From the Ashes of Neoliberalism Pt. 2

From Greed to Equity: Redistributing wealth – The neoconservative/neoliberal disaster has consolidated wealth in the hands of a few individuals and corporations. Half of the largest economies in the world are multi-national corporations. CEO salaries have ballooned to over 300 times the average pay of workers of the same company. Several corporations are also double and triple-dipping into the national public coffers, first by avoiding taxes through offshore tax havens or by having taxes completely eliminated by their friends in Washington, then by getting government contracts as government services become privatized.

Meanwhile there are now many more desperately poor people throughout the world and in the United States. Homelessness, bankruptcy and unemployment are all on the rise. So is the prison population. A recent study by the Pew Foundation shows that an astounding 1 out of 100 people in the U.S. are in prison. One out of 36 Latino males and one out of 15 Black males over the age of 18 make up a large percentage of this population. 

Redistributing wealth will have to take place on a number of fronts, including raising the minimum wage, closing prisons and putting people back to work at livable wages, and taxing the rich, taxing the rich, taxing the rich. We must also confront the class divide built on the legacy of racism in the United States.

From Private to Public: Creating public wealth – But beyond just taxing the rich, we must also challenge the premise that has been a pillar of the neocons/neolibs – that taxes are bad. Taxes are public resources that are essential in providing for the public good. The idea that the public sector is inefficient, bureaucratic and corrupt for the most part is hogwash promoted by the Neos, but when it comes right down to it someone has to pay our firefighters, pave the roads, build the schools and strengthen the levies. Certainly there are abuses that take place in public expenditures – mainly in the outrageous spending for the military and Homeland Security, and in the abuses by private contractors like Halliburton that overcharge the public for their services. But at least there are mechanisms for public oversight. We also must think about what a strong tax base can achieve – national, universal healthcare, for instance: public works projects that can put people to work; generating a green, sustainable energy economy; rehabilitation programs to help the generations of soldiers, prisoners and homeless people who are likely to, once again, be abandoned and put out on the street in the next few years.

From Competition to Community, Cooperation and Reciprocity: Building sustainable economies – In 2004 I visited New Westminster, British Columbia, an industrial town just outside of Vancouver. With the decline of local industries New Westminster was notorious for having the highest crime rate in North America. Yet from 1999-2004 the community had started 105 new businesses, an astounding 100 were still thriving. The success of New Westminster was attributed to a model of economic development promoted by Italian-born Ernesto Sirolli. The model is called Enterprise Facilitation (EF). The process of EF sounds very similar to community organizing, whereby a “facilitator” is hired from the community and is tasked with helping local residents get their business ideas off the ground. The facilitator then develops social networks of resource people, government agencies, businesses and non-profit institutions that help sustain the projects. Homeless people and high schools students have started successful small businesses through this process. “The economic development comes along as a secondary result of developing community, because people know each other and trust each other” says Vicki Austad of New Westminster's Community Development Society. In a presentation to the Albuquerque Chamber of Commerce, Ernesto Sirolli summarized one of the underlying premises of Enterprise Facilitation: “It is arrogant to think that the answers to your economic development problems are in the boardrooms of your corporations. It is out there - in the streets of your barrios and ghettos!”

For a larger scale version of this model, we can look at the northern Italian region of Emilia Romagna, one of the most productive regions in the world. Emilia Romagna is built on 8,000 worker cooperatives and over 300,000 small businesses with fewer than 50 employees that are networked to produce everything from Ducati motorcycles to leather goods. The thousands of small firms subcontract with each other to create flexible, cooperative manufacturing networks.  A fundamental principle of Emilia Romagna’s economy is “reciprocity” defined as “bi-directional transfers...implying a balance between what one gives and what one expects to obtain.”

For development of the capacity of the local economy, there are also examples closer to home. Despite the Right-wing propaganda about Cuba as being a centralized economy run by an iron-fisted dictator, the island nation has made great advances in building capacity at the local level. Since the loss of support from the Soviet Union and despite the economic stranglehold of the U.S. embargo, the Cubans have developed an impressive model of local infrastructure, developing everything from organic local farms and urban gardens, to medical facilities and specialists in all communities. Cuba has also developed an incredibly effective, decentralized emergency response system. When Cuba suffered a direct hit by the same Hurricane Katrina that led to the devastation of the U.S. Gulf Coast, the island suffered no casualties.

From Imperialism to Solidarity: Making Peoples Trade Agreements – For the past 30 years, the neocons/neolibs have undermined the national economies of several nations. They have done this through three primary mechanisms: bad trade deals, violent overthrow and loan-sharking. The loan-sharking was carried out by the World Bank and International Monetary Fund. These institutions were initially conceived to help foster development in poor nations. By the 1980s they were used to force countries to adopt the neoliberal/neoconservative agenda including the privatization of public services and selling of national resources. Bad trade deals like the North American Free Trade Agreement and rules established by the World Trade Organization have undermined government controls on corporations and subsidies for agriculture and industry. The results have been devastating. Millions of farmers have been forced from their land, having to compete with subsidized corporate agriculture in the U.S. and Europe. Now they are migrating to northern countries seeking a means to survive. Countries that have not caved to the sharks have been denied financial support from the WB and IMF or faced violent overthrow by U.S. sponsored terrorists.

In a recent Business Week article “Economists Rethink Free Trade”, even some of the most pro-Free Trade business people are coming to grips with the fact that maybe their trade deals weren't such a good idea after all. Matthew J. Slaughter, economist from Dartmouth University acknowledges that “...the share of Americans who are not included in the gains from trade may be very big.” The article also states that inflation-adjusted earnings have fallen in every educational category other than the 4% who hold doctorates or professional degrees. 

Presidents have been elected in Venezuela, Brazil, Chile, Argentina, Uruguay, Bolivia and Ecuador who have publicly criticized neoliberal policies, and have begun to implement alternative models of national development and trade between nations.

Bolivia has drafted the Peoples Free Trade Agreement (PTA). Based on the principles of complementarity, cooperation, solidarity, reciprocity, prosperity and respect for the sovereignty of each country.  The proposal states that “absolute liberalization of markets and the 'shrinking of the state' are not the primary objectives, rather the well-being of the people is the primary objective.” Unlike the trade agreements designed by the Neos, the PTA incorporates objectives such as effective poverty reduction, preservation of indigenous communities, and respect for the environment. 

Bolivia, Haiti, Nicaragua, Cuba and Venezuela have forged an agreement for economic integration as an alternative to corporate-driven free trade agreements. The Bolivarian Alternative for the Americas (ALBA), is based on regional cooperation and functions almost as a bartering system at an international level. Through the agreement the countries establish integrated joint projects on education, health, food, energy and other issues. Another key aspect to ALBA is the formation of a Council of Social Movements, a vehicle for grassroots participation from throughout the Americas in decision-making.

From War and “Security” to Peace: Transitioning from the military economy – The most important and fundamental shift of the U.S. economy would be our divestment from empire building and the military industrial complex. Of the $2.6 trillion federal budget, 54% goes to military expenditures. Meeting the basic needs of the country and the world will require a monumental shift away from military spending. While we are threatening to bomb or invade other countries allegedly to prevent them from developing nuclear weapons, the U.S. is constantly upgrading its nuclear arsenal and conducting research and development for unimaginable new weapons of mass destruction. The possibilities for the use of these public dollars are endless.

A whole new national economy could be built on a shift from war to addressing basic needs like national healthcare, infrastructure, rehabilitation for prisoners and war veterans, affordable housing, reconstruction of the Gulf Coast, clean up of incredibly toxic waste sites owned by the military, governments and the private sector, and the transition from fossil-fuel dependency to sustainable energy.

From Energy Exploitation to Environmental Justice and Global Well-being: Transitioning from the fossil fuel economy – Indigenous communities are bearing a huge burden for the fossil fuel economy. The sovereignty of indigenous nations is under attack for the oil, gas, tar sands and coal that rest under many native lands. Extraction of these resources is taking a huge toll physically, culturally and economically on these communities. Poor white communities in Appalachia are facing similar struggles as coal companies strip away mountaintops to reach coal deposits, pulverizing the landscape and poisoning the rivers. Communities of color world-wide are already experiencing the effects of global warming – Micronesian and Caribbean communities are being displaced by rising tides that are rapidly inundating small island nations. Market-based solutions to the global crisis have proven effective only in providing political cover for polluters and transferring the burden of the climate crisis to poor communities and communities of color. It is clear that regulations and a fundamental shift from carbon-based energy are essential and must be implemented now. A massive investment in Green Jobs towards building an ecologically sustainable economy could also put millions of people to work.

Building Movement and Democracy

For us to achieve these and other significant changes it will require a new level of development of social movements in the United States. Our movements are fractured and divided by issue areas, geography, race and class. Building effective and principled alliances across sectors will be essential to achieving change at the national and international level. The dialogues at the first United States Social Forum in June of this year marked a hopeful turning point in defining different political visions for the U.S. A diverse crowd of more than twelve-thousand people gathered in Atlanta, GA. It was a grassroots convergence of people fighting in their communities for housing rights, economic justice, environmental justice, peace, women and queer liberation, the rights of workers and immigrants. The forum conveyed a sense of hope and of urgency, which was reflected in the theme: Another World is Possible! Another World is Necessary! The event was not covered by the mainstream media, and barely by the progressive press, but the continuing process of the USSF post-Atlanta and leading to the second USSF in 2010 will have a lasting impact.

In a previous blog for the Movement Vision Lab,  I cited examples of models that are building electoral power and democracy at the local level. A report written by Ryo Awawatari at the University of Osaka in Japan demonstrates that there is a correlation between higher voter turnouts with fairer distribution of wealth and economic growth. Economic democracy benefits everyone. These changes are long-term but certainly within our reach.

Opportunities and Challenges

The signs are everywhere that the global economy and U.S. politics are due for a significant change. A powerful global justice movement has emerged over the past decade putting in check the neoliberal/neoconservative steamroller. New Latin American governments have come to power, buoyed by the strength of mass popular movements and openly challenging the neoliberal policies and military repression that have destroyed the economy of the continent. Although the next U.S. President will not radically change the political course of the country, for the first time in U.S. history there is a very real possibility that a woman or African American will hold the nation's highest office, signifying an openness to significant change among the U.S. electorate. The campaign of Barack Obama has energized youth and African Americans to vote in unprecedented numbers. Peoples' movements in the U.S. are gaining strength. Union membership increased in 2007 for the first time in over two decades. Community-based organizations have grown in numbers and sophistication, and gatherings like the US Social Forum signify greater potential for movements to overcome isolation and political divisions.

For 30 years, the road towards a just and sustainable societies was derailed by a small band of callous elites. They set us back for decades, but if we act now we can usher in a new era of humanity, drawing on the centuries of struggles and the many innovative models around the world. There is hope to build a democratic society from the ashes of neoliberalism.

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Michael Leon Guerrero works with Grassroots Global Justice