Economic Policies After the Death of Neoliberalism

Published on ZNet (first on LINKS), by Boris Kagarlitsky, November 12, 2011.

The international economic system that took shape after the collapse of the Soviet Union is not dead yet, but it is dying. We see that daily, not only in reports on the crisis but also in other news from around the world that tells the same story: the system isn’t working.

The truth is that the system has never worked for the poor and for the toiling classes. It wasn’t designed for that purpose, no matter what its propagandists and various corrupt intellectuals keep telling us. The system did work for the elites; it generated a tremendous redistribution of wealth and power in favour of those already rich and powerful, in favour of the bourgeoisie. But now it no longer delivers even for them. Though the elites aren’t brave enough to admit it, the system has to be transformed … // 

… We need a new model of public enterprise based on openness, on doing away with boundaries within the public sector, and on new criteria of efficiency that include contributing to social development. We have to socialise the banking system, suppressing financial speculation and encouraging investment, while providing micro-credits for small businesses, for municipalities, for job creation and for technological experimentation at the local level. Energy and transport must become public services like health care and education, and much of the production that is oriented toward these sectors must also be carried out by public enterprise. This should be part of a general effort to bring about greater interaction and integration. Producers, users and consumers must cooperate directly through public networks.

If something is public, that does not automatically mean it belongs to the state. Nevertheless, public property is created through state property, and if nationalisations are to be carried out (there is no other way we can create a new public sector), we have to transform the state. Neoliberals speak at length about the evils of bureaucracy and about official corruption, but in the world of total privatisation they happily tolerate both. Moreover, they have an interest in many ways in keeping the state inefficient and corrupt so as to deter the public from wanting to expand it through socialising private property. That is why after three decades of neoliberalism in the West, and two decades elsewhere, there has been no decrease in the level of corruption, in the number of scandals, or even in the army of often-incompetent bureaucrats. To the contrary, these have increased everywhere, including in European countries that are proud of their democratic traditions and efficiency. The state needs to be decentralised, democratised and made more open to the public. We should remember what Lenin said of the soviets in 1905 and 1917. We need bodies that are directly involved with the population. Parliamentary democracy is good, but it is not sufficient; we need institutions of direct democracy.

Finally, we need regional integration, which is not about providing open markets for Western corporations intent on selling us Chinese goods. It is about collectively protecting industrial development and introducing standards of education that fit the needs of the region. It is about science, oriented toward these same local needs, about developing new technologies that are cheap, easy to use, and friendly to a particular type of environment. It is about creating markets for local industries, in the process not just opening the way for industrialisation and reindustrialisation, but also linking them with human development. It is about integrating transport systems. It is about collectively abolishing the absurd intellectual property system imposed on us by multinational corporations, while speaking out against these corporations with a united voice. It is not about abolishing national sovereignty, as the European Union has tried to do, but about strengthening it through international representative institutions responsible to the public.

The Arab revolutions that are now shaking the world provide an opportunity to move the region and all of humanity in the direction of democratic change, which in the long run will lead us toward overcoming capitalism. These revolutions need to put forward the questions of regional integration and of economic policies oriented toward social interests. But revolutions can also fail, and be defeated. The struggle to make revolutions and to defend them takes place at a national level, but it is truly international in its meaning. To start a revolution, popular anger and the will for change can be enough, but for it to triumph, a serious political force is essential. The left in Arab countries faces the task of uniting itself and of helping to build such a force, not just as a way of contributing to the transformation of the Arab world, but in order to help change the world as a whole. (full text).

(Boris Kagarlitsky is director of the Institute for Globalisation Studies and Social Movements. This paper will be presented at a conference in Ramallah, occupied Palestine, on December 20 to discuss alternative economic policies, organised by Palestinian Center for Peace and Democracy).


Links International Journal of Socialist Renewal;

Institute of Globalization and Social Movements IGSO: werbsite in russian, and in english;

Beyond `feminine’ and `masculine’, on (first on, by Anna Ochkina (translated by Renfrey Clarke for Links International Journal of Socialist Renewal), November 13, 2011.

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