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Neoliberalism against consensus of the people

Neoliberalism

Neoliberalism is the attempt to resurrect the economic liberalism of the 19th century, discredited by the recurrent and devastating economic crises of the first half of the 20th century, triggering two World Wars and countless other conflicts.

Neoliberals preach the non-intervention of the State in economic matters, the absolute freedom of capitalism to set the conditions of the productive process, the application of the law of supply and demand to regulate the economy and working conditions, as well as a drastic decrease in the size and powers of the State, with privatization of public companies and services. The behavior of the systems that are called neoliberal almost completely contradicts these postulates.

Well, the intervention of the State, custodian of certain relations of production, defender of private property and creator, executor and judge of the application of norms, is vital for the survival of capitalism. The State is the creator and promoter of all the protectionist systems thanks to which big capital developed; represses workers to accept minimal remuneration or wages below the minimum wage; comes to the rescue every time the mechanics of capital have unleashed a crisis, assisting bankrupt financial entities with “golden lifesavers”; maintains a coercive military apparatus to defend the interests of its capitalists at home and abroad.

Nothing is more false than the capitalist doctrine of the “decrease in the size of the State.” The portion of the GDP that the State consumes is proportional to the development of the country, and partly responsible for it. According to the report of the Trade and Economic Development Organization Overview of Public Administrations: Latin America and the Caribbean 2017 (Éditions Ocde, Paris) “The State is much smaller on average in the region of Latin America and the Caribbean than in the countries of the Trade and Economic Development Organization. Public spending reaches 31% of GDP on average in LAC countries, compared to 41,5% in OECD countries.”

Big capital, in addition, haggles over its tax obligations and, sometimes, manages to avoid them by placing its profits in tax havens, or obtaining important exemptions from the State: public income is stabilized by broadening the tax base and loading it on the economically weakest, as occurs with the value added tax.

As for the almost disappearance of the State, this would mean the almost disappearance of capitalism. Who would maintain police, courts, educational systems and armies that, in turn, in capitalist countries protect capital? In the most advanced capitalist countries, an all-powerful machinery has been created, the “military-industrial complex,” which helps maintain production and attacks socialist, nationalist or simply owners of natural resources states through multiform and continuous aggression.

Neoliberalism was always imposed without popular consultation, through the brutal intervention of the same State that it claimed to execrate. In Chile, with the coup against Salvador Allende in 1973. In Indonesia, through a massacre that cost half a million lives. In Europe, the “dismantling of the Welfare State” was carried out, with Margaret Thatcher, between 1979 and 1990. Ronald Reagan and George Bush dismantled it in the United States. In Venezuela, the neoliberal package of 1989 sparked a social uprising that was quelled at the cost of some five thousand lives.

People's Consensus

In 1989 the World Bank, the United States Treasury Department and the International Monetary Fund imposed a decalogue called The Washington Consensus, for all countries under the sphere of capitalism. Against it we propose a Consensus of the People, applicable by revolutionary or progressive governments, under the following principles:

  1. Fiscal policy oriented towards social well-being and development, even at the cost of reasonable fiscal deficits.
  2. Redirection of subsidies towards investments for the development of the country and social investment in free education at all levels, free universal health care and accessible housing plans and socially useful infrastructure.
  3. Tax reform based on principles of territoriality and progressivity, which taxes higher incomes more, reviews and eliminates tax exonerations, exemptions and immunities granted to large national and foreign capital, and reduces or cancels tax rates for the working classes.
  4. Interest rates adjusted to social policies, and eliminated for certain social interest loans.
  5. Exchange rates regulated by the State, with comprehensive and decisive powers for exchange control.
  6. Social control of trade, and particularly of the type and amount of imports, with prohibition of some of them, high customs rates to discourage luxury imports and low or exempt tariffs for imports of social interest.
  7. Strict limits on foreign direct investment (FDI); allowing it only for areas in which there is no national technical capacity, which are not decisive for the development or security of the nation, always through concessions limited in time and extension and discretionally revocable, without granting them privileges and advantages greater than those nationals, and under complete public control and subjection to national laws.
  8. Renationalization of state companies and public services that have been privatized, and progressive socialization of economic exploitations.
  9. Comprehensive regulation of economic activities, with particular emphasis on safety reasons, environmental and consumer protection, and nationalization or strict supervision of financial entities.
  10. Legal security for the rights of workers, with strict compliance with labor and social laws, effective irreversibility of the achievements obtained, and timely compliance with the constitutional norms that reserve the resolution of disputes on matters of public interest to the courts of the Republic.

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