Neoliberalism: The Present Model of Capitalism Among Developed Countries

With the rise of big business and monopolies the economically developed countries feel they can now have free trade, allowing the monopolies of other nations to come in at the expense of small and medium size domestic businesses while in return being given free rein to go abroad and operate at the expense of small and medium size businesses who cannot compete with Big Business.  So there is an agreement among the monopolies of all the countries to share the world among themselves, driving tens of millions of farmers off the land, bankrupting small and medium businesses.

So all the monopolies want their governments to do is to use their military muscle to make sure every country pursues the neoliberal model, including turning over the resources of all countries to the monopolies. Among the most advantages of neoliberalism, made possible by the communications and transportation revolutions, is that it has become relatively easy to transfer factories to the cheap labor countries, like China and also not to have to deal with unions, with labor laws and health and safety regulations, and with environmental regulations.  Also, it is possible to avoid paying taxes by not bringing the profits back to the home country.

The European Union is based on the neoliberal model.  The nations of the European Union have given up a large part of their sovereignty and are doing the bidding of the monopolies, especially the big banks.   National governments, at the bidding of the banks,  are imposing a severe austerity program on the masses, who are seeing their standard of living slashed in a way never seen before.  Everything in Europe is now being done in the interest of the banks and big corporations.

The free trade agreements that Washington imposed on Mexico and other countries are part of the neoliberal model.  What these agreements do is flood the weaker countries with US goods, as well as allow US companies to set up shops in those countries using their cheap labor and throwing US workers out of work.

Another new development in the neocolonial international order is the subjection of most of the European countries to the IMF and other central banks.  The same harsh terms previously imposed on Africa, Asia and Latin America, that used to be called a Structural Adjustment Program,  the same loss of sovereignty, the same corruption of leaders, has now characterized the European Union, led by Germany, Europe’s strongest economy.  A number of European countries are suffering mass unemployment, and in order to satisfy the financial conditions imposed by the banks, are privatizing social assets, cutting social benefits – pensions, unemployment insurance.,  a program of austerity.  Austerity, that is, for the working people and middle class; great prosperity for the corporate and banking elite.    The standard of living of most Europeans has gone into serious decline.  And this is transpiring whatever the political complexion of the various national governments – Center Left, Center Right – conservative, pseudo-Socialist.  So there is growing popular dissatisfaction, the loss of confidence in many of the institutions, including the media, the politicians, the parties, the courts – just as is now the case in the United States.  New parties, which have been misleadingly dubbed “populist” have achieved great success and are threatening to become the governing parties in a number of countries.  The European Union is in a state of crisis, as centrifugal forces, under the pressure of a newly assertive nationalism, reflect the dominant mood of the majority of the people, a nationalism which also takes on racist tones, anti-immigrant.  At the same time, these essentially right-wing movements urge better relations with Russia and refuse to sign on to the new Cold War project which, if not checked, can well lead to a Third World War.

Capitalism, of which Neoliberalism is a variant – not a separate system – inevitably goes through a cycle  of boom and bust.  And the busts in general keep getting worse – more and more people never re-enter or enter the labor force after the crisis has gone its course.  Growing globalization means that a crisis is one country, certainly a major country from an economic point of view, will bring down most if not all other countries.  In the past, the competition among imperialist countries led to war between them.  But as the experience of such wars resulted in growing strength of socialism, the extension of socialism to more and more countries, the imperialists set up cartel arrangements – the European Union, for example, multinational trade agreements, international institutions such as the World Trade Association, to resolve disputes among themselves and to focus on weakening or destroying those governments that do not bow before the imperialist order, dominated by the United States, a leadership accepted because as by far the most powerful military state, it has taken on the role of protector of the other capitalist states, takes on far more of the burden of a common defense.  

It was expected (by some) that with the collapse of the socialist countries and the seeming end of the Cold War (see my paper as to why only seeming) we would enter a period of peace.  But capitalism is a dog-eat-dog, competitive system.  It is ruthless and will use any means to maintain its power and profits.  So although China and Russia abandoned socialism and has joined the neoliberal world order, they both refuse to submit to the rule of the United States.  Hence, tensions are building up once again just as in the days of the old Cold War.  And because capitalism is ruthless and will use any means to maintain its power and profits, while it prefers to maintain a façade of democracy in order to most conveniently control the masses, when push comes to shove it will resort to Fascism.  That is why we say that Fascism is inherent in capitalism, and that as long as capitalism exists, so does the danger of Fascism – and war.