What I Read this Week

W/c 18th August

Books

The Great Global Transformation: National Market Liberalism in a Multipolar World by Branco Milanovic

Thanks to the folks at Allen Lane for sending over an advance copy of yet another fascinating book by the prolific Branco Milanovic. His core argument is that neoliberalism is over and we have moved into a world of ‘national market liberalism’. This regime “retains many of the key features of neoliberalism in the domestic market sphere, but abandons internationalism, and often even the application of liberalism to domestic and social issues”. In other words, it’s neoliberalism, but with trade protectionism, nationalism, and chauvinism.

Neoliberalism and ‘free markets’

Those familiar with my work, particularly Vulture Capitalism, will know I argue neoliberalism has always been associated with some trade protectionism (for vested interests within the imperial core), as well as a healthy dose of both nationalism and chauvinism – Thatcher didn’t invade Argentina on a mission of humanitarian internationalism.

This isn’t just a matter of historical importance. The key feature of neoliberalism was the use of market ideology by capital and its allies within the state to bludgeon their class enemies into submission. Unions were destroyed based on the argument that they were market distorting. Government spending was reduced on the basis that it crowds out private investment. Social security was slashed on the basis that it would disincentivise participation in labour markets. Taxes were cut on the basis that they impede private investment. Regulation was abandoned on the basis that it undermined entrepreneurial risk taking.

But these were not the real reasons for the implementation of these policies – as I explain in VC. Unions were crushed because they threatened both the profits and power of capital. Public services and social security were destroyed because free healthcare and unemployment insurance emboldened organised labour. Taxes and regulation were cut to make the rich richer, and to extend some of the benefits of their wealth to the middle classes – undermining the formerly clear distinction between workers and bosses. It’s important that we recognise that neoliberalism was never a ‘free market’ order – it was a project to shift the balance of power in favour of capital.

Global Transformations

Nevertheless, there have been some important changes to the capitalist world system irecent decades, and these show up in the changing nature of neoliberal policy and ideology. Milanovic highlights these changes with immense skill.

First, he delves into the data to paint a picture of a world converging, while the west diverges among itself, and Africa remains behind. As he puts it, “we are living in the period of the greatest reshuffling of individual incomes since the Industrial Revolution”.