What is the Struggle against Neoliberalism?

Javier Villanueva

translated by Holly Yasui

*Note: see Spanish language version for graphs* 

To start off, I would like to present a “snapshot” of what has been happening in the world since the end of the Second World War. In particular, this will indicate very clearly and vividly the moment that neoliberalism was unleashed. I warn you that the “snapshot” appears in a very compact form, as a single image unlike a photograph. It is a cold image, frozen, but it is worth taking the time to look closely at it in order to recover the live, burning struggle that is behind it.

Source: Branko Milanovic, web page of the World Bank, taken from Patrick Bond

What this image shows is the evolution of what economists call the Gini co-efficient. This co-efficient is the most well-known indicator of the inequality of income within a society. The closer the value approaches to one, the greater the inequality of income; the closer it approaches to zero, the less the inequality. Usually this is calculated for individual countries, and must be complemented by other information. Nonetheless, as Milanovic calculated it for the entire population of the world, and not only for one year but for almost the entire second half of the twentieth century, it offers us a composite perspective that is useful to analyze it in itself.

Before entering into the analysis, it is useful to give a few examples that can serve as reference points: in Cuba, the Gini index was 0.24 in 1986; in 1999 after the huge adjustments that it had to make after the fall of the Soviet Union, the Gini index increased to 0.41, and then in 2002, it had decreased again to 0.38 (Brundenius, 1987 and 2002, and Ferriol, 2002, cited in Domínguez, 2006; Espina, 2006; Barberia et al., 2006; Eckstein, 2006). In 1993, the inequality in Latin America as a whole was 0.56; in Mexico 0.53; in the G7 countries it was 0.35, in the United States 0.39 and in Switzerland 0.32 (Milanovic y Yitzhaki, 2002). In 2003, in Brazil, the Gini index was around 0.58 and, according the most recent data, in the United States it was above 0.40 ( ocde y World Bank, graphic published by La Jornada, June 27, 2006, p. 27).

But let’s return to the evolution of the world Gini index between 1950 and 1998.

Three periods are immediately apparent in this image.

Between 1950 and 1964, there is a clear tendency, with some ups and downs, to move toward an ever increasing concentration of wealth:

Then, between 1965 and 1984, that tendency not only halted but even decreased in terms of the concentration of wealth, that is to say, socialization advanced moderately. This is the period of revolutions of national liberation, workers and socialist movements; the struggle against the imperialist war in Vietnam; the student, feminist and civil rights movements; and the Arab oil embargo against the western powers.

Finally, between 1985 and 1998, once again the tendency toward the concentration of wealth is seen, now in an abruptly dominant manner, which continues until 1994 when a certain resistance begins to damper what was becoming an irresistible growth. This is, without a doubt, what we refer to as neoliberalism.

Moreover, it can be observed that neoliberalism not only re-established the increasing tendency toward the concentration of wealth, but also recuperated a good part of the decline in this area caused by the struggle of workers and common people between 1965 and 1984.

There is, then, a sustained and pronounced concentration of income in the world, especially during the last 20 years, which has been advancing since the end of the Second World War; therefore we can and must talk about it as a concentration of all the wealth of the world.

So, we must see a bit more concretely where it has been concentrated. Mulanovic scrutinizes this concentration between 1988 and 1993 and emphasizes that it benefited only 10% of the world population. This percentage means approximately 600 million people.


So, what is the point of all this?

In the first place, that this entire process of concentration of wealth cannot be explained by resorting to a model, nor is it based on an ideology nor decisions taken by any authority. It is difficult to believe that 600 million people began to concentrate in their own hands an increasing part of the production of the rest of the 5,400 million people simply because some economists in Chicago discovered a new model and they convinced a team of officials of world financial institutions and presidents of various countries to make decisions based on their equations. It is much more believable to think that things happened conversely: that these 600 million people and others, always interested in concentrating ever more wealth (though between 1965 ad 1984 their aspirations had been limited) since the mid-80s found themselves in a situation which finally enabled them to break through the obstacles that restricted them and they launched a plunder of whatever was within their reach, for which reason they promoted the rise of economists, officials and candidates who were aligned with them.

What was this situation, how did it come about? This is a question we have to investigate based on the economic, political and social history of the struggle that took place between 1965 and 1984. What we cannot do is take for granted the appearance of a new model, of a new ideology or a new technocracy that, in any case, far from explaining the change in the situation is more likely a part of its consequences, a part of what needs to be explained.

Milanovic’s graphic, which describes the concentration of wealth, poses the issue in the following terms: neoliberalism is a counter-offensive of big capital finance against the workers and common people of the world, to once again impose conditions favorable to the concentration of the wealth of the world, after a decade and a half during which this concentration had been halted and even made to reverse itself; what needs to be explained, then, is how this change in the correlation of social forces came about at the worldwide level between these 600 million people on the one hand and 5,400 million on the other. It is, thus, a political question, of social relations of power and force on a worldwide scale, which cannot be reduced to the relations between political institutions and, even less, among professional political actors. It is a question of political struggle between large social sectors, between those above and those below and those in the middle.

The second issue I want to address, which is the one I am most interested in emphasizing, is that the strengthening of the struggle against neoliberalism does not depend so much upon the creation of an alternative model, nor upon the spreading of another ideology, nor the formation of a bureaucracy opposed to the technocracy. All this can be valid and necessary, but all that, if one wants to be moderately efficient has to be sustained and have its roots and put itself at the service and efforts of political relations of alliances, rivalry and mistrust that are concretely established among all the social sectors, those above, below and in the middle; relations that are decisive and appear before the eyes of all engaged in massive social struggles.

It must be assumed that the real material and social content of the models, of the ideologies and of the bureaucracies that truly matter consist of the social relations established or projected between large sectors of society. The strengthening of the struggle against neoliberalism requires that those below recognize those in the middle and above, that they identify their points of coincidence and contradiction, their strong sides and their weak flanks, and that they do this in mass struggles; it is the political side that is always present, no matter how economic or cultural it might seem at first glance. It is necessary to make a commitment to this massive and daily political struggle that takes place, above all, outside of the institutional and professional frameworks. Within these massive struggles, it is necessary to concretely promote the solidarity of those below; divide and isolate those above; win over those in the middle and neutralize their tendencies to ally themselves with those above in exchange for a few crumbs. It is this political practice that will define and put to the test the real sense of the models, of the ideologies and of the bureaucracies that rise and fall as part of this struggle.