The Global Abyss
It seemed unthinkable. A narcissistic reality show star with an authoritarian personality and a highly volatile temperament was elected to the highest office in the land on a platform of bigotry, xenophobia, and bullying. He was quite possibly the least qualified man to ever make it to the general election, let alone win the election. Yet against all expectations, here we are. The question has come up repeatedly over the course of this election as to whether he could legitimately be labeled a fascist. One Marxist history professor I spoke to suggested that “Bonapartist” would be more accurate, but for our purposes, “fascism” is about as useful a term as any to describe the current political atmosphere, but whatever the case, he is certainly part of a global far right uprising that has taken the Philippines, Britain, Brazil, and Turkey, and may soon include France. How did we get here?
Many pundits have been quick to point out that the Democrats sowed the seeds of their own destruction by pursuing neoliberal policies that outsourced jobs and abandoned the working class. I do not disagree with this, but I think it behooves us to look closely at what neoliberalism is, and how it developed in the first place.
The Global Empire
Our story begins in 1492. When Columbus landed on the island of Hispaniola, he and his fellow conquistadors enslaved the local population to mine gold for the Spanish empire. Later colonial powers including Britain, Portugal, France, and the Netherlands all followed suit, using enslaved peoples to extract natural resources from their homeland for export to their colonial masters. Finding indigenous slaves troublesome because of their tendency to know the lay of the land, slaves were purchased from kingdoms in Africa, before they themselves were conquered by European powers, and its citizens subjugated under laws that reduced them to indentured servitude. Resources previously held in the commons were privatized, and crushing debts were imposed on the population. After slavery was abolished and those countries gained their independence, those debts remained.
In the aftermath of World War II, two new superpowers emerged: The United States and the Soviet Union. The two competed with other over control of the rest of the world. An economic pact of countries from the capitalist west resulted in the Bretton Woods system, which established the World Bank and International Monetary Fund. These institutions issued loans to foreign governments, denominated in US dollars, with the intended purpose of developing and modernizing their country through infrastructure projects. This seemed to have great results at first, and countries were encouraged to borrow more. These debts compounded upon the existing debts they owed to their former colonizers since gaining their independence. At the same time, the leaders of these countries were being advised by western economists, who advised them to pursue policies that favored export-led development, switching from subsistence agriculture to cash crops and selling natural resources to the developed world, which had itself developed its industries through long periods of protectionism, opening their borders to trade primarily in finished goods. The US itself had major farm subsidies to give its agricultural exports a competitive edge. It didn’t help that many of the leaders of these countries were themselves educated in prestigious European and American universities, where they were taught the same economic canon that western advisers were feeding them.
This economic dogma was built on the idea of growth: People were made better off by expanding the scale of economic activity. In a growth economy, all boats would be lifted, so there was no need to redistribute wealth from the top to the bottom so that others could have a bigger piece of the pie. Instead, the pie itself would become larger. Policies were implemented that promoted free enterprise while taxing the poor through payroll and consumption taxes. Capital markets were opened so that investment would flood into these countries. So-called “export processing zones” were established offering a barrier-free environment for corporations to set up factories to produce goods for export.
These policies in many cases did result in growth, but the benefits did not spread to everyone as promised. Instead, they created a small economic elite while dispossessing countless others. Land and resources were sold off to extractive industries, forcing people off their land and into the cities to look for work, where they found it in factories built by Western corporations, the profits from which went not to their own country, but into the hands of corporate shareholders. These factories, otherwise known as “sweatshops,” would often have small dormitories for workers to live on-site, while working long days under poor working conditions with military-like discipline in order to send what little wages they made to their families. Others who were unable to get jobs in these factories ended up in slums, living in small improvised shacks put together from pieces of wood, scrap metal, and whatever else they could get their hands on, while turning to whatever kind of enterprise they could manage, legal or illegal. It’s a myth that poverty, in and of itself, produces crime. It is countries with high levels of inequality that see high levels of crime and violence. It is the existence of a wealthy elite that pushes others off to the margins, leaving them having to fight for survival any way they can.
Many countries had no choice but to take on these loans, due to their existing debt to their colonizers. When the loans went bad, as they tended to do in times of economic crisis, the World Bank and IMF implemented “structural adjustment programs,” in which they would send in advisors to “restructure” the economy according to a set of prevailing economic theories that became known as the “Washington consensus.” Those leaders that refused to go along with this scheme put their lives in danger. The CIA would often come in and arm rebel groups, supporting juntas that were friendly to American business interests. Guatemala, Iran, Chile, El Salvador, and several others all learned firsthand the consequences of defying the Washington consensus. When the CIA failed, only then would the US commit troops to the ground, as in Iraq and Libya.
All of this extracted wealth funded the most prosperous economy in America’s history. Labor unions were strong, wages were rising, and a very progressive income tax redistributed this influx of money broadly to ordinary Americans. Even modern progressives who now look back fondly upon this time scarcely realize it was financed by blood money. This prosperous period began to see cracks in its façade sometime in the mid-70s. Factories began to close as corporations outsourced them overseas, where they could hire cheap labor and import the products back into America. Thatcher in Britain and Reagan in America each did their part to break up unions and dismantle the welfare state in their countries. Clinton signed the infamous NAFTA treaty, sending American jobs to Mexico, and bringing in an unprecedented wave of immigration from the south.
For the first time, the developed world was beginning to apply the Washington consensus to itself, with one notable exception: rather than using these economies to supply labor and natural resources, they would be service-based consumer economies that would buy the products produced in these other countries while working service jobs that produced nothing. These service jobs themselves were propped up by what is known as the FIRE sector: finance, insurance, and real estate. These extractive industries produce no value of their own either, but live parasitically off of wealth produced elsewhere. Rent and debt thus became a ghostly platform upon which neoliberalism constructed its house of cards, which came crashing down in the Global Financial Crisis of 2008. Obama came to power on the promise of fixing the economy, and bringing America back to prosperity. He bailed out the auto industry, passed a stimulus plan, and pushed the country’s first universal healthcare law, commonly referred to as “Obamacare.” However, Obamacare proved to be a huge corporate giveaway, the stimulus plan proved too small, and the so-called “auto industry” he bailed out was producing most of its cars in Mexico, and most of its activity in America was in the FIRE sector. Thus, it turned out to be yet another bank bailout. The economy did make a recovery, but mostly in low-wage part-time work. The fundamentals are still as weak as ever.
It is in this environment that we have just witnessed the most shocking election in this country’s history. A woman who was in the eyes of many the very embodiment of this neoliberal establishment faced off against a corrupt, authoritarian, narcissistic billionaire who campaigned against everything she stood for: feminism, political correctness, multiculturalism, and most of all, neoliberalism. The fascist won, and America is now in uncharted territory. This man promised to ban Muslims from entering the US, called Mexicans rapists and murderers and threatened to deport millions of them, declared war on the media, and threatened to jail his political opponent. The future has never looked more bleak.
What happened here? How did we arrive at this dark abyss? To understand this, we need to understand the inner workings of capitalism. Capitalism is built on the basis of profit. Profit, in accounting terms, simply means walking away from a deal with more than you came in with. However, if everyone is trading with each other, then for every profit there should be a corresponding loss, such that the two cancel each other out. On balance, there should be no aggregate profit. Yet capitalism sees massive profits for international corporations. So where is this profit coming from? It is extracted, first from the earth’s natural resources and then from the labor power of the workers. Labor, treated as a commodity, is consistently undersold. Land and natural resources have been monopolized, dispossessing people of the means to work for themselves, and forcing them to sell their labor for a wage just high enough to keep them working there. The surplus value they generate goes to the capitalist as profit, along with rents from natural resources.
But profit is not stable. All else being equal, it will tend to diminish over time as a result of competition. In order to maintain aggregate profits, capitalism must continuously expand. New natural resources and labor markets must be tapped to keep the cycle going. It is not merely that neoliberal ideology has everyone believing in growth as the solution to all economic problems. Capitalism does, in fact, structurally require growth in order to maintain itself. The neocolonialism of the 20th century funded the economic prosperity of America and the generous welfare states in Europe. However, sometime in the 70s, globalization started to reach certain limits. There were fewer new resources they hadn’t taken control of yet. There were fewer labor markets that could provide cheap labor. Western governments started to roll back the policies that had helped enable the standard of living their citizens were used to. Its grip on the Third World was starting to slip, so it had to start squeezing workers in the First World. Unions were crushed, jobs were outsourced, and the whole society was shifted towards a FIRE-sector economy. Even as the economy came crashing down in 2008, the main concern was not saving the workers or industry, but rather the banks, who were bailed out to the tune of about $700 billion. “Austerity,” as it’s called, was the trend in Europe where their welfare state apparatuses were slashed in order to discipline labor and increase corporate power.
It is in this context that the new Far Right has emerged. The target of their anger: globalists. What is meant by this broad term? In some respects, their anger is directed at many of the same groups opposed by the Left: international bankers, corporations that ship jobs overseas, politicians who sign trade agreements like NAFTA, and so on. But along with this anger against the elites, they also tapped into a popular anger against marginalized groups that had been brought along with globalism. Along with NAFTA came immigrants from south of the border seeking to escape the economic conditions wrought by neoliberalism. Refugees from the Middle East poured in seeking sanctuary from the conflicts wrought by US interventionist foreign policy. They do not care if these people are victims; they are contaminated with the stench of this social decay. Their grievance with globalization is not so much that it has disenfranchised so much of the world, but that it has cost them their own national identity, while forcing them to adopt to a global world of “political correctness” and multiculturalism.
Across the world, we are seeing a rise of ethno-nationalism, seeking to reclaim a national ethnic identity and essentially closing off the rest of the world to focus on the needs of a specific group identified as the rightful inheritors of the national legacy, to the exclusion of all others. It is a symptom of a culture in decay, in which the familiar structures of are withering away, while the new structures leave everyone isolated and abandoned. The result is a cathartic impulse to make their country great again, by purging those who are seen as symbols of this corrupted world order in a kind of cultural death drive that consumes the nation.
The Arc of History
In the short-term, the nation may in fact find renewed prosperity as the increased military and prison infrastructure provides a boost to the economy, while property of those groups that have been purged can be confiscated and redistributed among the “chosen” group. In the end, however, this primal upheaval devours its own and self-destructs as the forces of globalism can no longer be contained. This emerging fascism is a futile attempt to halt the unstoppable momentum of an emerging globalized world.
In the end, it is not a matter of whether we have globalization, but rather of what kind of globalization we have. As we fight the fascist menace in the years to come (and fight we must), let us also start building a new global economy. Through networking and organizing, we must attempt to build an alternative global economy, based on cooperation and mutual benefit rather than profit. Where local autonomy is respected while rhizomatic trade networks grow organically. The globalization of the world was brought about by plunder, but it can become the platform for our redemption. We cannot reverse the path it has taken, but we can steer it toward a new world of our making. Though the path ahead is dark and frightening, know that our liberation awaits us, if only we have the courage to claim it.