Neoliberalism and the Decline of Democracy

The neoliberal inspired market deregulation over the last thirty years has been the destroyer of freedom. The most obvious mechanism by which this destruction occurs is the weakening of the power of trade unions and other popular organizations – Published on The Bullet, Socialist Project’s E-Bulletin no 958, par John Weeks, March 27, 2014.

In one of his last books Eric Hobsbawm argued that the conflict between capitalism and communism determined the course of the twentieth century (thus the title, The Age of Extremes: the Short Twentieth Century, 1914-1991). This confrontation of socioeconomic ideologies without doubt dominated European and global history, especially after 1945.  

As I argue in my new book, (economy of the 1%), another confrontation that determined the course of the twentieth century was authoritarianism versus democracy. The capitalism-communism conflict seems but a moment of history for people in their forties and younger. However, the danger of a rising authoritarian wave is as imminent in the twenty-first century as it was in the twentieth. Understanding that danger requires a brief excursion back to the last century.

As the one hundredth anniversary of the beginning of World War I approaches, one encounters rather strained attempts to compare the current global balance of forces to that in Europe in 1914. I recently visited several countries of Southeast Asia and a different comparison struck me, the similarities between now and the 1930s, weak democracies and strong dictatorships. This comparison “jumped off the page” after a week in Bangkok followed by a several days in Hanoi. This journey went from a country with weak and faltering formal democratic institutions to an apparently stable one with an authoritarian regime (bordering on a country with a considerably more brutal dictatorship, China).

Contest Between Authoritarian and Democratic Visions: … //

… Surrendering Sovereignty:

This treaty, which came into effect at the beginning of 2013, severely limits the authority of national parliaments to set fiscal policy. The treaty and additional measures demanded by the German government remove fiscal policy from public control, with monetary policy already in the hands of the European Central Bank and beyond national accountability. This process in which major decisions are taken away from the electorate fundamentally undermines public faith in the democratic process. The rise of neo-fascist groups with an extra-parliamentary agenda such as the New Dawn in Greece should come as no surprise.

Almost exactly a year ago, Peer Steinbrueck, then the German Social Democratic Party’s candidate for chancellor, spoke at the German Embassy in London. In his speech he proposed that the European Commission should have the power to veto national budgets if they exceed the guidelines of the fiscal pack.

In the question period I suggested that such a veto would violate the principle that the governed should be able to hold their governments accountable. In reply Germany’s leading Social Democrat said that fiscal stability required countries to surrender some of their sovereignty. In other words, the goal of “fiscal stability” requires the citizens of Europe to surrender their basic democratic right to hold a government responsible for its economic policies. This is the fulfillment of the neoliberal agenda of removing from democratic control all major economic policies.

The authoritarian trend in the United States and Europe is obvious. What is its source in these countries? In the 1920s and 1930s the rise of authoritarian regimes followed the wide-spread public perception that unregulated capitalism resulted in spectacular disasters. These disasters included the most catastrophic war in human history, soon followed by the most devastating economic crisis the world had ever known. Many on both the Left and the Right judged “bourgeois democracy” as degenerate and dysfunctional. In Russia the rejection of capitalism took the form of an attempt to create a governance system in the interests of the working-class and peasantry. The hope for popular democracy quickly collapsed as the putative workers’ state transformed into thinly disguised authoritarian rule.

Far worse, in Italy and Germany the discrediting of liberal capitalism led to unabashed dictatorships that made no pretence of their authoritarian nature. The business elites constructed these fascist regimes to maintain the rule of capital in face of powerful labour movements. The regimes proved appallingly successful not only in crushing the labour movement but in rolling back the principles of the Enlightenment. Destruction of these savage regimes required a war even more catastrophic than the 1914-1918 conflict … //

… (full long text).

(John Weeks is an economist and Professor Emeritus at SOAS, (School of Oriental and African Studies), University of London. He maintains a blog at For more on the anti-democratic tendency in neoliberalism, see his new book, The Economics of the 1%: How mainstream economics serves the rich, obscures reality and distorts policy, Anthem Press).


Milton Friedman’s infamous London lecture (Free Markets for Free Men);

Page: CSEC Spying, on The Huffington Post;

CCTV cameras on Britain’s roads capture 26 million images every day, on The Guardian, by Nick Hopkins, Jan 23, 2014.

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