Neoliberalism is failing. Even the IMF says so!
Dennis Sanders
volume 37
issue 4
August 2016

What the hell is going on over at the International Monetary Fund (IMF)? Have socialists or some malcontents infiltrated the place with the aim of bringing it down from the inside? Nah. It is just three research wonks who wrote a document saying that the benefits of “neoliberalism” may have been “oversold.” The IMF acts as part henchman, part marketing department for capitalism, and they are not about to stop the neoliberal “party” now.

Neoliberalism posits that if the economy were just relieved of all its regulatory shackles (“free trade”), if government could just shed all of its “assets,” if taxes were lowered or eliminated, if international trade were opened up — then the world’s people could realize their maximum potential and ride off into the sunset happy and satisfied. And the music swells, the crowd roars to its feet in triumphant adulation! This is the version inside the echo chamber of the bourgeoisie — the global 1 percent.

Though the basic tenets of neoliberalism have been around since the 1930s, the consecutive and extended crisis of capitalism in the middle decades of the 20th century pushed it into the shadows. Governments around the world increased regulation, spent money on social welfare, and did everything they could to save capitalism. Better this than to contend with the rising and angry working class of the industrialized world.

And then in the early 1970s, neoliberalism was dusted off and applied to the Chilean economy. Economist Milton Friedman, advisor to President Reagan and Prime Minister Thatcher and best-selling author of Capitalism and Freedom, put neoliberalism on the map and rose to rock star status. But his earlier claim to fame was as instructor to a group of Chilean economics students attending the University of Chicago. These “Chicago Boys” (as they became known) took Friedman’s theory back to Chile, and Augusto Pinochet proceeded to gut the economy, sending it into a deep recession and massacring opposition to his dictatorship.

Public enterprises that had been nationalized under the Allende regime were reprivatized, unions were busted, progressive taxes eliminated and replaced by regressive ones. Though devastating for the masses in almost every way, inflation was drastically reduced, and the private sector had free reign over the economy.

That is when the neoliberal party really started for the 1 percent, and it has been a wealth orgy ever since. It’s hard to keep up with the number of “free trade” agreements in place now. There are many bilateral agreements, and multi-lateral agreements with the crown jewel, the Trans Pacific Partnership (TPP), on the way. Each of these implements neoliberal policies between the trading partners, generally sending wealth upward.

And if that isn’t bad enough, the IMF itself estimates that over one-third of global corporate income avoids taxation by passing through offshore accounts. These tax havens in over 70 locales have arisen with the viral spread of neoliberal policies, robbing countries of the ability to pay for human needs.

The IMF report is really “image management” saying that neoliberalism has “not delivered as promised” and “inequality is prominent” which “hurts the level and sustainability of growth.” This one is a corker: “advocates need to pay attention to the distributional effects.” It drones on in academic mumbo-jumbo and serves up charts and graphs. But in the end, what they mean is that neoliberalism is good for the 1 percent. But this radical upward distribution of wealth is showing big time, and if they want the party to continue, they might want to turn the music down just a touch.

I’ll wager that none of any of the billions (yes, billions) of people harmed by almost four decades of intensive neoliberal “reforms” give a rat’s ass about academic excuses for the increasing fragility of their existence. Why people don’t have affordable drinking water, or why their wages are falling like rocks or why most have to weigh paying the rent so at least some of their family members can eat regularly. Though the IMF is trying to hone down the rough edges, its rationale for these facts of life for the 99 percent can only be viewed as condescending and downright sadistic.

But from Johannesburg to Athens, to London, to Shanghai, Detroit, and Paris, resistance is growing against neoliberal raiding of public coffers and privatizing of public services.

Why not crash their party and end it once and for all!

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