HSI Ev Challenge 1: Neoliberalism Aff

We recently did a poll about what critique people wanted help answering and by 3 votes the winner was Neoliberalism. Before the article comes out we are rolling out a new feature- the Ev Challenge: the person who submits the best card to read as an Aff. answer to the Neoliberalism critique will win a $500 scholarship to any 2014 University of Michigan Debate Camp.  The deadline for submissions will be 11:59 pm October 28th.

Here are the rules

1. Each person can submit 1 card in the comments section, your submission must be made using your Facebook page as a log-in so we can verify it is 1 submission per person. Judges won’t vote for/evaluate their own students if they make a submission.

2. You can enter a card of any length but it must be cited completely including page numbers if it’s a book/pdf

3. There are a lot of different cards you may want to read to answer neoliberalism- impact turns, framework, alternative indicts etc.- what we are imagining is that you misallocated time and only have enough to read 1 card- so factor strategy into your submission.

4. Common cards everyone knows about like “cap solves peace- Griswald 7”- will be heavily discounted- we are looking for original research.

5. Evidence will be judged by the HSI staff

6. If there are similar submissions-i.e. 2 cards that overlap in terms of what is being quoted or are the same- whoever submitted first will be the victor

So what makes a good card? We will be looking for things like multiple warrants, good explanation, qualified authors, recent date etc.


11 responses to “HSI Ev Challenge 1: Neoliberalism Aff

  1. Modern capitalism is sustainable, and attempts at creating alternative moments fail- these failures only re-entrench global capitalism and helps it live
    Rose 2012, (Gideon, editor of Foreign Affairs, “Making modernity work: the reconciliation of capitalism and democracy.” Foreign Affairs – Jan/Feb 2012. http://search.proquest.com.proxy.library.umkc.edu/docview/912658306)
    Reflecting the hangover of the interwar ideological binge, the system stressed not transcendence but compromise. It offered neither salvation nor utopia, only a framework within which citizens could pursue their personal betterment. It has never been as satisfying as the religions, sacred or secular, it replaced. And it remains a work in progress, requiring tinkering and modification as conditions and attitudes change. Yet its success has been manifest- and reflecting that, its basic framework has remained remarkably intact.カ The central question of modernity has been how to reconcile capitalism and mass democracy, and since the postwar order came up with a good answer, it has managed to weather all subsequent challenges. The upheavals of the late 1960s seemed poised to disrupt it. But despite what activists at the time thought, they had little to offer in terms of politics or economics, and so their lasting impact was on social life instead. This had the ironic effect of stabilizing the system rather than overturning it, helping it live up to its full potential by bringing previously subordinated or disenfranchised groups inside the castle walls. The neoliberal revolutionaries of the 1980s also had little luck, never managing to turn the clock back all that far.カ All potential alternatives in the developing world, meanwhile, have proved to be either dead ends or temporary detours from the beaten path. The much-ballyhooed “rise of the rest” has involved not the discrediting of the postwar order of Western political economy but its reinforcement: the countries that have risen have done so by embracing global capitalism while keeping some of its destabilizing attributes in check, and have liberalized their polities and societies along the way (and will founder unless they continue to do so).カ Although the structure still stands, however, it has seen better days. Poor management of public spending and fiscal policy has resulted in unsustainable levels of debt across the advanced industrial world, even as mature economies have found it difficult to generate dynamic growth and full employment in an ever more globalized environment. Lax regulation and oversight allowed reckless and predatory financial practices to drive leading economies to the brink of collapse. Economic inequality has increased as social mobility has declined. And a loss of broad-based social solidarity on both sides of the Atlantic has eroded public support for the active remedies needed to address these and other problems.カ Renovating the structure will be a slow and difficult project, the cost and duration of which remain unclear, as do the contractors involved. Still, at root, this is not an ideological issue. The question is not what to do but how to do it-how, under twenty-first-century conditions, to rise to the challenge Laski described, making the modern political economy provide enough solid benefit to the mass of men that they see its continuation as a matter of urgency to themselves.カ The old and new articles that follow trace this story from the totalitarian challenge of the interwar years, through the crisis of liberalism and the emergence of the postwar order, to that order’s present difficulties and future prospects. Some of our authors are distinctly gloomy, and one need only glance at a newspaper to see why. But remembering the far greater obstacles that have been overcome in the past, optimism would seem the better long-term bet.

  2. Their totalizing critique of capitalism impedes effective resistance—vote affirmative to endorse positive change within the confines of capitalism that affirms compassion, empathy, and love.
    Nancy Ettlinger, Associate Professor of Geography at the Ohio State University, 2009
    [“Whose capitalism? Mean discourse and/or actions of the heart,” Emotion, Space and Society, Volume 2, Issue 2, December, Available Online to Subscribing Institutions via ScienceDirect ]
    Actually existing capitalism can be cruel, ruthless, and destructive, deriving in part from negative emotions such as envy, hate, and indifference to others; but it also can be benevolent, deriving in part from positive emotions such as compassion, empathy, and love. It is this latter, often unrecognized dimension of capitalism-in-practice that has much to offer if we recognize, value, and draw upon it in the construction of efforts to create positive change by revaluing emotions, whether on the basis of policy ([Folbre, 2001] and [Tronto, 2003]) or grassroots organization. Discourse of ‘The State,’ like ‘the economy,’ commonly is devoid of issues of emotions and ethics(Askew, 2009). But what about the compassionate human service workers who often work at the interstices of government departments, local institutions, and communities to fortify conditions of living ([Askew, 2009] and [Larner and Butler, 2007])? That we lack accounts of many other instances of state or quasi-state agents whose behavior may derive as much from positive, relational emotions and ethics as from self-interested calculation may pertain to the relative infancy of research on how actions of the heart, both positive and negative, figure in everyday political economy. Reductionistic accounts of hegemonic capitalism, and neoliberalism in particular, impede a vision of the future based on a critique of the problems as well as hopeful prospects of lived experience. The critical normative dimension of seeing and accounting for emotions and related practices in capitalist life pertains to redefining capitalism and revaluing emotions ([Askew, 2009], [Easterlow and Smith, 2004], [Ettlinger, 2003], [Ettlinger, 2004], [Ettlinger, 2009], [Folbre, 2001], [McDowell, 2004], Robinson, 2006 Fiona Robinson, Beyond labour rights: the ethics of care and women’s work in the global economy, International Feminist Journal of Politics 8 (2006), pp. 321–342. Full Text via CrossRef | View Record in Scopus | Cited By in Scopus (1)[Robinson, 2006], [Sayer, 2007], [Sevenhuijsen, 2003], [Smith, 2005] and [Tronto, 2003]). If the mean discourse of capitalism represents the status quo, then resistance might fruitfully be defined not in terms of opposition to the state or groups defined as the capitalist class, but rather to ‘the separate spheres doctrine’ (Folbre, 2001) – the idea that actions of the heart lie outside, and in opposition to, capitalism. Whereas oppositional or confrontational accounts of resistance connect with the idea of power as located in persons and positions at the apex of societal hierarchies (with powerlessness residing among the subjugated), resistance as a critique of societal norms connects with the idea of power as diffuse. Back to power, then, which, depending on one’s perspective, is understood in terms of the implicit binary of ‘productive’ or ‘destructive’. The view here denies neither the destructive elements of capitalist life nor the problems of power held by a few over the majority (Foucault, 1980c); rather, it highlights the problematizing potential of practices that diverge from societal discourse towards possibilities for transformational change (Foucault, 2007).

  3. Neoliberalism is a stabilizing force in Latin America and protects democracy. Alternatives are dead and result in radical polarization that empirically caused in military coups and instability – prefer the specificity of our evidence
    Weyland 04 (Kurt Gerhard, “Neoliberalism and Democracy in Latin America: A Mixed Record”, Latin American Politics & Society, Volume 46, Number 1, Spring 2004,
    pp. 135-157, ProjectMuse)//js

    HOW NEOLIBERALISM HAS STRENGTHENED THE EXTERNAL PROTECTION OF DEMOCRACY Rather than undermining democracy, neoliberalism actually seems to have strengthened its survival in a couple of important ways. First, market reform has enhanced the international protection for democracy in Latin America. Second, the internal socioeconomic transformations resulting from profound market reform have helped to forestall domestic challenges to democratic stability. Structural adjustment and its corollary, the deeper integration of Latin American countries into the global economy, have made the region more susceptible to international pressures for maintaining democracy. Since the end of the Cold War, the United States and other First World countries have put much more emphasis on preserving pluralistic, civilian rule in the region. As the concern over communism faded away, the promotion of democracy, which often took a back seat during the preceding decades, became a first-order priority from the early 1990s on. The disappearance of threats to its strategic interests has made U.S. support for democracy in Latin America much more unconditional. As a result, when the danger of a military coup or some other interruption of democracy threatens, the U.S. government most often has sought to prevent it.2 And when democracy actually is interrupted or overthrown, the U.S. government has typically threatened or enacted sanctions. Neoliberalism has increased the exposure of Latin American countries to these forms of international pressure. By lowering barriers to trade, Latin American countries have become more involved in the world economy. By opening up to foreign investors, they have become much more dependent on international capital markets. By submitting—however grudgingly—to greater supervision from the IMF and other international financial institutions, they have seen their autonomy in economic policymaking shrink. Because the U.S. government has considerable direct and indirect influence over these international economic flows, it now has greater leverage for protecting democracy in the region. Thus, when President Fujimori closed the Peruvian congress with his autogolpe of April 5, 1992, the U.S. government protested and intervened. This pressure, which was exerted unilaterally and through the Organization of American States, quickly made clear to Peru’s autocratic leader, who had recently initiated neoliberal reform, that he was facing a stark trade-off. If he wanted to reschedule the country’s external debt and reestablish good relations with the IMF—relations that his predecessor, Alan García, had destroyed—he needed to accommodate the U.S. demand for restoring minimal, procedural democracy. If he sought to attract foreign capital and thus reignite growth in his crisis-plagued nation, he needed to be in good standing with the advanced industrialized countries, especially the United States. Therefore, Fujimori reluctantly and grudgingly backed away from his effort to install an openly authoritarian regime and started a process of redemocratization (Boloña 1996; De Soto 1996). Thus, by increasing the economic costs of a move to open dictatorship, neoliberalism helped to restore the basic outlines of democracy in Peru. To what extent neoliberalism and its result, the greater integration of Latin American economies into the world market, have facilitated the external protection of democracy is evident in the case of Guatemala. In 1977, President Jimmy Carter told Guatemala’s military dictators that he would cut off aid unless they began to respect human rights. Because the country was not highly involved in foreign trade at the time, the military government canceled collaboration with the United States and continued to commit egregious atrocities (Martin and Sikkink 1993, 331–38). In the 1980s and early 1990s, however, Guatemala opened its economy to foreign trade and capital and significantly increased its exports of agricultural products to the United States.3 When President Jorge Serrano in 1993 followed Fujimori’s example and tried to assume dictatorial powers, the Clinton administration threatened to impose sanctions, and domestic business leaders worried about the resulting disturbance of trade flows. These threats and concerns contributed to the failure of Serrano’s self-coup and the restoration of democracy. Indeed, societal opposition to the autogolpe, which had a significant impact on the outcome of the crisis, was “led by major business elites” (Torres-Rivas 1996, 58). By contrast, “Guatemalan business organizations were uniformly conservative and supportive of the repressive policies of the government during the 1970s” (Martin and Sikkink 1993, 346). The comparison of these two episodes from Guatemala suggests with particular clarity that market reform has strengthened the hand of external powers that seek to protect democracy in Latin America and has helped to transform the stance of the societal groups that are most directly affected by these external pressures. This external support for democracy emerges not only from First World countries but also from other Latin American nations.4 It is being institutionalized, moreover, through the inclusion of democracy clauses in trade agreements, which have flourished as a result of neoliberal reform. For instance, the South American Common Market (Mercosur), which received its most important impulse from the decisions of Argentine President Carlos Menem (1989–99) and his Brazilian counterpart, Fernando Collor de Mello (1990–92), to enact market-oriented reform and therefore to reduce trade barriers (Cason 2000, 208–10), has provisions that make membership conditional on the preservation of competitive civilian rule. Accordingly, when Paraguay faced serious challenges to democracy in the mid- to late 1990s, its neighbors encouraged that nation to maintain its established regime, and these pressures contributed to the survival of competitive civilian rule (Valenzuela 1997, 50–54). Neoliberalism and the resulting move to international economic integration furthered not only the maintenance but also the promotion of democracy during the 1990s, as the Mexican case suggests. The decision to open Mexico’s economy and seek a close association with the United States constrained the margin of maneuver of Mexico’s authoritarian regime, making electoral fraud and political repression much more costly and therefore less likely. For instance, when the established regime faced a rebellion in Chiapas in early 1994, it first responded with traditional means (as applied against a similar rebellion in Guerrero in the early 1970s); namely, brute military force. But the international outcry provoked by the resulting human rights violations quickly made the government change course and pursue negotiations with the insurgents, because a “dirty war” could have jeopardized its close relations with its partners in the North American Free Trade Agreement. Similarly, directly after NAFTA took effect, the Mexican government, for the first time, invited international observers to certify the honesty of its elections. Thus neoliberal reform and its direct effect, economic integration with the United States, helped to advance democratization in Mexico (Levy and Bruhn 2001, 194–201; Pastor 2001, 278; Remmer 2003, 33). In sum, neoliberalism and the resulting advance in economic globalization have increased the exposure of Latin American countries to the international pressures for the promotion and preservation of democracy that have become much more intense with the end of the Cold War. While this change in geostrategic context clearly was the major reason for the increased sustainability of democracy in the region, market reform and its product, Latin America’s greater openness to the world economy, have contributed to this outcome. As Domínguez notes, “involvement in international markets, especially if guaranteed by freetrade agreements, increases the leverage that external actors can apply in defense of constitutional government” (1998, 72; similar Remmer 2003, 33, 52). HOW NEOLIBERALISM HAS WEAKENED INTERNAL THREATS TO DEMOCRACY In addition to enhancing the effects of external support for democracy, neoliberalism has also stabilized competitive civilian rule by weakening internal challenges to its survival. To explain this argument, it is important to explore how threats to democracy often emerged in Latin America before the wave of neoliberalism, especially in the 1960s and 1970s. On several occasions, the region’s large-scale poverty and tremendous inequalities of income and wealth triggered calls for redistribution and other deep-reaching social reforms. These problems also allowed for the rise of radical populists, who used fiery rhetoric to win backing from masses of discontented citizens, left-wing parties, and trade unions and thereby to advance their political ambitions. The variegated demands and proposals for profound socioeconomic and political change led to mobilization and countermobilization; as a result, polarization intensified. All this conflict and turmoil further diminished the capacity of governments to solve problems and maintain economic and political stability. The growing disorder, in turn, frightened established political and economic elites, leading them to ask the military to intervene. In many cases, important groups inside the armed forces felt that social polarization and political conflict threatened the military’s own institutional interests. Therefore, they eventually used force to restore order, thereby interrupting or abolishing democracy.5 Across most of Latin America, wherever neoliberalism has firmly taken hold, it has largely blocked this dynamic by sealing the political defeat of radical populists and socialists and by hindering the emergence of mass movements that socioeconomic and political elites perceive as serious threats. What the enactment of market reform means, essentially—above and beyond all its specific reforms—is that capitalism and the market economy are here to stay. Communism, socialism, and radical populism are dead or greatly weakened wherever the new development model is in place.6 International economic integration has made challenges to the established economic and social order much less feasible. Even advancing such demands now has a prohibitive cost by scaring away domestic and foreign investors, who have more “exit” options as a result of market reform, especially the easing or elimination of capital controls. Neoliberalism has also changed the balance of power between domestic socioeconomic and political forces. Leading business sectors have gained greater clout; they now have better access to international capital markets; they have stronger links to transnational corporations; they have bought up many public enterprises, often at rock-bottom prices; and therefore they own a greater share of the economy. At the same time, thoroughgoing market reform has weakened the sociopolitical forces that used to support radicalism. As a result of trade liberalization, labor market deregulation, privatization, and the shrinking of the public administration, unions have lost members in most countries, are often internally divided, and have generally reduced their militancy. Because of the fall of communism and the worldwide victory of capitalism, most of Latin America’s socialist and Marxist parties are on the defensive. A number of them have given up socialist programs and radical- populist rhetoric, and many have accepted the basic outlines of the market model. Furthermore, several political leaders of the neoliberal era have used populist political tactics not to attack neoliberalism but to promote, enact, and preserve it (Roberts 1995; Weyland 1996). Latin America’s economic, social, and political elites are therefore much more secure nowadays than they were during the decades preceding the recent neoliberal wave. While this shift in the domestic balance of power precludes any bold equity-enhancing reforms designed to combat Latin America’s pronounced social inequality, it favors the preservation of political democracy. Economic and political elites no longer feel the need to knock at the barracks door. Because the risk of mass mobilization, polarization, and turmoil is relatively low, moreover, the military itself is disinclined to roll out the tanks and impose order. Thus, by putting economic and political elites at greater ease, neoliberalism has substantially lowered internal challenges to democracy in Latin America.7 The exceptional experience of Venezuela under the regime of Hugo Chávez corroborates this rule. Throughout the 1990s, Venezuela instituted the neoliberal program only partially and in a confusing stop-andgo pattern, giving the country a relatively low score on the “general reform index” (Morley et al. 1999, 29; see also Weyland 2002, chaps. 5, 6, 8). The economy therefore never attained stability and remained highly dependent on volatile oil revenues. Popular discontent with the failure of the established political class to stop Venezuela’s continuing economic and political deterioration allowed radical outsider Chávez to win the presidency in a landslide.8 The belligerent rhetoric of this radical populist leader scared domestic and foreign investors, the church, sectors of the military, and even most trade unions (Ellner and Hellinger 2003). In a pattern resembling the experience of many Latin American countries from the 1940s to the 1970s, these sectors coalesced to oppose the president with all means, culminating in an abortive military coup in April 2002. Thus, precisely where market reform has not firmly taken hold, the old sequence of radical populism, stubborn elite-led opposition, and threats to the survival of democracy still gets under way. In most other Latin American countries, however, thoroughgoing market reform has prevented such dangerous polarization from emerging. Thus the Venezuelan contrast provides interesting corroboration for the argument. In sum, neoliberalism seems to have boosted the sustainability of democracy in Latin America, both by exposing the region more to external pressures for maintaining competitive civilian rule and by forestalling internal challenges to its survival.

    • Forgot qualifications – associate professor of government at the University of Texas at Austin, Ph.D. from Stanford University, previously fellow at the Woodrow Wilson Center in Washington, DC and at the Kellogg Institute, University of Notre Dame

  4. Neoliberalism is inevitable – self correction, popularity, and lack of alternatives.
    Schmidt and Thatcher 10/24 (Vivien A. Schmidt, Professor of International Relations and Political Science at Boston University; Mark Thatcher, Professor of Comparative Politics and International Studies at the London School of Economics, “Why are Neo-liberal ideas so resilient?” October 24th, 2013, http://www.policy-network.net/pno_detail.aspx?ID=4500&title=Why-are-Neo-liberal-ideas-so-resilient-) //J.N.E
    Given the abject failure of the Neo-liberal policy offer, why has it persisted as the dominant approach to European policymaking and is there any way out? Despite the economic crisis that hit the US and Europe full force in 2008, political leaders have made little attempt to rethink the neo-liberal ideas that are in large part responsible for the boom and bust, let alone to come to terms with how immoderate the ‘Great Moderation’ really was. Much the contrary, neo-liberal ideas continue to be the only ideas available. In the financial markets, where the crisis began, reregulation remains woefully inadequate, while the only ideas in play are neo-liberal, either for more ‘market-enhancing’ regulation or in favor of greater laissez-faire. The biggest puzzle, however, is the response to the crisis by Eurozone countries that have embraced ‘market discipline’ through austerity and, in so doing, have condemned themselves to slow or no growth. This is in contrast to the US, which has posted better economic results, despite being torn between Republican fundamentalists advocating austerity and a more pragmatic leadership focused on growth. Our question, then, is: How do we explain the resilience of neo-liberal economic ideas? Since the 1980s, why have such ideas not just survived but continued to be dominant? Neo-liberalism entails belief in competitive markets enhanced by global free trade and capital mobility, backed up by a pro-market, limited state that promotes labor market flexibility and seeks to reduce welfare dependence while marketizing the provision of public goods. The watchwords for such neo-liberalism are liberalization, privatization, deregulation, and delegation to non-majoritarian institutions such as ‘independent’ regulatory agencies and central banks. The touchstones highlight the importance of individual responsibility, the value of competition, and the centrality of market allocation. The neo-liberal mantra presents the state as the perennial problem, the market as the solution – even today, despite the fact that the crisis was caused by the markets, not the state. So why, in light of the crisis, has there been no major shift in ideas, either back to the neo-Keynesianism that brought the postwar ‘Golden Era’ or forward to something new? How do we explain the fact that neo-liberalism continues to permeate how people think and talk about state and market? We propose five lines of analysis to explain such resilience: the flexibility of neo-liberalism’s core principles; the gaps between neo-liberal rhetoric and reality; the strength of neo-liberal discourse in debates; the power of interests in the strategic use of ideas; and the force of institutions in the embedding of neo-liberal ideas. First, the generality of neo-liberalism’s core principles, focused on competitive markets and a limited state, make it highly adaptable to changing circumstances and needs. Thus, neo-liberalism has been able to move from ideas focused on the ‘rollback’ of the state to free up the markets in the 1980s under conservative leaders to the ‘rollout’ of the state to make markets work more freely under progressives in the 1990s. It has also been able to absorb seemingly contradictory ideas, as in the case of the welfare state, where after an initial clash with social democratic ideas, through attempts at passive reduction of social spending and job protections, it incorporated such ideas in programs that sought to make active use of the welfare state to promote market efficiency via ‘active labor market policies.’ Finally, it has equally been able to undergo metamorphoses such that ideas discredited in previous periods recur, returning in new guises, such as the 1920s discourse of ‘sound money’ reappearing in the 1970s as monetarism and in the late 2000s as ‘sustainable debt.’ Second, neo-liberalism often works only in the rhetoric, not in the reality of implementation. Notably, many neo-liberal policies – such as cutting public spending, reforming welfare, and reducing regulatory protection – are difficult to implement and extremely unpopular politically. This helps explain why promises to cut back the state for the most part turned out to be hollow, in particular as state restructuring did not lead to a decrease in its size, nor did it necessarily reduce public spending. Deregulation, rather than getting rid of the state, simply led to reregulation of a different kind. But rather than a weakness, this can be seen as a strength, since lack of implementation can serve neo-liberal politicians also as a rallying cry, to call for more neo-liberalism. Third, neo-liberal ideas have generally been more successful in policy debates and political discourse, winning in the ‘battle of ideas’ against weaker alternatives. In some cases, that strength may come from the seemingly common sense nature of neo-liberal arguments. For example, appeals to the ‘virtue’ of sound finances using the metaphor of the household economy—extrapolating from the need to balance one’s household budget to the need to do the same for the state budget—may resonate better with ordinary citizens than the Keynesian counterintuitive proposition to spend more at a time of high deficits and debts. In other cases, neo-liberal success can be attributed to the reframing of current problems—say, as a crisis of public debt rather than of the banks; to the narratives—about public profligacy being the problem, belt-tightening the solution; and to the myths—for the Germans, that belt-tightening is the only way to avoid the risks of hyperinflation of the early 1920s, thereby ignoring the risks of deflation and unemployment of the early 1930s that led to the rise of Hitler. Equally importantly, it may be that neo-liberals are not so strong but their opponents are weak. Where, after all, have the center-left parties been in all of this, in particular in Europe throughout the Eurozone crisis? Notably, only very recently have European social democratic leaders called for growth, even as they continue to dole out austerity. Fourth, powerful coalitions of interests often take up neo-liberal ideas for their own strategic purposes, whether they believe in them or not. Economic actors may benefit materially, notably through lower taxes or the new opportunities opened up by ‘deregulation’ and privatization. Bankers have been laughing all the way to the bank. Politicians also can benefit by using neo-liberal ideas to gain or retain political power while institutional actors—regulators, central bankers, and the like—gain autonomy and increasing power. All of this, moreover, tends to be self-reinforcing, since the more neo-liberalism takes hold, the more it is likely to consolidate such actors’ commitment to neo-liberal ideas, as well as to create an attitude of ‘if you can’t beat them, join them,’ as in the center-left’s adoption of neo-liberal ideas beginning in the 1990s. Fifth, the neo-liberal ideas gain force from their institutionalization in rules and regulations, as well as in the organisations, including the ‘non-majoritarian’ independent regulatory bodies such as the independent central banks, the international credit-rating agencies, and the standard-setting bodies that are out of the reach of national state control. Moreover, in the EU, the successive pacts for stability in the Eurozone – beginning with the Stability and Growth Pact that consecrated the 1990s Maastricht criteria for monetary union and culminating with various pacts during the Eurozone crisis – ensure that neo-liberal ideas about fiscal consolidation will be difficult to reverse, regardless of their failure to solve the crisis.

  5. Neoliberalism is sustainable and self-correcting – alternatives fail

    Peck and Tickell, 2 – *Jamie, PhD, Canada Research Chair in Urban & Regional Political

    Economy and Professor of Geography, University of British Columbia. Former Honourary Professorial

    Fellow, School of Environment and Development, University of Manchester. PhD in Geography, Vice

    Chair and Chair, Research Committee, Regional Studies Association Chair, Summer Institute in

    Economic Geography Steering Committee Trustee, Antipode Foundation Chair (previously treasurer),

    Economic Geography Specialty Group, Association of American Geographers, **Adam, PhD, Professor

    of Geography, University of Bristol (“Neoliberalizing Space” Antipode, 2002, pg. 400-402)kristof

    In many respects, it would be tempting to conclude with a teleological reading of neoliberalism, as if it

    were somehow locked on a course of increasing vulnerability to crisis. Yet this would be both

    politically complacent and theoretically erroneous. One of the most striking features of the

    recent history of neoliberalism is its quite remarkable transformative capacity. To a greater extent than

    many would have predicted, including ourselves, neoliberalism has demonstrated an ability to absorb or displace

    crisis tendencies, to ride—and capitalize upon—the very economic cycles and localized policy

    failures that it was complicit in creating, and to erode the foundations upon which generalized or

    extralocal resistance might be constructed. The transformative potential—and consequent political

    durability—of neoliberalism has been repeatedly underestimated, and reports of its death

    correspondingly exaggerated. Although antiglobalization protests have clearly disrupted the functioning of “business as usual” for

    some sections of the neoliberal elite, the underlying power structures of neoliberalism remain substantially

    intact. What remains to be seen is how far these acts of resistance, asymmetrical though the power relations clearly are, serve to expose the true

    character of neoliberalism as a political project. In its own explicit politicization, then, the resistance movement may have the capacity to hold a mirror

    to the process of (ostensibly apolitical) neoliberalization, revealing its real character, scope, and consequences. Jusi as neoliberalism is, in effect, a

    form of “high politics” that expressly denies its political character (Beck 2000), so it also exists in a self-contradictory way as a form of “metaregulation,”

    a rule system that paradoxically defines itself as a form of a/?//regulation. In their targeting of global rule centers like the WTO, the IMF, and the G8,

    resistance movements seek not only to disrupt the transaction of neoliberal business but also to

    draw attention to the inequities and perversities of these rule regimes themselves. At the same time,

    however, these rule systems cannot unproblematically be reduced to institutional condensates like the WTO,

    because one of the funda- mental features of neoliberalism is its pervasiveness as a system

    of diffused power (Hardt and Negri 20(H)). Contemporary politics revolve around axes the very essences of which have

    been neoliberalized. As such, neoliberalism is qualitatively different from “competing” regulatory projects and experiments: it shapes the

    environments, contexts, and frameworks within which political-economic and socio- institutional restructuring takes place. Thus, neoliberal rule

    systems are perplexingly elusive; they operate between as well as within specific sites of

    incorporation and reproduction, such as national and local states. Consequently, they have the capacity to

    constrain, condition, and constitute political change and institutional reform in far-reaching and

    multifaceted ways. Even if it may be wrong-headed to characterize neoliberalization as some actorless force-field of extra- local pressures

    and disciplines—given what we know about the decisive purposive interventions of think-tanks, policy elites, and experts, not to mention the

    fundamental role of state power itself in the (reproduc- tion of neoliberalism—as an ongoing ideological project neoliberalism is clearly

    more than the sum of its (local institutional) parts. Thus, it is important to specify closely—and challenge—the

    extralocal rule systems that provide a major source of neoliberalism’s reproductive and adaptive

    capacity. Local resistance—especially strategically targeted local resistance—is a necessary but perhaps insufficient part of this

    task. Crucially, neoliberalism has been able to make a virtue of uneven spatial development and

    continuous regu- latory restructuring, rendering the macro power structure as a whole partially

    insulated from local challenges. In addition, progressive local alternatives are persistently vulnerable, in

    this turbulent and marketized environment, to social undercutting, institutional over- loading, and regulatory

    dumping. This is not to say that the hegemony of neoliberalism must necessarily remain completely impervious to targeted campaigns of

    disruption and “regime competition” from progressive alternatives, but rather to argue that the effectiveness of such

    counterstrategies will continue to be muted, absent a phase-shift in the constitution of extralocal relations. This means that the

    strategic objectives for opponents of neoliberalism must include the reform of macroinstitutional priorities and the remaking of extralocal rule systems in

    fields like trade, finance, environmental, antipoverty, education, and labor policy. These may lack the radical edge of more direct forms of resistance,

    but as intermediate and facilitative objectives thev would certainly help to tip the macroenvironment in favor of progressive possibilities. In this context,

    the defeat (or failure) of local neoliberalisms—even strategically important ones—will not be enough to topple what we are still perhaps justified in

    calling “the system.” It will continue to be premature to anticipate an era of “push- back” neoliberalism, let

    alone the installation of a more progressive regulatory settlement, until extralocal rule regimes are remade in ways that contain and challenge the

    forces of marketization and commodification—until there is a far-reaching deliberalization of spatial relations.

  6. Alt fails-American support of Latin American social movements depoliticizes neoliberal institutions, co-opting and subverting attempts at resistance-allows regimes to devastate communities and use funds for capitalist expansion,
    (James Petras, Ph.D. from UC Berkeley, professor of sociology at Binghamton University, coauthor of Neoliberalism and Class Conflict in Latin America, “Imperialism and NGOs in Latin America,” Monthly Review, December 1997, http://monthlyreview.org/1997/12/01/imperialism-and-ngos-in-latin-america)

    By the early 1980s the more perceptive sectors of the neoliberal ruling classes realized that their policies were polarizing the society and provoking large-scale social discontent. Neoliberal politicians began to finance and promote a parallel strategy “from below,” the promotion of “grassroots” organization with an “anti-statist” ideology to intervene among potentially conflictory classes, to create a “social cushion.” These organizations were financially dependent on neoliberal sources and were directly involved in competing with socio-political movements for the allegiance of local leaders and activist communities. By the 1990s these organizations, described as “nongovernmental,” numbered in the thousands and were receiving close to four billion dollars world-wide.¶ The confusion concerning the political character of the nongovernmental organizations (NGOs) stems from their earlier history in the 1970s during the days of the dictatorships. In this period they were active in providing humanitarian support to the victims of the military dictatorship and denouncing human rights violations. The NGOs supported “soup kitchens” which allowed victimized families to survive the first wave of shock treatments administered by the neoliberal dictatorships. This period created a favorable image of NGOs even among the left. They were considered part of the “progressive camp.”¶ Even then, however, the limits of the NGOs were evident. While they attacked the human rights violations of local dictatorships, they rarely denounced the U.S. and European patrons who financed and advised them. Nor was there a serious effort to link the neoliberal economic policies and human rights violations to the new turn in the imperialist system. Obviously the external sources of funding limited the sphere of criticism and human rights action.¶ As opposition to neoliberalism grew in the early 1980s, the U.S. and European governments and the World Bank increased their funding of NGOs. There is a direct relation between the growth of social movements challenging the neoliberal model and the effort to subvert them by creating alternative forms of social action through the NGOs. The basic point of convergence between the NGOs and the World Bank was their common opposition to “statism.” On the surface the NGOs criticized the state from a “left” perspective defending civil society, while the right did so in the name of the market. In reality, however, the World Bank, the neoliberal regimes, and western foundations co-opted and encouraged the NGOs to undermine the national welfare state by providing social services to compensate the victims of the multinational corporations (MNCs). In other words, as the neoliberal regimes at the top devastated communities by inundating the country with cheap imports, extracting external debt payment, abolishing labor legislation, and creating a growing mass of low-paid and unemployed workers, the NGOs were funded to provide “self-help” projects, “popular education,” and job training, to temporarily absorb small groups of poor, to co-opt local leaders, and to undermine anti-system struggles.¶ The NGOs became the “community face” of neoliberalism, intimately related to those at the top and complementing their destructive work with local projects. In effect the neoliberals organized a “pincer” operation or dual strategy. Unfortunately many on the left focused only on “neoliberalism” from above and the outside (International Monetary Fund, World Bank) and not on neoliberalism from below (NGOs, micro-enterprises). A major reason for this oversight was the conversion of many ex-Marxists to the NGO formula and practice. Anti-Statism was the ideological transit ticket from class politics to “community development,” from Marxism to the NGOs.¶ Typically, NGO ideologues counterpose “state” power to “local” power. State power is, they argue, distant from its citizens, autonomous, and arbitrary, and it tends to develop interests different from and opposed to those of its citizens, while local power is necessarily closer and more responsive to the people. But apart from historical cases where the reverse has also been true, this leaves out the essential relation between state and local power—the simple truth that state power wielded by a dominant, exploiting class will undermine progressive local initiatives, while that same power in the hands of progressive forces can reinforce such initiatives.¶ The counterposition of state and local power has been used to justify the role of NGOs as brokers between local organizations, neoliberal foreign donors (World Bank, Europe, or the United States) and the local free market regimes. But the effect is to strengthen neoliberal regimes by severing the link between local struggles and organizations and national/international political movements. The emphasis on “local activity” serves the neoliberal regimes since it allows its foreign and domestic backers to dominate macro-socio-economic policy and to channel most of the state’s resources toward subsidies for export capitalists and financial institutions.¶ So while the neoliberals were transferring lucrative state properties to the private rich, the NGOs were not part of the trade union resistance. On the contrary they were active in local private projects, promoting the private enterprise discourse (self-help) in the local communities by focusing on micro-enterprises. The NGOs built ideological bridges between the small scale capitalists and the monopolies benefitting from privatization—all in the name of “anti-statism” and the building of civil societies. While the rich accumulated vast financial empires from the privatization, the NGO middle class professionals got small sums to finance offices, transportation, and small-scale economic activity.¶ The important political point is that the NGOs depoliticized sectors of the population, undermined their commitment to public employees, and co-opted potential leaders in small projects. NGOs abstain from public school teacher struggles, as the neoliberal regimes attack public education and public educators. Rarely if ever do NGOs support the strikes and protests against low wages and budget cuts. Since their educational funding comes from the neoliberal governments, they avoid solidarity with public educators in struggle. In practice, “non-governmental” translates into anti-public-spending activities, freeing the bulk of funds for neoliberals to subsidize export capitalists while small sums trickle from the government to NGOs.

  7. Reject their impact framing. The terminology of “neoliberalism” encourages fake radicalism, oversimplification, and greater levels of cooptation.
    Barnett ’05 (Clive Barnett Faculty of the Social Sciences @ Open University (UK) ‘5 “The Consolations of ‘Neoliberalism’” Geoforum 36 (1) p. Science Direct pp7-12)

    3. There is no such thing as neoliberalism! The blind-spot in theories of neoliberalism—whether neo-Marxist and Foucauldian—comes with trying to account for how top-down initiatives ‘take’ in everyday situations. So perhaps the best thing to do is to stop thinking of “neoliberalism” as a coherent “hegemonic” project altogether. For all its apparent critical force, the vocabulary of “neoliberalism” and “neoliberalization” in fact provides a double consolation for leftist academics: it supplies us with plentiful opportunities for unveiling the real workings of hegemonic ideologies in a characteristic gesture of revelation; and in so doing, it invites us to align our own professional roles with the activities of various actors “out there”, who are always framed as engaging in resistance or contestation. The conceptualization of “neoliberalism” as a “hegemonic” project does not need refining by adding a splash of Foucault. Perhaps we should try to do without the concept of “neoliberalism” altogether, because it might actually compound rather than aid in the task of figuring out how the world works and how it changes. One reason for this is that, between an overly economistic derivation of political economy and an overly statist rendition of governmentality, stories about “neoliberalism” manage to reduce the understanding of social relations to a residual effect of hegemonic projects and/or governmental programmes of rule (see Clarke, 2004a). Stories about “neoliberalism” pay little attention to the pro-active role of socio-cultural processes in provoking changes in modes of governance, policy, and regulation. Consider the example of the restructuring of public services such as health care, education, and criminal justice in the UK over the last two or three decades. This can easily be thought of in terms of a “hegemonic” project of “neoliberalization”, and certainly one dimension of this process has been a form of anti-statism that has rhetorically contrasted market provision against the rigidities of the state. But in fact these ongoing changes in the terms of public-policy debate involve a combination of different factors that add up to a much more dispersed populist reorientation in policy, politics, and culture. These factors include changing consumer expectations, involving shifts in expectations towards public entitlements which follow from the generalization of consumerism; the decline of deference, involving shifts in conventions and hierarchies of taste, trust, access, and expertise; and the refusals of the subordinated, referring to the emergence of anti-paternalist attitudes found in, for example, women’s health movements or anti-psychiatry movements. They include also the development of the politics of difference, involving the emergence of discourses of institutional discrimination based on gender, sexuality, race, and disability. This has disrupted the ways in which welfare agencies think about inequality, helping to generate the emergence of contested inequalities, in which policies aimed at addressing inequalities of class and income develop an ever more expansive dynamic of expectation that public services should address other kinds of inequality as well (see Clarke, 2004b J. Clark, Dissolving the public realm? The logics and limits of neo-liberalism, Journal of Social Policy 33 (2004), pp. 27–48.Clarke, 2004b). None of these populist tendencies is simply an expression of a singular “hegemonic” project of “neoliberalization”. They are effects of much longer rhythms of socio-cultural change that emanate from the bottom-up. It seems just as plausible to suppose that what we have come to recognise as “hegemonic neoliberalism” is a muddled set of ad hoc, opportunistic accommodations to these unstable dynamics of social change as it is to think of it as the outcome of highly coherent political-ideological projects. Processes of privatization, market liberalization, and de-regulation have often followed an ironic pattern in so far as they have been triggered by citizens’ movements arguing from the left of the political spectrum against the rigidities of statist forms of social policy and welfare provision in the name of greater autonomy, equality, and participation (e.g. Horwitz, 1989). The political re-alignments of the last three or four decades cannot therefore be adequately understood in terms of a straightforward shift from the left to the right, from values of collectivism to values of individualism, or as a re-imposition of class power. The emergence and generalization of this populist ethos has much longer, deeper, and wider roots than those ascribed to “hegemonic neoliberalism”. And it also points towards the extent to which easily the most widely resonant political rationality in the world today is not right-wing market liberalism at all, but is, rather, the polyvalent discourse of “democracy” (see Barnett and Low, 2004). Recent theories of “neoliberalism” have retreated from the appreciation of the long-term rhythms of socio-cultural change, which Stuart Hall once developed in his influential account of Thatcherism as a variant of authoritarian populism. Instead, they favour elite-focused analyses of state bureaucracies, policy networks, and the like. One consequence of the residualization of the social is that theories of “neoliberalism” have great difficulty accounting for, or indeed even in recognizing, new forms of “individualized collective-action” (Marchetti, 2003) that have emerged in tandem with the apparent ascendancy of “neoliberal hegemony”: environmental politics and the politics of sustainability; new forms of consumer activism oriented by an ethics of assistance and global solidarity; the identity politics of sexuality related to demands for changes in modes of health care provision, and so on (see Norris, 2002). All of these might be thought of as variants of what we might want to call bottom-up governmentality. This refers to the notion that non-state and non-corporate actors are also engaged in trying to govern various fields of activity, both by acting on the conduct and contexts of ordinary everyday life, but also by acting on the conduct of state and corporate actors as well. Rose (1999, pp. 281–284) hints at the outlines of such an analysis, at the very end of his paradigmatic account of governmentality, but investigation of this phenomenon is poorly developed at present. Instead, the trouble-free amalgamation of Foucault’s ideas into the Marxist narrative of “neoliberalism” sets up a simplistic image of the world divided between the forces of hegemony and the spirits of subversion (see Sedgwick, 2003, pp. 11–12). And clinging to this image only makes it all the more difficult to acknowledge the possibility of positive political action that does not conform to a romanticized picture of rebellion, contestation, or protest against domination (see Touraine, 2001). Theories of “neoliberalism” are unable to recognize the emergence of new and innovative forms of individualized collective action because their critical imagination turns on a simple evaluative opposition between individualism and collectivism, the private and the public. The radical academic discourse of “neoliberalism” frames the relationship between collective action and individualism simplistically as an opposition between the good and the bad. In confirming a narrow account of liberalism, understood primarily as an economic doctrine of free markets and individual choice, there is a peculiar convergence between the radical academic left and the right-wing interpretation of liberal thought exemplified by Hayekian conservatism. By obliterating the political origins of modern liberalism—understood as answering the problem of how to live freely in societies divided by interminable conflicts of value, interest, and faith—the discourse of “neoliberalism” reiterates a longer problem for radical academic theory of being unable to account for its own normative priorities in a compelling way. And by denigrating the value of individualism as just an ideological ploy by the right, the pejorative vocabulary of “neoliberalism” invites us to take solace in an image of collective decision-making as a practically and normatively unproblematic procedure. The recurrent problem for theories of “neoliberalism” and “neoliberalization” is their two-dimensional view of both political power and of geographical space. They can only account for the relationship between top-down initiatives and bottom-up developments by recourse to the language of centres, peripheries, diffusion, and contingent realizations; and by displacing the conceptualization of social relations with a flurry of implied subject-effects. The turn to an overly systematized theory of governmentality, derived from Foucault, only compounds the theoretical limitations of economistic conceptualizations of “neoliberalism”. The task for social theory today remains a quite classical one, namely to try to specify “the recurrent causal processes that govern the intersections between abstract, centrally promoted plans and social life on the small scale” (Tilly, 2003, p. 345). Neither neoliberalism-as-hegemony nor neoliberalism-as-governmentality is really able to help in this task, not least because both invest in a deeply embedded picture of subject-formation as a process of “getting-at” ordinary people in order to make them believe in things against their best interests. With respect to the problem of accounting for how “hegemonic” projects of “neoliberalism” win wider consensual legitimacy, Foucault’s ideas on governmentality seem to promise an account of how people come to acquire what Ivison (1997) calls the “freedom to be formed and normed”. Over time, Foucault’s own work moved steadily away from an emphasis on the forming-and-norming end of this formulation towards an emphasis on the freedom end. This shift was itself a reflection of the realization that the circularities of poststructuralist theories of subjectivity can only be broken by developing an account of the active receptivity of people to being directed. But, in the last instance, neither the story of neoliberalism-as-hegemony or of neoliberalism-as-governmentality can account for the forms of receptivity, pro-activity, and generativity that might help to explain how the rhythms of the everyday are able to produce effects on macro-scale processes, and vice versa. So, rather than finding convenient synergies between what are already closely related theoretical traditions, perhaps it is better to keep open those tiresome debates about the degree of coherence between them, at the same time as trying to broaden the horizons of our theoretical curiosity a little more widely.

  8. There’s no alternative- Chinese fill-in ensures mercantilism
    Posen, 9 – Deputy director and senior fellow of the Peterson Institute for International Economics (Adam, “Economic leadership beyond the crisis,”http://clients.squareeye.com/uploads/foresight/documents/PN%20USA_FINAL_LR_1.pdf)

    In the postwar period, US power and prestige, beyond the nation’s military might, have been based largely on American relative economic size and success. These facts enabled the US to promote economic opennessand buy-in to a set of economic institutions, formal and informal, that resulted in increasing international economic integration. With the exception of the immediate post-Bretton Woods oil-shock period (1974-85), this combination produced generally growing prosperity at home and abroad, andunderpinned the idea that there were benefits to other countries offollowing the American model and playing by American rules. Initially this system was most influential and successful in those countries in tight military alliance with the US, such as Canada, West Germany, Japan, South Korea, and the United Kingdom. With the collapse of Soviet communism in 1989, and the concomitant switch of important emerging economies, notably Brazil, China, India, and Mexico, to increasingly free-market capitalism, global integration on American terms through American leadership has been increasingly dominant for the last two decades. The global financial crisis of 2008-09, however, represents a challenge to that world order. While overt financial panic has been averted, and most economic forecasts are for recovery to begin in the US and the major emerging markets well before end of 2009 (a belief I share), there remain significant risks for the US and its leadership. The global financial system, including but not limited to US-based entities, has not yet been sustainably reformed. In fact, financial stability will come under strain again when the current government financial guarantees and public ownership of financial firms and assets are unwound over the next couple of years. The growth rate of the US economy and the ability of the US government to finance responses to future crises, both military and economic, will be meaningfully curtailed for several years to come. Furthermore, the crisis will accelerate at least temporarily two related long-term trends eroding the viability of the current international economic arrangements. First, perhaps inevitably, the economic size and importance of China, India, Brazil, and other emerging markets (including oil-exporters like Russia) has been catching up with the US, and even more so with demographically and productivity challenged Europe and northeast Asia. Second, pressure has been building over the past fifteen years or so of these developing countries’ economic rise to give their governments more voice and weight in international economic decision-making. Again, this implies a transfer of relative voting share from the US, but an even greater one from over-represented Western Europe. The near certainty that Brazil, China, and India, are to be less harmed in real economic terms by the current crisis than either the US or most other advanced economies will only emphasise their growing strength, and their ability to claim a role in leadership. The need for capital transfers from China and oil-exporters to fund deficits and bank recapitalisation throughout the West, not just in the US, increases these rising countries’ leverage and legitimacy in international economic discussions. One aspect of this particular crisis is that American economic policymakers, both Democratic and Republican, became increasingly infatuated with financial services and innovation beginning in the mid-1990s. This reflected a number of factors, some ideological, some institutional, and some interest group driven. The key point here is that export of financial services and promotion of financial liberalisation on the US securitised model abroad came to dominate the US international economic policy agenda, and thus that of the IMF, the OECD, and the G8 as well. This came to be embodied by American multinational commercial and investment banks, in perception and in practice. That particular version of the American economic model has been widely discredited, because of the crisis’ apparent origins in US lax regulation and over-consumption, as well as in excessive faith in American-style financial markets. Thus,American global economic leadership has been eroded over the long-termby the rise of major emerging market economies, disrupted in the short-term by the nature and scope of the financial crisis, and partially discredited by the excessive reliance upon and overselling of US-led financial capitalism. This crisis therefore presents the possibility of the US model for economic development being displaced, not only deservedly tarnished, and the US having limited resources in the near-term to try to respond to that challenge. Additionally, the US’ traditional allies and co-capitalists in Western Europe and Northeast Asia have been at least as damaged economically by the crisis (though less damaged reputationally). Is there an alternative economic model? The preceding description would seem to confirm the rise of the Rest over the West. That would be premature. The empirical record is that economic recovery from financial crises, while painful, is doable even by the poorest countries, and in advanced countries rarely leads to significant political dislocation. Even large fiscal debt burdens can be reined in over a few years where political will and institutions allow, and the US has historically fit in that category. A few years of slower growth will be costly, but also may put the US back on a sustainable growth path in terms of savings versus consumption. Though the relative rise ofthe major emerging markets will be accelerated by the crisis, that acceleration will be insufficient to rapidly close the gap with the US in size, let alone in technology and well-being. None of those countries, except perhaps for China, can think in terms of rivaling the US in all the aspects of national power. These would include: a large, dynamic and open economy; favorable demographic dynamics; monetary stability and a currency with a global role; an ability to project hard power abroad; and an attractive economic model to export for wide emulation. This last point is key. In the area of alternative economic models, one cannot beat something with nothing – communism fell not just because of its internal contradictions, or the costly military build-up, but because capitalism presented a clearly superior alternative.The Chinese model is in part the American capitalist (albeit not high church financial liberalisation) model, and is in part mercantilism. There has been concern that some developing or small countries could take the lesson from China that building up lots of hard currency reserves through undervaluation and export orientation is smart. That would erode globalisation, and lead to greater conflict with and criticism of the US-led system. While in the abstract that is a concern, most emerging markets – and notably Brazil, India, Mexico, South Africa, and South Korea – are not pursuing that extreme line. The recent victory of the incumbent Congress Party in India is one indication, and the statements about openness of Brazilian President Lula is another. Mexico’s continued orientation towards NAFTA while seeking other investment flows (outside petroleum sector, admittedly) to and from abroad is a particularly brave example. Germany’s and Japan’s obvious crisis-prompted difficulties emerging from their very high export dependence, despite their being wealthy, serve as cautionary examples on the other side. So unlike in the1970s, the last time that the US economic performance and leadership were seriously compromised, we will not see leading developing economies like Brazil and India going down the import substitution or other self-destructive and uncooperative paths. If this assessment is correct, the policy challenge is to deal with relative US economic decline, but not outright hostility to the US model or displacement of the current international economic system. That is reassuring, for it leaves us in the realm of normal economic diplomacy, perhaps to be pursued more multilaterally and less high-handedly than the US has done over the past 20 years. It also suggests that adjustment of current international economic institutions is all that is required, rather than desperately defending economic globalisation itself. For all of that reassurance, however, the need to get buy-in from the rising new players to the current system is more pressing on the economic front than it ever has been before. Due to the crisis, the ability of the US and the other advanced industrial democracies to put up money and markets for rewards and side-payments to those new players is also more limited than it has been in the past, and will remain so for at least the next few years. The need for the US to avoid excessive domestic self-absorption is a real concern as well, given the combination of foreign policy fatigue from the Bush foreign policy agenda and economic insecurity from the financial crisis. Managing the post-crisis global economy Thus, the US faces a challenging but not truly threatening global economic situation as a result of the crisis and longer-term financial trends. Failure to act affirmatively to manage the situation, however, bears two significant and related risks: first, that China and perhaps some other rising economic powers will opportunistically divert countries in US-oriented integrated relationships to their economic sphere(s); second, that a leadership vacuum will arise in international financial affairs and in multilateral trade efforts, which will over time erode support for a globally integrated economy. Both of these risks if realised would diminish US foreign policy influence, make the economic system less resilient in response to future shocks (to every country’s detriment), reduce economic growth and thus the rate of reduction in global poverty, and conflict with other foreign policy goals like controlling climate change or managing migration and demographic shifts. If the US is to rise to the challenge, it should concentrate on the following priority measures.

  9. Market systems are comparatively the most prosperous and successfully applicable on a large scale—they’re also the most moral and have empirically avoided environmental disasters—critics are unfounded and rely on the same market economies they criticize
    Wolf 03 Master in Economics @ Oxford, a British journalist, widely considered to be one of the world’s most influential writers on economics. He is the associate editor and chief economics commentator at the Financial Times [Martin, “The Morality of the Market”, Foreign Policy, Sept 1, 2003, http://www.foreignpolicy.com/articles/2003/09/01/the_morality_of_the_market%5D///WNM

    A sophisticated market economy works better than any other economic arrangement that has ever existed. After two centuries of unprecedented economic advance, and especially since the collapse of the Soviet Union and China’s transition to capitalism, it is hard to argue anything else. Yet the victory of the market model is detested almost everywhere. Critics grudgingly concede that capitalism may work better than any plausible alternative, but they insist it remains a wicked system, one that rewards immoral behavior — greed, ruthlessness, and indifference to the fate of others — and produces immoral outcomes, namely widening inequality. This view is most stridently expressed by the anti-globalization left. But a similar, if more subtle, critique has emerged among economists themselves, some of whom even decry capitalism as inherently inhumane and in need of a “human face.” It is easy to agree that a market economy requires a supporting system of laws and regulations. It is also easy to accept the desirability of government-sponsored programs of social welfare, provided these are kept within manageable bounds. But the claim that the market economy is immoral is nonsense. The market economy rests on and encourages valuable moral qualities; provides unprecedented opportunities for people to engage in altruistic activities; underpins individual freedom and democracy; and has created societies that are, in all significant respects, less unequal than the traditional hierarchies that preceded them. In short, capitalism is the most inherently just economic system that humankind has ever devised. It is true that market economies neither create, nor reward, saints. But consider the virtuous behavior that capitalism fosters: trustworthiness, reliability, individual initiative, civility, self-reliance, and self-restraint. These qualities are, critics correctly note, placed in the service of self-interest. Since people are, with few exceptions, self-interested, that should be neither surprising nor shocking. Yet people are also not completely self-interested. Prosperous market economies generate a vast number of attractive opportunities for those who are not motivated by wealth alone. People can seek employment with non-governmental organizations or charities. They can work in the public sector, as doctors, teachers, or police officers. They can teach the iniquities of capitalism in schools and universities. Those who make a great deal of money can use it for any purpose they wish. They can give it away, for example. Quite a few have. In the advanced market economies, people care deeply about eliminating pain and injustice and ensuring the welfare of fellow humans and, more recently, animals. This concern exists because a rich, liberal society places enormous emphasis on the health and well-being of the individual. Life is no longer nasty, brutish, and short; rather, it is gentle, kind, and long, and more precious than before. The savage punishments and casual indignities of two centuries ago are no longer acceptable to civilized people. Nor are slavery and serfdom, both of which were rendered obsolete and immoral under the capitalist system. Militarists, extreme nationalists, communists, and fascists — the anti-liberals — brought these horrors back, if only temporarily. And it is no accident that the creeds that brought them back were fiercely anti-individualistic and anti-market. Yet another example of changed sensibilities is environmentalism. The environmental catastrophes caused by supposedly benevolent state socialist economies are well documented. The market economy has largely avoided such disasters. That is because prosperous people tend to care more about the environment in which they live than those who are condemned to squalor. Moreover, only liberal democracy makes it possible for concerns about the environment to be routinely aired and addressed. It affords environmentalists the right to pursue their agendas and to raise money in support of their goals. It segregates the public and private sectors, which enables government to regulate business. And because information is widely disseminated in a free society, companies must adhere to environmental standards if they hope to maintain their reputations. Branding Dissent One of the more insidious charges now leveled against the market economy is that it undermines individual liberty and subverts democracy. In her book No Logo: Taking Aim at the Brand Bullies, acclaimed anti-globalization campaigner Naomi Klein lapses into paranoia and delusion when she writes of “corporate space as a fascist state where we all salute the logo and have little opportunity for criticism because our newspapers, television stations, Internet servers, streets and retail spaces are all controlled by multinational corporate interests.” In reality, a competitive market economy is a necessary condition for democracy. The bedrock of a market economy is, as the 17th-century philosopher John Locke argued, the right of individuals to own and use property freely, subject to reasonable legal constraints. In turn, the right to own and use property freely gave rise to ideas about political liberty and the rule of law. Secure property rights require stable, durable governments interested in the long-term health of their countries. As the late economist Mancur Olson observed, “The only societies where individual rights to property and contract are confidently expected to last across generations are the securely democratic societies.” But sustained democracy requires the rule of law: The system can only endure if those in power accept free speech and political competition and abide by the results of elections. The rule of law came about as a means of facilitating commerce; in this sense, capitalism provides the basis for democracy, not vice versa. A planned economy, by contrast, will always go hand-in-hand with tyranny. Vaclav Havel, erstwhile dissident and later president of the Czech Republic, has pointed out that a government that controls the economy will inevitably also control the civic life of a nation. True, some countries have proved the reverse: They have market economies but not democracy nor civil and human rights. But even if all nations with market economies are not (yet) democratic, all democracies have market economies. As the distinguished Hungarian economist Janos Kornai notes, “There has been no country with a democratic political sphere, past or present, whose economy has not been dominated by private ownership and market coordination.” The market supports democracy in another way — through growth. When per capita output rises, a society’s condition can be described as “positive sum” — every person in that society can become better off. This outcome makes politics relatively easy to manage. In a static society, however, a “zero-sum” condition prevails: If anyone is to receive more, someone else must receive less. It is a safe bet that if environmentalists imposed a zero-economic growth agenda on a country, that country would swiftly become authoritarian. And far from stifling democracy, as Klein and her cohorts contend, the market economy manufactures political dissent with unparalleled efficiency. As the Austrian economist Joseph Schumpeter argued in Capitalism, Socialism, and Democracy, liberal democracies are the only societies that create their own opposition. Only in a market economy would the wealthy give large sums of money to universities, despite the contempt that many professors and students express for capitalism and the affluent. Only in a market economy could books and newspaper articles condemning the rich and powerful be published and promoted with such success. Indeed, for all her jeremiads against capitalism, multinationals, and global brands, Klein appears to have done quite well by the market economy. Under no other system could her book have become such an international sensation. Her complaints about media conglomeration ring somewhat hollow considering what a media darling she has become. It could even be said that No Logo is now a brand of its own. The market economy does not merely support its critics; it embraces them. The Great Leveler Inequality is considered the scourge of capitalism. Yes, the rewards in market economies are far from equally distributed. However, all complex societies with elaborate divisions of labor are unequal. Those countries with market economies are not only the least unequal, but the inequality they generate is the least harmful. In agrarian kingdoms and feudal societies, kings and lords could seize at will the labor, possessions, and even the lives of subjects, serfs, and slaves. Perhaps the most unequal societies of all were the state-socialist and national-socialist regimes of the 20th century. When, on a whim, Chinese leader Mao Zedong initiated the Great Leap Forward in the late 1950s, some 20 million people died. The irony is that such tyranny was justified by the alleged depredations of capitalism. To eliminate market-driven inequality, all power was concentrated in the hands of the state; the result was an infinitely more unjust distribution of wealth that benefited those who controlled the economy. It is fashionable now to claim that the market economy has produced staggering global inequality. Disparity in the global distribution of household incomes did increase progressively from the early 19th century to around 1965. But this trend must be properly understood. The proportion of the world’s population living on the margins of subsistence — that is, on an income of $1 per day — has actually decreased from more than 80 percent in 1820 to around 20 percent today, despite a roughly six-fold increase in world population. Moreover, the rise in global inequality was not caused by increased inequality within countries but increased inequality among them. This gap reflects the success of those countries that embraced capitalism and the failure of those that did not. Likewise, the reduction in global inequality that has apparently occurred in the past two decades reflects the successful introduction of dynamic market economies in China and, to a lesser extent, in India. In all that matters-the ability to define one’s aspirations and to enjoy the full rights and protections of citizenship-modern liberal democracies are uniquely equal. Wealthy people have more influence in a democracy than the working class. But compared to the power wielded by the affluent in traditional, hierarchical societies, the influence of today’s wealthy is tightly circumscribed. No millionaire or corporation can flout the law, as a number of scoundrels discovered in 2002. Even Microsoft’s Bill Gates, the world’s wealthiest person according to Forbes, discovered he could not ignore the low-paid lawyers of the Department of Justice when they went after Microsoft’s monopolistic abuses. In a competitive market economy subject to the rule of law, Gates can support politicians but not coerce them; cajole customers but not compel them; and control the destiny of his company but not the lives of the people he employs. Gates is neither a tyrant nor an overlord. He is simply a citizen, entrepreneur, investor, and philanthropist. The liberal market economy is morally imperfect, not least because it reflects the tastes, desires, and motivations of imperfect human beings. A market economy satisfies the desires of the majority more than the tastes of a refined minority. It rewards the hustler more than the sage. It rests on the power of self-interest more than universal benevolence. The relentless tirades against capitalism come from dreamers who compare it with an ideal system that has never existed and from intellectuals who resent their modest status in a society where wealth and prestige are gained by satisfying the wants of ordinary people. It is not the market that is immoral but the sloppy and self-indulgent arguments and attitudes of its critics.

  10. Neoliberalism is good–spreads peace, increases prosperity, and environmental sustainability–its sustainable and inevitable
    Kilgour 2k – JD @ Toronto Law, crown attorney in northern Alberta to Canadian Cabinet minister, Kilgour ended his 27-year tenure in the Canadian House of Commons as an Independent MP
    (David, “Globalization For the Benefit of All,” http://www.david-kilgour.com/secstate/globali2.htm)

    When your Secretary General asked me to participate in this session of entrepreneurs from approximately 100 countries, I was delighted. Let me be candid from the outset: I’m reasonably confident that many of your fellow citizens, like Canadians aplenty, fear globalization. Many say it brings the decay of social values, cultures and the environment; I would argue that the main challenge is not to decide whether globalization is good or bad, but rather to ensure that a “walled-down world” provides more fulfilled lives for all. Globalization can be an agent for good, a force to create unprecedented growth and opportunity for those who embrace it.¶ Economists have talked about globalization for many decades even if the term itself emerged only recently. Many speak of a borderless world, but that is a far from today’s reality where boundaries are still very real. Too often the term is thought of as synonymous with unbridled capitalism where any entrepreneur can raise money anywhere in the world, make anything and sell it anywhere. But globalization is also about the free flow of ideas, the exchange of culture and values, the greater attention now being given to issues such as human rights, environmental protection and technological advances which have brought people closer together than ever.¶ Benefits of Globalization¶ Virtually all economists agree that the large majority of residents of our shrunken planet are considerably better off through the growth of markets and the efforts of the GATT and its successor, the WTO, to keep them open. With ever expanding technology comes new markets, increased demand for products but also greater competition. There are now more people with computers connected to the world who are investing than ever before. As Klaus Schwab of the Davos World Economic Forum observed: “We have moved from a world where the big eat the small to a world where the fast eat the slow.” More than $1.5 trillion is now exchanged in the world’s currency markets each day, and nearly a fifth of the goods and services produced each year are traded.¶ Consumers of goods and services in all countries are one huge community who benefit from trade for reasons which include increased competition, comparative advantage, economies of scale and access to a greater range of products and services. There are also those likely to gain less than others from globalization.¶ Lower inflation is often cited as a favourable consequence of globalization because increased competition makes businesses more reluctant to boost prices/wages unless warranted by productivity increases. Another possible benefit is faster technological and productivity growth because increased international competition has obliged business generally to innovate more rapidly since the ’70s.¶ Social Tensions¶ Dani Rodrik of Harvard has singled out three sources of tension between global markets and social stability:¶ 1) Globalization makes the services of large segments of working populations more easily substitutable across boundaries,¶ 2) Trade can unleash forces that undermine norms in national practices, for example when child labour in Honduras replaces workers in South Carolina or cuts in pension benefits in France are called for in response to the requirements of the Maastricht treaty,¶ 3) Globalization and its competitive pressures make it more difficult for governments to carry out the important functions of providing the social programs which since World War II helped to maintain social cohesion and domestic support for liberalization.¶ Successful Globalizers¶ Rodrik concludes from the experience of both Europe and Asia that successful globalizers have had “market-friendly but pro-active governments, adequate social insurance and have integrated into the world economy on their own terms. This lesson contradicts much of today’s conventional wisdom that globalization requires small government, that welfare states have to be cut down to size, and that there is a single (read Anglo-American) model on which all countries will reasonably converge.” He asserts that it is the overall quality of a society’s domestic institutions – respect for the rule of law, human rights, good governance, social and political stability, adequate infrastructure and a skilled labour force- rather than labour costs or taxes that determines where most investments go.¶ Few question that unprecedented freedom in many markets has resulted in spectacular economic growth; international trade since 1988 alone has doubled to almost US$7 trillion. Quite a number of countries around the world are experiencing rapid overall growth, and some currently enjoy record low unemployment rates. In the case of a uniquely export dependent country like Canada, where about 43 per cent of our gross domestic output now is exports, I believe virtually all of us have benefitted from more open economies worldwide.¶ NAFTA¶ When the North American Free Trade Agreement (NAFTA) began in 1994 for Canada the United States and Mexico, there were more than few skeptics. Six years later, the figures speak for themselves: total merchandise trade across North America surpassed $752 billion in 1998. Canada’s merchandise trade with Mexico doubled over the same period, reaching $9 billion a year. In the last four years an estimated 1.5 million new jobs have been created in Mexico alone. Since NAFTA there were 15,883 new Mexican export firms created.¶ There was also fear that NAFTA would lead to environmental degradation in Mexico; environmental regulations would be relaxed in an attempt to woo investors. Mexican President Ernesto Zedillo put some of those fears to rest in comments earlier this year. Since 1994, he explained, Mexico’s enforcement of environmental standards has become stricter; he added that new employment opportunities offered by international trade have made it possible for highly polluting activities to be replaced by environmentally friendly ones.¶ Developing World¶ Many are concerned about the impact globalization is having on developing countries. Consider these statistics from the 1999 UN Human Development Report:¶ The income gap between the fifth of the world’s people living in the richest countries and the fifth living in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990.¶ By the late 1990s the fifth of the world’s people living in the highest income counties had:¶ 86% of world GDP, while the bottom fifth, just 1%,¶ 68% of foreign direct investment, and the bottom fifth, just 1%¶ and,74% of world telephone lines, the bottom fifth, just 1.5%¶ And most striking of all, the assets of the top three billionaires are more than the combined GNP of all least developed countries and their 600 million people. This has contributed to the perception that globalization benefits only the rich, leaving the poor behind.¶ Recently, countries in Sub-Saharan Africa have begun to experience the benefits of globalization, and some have led the world in percentage economic growth. Angola, Uganda and Botswana already stand among the ten fastest growing economies globally. The IMF forecasts that Africa’s overall GDP should grow by 5% in 2000, a significant improvement from 3.1% in 1999.¶ Botswana and Mauritius are shining examples of the positive effects of globalization. Both experienced exponential growth as they embraced foreign investment on their own terms and married their economic success with good governance and generous budget allocations for education and health care. Botswana, often cited as a major African success story, was one of the poorest countries in the world at independence, but has evidently been the fastest growing economy on earth since 1965. While such successes may continue to be the exception rather than the rule in Africa, other economies can do well too.¶ Much of what separates the developed and developing worlds today is the knowledge gap. In many developing countries, resources and people are abundant; it is the relative lack of experience in good economic, social and political structures that hurts their ability to compete. In 1998, the Internet had more than 140 million users and that number is expected to surpass 700 million by 2001. However South Asia, home to 23% of the world’s population, has less than 1% of Internet users.¶ Dissemination of ideas through the Information Highway, television or satellites introduces ideas about the environment, democracy, human rights and even wealth creation. I would suggest that one of the best effects of globalization is that information technology has brought attention to the need for more democratic development worldwide and the protection of human rights everywhere. The BBC World Service, TV-5, CNN and other television broadcasters are the principal vehicles of instant communication, which has revolutionized our understanding of the world. At the same time, many worry about the growing exports of American films, music and commercial television programs.¶ Whither Globalization?¶ The European financial problems of the early 90s, the Latin American crisis, beginning in Mexico in the mid 90s, and the East Asian flu which also hit Russia and Brazil in 1998-99, were highly destructive of many livelihoods. If the sudden removal of capital from these countries caused financial instability, it should be added that their access to global investments helped them to prosper earlier and for most of them to recover much faster then expected. Could not these crises have been avoided through better regulation of financial markets by international organizations and national governments?¶ In the case of the WTO, critics should note that its dispute settlement mechanism is much better than the one in the GATT, which curiously required the unanimous agreement of all members, including the offending member country itself. The WTO requires a unanimous decision to block a dispute panel report. Even large countries have thus stopped dealing with important trade complaints outside the GATT/WTO, which should benefit smaller economies.¶ Labour Standards/Environment¶ The WTO also promises to phase out over 10 years the Multi-Fibre Agreement, which limited exports of textiles and apparels from developing countries to developed ones. Some initial steps have been taken to include agriculture by converting market barriers to tariffs as a first stage in negotiating them downwards. A parallel agreement on services (GATS) hopes to do for services what the GATT has done for goods.¶ Three areas where the WTO has not extended its authority in a significant way is labour standards, human rights and the environment. I understand that the WTO does permit some uses of trade policies, including economic sanctions, for human rights abuses. The issue is more complicated for labour standards. Prohibiting slave labour and exploitive child labour is obvious, but what of issues such as minimum wage levels? If it is mostly better paid employees in OECD countries who lose from the WTO’s present exclusion of labour standards from trade policy, is it not understandable that developing countries see the issue as protecting job-holders in highly developed countries?¶ The Future¶ The way ahead is certainly unclear judging from the fairly recent protests at the IMF and World Bank meeting in Washington DC. The next US President will probably have to obtain fast track legislation from the new Congress before any new trade negotiations can make substantive progress. Greater participation by NGO’s in trade negotiations might help win public support. Developing countries should be represented formally in WTO decision-making, perhaps through a steering committee having permanent members from developed economies and rotating reps from small/developing countries.¶ The alternative to managed globalization could be painful if we recall what happened to the pre-1914 short-lived victory of free markets and liberal democracy over mercantilism and nationalism. Globalization today must be complemented by social programs, safety nets and more investments in education/ training. We ignore at our peril the challenge to build genuine legitimacy in each of our countries for more open economies.¶ Many people I talk to in Canada and elsewhere think the momentum today is with the anti-globalization forces. If Fred Bergsten of the Institute for International Economics is correct that on trade matters you either move forward or fall over – the bicycle theory – there is real work to be done by all of us. It is clear that globalization is a force of great change and not simply a spectre on the horizon. Through technology, communications and economics, globalization and our increasing interconnection with each other are inevitable. Time and distance are shrinking: globalization is a reflection of that reality. That is why I question those who wholly condemn the phenomenon. Countries cannot succeed in isolation today. A poor country that closes its borders to investment is likely to stay poor. Globalization can champion stability, democracy and greater sharing around the world.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s