Wednesday, July 30, 2008

Neoliberal “freedom” = Government coercion, violence. The non-market.

In the last few decades many individuals and politicians, with rather privileged access to global mass media outlets[1], have spread an ideology of political persuasion known as ‘neoliberalism’ or ‘neoconservatism’. It has been confused by many – and it seems that this confusion may be deliberate[2 ] - as the simple reiteration of ‘liberalism’ [3 ]. However, critiques of neoliberalism indicate that this doctrine focuses on only one aspect of the traditional liberal doctrine – that of ‘economic liberalism’ which is the belief that “states ought to abstain from intervening in the economy, and instead leave as much as possible up to individuals participating in free and self-regulating markets.” [4 ]

How strange! This doctrine has emerged at the very time when the evidence for the effectiveness of ‘self-regulation was virtually non-existent and after governments gave birth to the giant corporation with heavy-handed protectionist approaches. It was promulgated when a large body of economic literature showed that industry in developed nations had become extraordinarily concentrated and was exerting undue political influence over and within governments. Environmental scientists, independent journalists and even the Secretary General of the United Nations were warning that nations had a very limited amount of time “to improve the human environment, to defuse the population explosion and to supply the required momentum to development efforts” before planetary problems would reach “such staggering proportions that they will be beyond out capacity to control.”[5 ] If there was ever a time for governments around the world to reign in the excesses of industrial pollution, wasteful production methods and excessive and unnecessary consumption it must surely have been the last 30-40 years.

For all the incessant talk of freedom and markets the reality on the ground is that governments are fully in league with large transnational corporations and both have moved not to foster market relations but to actually prevent ordinary citizens from engaging as producers and sellers in markets.

This has been done through forced evictions [6] , a mountain of new regulation, tax privileges and resource agreements that allocate almost an entire region’s forests, water, land etc to only a select few enterprises. In Australia, for instance, the Federal Liberal and Labor governments have encouraged investors to put their money into a small number of selected corporations that are engaged in the clearfelling and woodchipping of huge stands of government-granted native forest. Forests that have been taken out of the hands of the public through the passing of ‘resource guarantee’ legislation where citizens and every other unselected enterprise (almost every one) are banned from the purchase and access to forest resources. ‘Managed Investment Schemes’ (MIS) are the tool used by government to redirect economic resources away from viable and sustainable forms of business. Those investors with capital gains that need to be offset are “generally driven into MIS by their tax deductibility - you put in $100,000 and you get $100,000 of deductions against other income” [7 ]

The biggest native forest woodchipper in Tasmania is Gunns Ltd. Two of its major investors are the AMP (Australian Mutual Provident) Society and Perpetual Investments. Both companies have links with the Fairfax [8 ] and Murdoch [9 ] media empires. Rupert Murdoch’s ‘News Corporation’ is one of the three largest international media groups, operating in most sectors and most continents. Are these media organisations using their investments to access a very cheap source of newsprint for their publications? The question has to be asked.

I believe that a careful unraveling of the corporate networks involved in Tasmania’s contemporary environmental holocaust[10 ] [11] need to be performed. Will such research reveal a host of transnational corporations co-owned by each other? Will we find that these entities are, in effect, exchanging goods between their own enterprise both within Australia and, by way of intra-corporate transactions, across national boundaries? If so, we cannot view this as even a form of trade [12] ; it is all ‘in-house’. They will be seen simply to be using cheaply or freely acquired public resources, with government granted exclusion of competitors from the market place to take advantage of the most extraordinary profit-making opportunities in history. How convenient it appears to be, to use these inaptly entitled ‘free trade’ agreements that allow for avoidance of tariffs along with the employment of a host of other questionable mercantile mechanisms.

‘Market’? ‘Freedom’? ‘liberalism’? Will we find any of those? I doubt it.

[1] Money and power are now sustaining global media concentration. This poses serious questions about the state of democracy in nations.

[2] One of the innumerable examples is Ronald Reagan stating in his speech at Moscow State University on May 31, 1988: “Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States. They are the prime movers of the technological revolution.”

This was said at a time when a vast literature was well established warning of the dangerous levels of economic concentration in the US and the implications for political influence/policy setting priorities in Government. Further most of the most successful companies and countries of the 20th century did not develop according to free-market principles; successful countries protected and nurtured their industries.

[3] Liberalism.

[4] What is Neoliberalism? By Dag Einar Thorsen and Amund Lie, Department of Political Science University of Oslo

[5] UN Secretary General U Thant in 1969.

Social and Economic Rights Action Center (SERAC). Late 2007

[7] Investors wield the axe as Futuris blames forest scheme for downgrade
Ian McIlwraith, June 26, 2008.

[8] Sir James Reading Fairfax was a founder and director of the Perpetual Trustee Co. and a director of the Australian Mutual Provident Society the Bank of New South Wales, the Commercial Banking Co. of Sydney and Burns, Philp & Co. Ltd. Other members of the Fairfax family past and present have been directors of AMP.

[9] Australia's AMP lets Murdoch off the hook over News Corp. relocation.

[10] Paradise lost - with napalm,,1197159,00.html

Australian Broadcasting Corporation

[12] It’s NOT International Trade. Don’t be Fooled. By Brenda Rosser on 24th July 2008.


Anonymous said...

The treasures captured undisguised looting, enslavement, and murder, floated back to the mother-country ...

what/where is the
the modern system's

unit of analysis

Anonymous said...

This seems like an apropos topic to bring up a question that came to mind this AM while listening to a report on WBAI about an issue related to changes in the WTO being negotiated during the past several years. It seems that India, in particular, has been objecting to a wholely free market approach to food basics trade and the more establilshed econnomies, ie US, England, Australia,etc., were arguing for such an open market approach through the WTO. India it seems wants some protections for its local farmers from a sudden surge in cheaper grains from the other member states. The commenters on the program did not raise the popint that, as far as I can remember, the US provides just such protections and export supports for its farm companies.

Am I not understanding the issue, and the relative arguments? How can one side of the negotiation object to the other side practicing the same forms of national support for farms that the first side itself practices?