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Fri Dec 21, 2012, 03:54 PM


Why Does Neoliberalism Persist Even After the Global Crisis?

The 2007-9 crisis in global capitalism brought a new energy and focus to... critics of neoliberalism... It seemed clear at that time that neoliberalism had run its course...it looked like the avenues through which demand was being generated were closed and the system was poised for structural change. Three years later, Southern Europe is witnessing an intense so-called sovereign debt crisis with the working people bearing the brunt of it, and real economies in the developed world are continuing to witness slow growth. The US seems to be under the threat of the so-called fiscal cliff... The economies that grew quickly during the neo-liberal period, like China and India, have slowed down considerably...Yet, neoliberalism persists. Why...? I offer one such explanation from field explorations in India to add to the existing explanations...

The first visit was in the region of Telangana...the people of the region are fighting for a separate state within the Indian nation-state. The second visit was to a tribal habitat in the northeastern region of the same state, where communist struggles have been active for a while. In both these areas, there are continued appropriations of common lands, common resources and minerals...In the process, these elites are destroying the local livelihoods without creating credible alternative. Both these are classic cases of primitive accumulation or accumulation by dispossession, a process that has centrally defined neoliberalism over the last thirty-five years across the globe.

Accumulation by dispossession...operates through the acquisition of lands from small producers ...in the name of Special Economic Zones and the like.... Second, there has been a large-scale privatization drive in most countries that has made public sector enterprises alienate their properties at throwaway prices to private players. Third...commons have been appropriated with ease either because the laws governing them are weak or because common properties are often meddled with by the State...

The local elites have pursued a three-fold strategy for the continued appropriation of the commons. First, they (with the support of the State) have put in place various populist policy imperatives that have temporarily addressed the consumption needs of the majority without altering the deeper neoliberal structural forces that have inhibited employment growth and wage growth over the last thirty years...schemes such as housing or subsidized food for the poor even as their productive resources such as land are acquired by the elites/states... elites have continued to appropriate common and public resources to keep their own accumulation levels above an acceptable minimum in a time of slowdown...

Resistance is sought to be controlled through populism of the kind discussed above. Even in regions that are highly politicized, such as Telangana, the leadership of the movement has been hand-in-glove with the local elites who gain consistently through the perpetuation of these appropriation practices.Third, professionals and middle classes have been the beneficiaries of a system that has thrived on the creation of enclave economies where there is a sharing of rents among the elites and these professional groups. These professional classes have taken up key positions in the government, media, corporate executive roles, and as intermediaries between the elites and the working people who use the commons. The broad support of these classes for the local elites has played a key role in the perpetuation of neoliberalism... the top decile of the population (in countries like China and India) continue to benefit from the perpetuation of the neoliberal configuration while they are pitted against their large majorities. As long as the political groups on the ground do not make their voices heard loudly enough against the top 1% or the top 10%, and as long as there are continued benefits for the elites from the perpetuation of neoliberalism, the system will persist.

Read more at http://www.nakedcapitalism.com/2012/12/why-does-neoliberalism-persist-even-after-the-global-crisis.html#DpS8ttRS00BgUWsX.99

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Reply Why Does Neoliberalism Persist Even After the Global Crisis? (Original post)
HiPointDem Dec 2012 OP
leveymg Dec 2012 #1
leveymg Dec 2012 #3
leftstreet Dec 2012 #2

Response to HiPointDem (Original post)

Fri Dec 21, 2012, 04:33 PM

1. "After the global crisis"? I thought our politics are premised upon permanent crisis, both real and

illusory, which makes all this accumulation at the top seem inevitable if not necessary.

The crisis of capital is permanent - sounds impressive, eh? But, I think someone may have already coined that one.

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Response to leveymg (Reply #1)

Fri Dec 21, 2012, 05:00 PM

3. Found this from 1934 - - remarkably prescient about how the crisis evolves over the next 35 years

As a predictor of banking crises, this is remarkable. It charts out the enormous growth of capital (C) accompanied by increasing consumption by the capitalist class (V) and the declining rates of capital reserves, which is represented by R. Where Marx, Grossman and Mattick may have gotten it wrong is in the assumption of a constantlt declining rate of return, being unable to foresee the impact of constant increases in technology and the effect of globalization of nearly all production to restabilize and drive up the rate of returns (Profit - P).


Paul Mattick. 1934
The Permanent Crisis -
Henryk Grossman’s Interpretation of
Marx’s Theory Of Capitalist Accumulation

(Constant capital we call C, variable V. The consumption fund of the capitalists is R. AC is surplus value available for accumulation of constant capital; AV for variable. The value of the yearly product we call VYP; the percentage of surplus value consumed by the capitalists we call R%; the rate for accumulation A%, the rate of profit P%.)

5 292,600 121,500 86,213 29,260 6,077 535,700 70.93 29.07 29.3
6 321,860 127,627 89,060 32,186 6,381 577,114 69.70 30.30 28.4
20 1,222,252 252961 117,832 122,225 12,634 1,727,634 46.63 53.37 17.1
21 1,344,477 265325 117,612 134,447 13,266 1,875,127 44.33 55.67 16.4
34 4,641,489 500,304 11,141 464,148 25,015 5,642,097 0.45 99.55 9.7
35 5,105,637 525,319 0 510,563 14,756 6,156,275 0 104.61 9.3

The table shows that the same forces which at first made the rise of capitalism possible at a certain phase of accumulation lead to over-accumulation and its consequences. The constant capital that in the first year (first table) was 50% of the year’s production, demands in the 35th year (second table) 82.9%. The revenue (R) that until the 20th year only increased relative to the total mass of surplus value as shown by (R%) from then on decreases absolutely. In the 35th year it disappears completely. It is only after the 20th year that the fall in the rate of profit is first felt as an absolute fall in that part of the mass of profit which the capitalist class had at its disposal for its own private consumption. Until the 20th year, accumulation was a paying proposition as measured by the returns. From the 21st year, these returns dwindle down to a vanishing point. Besides that, from the assumption made that the additional variable capital increases yearly 5%, AV has a deficit. Instead of the needed 26,265 in the 35th year, only 14,756 is available, leaving a deficit of 11,509. This deficit would represent the industrial reserve army as the inevitable outcome of the capitalist process of accumulation. The capital accumulated in the 35th year can’t function completely. Because 11 509 workers cannot be employed, the whole additional constant capital (AV: 510,563) cannot be reinvested. On the basis of our assumption, a population of 551,548 in the 36th year would require a constant capital of 5,616,200; consequently, by a population of 540,075 only 5,499,015 constant capital could be invested. There is a capital surplus of 117,185 that cannot be used. Insufficient capital “utilisation” has led to over-accumulation. We have a surplus of capital unable to expand and an unusable surplus population. (The empirical researches, eg by WC Mitchel in the USA has shown that in time of economic expansion profit is uninterruptedly increasing, while a crisis is preceded by a decrease of profits.) Thus, increasing “utilisation” of capital is the chief cause of capital accumulation, and the lack of a sufficient “utilisation” of capital the cause of crisis.

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Response to HiPointDem (Original post)

Fri Dec 21, 2012, 04:36 PM

2. Um..because it's part of the cause?


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