Why the current neoliberal dystopia in America was entirely predictable and deliberately created
It’s fairly clear to many non-corporate observers that neoliberal capitalism has accelerated over the last 50 years.
Declines in GDP growth, investment, productivity, wages, and rising inequality are de rigeur. One can read various critiques of the rise of the consolidation of capital over the last several decades, creating monopolies that privilege elite capital at the expense of small businesses and consumers.
It stands to reason that neoliberalism, a recipe for capitalism that stresses deregulation and privatization, should accelerate the growth of monopolies.
The neoliberal path to monopoly has been underway ever since the infamous Powell Memo, among other influences, organized capital and launched neoliberal economics.
As Cory Doctorow points out in an illuminating interview with Novara Media, the Chicago School of Economics—the hotbed of neoliberal economic theory in the Seventies—pushed the idea that monopolies were efficient mechanisms of the free market. Armed with this intellectual battering ram, think tanks and foundations relentlessly promoted the deregulation of antitrust law. Clinton’s deregulatory Telecommunications Act of 1996 is a seminal example.
But how it happened in the late twentieth-century United States is less germane to the discussion than the fact that it inevitably happened, that it is a feature of capitalism, not an anomaly.
The Inevitable Concentration of Capital
Rudolf Hilferding, Vladimir Lenin, Nikolai Bukharin, and others wrote about this more than a hundred years ago. Bank capital and industrial capital merge, and capital in general tends to concentrate. As Karl Marx wrote in Capital:
“The world would still be without railways if it had had to wait until accumulation had got a few individual capitals far enough to be adequate for the construction of a railway. Centralization, on the contrary, accomplished this in the twinkling of an eye…”
Just as there is division of labor on the labor side of the capitalist equation, there is a corresponding centralization on the capital side. Capitalists of different abilities and resources combine to achieve production goals at a faster rate than the competition, which then leads to the ability to eliminate or acquire competitors.
As Marx laid out, the state exists to oversee the interests of a particular class and as a consequence the repression of other classes. The modern capitalist state, the U.S., for instance, manages the affairs of the ruling class. In so doing, it disciplines labor domestically and devastates labor abroad as it acts as the vanguard of capital.
Monopolizing Worker Wealth
Monopolies—with the state serving them—drive the repression of labor, leading to crises in both labor and capital. Monopolies drive the growth of the surplus that is hoarded by capital after it is extracted from labor (see the declining of the purchasing power of wages alongside the growth of worker productivity). Worker wealth is pillaged in numerous ways by monopoly capital.
Wages: Large corporations, commodity cartels, and transnational monopolies can administer prices as they like as they eliminate competition. Labor is fragmented and unable to bargain successfully against unified capital. Then, as worker productivity rises, wages stagnate. They produce more but consume less, and can less afford what they produce.
Social Welfare: This is especially true in developing nations where the IMF and World Bank have implemented Structural Adjustment Programs (SAPs), whose purpose is to, as Jason Hickel and Dylan Sullivan note, “Capital therefore seeks to constrain the consumption of these communities in order to make resources available for accumulation. It is only by squeezing the incomes of the poor, often to the point of causing millions of needless deaths, that capital can ensure the steady flow of resources required for profit maximization and perpetual corporate growth.”
Consumption: But monopolies also attack workers in their role as consumers. Think of the ways, aside from reduced wage and purchasing power through deflationary money printing, that monopoly capital extracts wealth from consumers, even as it reduces the buying power of these consumers in their role as workers.
User fees are a principal method. Overdraft fees, processing fees, content hierarchies guarded by new paywalls, seat-choice fees, baggage fees, refill fees, costs induced by planned obsolescence, and so on. (Banks make billions annually in overdraft fees alone.)
Likewise, product quality is degraded. Products are deliberately cheapened through the use of less expensive materials in the production process. The enshitification, as Doctorow calls it, is obvious in retail goods. Textile production, constantly on the move in search of cheaper labor pools and regulatory environments, is increasingly poor quality. Retailers like H&M, now in some 77 countries, Uniqlo, and Mango, disguise poor quality with cosmopolitan design and slick advertising.
Comprehensive Collapse
But there’s plenty to suggest that the impoverishment of the masses is a clear outcome of monopolistic imperialism. David Harvey helpfully describes this heightened exploitation of monopoly capitalism as “accumulation by dispossession.”
Chris Hedges recently drew comparisons between our imperial dysfunction and that of early 20th century England, where the fading empire left nearly a third of its people in poverty. One researcher who studied the British slums declared that the dire conditions weren’t produced by the usual scapegoats, namely alcoholism, apathy, and a failure of personal responsibility, but rather a lack of available and full-time work and because “the wages paid for unskilled labour in York are insufficient to provide food, shelter, and clothing adequate to maintain a family of moderate size in a state of bare physical efficiency.”
Both modern Britain and the United States resemble these earlier conditions. Some 20 percent of British people live in poverty, the absolute numbers rising significantly since 2010, often to do with insufficient wages, insecure employment or lack of available employment, exorbitant housing costs, and so on.
As Hedges notes, the numbers are higher in the U.S., where 40 percent or more of the population is poor or low-income, and almost 70 percent live paycheck to paycheck. Tens of millions of Americans are one medical crisis away from desperate poverty. This past week, it was announced that U.S. household debt crossed $18 trillion dollars, the highest amount ever, including mortgage, auto, student, and credit card debt.
This despite the fact that most government poverty measures are insultingly inadequate.
More recently, research by Bineh Ndefru, Jason Hickel and Dylan Sullivan estimated some 16.9 million excess deaths in Eastern Europe thanks to the collapse of socialism and the introduction of neoliberal capitalism, much to do with the collapse of social support systems, the increasing precarity of work, and the lack of adequate income to paper over the new insecurity.
Another feature of monopoly capitalism is unilateral coercion, usually in the form of sanctions. A recent study by the Lancet described the shocking toll of Western sanctions on developing nations. Some 38 million are estimated to have died as an effect of sanctions, implemented of course to sustain Western economic hegemony and crush nations attempting a different economic development model.
Alternative Presents
By contrast, Chinese market socialism has directed the productivity of capital towards the interests of the majority of the population. Since the establishment of the Chinese Communist state, the country has progressed steadily, achieving remarkable progress. Some 30 years of double digit economic growth. Doubling life expectancy. Raising some 800 million people out of poverty. Dramatically reducing extreme poverty.
The Bolivarian Revolution in Venezuela has accomplished comparable figures in some respects, dramatically increasing caloric intake of the population, nearly driving illiteracy out of existence, eliminating extreme poverty, and directing the boon of massive energy reserves to the cause of mass prosperity, not the enrichment of a cartel of greed-soaked oligarchs.
The USSR and the DDR performed many similar feats, and the Soviet Union most notably led the Allies in the destruction of Axis fascism, one of the great feats in modern world history.
Not only has socialism been a boon to the masses, but it has supported anticolonial movements across the Third World and reigned in some of the excesses of capitalism, notably in its Soviet incarnation. Wargen cites various sources in arguing that wages and food security declined, while developing nations fell prey to unilateral sanctions and debt servitude.
A More Convenient Season
Why then do so many people argue for capitalism? Some because they have been comprehensively indoctrinated, but many others because they have a material interest in sustaining it. Maintaining the status quo state of mass exploitation and immiseration so that the one percent and their parasitic Professional Managerial Class (PMC) can enrich themselves.
This is the path of liberal Democrats and so-called Democratic Socialists and their ilk. A tiresome pantomime of progress, cosplay revolution, and the rhetoric of the empath, sacrificing the lives and livelihoods of millions abroad for a few token reforms in the imperial core. Neither ethically commendable nor logically sound, it is short-term self-interest while the long-term prospects of the masses flicker into insignificance. Invisible. Intangible. Inapprehensible.
Even one of the excellent articles on poverty linked above closes with a call for, “compassionately lifting the load of poverty and so strengthen the very foundation of our democracy.”
The fantasy that we live in a democracy and that the democracy is ours (as if we all participate, arm in arm, in some grand noble project of human uplift) is ahistorical and pernicious. It is the lie that leads people to vote for the Democratic Party, perhaps slowing the glide path to misery domestically but surely maintaining or accelerating the violence of global imperialism.
This is navel-gazing privilege at its finest. Like Martin Luther King Jr., despaired from a Birmingham jailhouse,
“…the Negro’s great stumbling block in the stride toward freedom is not the White citizens’ “Councilor” or the Ku Klux Klanner, but the white moderate who is more devoted to ‘order’ than to justice; who prefers a negative peace which is the absence of tension to a positive peace which is the presence of justice; who constantly says ‘I agree with you in the goal you seek, but I can’t agree with your methods of direct action’ who paternalistically feels that he can set the timetable for another man’s freedom; who lives by the myth of time and who constantly advises the Negro to wait until a ‘more convenient season.’”
In his illuminating talk, Doctorow also noted that while the neoliberal era actively encouraged imperial monopolies, world communities following the Second World War understood the interdependency of monopoly capitalism and fascism. When Germany and Italy sought to mobilize industry and rapidly rearm, it was imperative to utilize consolidated corporate power to coordinate production in step with state objectives without democratic interference. Monopolies are also excellent at disciplining labor, destroying trade unions, undermining strikes, and so on. In Italy Mussolini dreamed of private monopolies operating in lock step with a public dictatorship.
That knowledge has been set aside thanks to decades of ruling class propaganda and long-term immiseration being blamed on scapegoats, from immigrants to foreign powers. The usual suspects, in other words.
Identity politics has been used as an effective wedge to divide the working class and the unemployed, ensuring no common class struggle emerged to challenge the dictatorship of capital.
