Saturday, April 18, 2009

30 YEARS OF NEOLIBERAL ECONOMICS; NEOCONSERVATIVE MILITARISM

Harry Targ

Developing a progressive political agenda often requires historical reflection. This should be true of our assessments of the consequences of the recently completed G20 summit in London.

Thirty years before the summit, 1979, US imperial policy experienced multiple challenges, challenges so dramatic that the Carter administration began a shift in overall economic and military policy back toward a global cold war. The new cold war reignited by Carter was fully expanded and institutionalized by Reagan, two Bushes, and Clinton (even with the cold war enemy gone).

In January, 1979, to the surprise of friend and foe alike the brutal Iranian dictatorship of the Shah was overthrown by a mass movement of workers, religious followers, students, and bourgeois nationalists. The impregnable Iranian regime, with the fifth largest military in the world and the keeper of the flow of Persian Gulf oil, was no more. The ouster of the Shah so shocked Washington that for a time some Carter aides advocated a US military operation to save this most critical of allies from revolution.

Later, the US empire was shaken by revolutionary ferment in the Western Hemisphere: the seizure of power of the New Jewel movement in Grenada, the Sandinista triumphant march into Managua, Nicaragua and a reform coup in El Salvador. In November, 1979, 55 US hostages were taken by students in Tehran (and held for 441 days) and the Soviet Union sent troops into Afghanistan to save a beleaguered ally from internal revolt. (Subsequently, National Security Advisor Zbigniew Brzezinski admitted that the Carter administration began funding Islamic rebels fighting against the Kabul government before the Soviet Union sent troops to save it.).

Paralleling geopolitical and military crisis in 1979, the US was mired in a recession, including both high unemployment and inflation (a combination that mainstream economists said could not happen at the same time). Analysts wrote about a US economy plagued with overproduction, underconsumption, declining rates of profit, and a state fiscal crisis.

The seeds were planted for the full flowering of new economic and military policies by the Reagan administration to stem the crises. “Neoliberalism” refers to the set of economic policies the new administration (through the International Monetary Fund, the World Bank, the G7 countries, and private banks) imposed on virtually every country in the world. These policies required that every country shift from state directed to “market” approaches to economic growth. Countries were forced to downsize, privatize, and deregulate their economies and to shift from the production of goods and services for domestic consumption to exports. First poor countries, then socialist countries, then European social democracies, and the United States itself were subjected to neoliberalism. And, of course, from Chile to Mexico to Eastern Europe, to many Asian countries, the policies generated growing economic inequalities, declining rates of growth, and increasing indebtedness to foreign banks. In Latin America, the 1980s became known as “the lost decade.”

Beginning with President Carter’s 1980 State of the Union address and dramatically expanded in the 1980s, and refined to a brutal art in the new century, president after president embraced a political/military policy referred to as “neoconservatism.” Neoconservative military doctrine, commonly associated with the Project for a New American Century, a group of political influentials assembled in the 1990s, was proclaimed earlier as the Reagan Doctrine which called for global domination (even before the collapse of the Soviet Union and the socialist bloc). Neoconservatism referred to the proposition that the United States was the last great hope for humankind, the city on the hill. As strategic doctrine neoconservatism evolved after the collapse of the Soviet Union asserting that nations that had military power should use it any time and any place to impose on peoples the “right” course for their development. Might makes right. The United States is the hegemon, neoconservatism proclaimed. The United States should use all its resources to dominate the world because it is the “last remaining superpower.”

Why go into all this? Because the character of President Obama’s participation at the G20 Summit three weeks ago suggested that modest changes in United States foreign policy, particularly in reference to neoliberalism and neoconservatism, had begun. Also President Obama’s words and actions at the Summit about new directions in US policy were enthusiastically endorsed all around the world. The new rhetoric has led to changed expectations which may translate into new demands (from governments and peoples) for change in the years ahead.

As to neoliberalism, it is clear to all that reliance on “the magic of the marketplace” has been and would continue to be a disaster for the global economy. A global economic stimulus package, for all its flaws, has replaced demands for government austerity programs characteristic of the era of neoliberalism. In addition, while the International Monetary Fund and the World Bank remain the primary agents of global economic policy, influential G20 countries have made it clear that these two international financial institutions must be reformed such that vast majorities of humankind have some formal representation in their decisionmaking.

As to neoconservatism, President Obama at G20 and elsewhere on his travels has articulated the very modest proposition that the United States is not perfect, that it cannot act without others, and that diplomacy (the rudimentary tool of international relations since the foundation of the state system) will play a significant role in United States interactions with the world. Since G20 Obama has mentioned dialogue with Iran and Cuba, and was photographed shaking hands with Hugo Chavez at the meeting of Western Hemisphere leaders in Trinidad.

These modest and largely symbolic gestures by the new President do not constitute an end to the US pursuit of empire. However, they do recognize the rise of resistance to forty years of US driven neoliberal economic policies and neoconservative military policies. As so often has happened in US politics the gap between rhetoric and reality still remain large. But signs of G20 rejections of forty years of neoliberalism and neoconservatism can serve as a basis for progressives to insist that rhetoric become reality.