THE NEO LIBERALS ARE COMING! THEY ARE AMONG US!

There are newer developments in political philosophy that expand or build on the classic types that I have written about before.

Since the 1980s, neo liberalism has taken root, and it is a powerful influence in international politics. It is taking root in Malawi without any meaningful discussion. We are taken over (a form of neo colonialism) without even acknowledging it. Let’s look at what it is, and how it shapes our lives here in Malawi.

Classic liberalism was founded in the 18th century by Adam Smith. It grew in importance, and until the 1930s it was what was seen as liberalism. It gave rise to strong markets, and in principle it tried to limit government to the most basic functions: security, protection of private property, enforcement of contracts and international policy. Nothing else. This lack of regulation of the financial sector gave rise to an enormous stock market crash in 1929, first in the USA but it spread world-wide. The phenomenon is known as the “Great Depression”. It resulted in world-wide poverty, and was probably the worst in Germany, where it gave room for the rise of fascism, which was an important force in starting the Second World War.

At first after the stock market crash the US government reacted in classic liberal way: less government spending. This deepened the crisis. Then after elections a new president: FD Roosevelt in cooperation with the British economist Keynes did the opposite: he increased government spending and increased government regulation especially of the financial sector. This pulled the USA and subsequently the world out of the Great Depression. The type of policy was called “social liberalism”.

For decades this policy was followed by the US government. In Europe more social democrat policies were followed. All this was built on strong government regulation of markets and finance. It lowered inequality: the lower income part of the population was doing better than ever before. But this was paid for by the rich. They wanted to increase their wealth at the cost of the lower income sections of the world population.

The first place to implement it was in Chile in the 1970s. The US agency CIA instigated a coup d’etat against the democratically elected president Allende, and general Pinochet started oppression with large scale human rights violations. He needed the oppression to implement free market policies, which were very unpopular with the population. In some other countries in South America similar policies were pushed through with violence and oppression, always backed by the US government and the US CIA. It appeared that “free market” capitalism could not be implemented in a free society, ie democracy. So the liberty that gave name to liberalism was only economic, and then only for the elite. Social and political liberty was greatly suppressed.

In the 1980s this type of policy was implemented by the British Prime Minister Thatcher and the US president Reagan. It was called neo liberalism, as a form of liberalism that went back to the original type. It greatly increased inequality. In the UK Thatcher used the leverage she got because of the Falklands war to push through economic liberalization against the will of trade union members and large parts of the population. Unemployment went up. Towards the end of her term in office she had become very unpopular, but the free markets were implemented by that time.

Since then shocks of war and disaster have been used by powerful politicians and private sector people to implement neo liberal policies in for instance Iraq (after the American attack), New Orleans (after hurricane Katrina) and Sri Lanka (after the tsunami).

In principle, neo liberalism is looking for as little government involvement in the economy as possible, and everything is looked at as an opportunity for the private sector to make profits. This includes security, education, health care, pensions and all. This gives opportunities for the rich and powerful to make more profits, and often raises prices, increasing inflation, and making life hard for the poor. In Malawi we see that the US grant for Escom comes with the conditionality of raising electricity prices, and splitting it up so part of it (power generation) can be privatized, which means electricity is not seen as a public utility for the population but as an opportunity for profit for the capitalist. With water we see prices go up. Education and health care are neglected to such a point that the rich take private education and health care, and the poor get worse service. Public hospitals rarely have all essential drugs. Public education is loosing quality every year, and even then school fees are raised and raised. This is not debated as a policy, it is implemented step by step under the name of “cost sharing”.

We should debate publicly if we want this neo liberal model of less government, more private sector, more liberty for the rich, and higher inequality. Or do we want a strong state with strict regulation for the private sector, a realistic minimum wage, enforcement of labour laws (including an end to child labour) high quality free public education and health care?

Let’s have the debate. In the newspapers, on the radio, in the bottle store, at the borehole, in Parliament. Let’s demand explanations from the Executive that go beyond the cries of our Honorable Minister of Agriculture like: “What do you do when the money is finished.” And “There is nothing we could have done.” This denies the government’s responsibility for its policies. We need a long term view, and we need to check every decision against our long term idea of which direction we want the country to go.

Advertisements

One thought on “THE NEO LIBERALS ARE COMING! THEY ARE AMONG US!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s