Fernando Alcoforado *
This article aims to show how neoliberal globalization emerged, the consequences of neoliberal globalization, the obstacles to neoliberal globalization, the advance of fascism with the neoliberal globalization crisis and the solutions to the neoliberal globalization crisis.
How did neoliberal globalization come about
The economic failure of liberal capitalism from the American Revolution (1776) and the French Revolution (1789) to the Great Depression with crack on the New York Stock Exchange (1929) led to the adoption of Keynesianism based on the ideas of the English economist John Maynard Keynes, who, unlike the classic economic liberalism adopted until then, advocated the action of the state in the economy in order to rationalize the management of national economies and achieve full employment having as main characteristics state intervention in the economy, especially in areas where private initiative was unable or unwilling to act, the defense of political actions aimed at economic protectionism, against economic liberalism and the defense of state economic measures aimed at guaranteeing the full employment that would be achieved with the balance between demand and production.
Keynesianism ceased to be effective in the 1970s, explained by the fall in world economic growth after the so-called “glorious years” (1950/1960), the two oil crises, and the debt crisis of most of the world’s countries that became insolvent with international banks. This situation led the conservative forces of the United Kingdom and the United States under the leadership, respectively, of Margaret Thatcher and Ronald Reagan to advance neoliberalism whose economic doctrine advocated the return of liberalism now on the world level that meant the end of economic borders, absolute freedom of the market and a restriction on state intervention in the economy, which should only take place in essential sectors and to a minimum. Neoliberalism was adopted almost everywhere around the world after the end of the Soviet Union and the eastern European socialist system in 1989.
The factors that triggered neoliberalism worldwide were, on the one hand, the crisis of the world capitalist system with the decline of the process of capital accumulation on a world scale aggravated by the tripling of oil prices, literally the fuel of capitalism in 1973 and again in 1979, when there was also a huge increase in US interest rates, which caused, in the 1980s, the so-called “external debt crisis” in peripheral capitalist countries such as Brazil. The whole crisis was demonstrated through rising unemployment, falling investment levels, reduced capital profitability, the fiscal crisis of national states, and so on. The answer to this was neoliberalism on the basis of which new ideologies, new forms of administration, management and production were adopted. Russia and the Eastern European countries that have adopted socialism, as well as some countries that have adopted the welfare state in Western Europe as a capitalist counterpoint to the socialist system, have replaced it with the neoliberal model.
In general, neoliberalism has as its basic principles: 1) minimal state intervention in the direction of the national economy; 2) privatization policy of state enterprises; 3) little government intervention in the labor market; 4) free movement of international capital and emphasis on globalization; 5) opening of the economy to the entry of multinationals; 5) adoption of measures against economic protectionism; 6) State bureaucracy with the adoption of simplified economic laws and rules to facilitate the functioning of the economy; 7) shrinking the size of the state to make it more efficient; 8) non-interference by the State in the prices of products and services that must be determined by the market based on the law of supply and demand; 9) State control of inflation through monetary policies based on inflation targets; 10) State adoption of the floating exchange rate policy; and 11) obtaining a fiscal surplus to pay the public debt.
Consequences of neoliberal globalization
With neoliberalism social inequality has reached alarming levels around the world. Thomas Piketty demonstrated in his book Capital in the twenty-first century that there has been a steady increase in wealth inequality since the 1970s, contrary to the trend of the previous 60 years and much more pronounced and socially relevant than rent inequality. From 1970 to 2010, the richest 1% (ruling classes) held half of all the world’s wealth, while the poorest 50% (popular classes) held a mere 5%. The number of billionaires, according to Piketty, increased from 1,011 with a total wealth of 3.6 trillion in 1970 to 1,826 with an aggregate value of 7.05 trillion in 2010. By 2010, this group had roughly the same as the poorest half of humanity. Five years later, it hoists more than triple (PIKETTY, Thomas. Capital in the twenty-first century. Cambridge: The Belknap Press of Harvard University Press, 2014).
The IMF itself states that neoliberal policies have increased social inequalities. Article under the title FMI diz que políticas neoliberais aumentaram desigualdade (IMF says that neoliberal policies have increased inequality), published in 2016 on the website <http://g1.globo.com/economia/noticia/2016/05/fmi-diz-que-politicas-neoliberais-aumentaram-desigualdade.amp>, reports that neoliberalism has received criticism from one of its biggest supporters, the International Monetary Fund (IMF), in an article published by three economists of the institution. The article suggests that the neoliberal prescription prescribed by the IMF itself for sustainable economic growth in developing countries may have long-term adverse effects. The benefits of some policies that are an important part of the neoliberal agenda appear to have been a bit exaggerated, economists said in the June issue of Finance & Development. In addition to not generating economic growth, neoliberal policies have increased inequality, endangering lasting economic expansion. The authors of the article, three members of the IMF’s research department, said the traditional approach to helping countries rebuild their economies through government spending cuts, privatization, free trade, and capital opening could have “significant” costs in many countries in terms of greatest inequality. The catastrophic economic and social situation in which Brazil finds itself proves the statement of the authors of the aforementioned article.
Like liberalism adopted worldwide until 1929, neoliberal capitalism adopted since 1990 also failed economically with the outbreak of the 2008 United States world crisis in the mortgage lending sector that immediately spread to other parts of the financial system. with a speed and breadth that surprised the market. The Asian Development Bank estimated that financial assets worldwide may have fallen by more than $ 50 trillion – a figure equivalent to annual global output. The financial system has embittered losses on a scale that no one has ever anticipated.
The facts of reality show that few countries and companies benefit from globalization, including the globalized financial system that makes astronomical profits thanks to the absence of global economic and financial regulation and few countries like China, India, South Korea and others Asian countries that are able to attract foreign investment thanks to cheap labor and favorable national legislation and Germany for the weight it represents in the European Union. On the other hand, loses with neoliberal globalization central capitalist countries such as the United States and Japan, and other peripheral countries facing problems of deindustrialization, rising unemployment, economic stagnation, and rising public debt like Brazil.
The lack of response to the economic crisis generated by neoliberal globalization calls into question the legitimacy of the European Union which is threatened with fragmentation, as evidenced by Brexit with the likely departure of the United Kingdom from the European Union. And the most serious is that there is no plan to overcome the crisis. After 50 years of unification, Europe risks a reverse process: its fragmentation. If the eurozone crisis were not enough, which threatens to divide the bloc between countries that have managed their finances and those that have failed to adopt the single currency (the Euro), regional nationalisms are now gaining momentum as a result of the economic crisis. In the meantime, in societies in southern Europe, there is nowhere near a way out of the crisis, but more recession and unemployment. What happens in Greece, Portugal and Spain cannot be explained without this profound economic and financial crisis that hits the world capitalist system and the European Union that imposes immense sacrifice on its people to save the banks from bankruptcy with the adoption of the policy austerity adopted by its member countries. The hopelessness of the populations of the European Union and the excessive social tension within it can lead to the end of the European Union and threaten the political and institutional order prevailing in each of the countries of the region.
The European Union is threatened with fragmentation or dismantling as a result of coexisting internal structural imbalances with surplus rich countries and others with chronic deficits. One of the problems weighing negatively on the evolution of the European crisis is that there is excess liquidity in parts of the euro area, and lack in others. The fragmentation of the European Union is expected to intensify, economically and financially, with the interruption of transnational flows of goods, services and capital with large currency mismatches that could cause multiple defaults among the member countries of the European Union. The consequence of all this is rising unemployment and rising social tensions across the European Union. The most vulnerable members of the Eurozone (Greece, Italy, Spain and Portugal) have been facing for some time the risk of economic and financial disruptions that could foster social unrest and political dysfunction that could lead them away from the European Union. An example of this phenomenon is Catalonia, one of Spain’s most important autonomous regions, which accounts for one-fifth of the national economy, where the already powerful independentist sentiment is now fueled by the feeling that Spain is failing.
The inevitable result of neoliberalism adopted worldwide was the widening global imbalance in trade, saving and investment, and materialized social inequality in the excessive concentration of wealth around the world. This global imbalance in trade, savings and investment was the result of the crisis that broke out in the United States in 2008 and spread around the world and has put the United States, the United Kingdom and Europe’s financial system at risk of unsustainable debt. For countries that have deindustrialized by relocating much of their industries out of their territory and fueled consumption with increased credit, the result has always been that they have to deal with trade deficits, high government debt and financial sector instability. Asia’s trade surplus with the rest of the world, Germany’s with Europe, the relentless accumulation of capital from oil exporters at the expense of other indebted peoples has led the United States, the United Kingdom and southern Western European countries to get into debt beyond the limits. It must be understood that neoliberalism only exists because some countries do not practice it, such as Germany, China and Japan, which adopt what their critics call “neo-mercantilism” by manipulating their trade, investment and positions to accumulate large amounts of money from other countries. The main current account balance of payments deficits are in the United States and many European countries. The surplus countries are China, the rest of Asia, Germany, Japan and oil producing countries.
There is no doubt that the capitalist system is a system that operates according to the entropy principle because it has a universal tendency to evolve into increasing disorder and self-destruction. It is noteworthy that entropy is a thermodynamic quantity that measures the degree of irreversibility of a system and is generally associated with what is called the “disorder” of a thermodynamic system. Entropy measures the degree of disorder of a system. It also seems evident that the entropy that occurs in the material world is also reflected in economic activity. By denying the regulation of the world capitalist system, neoliberalism collaborates in bringing the system to self-destruction.
Barriers to neoliberal globalization
Donald Trump evidenced his disgust for neoliberal globalization in his nationalist White House inauguration address when he stated that for many decades the United States has enriched foreign industry over American industry, made other countries rich, while the wealth, strength and confidence of his country was dissipating on the horizon, that “one by one, the factories closed and left our territory, never thinking about the millions and millions of American workers who were abandoned. The wealth of our middle class was taken from their homes and then redistributed around the world. ” Trump’s nationalism is marked in his speech by stating that “from this day forward, it will be only America first, America first” and that it will protect the United States from the devastation caused by countries that rob their businesses and destroy their businesses, jobs and that “we will bring our jobs back. We will bring back our wealth. ” Trump said he will follow two simple rules: buy American products and hire Americans. There will be advancement of protectionism in the United States to be adopted by the Trump administration with the aim of defending US companies and jobs that will cause the same to happen in the world as a counterpart.
Donald Trump’s arrival in the White House could lead to the advance of protectionism in the United States and the world, the end of the globalization of the productive system and free trade, and the deterioration of economic relations with China. The advancement of protectionism in the United States to be adopted by the Trump administration in order to defend US companies and jobs will cause the same in the world as a counterpart. Trump said he will follow two simple rules: buy American products and hire Americans. The end of the globalization of the productive system will materialize with the end of free trade that will prevent American companies from settling at their discretion in countries where they make the most profits. The deterioration of economic relations with China with the ongoing trade war stems from the fact that Trump accuses him of “stealing” businesses and jobs in the United States.
Advance of fascism with the crisis of neoliberal globalization
From the book Capitalism, Hegemony and Violence in the Age of Drones by the late American historian Norman Pollack who was emeritus professor of history at Michigan State University, published by Springer Nature in 2018, there is the affirmative that “fascism in the United States, at any gestational stage, advances against the people”. In Pollack’s view, fascism is more than a historically temporary political arrangement, as in Germany, Italy, Japan, and other countries between the two world wars. Fascism is a general social state. Pollack states that fascism does not require the camp of concentration, persecution or torture, although its threat and potential remain ever present. Instead, fascism can be grasped through various indicators, such as extreme concentration of wealth, the co-partnership between business and government, as a structural interpenetration of powerful institutions that promote monopoly capital, constrain labor organization and labor militancy, and create a strong state based on military power and commercial supremacy; also encouraging a complacent mass base, submissive to power and wealth, bound in ideological knots through false consciousness and intimidation, intellectually broken through media, propaganda, and signals from above.
Pollack says the United States has concentration camps. It has the so-called detention centers that imprison a secret number of people run by private companies. The United States has more than three million people in prison, nearly half of them black and poor people. Official propaganda demonizes a religious minority labeled Muslim. Google, Boeing, Raytheon, big banks and insurance companies enjoy the same status as state-owned devices like the military intelligence octopus that scrutinizes everyone and performs covert operations to topple governments around the world. These state-private entities include torture as part of their daily panoply. The media deal with an endless stream of fake news, CIA-directed Hollywood movies, and all the various public relations tools campaigning all at the service of the business-state apparatus that shapes public consciousness like an alienated mass.
Pollack states that it is in the United States where the fascist staff in defense of globalized capitalism is located. Pollack points out that the US government conducts drone murders, occupies foreign countries, creates and supports terrorist guerrillas, such as the Islamic State, around the world. The US government oppresses and investigates its own domestic population. It does all this in the service, not for the nation’s aggrandizement, but in the service of global capital. This is a different fascism from the old fascism which represented a reaction of conservative forces in various European countries against the rise of the workers to power after the victory of socialism in the Soviet Union in 1917 and was based on strongly nationalist conceptions and the totalitarian exercise of power, therefore against the democratic and liberal system, and repressive in the face of social democratic, socialist and communist ideas. Ancient fascism implanted during the 1920s and 1930s was based on a strong, totalitarian state that claimed to embody the spirit of the people in the exercise of power by a single party whose authority was imposed through violence, repression and political advertising.
Current fascism in the United States has a double connotation, being nationalistic in developing actions aimed at maintaining US global hegemony and globalist in taking action in defense of globalized capitalism. Pollack claims that the shadow of fascism has not only fallen over the United States, but encompasses all the nations that harbor the centers of world capitalism. No matter where, because the interests of capital and the global ruling class must be met by every state apparatus in the world. Pollack states that today’s world resembles the period between the two world wars when fascism arose across Europe. The underlying cause is the same: a crisis in capitalism. Moreover, the crisis stems from the same condition: a fall in the rate of profit in the process of capital accumulation, especially in the form of fictitious or financial capital, and an organic composition of capital in which production increasingly depends on machines or robots that replace human work. The result is that the value of production decreases, and with this decline profits decrease.
Pollack says that in order to maintain its hegemonic position and try to control China and Russia, the United States relies heavily on military force directly and indirectly. Sustaining its preeminent position means the United States government maintains at least 1,000 military bases around the world. To sustain its vigorous world hegemony, the United States government impoverishes most of its population, excluding the few thousands who own most of the wealth and control all capital. Pollack states that in addition to military force, the United States and its western allies use two strategies: 1) support authoritarian regimes; and 2) destabilize countries that make or could potentially pursue independent policies. The first of these strategies was adopted in Latin America with the support of military dictatorships implemented in the 1960s, 1970s and 1980s, respectively, in Brazil, Chile, Argentina, among other countries. The second of these strategies has been advanced most recently in Iraq, Afghanistan, Libya and Syria. The most extreme example of destabilization occurred in Syria, where Western powers created several competing anti-government guerrillas and even invaded and occupied a part of Syria.
Pollack states that both of the above strategies promote growing world chaos and encourage the advance of fascism. American fascism has joined European fascism, and in Japan there is a clear return to fascism, especially militarism, to support the Western bloc’s efforts to control China. In short, Pollack’s attribution of the advance of fascism in the United States is part of a global trend. In Brazil, fascism is present with the Bolsonaro government. Pollack claims that this same situation in the early twentieth century required two world wars and the Great World Depression to solve the crisis of capitalism. What followed was the so-called golden age that lasted about 25 years from 1945 to 1970 after World War II. The wars and the Great Depression destroyed the then existing capital. Achieving a similar destruction of capital, this time on a more global scale, might well require not only the destruction of capital but much of human civilization. Just remember the worldwide devastation caused by the Second World War.
Solutions to the crisis of neoliberal globalization
Paul Mason presents in his book Post Capitalism – A Guide to our Future (New York: Farrar, Straus and Giroux, 2015) his solution to the current crisis of capitalism. To avoid the problems of globalization, the financialization of the world economy would need to be reversed, as well as encouraging the return of industries and services to the West to create high-wage jobs in developed countries. As a result, the complexity of the financial system would shrink, wages would rise and the participation of the financial sector in GDP formation would be reduced, as would confidence in credit. There would, however, be huge social and political obstacles to implementing these measures. The rich would oppose raising wages and regulating finances. There would be winners and losers with the adoption of these measures. Germany would benefit from the creditor status with the colonization of Greece and Spain whose economies are heavily indebted. China would benefit from the cheap labor of 1.4 billion people. Germany and China would therefore block an escape solution to solve the problems of globalization. This situation that could not be peacefully managed would represent the collapse of globalization. Without Paul Mason’s escape solution to solve the problems of globalization, is likely the stagnation of the world economy.
As the oppression of neoliberal and fascist globalized capitalism extends to all walks of life around the world, the possibility of revolt takes on the form of civil war on a global scale. The destruction of totalitarian mercantile society becomes an imperative necessity in a world that is already doomed. Riots are reborn all over the planet and herald the future revolution. In order to combat the modern bondage to which all humanity is subjected, the struggle against globalized neoliberal capitalism and modern fascism, which prove to be the greatest enemies of all the peoples of the world, must be unleashed on a planetary scale. One fact is indisputable: without the overthrow of globalized neoliberal capitalism and modern fascism on a national and global scale, the problems affecting humanity will not be overcome.
Everything indicates that humanity is inexorably moving towards economic integration, initially, and, politically, later, between countries. For this to happen, a world government must be in place to make a globalized rule of law work as well. The constitution of a world government would aim not only at economic ordering on a world scale, but above all to create the conditions for facing the great challenges of humanity in the 21st Century which consist of: 1) chain economic and financial crises; 2) Social revolutions and counterrevolutions across the globe; 3) Cascade Wars; 4) World overpopulation; 5) Deadly Pandemic; 6) Extreme climate change; 7) organized crime; and, 8) Threats from space whose global actions to counteract them are impossible to be carried forward by individual national states and current international institutions.
To make a world government viable, a World Forum for Peace and the Progress of Humanity must be set up at first by civil society organizations from all countries of the world. At this Forum, the objectives and strategies of a mass suprapartisan world movement would be debated and established by the constitution of a world government and a world parliament to sensitize the world population and national governments to make a world of peace and progress for the whole humanity. This would be the way that would make it possible to turn the utopia of world government into reality.
* Fernando Alcoforado, 79, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, engineer and doctor in Territorial Planning and Regional Development by the University of Barcelona, university professor and consultant in the areas of strategic planning, business planning, regional planning and planning of energy systems, is author of the books Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2010), Amazônia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Invenção de um novo Brasil (Editora CRV, Curitiba, 2017), Esquerda x Direita e a sua convergência (Associação Baiana de Imprensa, Salvador, 2018, em co-autoria) and Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019).
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