Neoliberalism, or the Catastrophic Management of Catastrophe

Published on ROARMAG (also on ZNet), by Jérôme Roos, September 14, 2013.

… The catastrophic management of catastrophe. If there is one line that describes the nature of neoliberal crisis management, that must be it. From Mexico and Latin America in 1982 to the South-East Asian crisis of 1997-’98, and from Turkey and Argentina in the early 2000s to the European debt crisis from 2010 onward — the most catastrophic thing about neoliberal crisis management is not only that it has a penchant to turn already catastrophic financial crises caused by runaway private speculation into an immense source of private gain for the same very financiers responsible for the catastrophe to begin with; 

but, even more nefariously, that it makes those catastrophes so much more catastrophic than they really need to be for almost everyone else. Notwithstanding all the propaganda and rhetoric about “free markets” promoting democracy and development, the massive bank bailouts of the neoliberal era have invariably shown that those so-called neoliberals in fact care very little even about free markets — let alone about democracy or development. As one particularly candid banker told the Wall Street Journal during the Latin American debt crisis in 1985, “we foreign bankers are for the free market system when we are out to make a buck and believe in the state when we’re about to lose a buck.” And so the neoliberal ethos can really be summarized in a straightforward principle: “privatize profits and socialize losses!” Or, perhaps more appropriately: “fuck everyone else!”

In this sense, the political response to the European debt crisis is only the latest regurgitation of this sickening mantra: it is obvious for everyone by now that it’s all about bailouts for the bankers and austerity for everyone else. In Athens, in scenes unheard of as little as three years ago, children now go to school hungry, while junkies sink needles into their veins in broad daylight and the armed Sturmabteiling of the explicitly neo-Nazi Golden Dawn party, which now comes third in the polls, runs racist pogroms and violent assaults on leftists in the heart of the city. In this developed European economy, a quarter of the population has been forced into poverty. Suicide, HIV and child death rates have skyrocketed. Even malaria is staging a comeback. As a recent epidemiological study puts it, the single-minded insistence on austerity and structural reform has transformed today’s debt crises into “veritable epidemics, ruining or extinguishing thousands of lives in a misguided attempt to balance budgets and shore up financial markets.” Faced with such a catastrophic reality, how can anyone still pretend that the neoliberal approach to crisis management is a “success” from the point of view of the economy, let alone general well-being? If a developed economy loses over 20% of its size in just four years, how can anyone still maintain his or her credibility while preaching the virtues of an expansionary contraction? The whole thing would be a bloody tragedy if it weren’t so goddamn farcical.

The bottomline is that they are lying to us — they are lying through their teeth, and they know it. Austerity was never meant to speed up the recovery, just like structural reform was never meant to make the economy more competitive. Why would German industry or German politicians want more competition from Southern European firms? Of course they don’t. They want cheap labor, and they know how to get it. Beyond these goals, the design of the neoliberal policy response to the European debt crisis hinges on the absurd proposition that the banks, by virtue of them being “too big to fail”, are simply incapable of taking any losses at all. And so, in Spain, as in the US and Ireland, the very banks that speculated so recklessly on real estate in the lead-up to the crisis were first bailed out with taxpayer money — which the average Spaniard then had to pay for in terms of tax rises and austerity measures — and then continued to re-appropriate the same peoples’ homes! Over 400.000 families have lost their houses since the crisis began, many of them ending up on the street. If ever there was an example of accumulation by dispossession, this must be it. A maddening socialization of losses combined with a total privatization of profits. The houses now stand empty, uselessly wasting away in poor neighborhoods or eerie ghost cities, while more and more people sleep out in front of ATM machines at night. Homeless people and peopleless homes coexist in a bizarre social reality intermediated only by the bankers’ shortsighted idiocy and the utter irrationality of neoliberal finance more generally; a social reality that can only properly be defined as delusional – but perhaps the term “capitalism” captures this schizophrenic approach to resource allocation better … //

… In Chile, where the death of Allende marked with its bloody imprint the start of the neoliberal era, the youth continues to mobilize in massive numbers to erase the authoritarian neoliberal legacy of General Pinochet and to demand free and high quality public education. In Mexico, public school teachers are waging a major resistance campaign against the neoliberal school reforms that were pushed through by President Peña Nieto and his authoritarian neoliberal party, the PRI, which overlooked the transformation of the Mexican state into a businessman’s wet dream during the crises of the 1980s and 1990s. In Colombia, farmers have been waging a violent battle with the state against free trade agreements that have sent the price of agricultural inputs soaring and the price of food imports skyrocketing, effectively pricing local smallholders out of the market. Five farmers died in the state crackdown. In Turkey, the resistance against the authoritarian neoliberalism of Erdogan’s AKP continues unabated as the country enters another week of riots following the police murder of 22-year-old Ahmet Atakan. In Romania, thousands are taking to the streets to resist the construction of Europe’s largest open-pit mine, which will see 200.000 tons of cyanide deployed and hundreds of families evicted from their homes to bring in some foreign investment.

Wherever you look nowadays, it is becoming increasingly clear that the self-serving hypocrisy of the ruling elite is not sustainable. Global capitalism is running everywhere into the social, financial and environmental limitations imposed by its own catastrophically shortsighted rush for endless accumulation. Still, it is important to recognize that zombies don’t just die, and there is no way neoliberalism will simply destroy itself — after all, further catastrophe can always be displaced by creating yet another catastrophe elsewhere; and further profits can be ensured by imposing the socialization of even more losses onto the general population. Capitalism won’t just voluntarily jump of a cliff, as David Harvey puts it. It will have to be pushed. But it is similarly obvious that there will eventually have to be a point where the irresistible force of market fundamentalism runs up against the unmovable object of popular resistance. The social collision course upon which the ruling elite has embarked is now playing out in front of our very eyes. A global class war is unfolding. There is no doubt that Warren Buffet was right when he said that it’s his class that’s making war and his class that’s winning. The only question is: for how much longer?
(full text).


Thatcher’s zombie ideology preying on our imagination;

Beasts of the Southern Wild (trailer), 1.59 min, uploaded by jagfilm;

The Shock Doctrine: The Rise of Disaster Capitalism;

The Body Economic: Why Austerity Kills, on amazon;

The Charitable-Industrial Complex;

How heavy industry captured European climate policy;

In Class Warfare, Guess Which Class Is Winning;

ROAR presents: Utopia on the Horizon, on, by Jerome Roos, November 17, 2012: text and a video on the Greek Debt Crisis, 27.54 min:
also on YouTube, and on ROARMAG channel;
(also in greek: Η Ουτοπία στον Ορίζοντα, 28.02 min).

Comments are closed.