Category: Neoliberalism

(After) Neoliberalism? Rethinking the Return of the State

John NarayanLeave a comment

By Ishan Khurana and John Narayan

A number of commentators have recently suggested  or is in a . During the disruption of global commodity chains caused by the Covid 19-pandemic, free-market policies that have dominated the global economy for the past 40 years appear to have less purchase. Here, authors point to a reversion to a national form of capitalism and protectionism, the questioning of globalization and return of state intervention in the economy. A prime example is the Biden regime鈥檚 approach to the US economy, which has turned to deficit driven social spending, expansion of union rights and protectionist measures to public procurement. This hasn鈥檛 come out of nowhere 鈥� with the neo-liberal global economy being zombie-like since the 2008 global financial crisis.

The fracturing of the global economy along national lines may herald conflict and a new cold war between the US and China. However, the retreat of neo-liberalism also seems to offer a possible opening 鈥� . Here, a rejuvenated politics of the left may be able to avoid the pitfalls of and launch a new national form of progressive politics around welfare policies such as the Green New Deal and Universal Basic Income in locations such as the UK and US.

Neo-liberalism is in trouble, but missing from these debates about its demise is a discussion of neo-liberalism in the Global South and, thus, the reality of what the crisis of neo-liberalism means for all rather than simply those within the Global North. 

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The partnership trap in the Indonesian gig economy

Arif Novianto3 Comments

In the last three months, there have been three strikes by gig workers in Indonesia. Problems related to harsh working conditions, injustice, and the decline in the welfare of gig workers became the main issues in the three strikes. The biggest strike was carried out by (delivery service from the platform company) involving nearly 1,500 couriers or almost 80% of active couriers on GoKilat. A day later, couriers from went on strike spontaneously for three days by mass deactivating accounts on their platform application.

Prior to the two strikes above, on April 6, 2021, a strike was carried out by couriers for 1 day in Bandung, Indonesia, involving around 1,000 couriers. The Shopee Express courier strike was motivated by a cut in the payment they received. The new rules reduce courier revenue from 2,500 rupiah (US$0.17)/package to only 1,500 rupiah (US$0.10)/package and that is the only income earned by the couriers. In other words, they did not earn basic income equal to the minimum wage in the province where they work. Moreover, they did not have health insurance, decent working hours, overtime pay, leave /holiday rights, and severance pay. The working conditions were worse due to the fact that the vehicles (motorcycle) used are theirs and they had to pay fuel cost.

With such a wage system, to be able to earn the minimum wage in Bandung City in 2021 of 3,742,267 rupiah (US$263.16) per month for instance, couriers have to deliver 2,495 packages monthly鈥攏ot including fuel and maintenance costs they have to pay. It means that they would have to deliver about 104 packages per day to the customers. If, on average, a package is delivered in 10 minutes, they need 17 hours per day, far above the decent 8 hours work day. This oppressive work system for gig workers is possible and there is no prohibition from the Indonesian government, due to the courier’s status as an independent contractor or, instead of labor.

The precarious and uncertain working conditions stem from the misclassification of their employment status. Companies classifies them as 鈥減artners鈥�, so that they could avoid the obligation to provide the minimum wage, health insurance, overtime pay, severance pay, 8 working hours per day, and holiday rights if they were labor, although the working relationships between the companies and their couriers represents the employer-employee relationships as there are shift work for the couriers, work control by the companies, requirements in recruitment such as contracts of employment, and the companies unilateral rules established by the companies.

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Neoliberalism and global development before and after the Washington Consensus: Agricultural credit at the World Bank

Nick BernardsLeave a comment

We鈥檝e witnessed a revival of debates about the Washington Consensus and the future of neoliberalism in recent months. Recent increases in public spending have led to conclude, or , that decades of neoliberal consensus have been shattered. Much of this debate is misguided, rooted in a mistaken dichotomy between 鈥榮tates鈥� and 鈥榤arkets鈥�, and a corresponding conception of neoliberalism as primarily involving a reduction in the role of the former. Efforts to rehabilitate the Washington Consensus, meanwhile, rely on flimsy and heavily ideological counterfactuals.

In this post, I want to take up another angle on this question, asking: what is 鈥榯he market鈥� in practice? In particular, I take a closer look at the emergence of the idea that 鈥榠nterest rates should be market-determined鈥�. This was a core tenet of the 鈥榃ashington Consensus鈥� in John Williamson鈥檚 . It was also, historically, a key argument of neoliberal economists. From the early 1970s, several influential pieces (e.g. McKinnon 1973; Shaw 1973) urged the deregulation of interest rates, arguing that while usury caps were intended to assist small farmers, they wound up forcing banks to concentrate on relatively low-risk loans to government or large-scale industry.

In practice, though, the relatively simple proposition that 鈥榠nterest rates should be left to the market鈥� invited a whole range of difficult questions and political challenges.

In a recent article in tracing the history of World Bank agricultural credit programmes (Bernards 2021), I show how neoliberal approaches to development have never really involved 鈥榮hrinking the state鈥� and unleashing markets so much as fraught and failure-prone efforts to figure out who and what should be governed by, and how to construct, markets.

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The Techfare State: The 鈥楴ew鈥� Face of Neoliberal State Regulation

alibhagatLeave a comment

By Ali Bhagat and

A recent article in the takes aim at 鈥楬ow Big Tech Won the Pandemic鈥�, highlighting how in the last year alone, Amazon, Apple, Google, Microsoft, and Facebook posted a combined revenue of more than $1.2 trillion. While the pandemic has resulted in the loss of both work and life the world over, companies like Amazon have managed to expand their warehouses and their cloud computing infrastructure鈥攁nd reaped unprecedented profits in the process. As the Times put it, 鈥榯he pandemic created a peculiar economy that benefited some people and industries, including in technology, even as it battered others.鈥� 

But as many commentators have pointed out, the explosive growth of the tech giants must also be understood in relation to more overtly political conditions. It may be true that the technology industry has maintained a liberal, progressive, and socially equitable visage throughout the pandemic, even as it has subtly extended its multi-tentacled reach into new physical and digital spaces. Indeed, we know by now, that and this is a dominant reading within critical political economy which has been at pains to point out how laissez-faire regulatory environments鈥攑articularly in the United States鈥攈ave allowed the tech industry to sniff out and exploit new sources of profit, including those that have arisen as a result of the COVID-19 crisis.  

In this literature, then, the tendency is to assume that it is an absence of state intervention that has underpinned the technology industry鈥檚 growing economic (and political) power. With our conception of techfare, however, we aim to push beyond these explorations of how Big Tech evades state control. Instead of focusing on state absences, we set out to highlight an equally significant dynamic: how the technology industry has become deeply entwined with the activities of the neoliberal state. 

Our research agenda is centred on one key question: how has the dramatic post-2008 growth of the American technology industry interacted with鈥攁nd been shaped by鈥攖he neoliberal regulatory projects that have prevailed during this time? In pursuing this question, we focus on one pivotal arena of neoliberal statecraft in which Big Tech companies increasingly participate, but where their presence has gone largely unnoticed: the disciplining of the , particularly through consumer debt, policing, and imprisonment. 

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Neoliberalism and Resistance in South Africa: Economic and Political Coalitions

ans012Leave a comment

In the first quarter of 2021, amidst the social and economic devastation wrought by the Covid-19 pandemic, the , and subsequently defended, its decision to refrain from increasing the country鈥檚 extensive social grant payments鈥攚hich now reach 18 million impoverished citizens鈥攂eyond the growth in inflation. Treasury officials have argued that a larger increase in social welfare protection is simply not currently feasible given the country鈥檚 rapidly rising public debt鈥攚hich has now breached 80% of the debt/GDP ratio鈥攁nd investor demands for fiscal consolidation. This type of fiscal restraint is unfolding in a context of heightened wealth inequality and an official unemployment rate now above 30%.

Those familiar with the financialization scholarship pertaining to developing countries鈥攖hat strand which portrays the global financial markets as a force that can alter committed policy trajectories on a whim ( 2004), as well as the more nuanced literature ( 2000; 2017; 2014; 2017)鈥攎ay recognize the Treasury鈥檚 framing of South Africa鈥檚 fiscal dilemma. However, as much of the international development literature on industrial upgrading and state policy has noted ( 2018; 2019; 2006), there is a third option available to policy-makers in developing countries beyond the binary of debt build-up vs. austerity; namely, comprehensive, employment generating state-led development.

This is precisely the case I make in my new book, published by Palgrave (2021), . In addition to documenting the onset of a financialized accumulation regime in post-apartheid South Africa since the democratic transition and the ANC鈥檚 adoption of economic liberalization, the monograph also highlights the missed opportunities that could have allowed the country to embark on a self-sustaining path of industrial up-grading, inclusive development, and internal revenue generation. Such missed opportunities include the early rejection by party leaders of the heterodox 鈥淢acro-Economic Research Group鈥� (MERG) policy cluster, the removal of the trade unions from broader macro-policy-making processes, the rejection of a modest reconstruction and wealth tax, and the abandonment of much of the 鈥淩econstruction and Development Program鈥� (RDP) platform in favor of the orthodox 鈥淕rowth, Employment, and Redistribution鈥� (GEAR) package in 1996. Had some of these missed opportunities been pursued, South African state officials would likely be in a much better position to currently adopt expansionary fiscal policies, and perhaps could have lifted their citizens out of poverty via inclusive development instead of cash-transfers.

Yet, as my monograph further documents, since the democratic transition Treasury officials have continued, despite recommendations from other government ministries such as the Department of Trade and Industry (DTI), to veto or oppose heterodox policy proposals that could potentially offer South Africa a path away from the current neoliberal quagmire. Such proposed polices include capital controls, export taxes on raw materials, the utilization of foreign exchange reserves to capitalize State-Owned-Enterprises (SOEs), and targeting specific industrial sectors for subsidies and state promotion.

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Debating 鈥楽tate Capitalism鈥� in Turkey: Beyond False Dichotomies

mehmetermanerol3 Comments

Following the 2016 failed coup attempt, and in the context of increasing mistrust towards the West, Turkey鈥檚 president Erdogan reflected his discontent with the EU and argued that , namely the Shanghai Cooperation Organisation (SCO) led primarily by China and Russia. Soon after, despite being a NATO member, to buy the S-400 air defence missile system. Taken together with Turkey鈥檚 other 鈥榓dventures鈥� in its region, these developments were perceived as manifestations of a changing political economy of Turkey, and were deeply disturbing to Western powers. After all, since the end of the Second World War, Turkey had been a close ally of the US-led Western capitalist bloc, it continued to be one during the Cold War; and had remained very close to US and EU interests following the end of the Cold War in 1991.

For some accounts[i], these developments are related to the changing world order and global power shifts following the 2008 crisis, as the decline of the 鈥榣iberal international order鈥� and the rise of BRICS (Brazil, Russia, India, China and South Africa) marked transformations of the global political economy. Hence, there is a tendency to explain Turkey鈥檚 late political economy in this context. It is argued that, in this 鈥榩ost-liberal international order鈥� where two competing political economies come to the fore, Turkey is moving towards the 鈥楨ast鈥� or 鈥榥on-West鈥� – mainly China and Russia. As such, Turkey鈥檚 engagement with non-Western 鈥榞reat powers鈥� (which are generally characterised by 鈥榓uthoritarian state capitalism鈥� as opposed to the 鈥榥eoliberal political economy鈥�/liberal democracy/鈥檇emocratic capitalism鈥� of the West), shapes Turkey鈥檚 political economy and paves the way for 鈥榓uthoritarianism鈥�, 鈥榠lliberal democracy鈥� and 鈥榮tate capitalism鈥�. Put differently, as the legitimacy crisis of 鈥榃estern neoliberalism鈥� makes it less desirable for countries like Turkey, Turkey is regarded to have deviated from neoliberalism and liberal democracy and moved to state capitalism and authoritarianism.

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Neoliberalism鈥檚 many deaths and strange non-deaths听

jdcbath1 Comment

neoliberalismBy Jack Copley and Alexis Moraitis

The coronavirus pandemic has required states to take unprecedented steps to backstop the world capitalist economy. This has included enormous liquidity injections into financial markets, guaranteeing the wages of furloughed workers, and temporarily requisitioning and coordinating parts of the private sector. Yet last year a different threat 鈥� not epidemiological but proletarian 鈥� similarly forced states to adopt redistributive policies against their wills, albeit on a smaller scale.听

From the vantage point of the current uprisings against racist police violence, the empty streets of the early 2020 lockdown appear as a brief exception to the broader trend of mass unrest. In , streets, avenues, and squares in different parts of the world flooded with protestors decrying the pro-rich policies of their respective governments. The scale, endurance, and spectacular disruptiveness of these popular explosions pressed governments from Western Asia to Europe to Latin America to abandon so-called neoliberal fiscal rectitude and reluctantly embrace Keynesian stimulus policies.

In Chile, on the eve of the autumn 2019 revolt, billionaire austerian president Sebasti谩n Pi帽era a classic metaphor of neoliberal stoicism to explain how he would resist popular opposition to his painful reform programme: 鈥楿lysses tied himself to a ship鈥檚 mast and put pieces of wax in his ears to avoid falling for the 鈥� siren calls鈥�. Less than one month later, this modern Ulysses had broken free from his tethers, announcing increases in the minimum wage, healthcare benefits, pensions, electricity subsidies, and the reform of Chile鈥檚 very constitution. There are clear with France鈥檚 Emmanuel Macron, a former investment banker who assumed power in 2017 on a platform of market discipline, only to buckle under the weight of the relentless Gilet Jaunes movement and announce a 鈧�17 billion package of concessions.

How are we to grasp the jarring Keynesian U-turns of such cartoonish neoliberal governments in the face of mass protest and pandemic? It is commonly assumed that the neoliberal project represented the shrinking of the state sphere and its replacement by the cold logic of the marketplace. The 2008 bank bailouts appeared to buck this trend, as states were called upon to undertake drastic interventions. But this turned out to be a hiccup in neoliberalism鈥檚 larger narrative arc, as austerity quickly took hold. Yet perhaps this latest accumulation of crises will at last force states to reclaim the territory they had ceded to the market. After its 鈥樷��, is neoliberalism finally dying?Read More »

Neoliberalism on Trial: Jokowi 2.0, Omnibus Bill and the New Capital City

trissiaoeiLeave a comment

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When the majority of Southeast Asian countries began to enact more aggressive responses to the novel coronavirus, Indonesia turned a deaf ear to virus mitigation efforts. As it had no confirmed cases of the coronavirus as of February, Joko Widodo鈥檚 (Jokowi) government instead kept pushing extensive economic reform agendas. It submitted a 1,028-page Job Creation Omnibus Bill on 12 February, calling the bill the country鈥檚 third great structural reform program after the听 1998 International Monetary Fund鈥檚 (IMF) Letter of Intent and the 1967 Foreign Direct Investment Law. Despite criticism from the opposition, the president insisted on this neoliberal agenda, claiming that the objective of the bill is to promote more foreign direct investment (FDI) in the manufacturing sector and thus create more jobs.听

What effects do neoliberal policies have on political and economic life in Indonesia and state-capital relations in particular? This blog post follows David (2006) in taking a historical-geographical approach to investigate this question, with a focus on policies put in place in the current president Jokowi鈥檚 second term. For , such a bold move to deregulate the economy signals the resurgence of state-led development in a new form. Put differently, what this article would like to argue is that deregulation, an all-encompassing hegemonic ideology rather than simply a policy, has become some sort of 鈥榖anner to unite under鈥� for the ruling capitalist class in Indonesia.听Read More »