Neoliberalism – A Useful Category?

Here’s a response to Donald Parkinson’s piece ‘What is our current historical era and how did we get here?’ from comrade Anton Johannsen. 

Donald Parkinson outlines some solid points for understanding where we’re at dealing with capitalism. I’d like to highlight some of these points, and provide some complication.

What is neoliberalism? Parkinson is correct that it is by many considered to coalesce around the 1973 financial crisis and a general policy shift from Keyensian political strategies toward strategies that favored the increasing financial nature of the U.S. economy. Management of social problems like inflation, housing prices, and so on, were deemed too complicated and messy for government to reasonably arbitrate, and over time, especially as business growth in the U.S. began to slow and incomes began to stagnate for the working and “middle” classes (if not outright decline) government mismanagement became the dominant political ideology. In general this took up with a set of ideas about government and business, that had been seeded over the 30 or so years prior to 1973, in addition to conditions that allowed businesses to route unions, riots and upsurges of workers.

The decisions that set up the kinds of urban crises that rocked places like Detroit, Chicago, and other cities in the 60’s, and also paved the way for capital to outmaneuver even the reformist union movement that existed, were not made by free market ideologues. They were made by corporate executives in the 40’s and 50’s dealing with an extremely militant, albeit reformist union movement, as well as politicians in the U.S. South, and nation more generally. They were exacerbated by housing conditions in major manufacturing cities like Detroit, including white flight, as well as informal racism that permeated union structures like the UAW and gave us the DRUM and other groups.

Aspects of “neoliberalization” were in swing smack-dab in the middle of the “Keynesian Golden Age” in the U.S. as steel and auto manufactures in places like Michigan and Ohio sought to move their plants to the U.S. south, and the passage of Taft-Hartley, in the 40’s. By the 60’s they were moving out of places like Wooster, Ohio to places like South Carolina, to pay workers way less than the union wages. This is critical to understanding the interaction between race, labor, and the north and south in the U.S. not only in the 40’s but leading to the 60s and 70s and today. It can show how struggles by workers shape the movement of capital, and how a divided class movement (or lack of class movement) can hurt workers severely. Thomas Sugrue’s Origins of the Urban Crisis, points this out, from the intro:

“The cities of America’s industrial heartland were the bellwethers of
economic change. The rusting of the Rust Belt began neither with the much touted
stagflation and oil crisis of the 1970s, nor with the rise of global
economic competition and the influx of car or steel imports. It began, unheralded,
in the 1950s. As pundits celebrated America’s economic growth and
unprecedented prosperity, America’s midwestern and northeastern cities
lost hundreds of thousands of entry-level manufacturing jobs. In the industrial
belt that extended from New England across New York, Pennsylvania,
and West Virginia, through the Midwest to the banks of the Mississippi,
major companies reduced work forces, speeded up production, and required
more overtime work. The manufacturing industries that formed the
bedrock of the American economy, including textiles, electrical appliances,
motor vehicles, and military hardware, automated production and relocated
plants in suburban and rural areas, and increasingly in the low-wage labor
markets of underdeveloped regions like the American South and the Caribbean.
The restructuring of the economy proceeded with the full support
and encouragement of the American government. Federal highway construction
and military spending facilitated and fueled industrial growth in
nonurban areas.″

Why does this matter? Well, perhaps most importantly for political movements that today like to pin all our political and social evils on free market “radicals” and runaway financialization, this indicates that the needs of American manufacturing business ran directly counter to the interests of the workers with whom they were united in a social partnership. Indeed as Sugrue argues, social planners of the period, especially in the South, were all to eager to receive fleeing capital. This is important for communists, as it is useful information to help workers today understand a period of American history that is heavily mythologized by liberals and the left. The cry for a return of U.S. jobs, and a social partnership characterized labor’s dying gasps in the 70’s and 80’s. It also laid the material foundations for future defeats, and helped situate business in a position to orient public discourse around it’s interests.

If the policies that characterize the neoliberal period, capital flight, the further automation of jobs, and the slashing of wages and benefits, are found in the preceding period, how do we mark the useful delineation? Is it that in the 50’s workers were able to still win a fight against Ford, GM, or Chrystler? Is it that wages were still growing? Is ‘neoliberal’ just a word, then, that means ‘losing working class’?

And more, what is the structure of work today? Not just in production but in services/consumption as well? A rough look at the Bureau of Labor Statistics Occupational Employment Statistics for Tampa-St.Pete-Clearwater indicates that the top 10 specific types of employment are: Retail Salespersons – 44,860; Customer Service Reps – 40,160; Combined Food Preparation and Serving Workers, Including Fast Food – 32,240 ; Waitstaff-29,450; Cashiers – 27,820; Registered Nurses – 25,180; Secretaries and Administrative Assistants, Except Legal, Medical and Executive – 24,840; Office Clerks, General – 20,570; Laborers and Freight, Stock, and Material Movers, Hand – 18,810; Stock Clerks and Order Fillers – 17,100; the combined of all being 281,074 workers. Now this is a very rough estimate, but gets at the fact that most of this work is not in the field of “production” which is characteristically regarded as manufacturing and shipping. Most of this work is in the field of services, production having been so thoroughly automated and made redundant of labor, or where it is unable to do so, been shipped off to places where wages are kept low.

As Parkinson points out, this corresponds with geographical trends in capital concentration that enables the decentralization of sites of accumulation, or the “McDonaldization” of wage-labor exploitation. This, more than ever, points toward the need of working class organization, as a class. This does not equal the need for a “party” as any organization can have a political platform, and with electoralism being a dead end, the “party” functions as dead rhetoric. Instead, ought we to organize geographically as many groups already do? (Here I’m thinking of various Anarchist groups, IWW GMB’s, Solnets, and political groups like Philly Socialists, Unity and Struggle, etc.)

True, there are other aspects of the ‘neoliberal’ period that theorists highlight. One is the increasing financialization of the economy. As Krippner points out:

“…in 2001, financial sector profits had rocketed up to represent more than 40 percent of total profits in the US economy. This figure, although striking, actually underestimates the importance of financial activites in the US economy, as nonfinancial firms too have become increasingly dependent on financial revenues as supplement to – or at times substitute for – earnings from traditional productive activities.”

Finance is a means for these entities to widen their income, and regulate production/consumption cycles of product. As far as consumer credit is concerned, it is a development that has it’s roots even earlier in the 20th century at Chrystler and Ford, with the absorbing of loan sharking, the development of revolving credit and the grocery and department store industries.

To what extent is the ideology of neoliberalism, and it’s command over the discussion of policies, the result of changes in the process of production, accumulation and realization of value, that shifted and changed especially during and after WWII? Why do the kinds of policies in the U.S. and other “global north” economies that call to mind “enclosures” and “primitive accumulation”? Why does theorization of the neoliberal period by leftists, commit so many of them to the project of defending types of labor and social management not anti-thetical to capitalism, just capitalism as it works now? Perhaps the answer, in part, is that the familiar forms and terrains of struggle are those from 60 years ago, even though the world we live in now is the one where those exact types of organizing were routed by capitalism. Does this gloss over changes in what is actually possible? What should we look for in subjectivities that are now emerging from changes in capitalist accumulation? These are the kinds of questions that need answering as our group moves forward.

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