consider for example Mexico, preparing for an election in July, in which a poll of polls predicts that a candidate with a clear left agenda, Lopez Obrador, who contests for the third time since 2006, has a clear edge, with 44 per cent of the vote. Obrador, or “Amlo” as he is popularly referred to, comes with a pro-poor, redistributive agenda, which includes reorienting Mexico’s excessively pro-big business policy environment. He has vowed to take on “the mafia of the powerful” and put an end to the “long dark night of neoliberalism”.

In response, big business leaders have chosen to come out openly against Amlo, in the hope that their opinion matters to their employees, shareholders and the population at large. In multiple letters the heads of many business groups— Grupo México, a mining, rail and infrastructure conglomerate; Femsa, the Coca-Cola bottling company; Grupo Herdez, a food company; Grupo Vasconia, a manufacturer of aluminium, tin and kitchen products; and Grupo Chihuahua, a construction company, among others—have chosen to caution employees, shareholders and voters against what they claim would be the catastrophic consequences of voting Obrador to power and allowing him to implement his “populist” policies.

In his letter to employees and shareholders, German Larrea, the chief executive of Grupo Mexico, warned that Mexicans had “recently heard worrying proposals of nationalising companies, scrapping the energy and education reforms among other ideas that would turn the clock back decades to an economic model that has been more than proven not to work,” as had been illustrated by the experiences of “Venezuela, Argentina, Cuba, the former Soviet Union, among others.” The message was clear. Pro-poor “populist” policies that aim to reverse the regressive redistribution of income and assets to a small minority of the rich, would not work and would have damaging consequence on growth and development. However, in the words of José Ramón Elizondo, head of Grupo Vasconia, since everybody was “very mad at politicians because of corruption, impunity, insecurity, poor services and the lack of opportunities,” there is a real danger that that anger could cloud popular judgment “and could lead us (the country) down the road of populism.”

This kind of aggressive campaign against politicians and parties that could in any way undermine the comfortable run that neoliberalism has had over the last four decades took a bizarre turn in Italy, where a divisive vote forced the right-of-centre, eccentric Five Star Movement and the far-right League to come together and stake a claim to form a government, on the basis of a clear majority of seats. At the centre of the programme of these parties in coalition is a rejection of the policy framework being imposed on European Union member countries by European Commission bureaucrats implementing the corporate-driven, neoliberal EU agenda.

In what was seen as a declaration of intent to pursue that programme, Matteo Salvini, the leader of the League, and Luigi Di Maio, the leader of the Five Star Movement, nominated Paolo Savona, a known Eurosceptic, as finance minister. Being in a position to form the government the two parties had a right to choose their cabinet and the portfolios of different ministers. However, even while allowing the coalition to form a government, Italian President Sergio Mattarella refused to swear in one that was to be headed by Giuseppe Conte, the Prime Minister designate of the coalition, so long as Savona was named as finance minister. When the League and Five Star threatened to withdraw their offer of forming a government, which would have precipitated an election in which the far-right League was widely expected to strengthen its position, Mattarella stuck to his guns and decided to put in place a stopgap government to be headed by a Prime Minister nominated by him—Carlo Cottarelli, a former senior IMF official. The recourse to ex-IMF and World Bank employees to head governments in periods of political uncertainty has been heard of in developing countries. But this was unusual in a developed country context. Clearly Mattarella was serving the interests of those wanting to protect the currently operative European Union framework. The pressure, which was clearly exerted by forces bigger than Mattarella, was so strong that both the League and Five Star relented and shifted Savona out of the finance ministerial position, which was handed over to a nominee seen as less of an opponent of the European “compact”.

What was at issue in this bizarre and anti-democratic stand-off was not the xenophobia and anti-immigration rhetoric of the League, but the threat to the European Union framework on which European neoliberalism rests. And here too the case sought to be made against the rightist coalition’s opposition to the regressive economic and social policies imposed on EU members from Brussels is that it is populist rejection of sensible economic “discipline” that was disastrous for Italy and its people. However, the real reason for the opposition to Savona was the fear (not necessarily founded) that he would begin to undermine the neoliberal, corporate-led globalisation framework into which nations are tied by the principles of the European Union agreements.

One challenge that this elite aggression has to address is the loss of legitimacy of and support for forces advocating neoliberalism. The neoliberal propaganda machine attributes this apparent loss of legitimacy to the misdirected turn to “populism” of citizens confronted with government failure. José Ramón Elizondo of Grupo Vasconia, for example attributed the turn to populism to people being “mad at politicians because of corruption, impunity, insecurity, poor services and the lack of opportunities.” In Mexico and much of Latin America too, the turn away from establishment politicians and parties is attributed to corruption, impunity and the inability to combat crime. The aim of such explanations is to deny that popular anger and protest is triggered by the inequalising, marginalising and exclusionary effects of neoliberalism itself.

There remains the issue as to why politicians such as Mattarella are willing to so brazenly advance the interest of a financial and corporate elite bent on protecting the neoliberal framework, even when it could prove politically damaging. One reason is, of course the capture of representative democracy, given the need for huge contributions across the world to finance party propaganda and election campaigns. The other is a possible corrupt nexus between big business and politicians. As the Brazilian case illustrates the journey from mobilising contributions for elections to corruption can be short.

For big business, the collaboration with politicians, parties and the state results in a willingness to subsume all other issues to the need to mobilise defenders of the neoliberal class project of income and asset redistribution in its favour. Thus, while there was business opposition to a Eurosceptic Finance Minister, there is no similar opposition being expressed about the xenophobia, penchant for violent racism and fascist ant-immigrant platform of the far-right League. This only emboldens the far-right, which uses a divisive platform to mobilise political support, even while retreating on its promise to end the damaging EU project. The far-right leader Matteo Salvini, who now serves as interior minister in the Italian cabinet, has already called for a census to determine the individuals in the country Roma population should be deported. On the other hand, the Five Star Movement, which was reportedly not pleased with Salvini’s statements about the Roma, is not able to advance its anti-establishment and anti-EU agenda.

In India too, this kind of a nexus between big business and politics is visible. The former lauds the Modi government for its embrace of neoliberalism and complains when it feels “reform” is slowing or monitoring and regulation of big capital is holding back the neoliberal project of extracting large surpluses. On the other hand, big business and the media it increasingly controls is unwilling to criticise and oppose the aggressive and violent majoritarian politics that the RSS, BJP and their associated organisations are known to pursue. If such politics can deliver votes, even when inequalising economic policies are adopted, that only suits the interests of finance and big business.

This article was originally published in the Frontline Print edition

  1. Helen Sakho
    July 5, 2018 at 2:20 am

    Thank you Chandrasekhar. Your analysis is spot on as always.
    I have tried to accompany my own very recent writing below with an all encompassing graph relating to the specificities of the “Globalisation” era. If I fail, then rest assured that India did and does have a vast contribution to world culture and heritage, and no matter how far-fetched the arms and the boots of the Empire extend, it can never erase it all.
    Colleagues who may not be as immediately involved as you or I with such matters ought to revisit the remarkable “Salaam Bombay! 1988” or an even more significant masterpiece of peaceful coexistence of all religions and peoples “Earth – 1947” – the year you refer to above.
    If only peoples, regions and continents were left alone to settle internal disagreements, the world would no be in the utter mess that it now finds itself, helplessly.

    “Godless Borders”

    This is dedicated to all those abandoned by all Gods they believe in, or otherwise.
    May they all find a place of safety, where they can survive to yearn for whatever or whoever they left behind; and stay strong enough and patient enough to dream of unification with anyone who may be waiting for them back home in not too distant a future.

    Humanity is borderless, as is its language, hope, and despair.

    The rest was, is, and will always remain History – in the era of “Globalisation” anyone with a slight degree of conscience, will hope that this history will be as short as humanely possible.

    As Edward Said quotes Auerbach quoting from Hugo: “It is, therefore, a great source of virtue for the practiced mind to learn, bit by bit, first to change about in visible and transitory things, so that afterwards it may be able to leave them behind altogether. The man who finds his homeland sweet is still a tender beginner; he to whom every soil is as his native one is already strong; but he is perfect to whom the entire world is a foreign land….From boyhood I have dwelt on foreign soil, and I know with what grief sometimes the mind takes leave of the narrow hearth of a peasant’s hut, and I know, too, how frankly it afterward disdains marble firesides and panelled halls”.

  2. gcerrai
    July 5, 2018 at 2:54 pm

    > “the xenophobia, penchant for violent racism and fascist ant-immigrant platform of the far-right League.”

    What the League is trying to do has nothing to do with racism or fascism. It’s a matter of legality.
    If you want to call this racism or fascism, no matter how unsubstantiated the claim, then you must call fascist and racist most of the world and governments, either left, right or center. Obama and Clinton have been stricter on immigration than the League. EU countries are stricter on immigration than the League, not always legally by the way and even actually violently. The italian left in the recent past was stricter on immigration than the League.

    > “The far-right leader Matteo Salvini, who now serves as interior minister in the Italian cabinet, has already called for a census to determine the individuals in the country Roma population should be deported.”

    The census is a requirement for everybody living in the italian territory regardless of race or ethnic group. If any, the discrimination would be against those who have been censused.
    The census is required in order to deliver the constitutional rights and respect the law. How do you grant rights to someone you don’t even know to be there?

    As per returning illegal immigrants. The League would like to return all illegal immigrants, not just a specific group. Again this is about legality.
    I don’t think they will manage much on this front, however. Other EU and non-EU countries are more effective at this than Italy.

  3. Helen Sakho
    July 5, 2018 at 9:18 pm

    There no contradictions, as far as I can see, between these analyses. They do and should strengthen solidarity.

  4. Blissex
    July 5, 2018 at 11:01 pm

    «uses the state to engineer a redistribution of income and assets in favour of finance capital and big business—has lost its legitimacy»

    The critical factor is that redistribution has also been in favour of middle and upper-middle class rentiers, that is small property and share owners and pensioners, often the same people.
    That is, the successes of the left in the 1960s and 1970s in improving the conditions of many workers turned them into petty, mean rentiers who hate the left and the unions, and vote consistently for bigger property prices and rents and for lower worker wages and employment.
    The political problem it has created is mass rentierism, not mere elitism as in “a redistribution of income and assets in favour of finance capital and big business”, a favourite misunderstanding of “prosecco leftoids”.

  5. Craig
    July 6, 2018 at 5:14 am

    The Declaration of Monetary and Economic Freedom For Humanity

    When after 5000 years of the reign of the paradigm of Debt Only and 500 years of its coalescence by private finance it becomes necessary for Mankind to dissolve the problems that such have oppressed them with and assume among the powers of the earth, a new paradigm which aligns with the laws of nature and establishes the right of every citizen to a satisfactory level of the abundance made possible by the past and present level of technological productive capability that their economies are capable of.

    We hold these truths to be self evident, that all men are created equal, that the social contract endows and entitles them with and to the above cultural heritage especially if it is accomplished by a new monetary and economic paradigm that lifts the covert or unconscious oppression currently afflicting both the individual and commercial agents. —–That to secure these rights, Governments are instituted among men, deriving their just powers from the consent of the governed, —–That whenever any form of overt or covert government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute new political, economic and monetary government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments of any kind long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. —–Such has been the patient sufferance of humanity and its civilizations for the entirety of its last 5000 years; and such is now the necessity which constrains them to alter their former systems of economics, money and politics. The history of the present monetary and economic paradigm is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over Mankind. To prove this, let Facts be submitted to a candid world.

    Economies are increasingly productive and yet curiously less stably and less equitably so.

    An honest and scholarly examination of human history shows that the enforcement of the current paradigm of Debt/Burden/Cost Only has been a factor, the operant factor and a too little examined factor in the eventual dissolution and collapse of human civilizations for the last 5000 years.

    That over the last 500 years private finance has utilized its monopolistic money creating powers and profit therefrom to dominate and manipulate human governments and to hypnotize economists, politicians and the general populace into believing that there is no alternative to the current paradigm.

    That the general populace partially consciously recognizes this domination and hence has begun to assert its natural and historic dissatisfaction with it in ways that are less than savory and have equally historically resulted in political fractiousness, rebellion and eventually the collapse and end of civilizations….instead of, with the help of their leaders, pursued a new integration of the particles of truths, workabilities, applicabilities and highest ethical considerations of presently assumed opposite perspectives.

    We the people of the United States of America must, therefore, acquiesce in the necessity, which announces our declaration of independence from the old paradigm and allegiance to the philosophy and policies of the new one of Direct and Reciprocal Monetary Grace as in Gifting, and beseech the rest of mankind to bond with us in this unmistakable progression of economics and money systems.


    Steven Craig Hummel

  6. curri
    July 9, 2018 at 4:02 pm

    “As of now there is little that big capital can do to deal with the likes of Trump presiding over the world’s most powerful capitalist nation. ”

    Have you somehow missed the Russiagate hoax and the resulting Mueller investigation?

  7. July 23, 2018 at 6:44 am

    To legitimize neoliberalism in the US the supporters only needed one folk hero and actor, Ronald Reagan. Reagan wasn’t a technician. He understood little about economics beyond private property is sacrosanct and all hail the corporation. Makes me think he really didn’t grasp what he was starting when he put his fame and acting skills behind neoliberalism. Milton Friedman laid out Reagan’s economic path. Friedman says the right way to shrink government (the Nirvana of every conservative) is NOT immediate spending cuts. The right way to shrink government is to hold down the rate of growth of government so that it
    shrinks in real terms, over time. And as it shrinks its power and reach decay. Opening the way to corporations and academics spreading the neoliberal creed. Also, Reagan rejected recommendations to help bring the US into the emerging 21st century economy. Preferring instead to support the financialization of the US economy. During the 20 years from 1980 and 2000 just about every banking and financial regulation in place from the “New Deal” was repealed or watered down to insignificance. A mediocre actor and movie “hero” rode in on his white horse and screwed the nation. Most Americans don’t know or understand Reagan’s attacks on the US. So, he remains a popular US President. I’m certain sometime in the future the Kochs and their associates will put up a few billion to build a life-size statue of Reagan on that very same horse. They already paid for a huge presidential library for him. The Reagan personality cult remains the go-to justification Republicans like to call out, especially now in the era of Trump.

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