The Hubris of Neoliberal Globalisation

By Uditha Devapriya | Published: 2:00 AM Dec 2 2021
Columns The Hubris of Neoliberal Globalisation

By Uditha Devapriya 

For many, the end of the Cold War meant the triumph of liberal values. It was automatically assumed this would lead to world peace through the convergence of global interests and concerns. 30 years on after the collapse of Communism, it seems like a dream that never came true, an oasis that became a mirage. The logical extension of postCold War globalisation, global governance, has now begun to unravel, prompting scholars and commentators to suggest it has failed. Not surprisingly, the optimism of the 1990s has now given way to a dour pessimism and cynicism. 

But make no mistake, while the going was good, the naysayers remained in the minority. Marked on the one hand by faith in a Western worldview and on the other by belief in the establishment of what Benjamin Barber idealised as a group of confederal states, the drive towards integration saw the coming apart of traditional political divisions. It was in the 1990s that Giddensian Radical Centres, and Third Way liberalism, caught on across the capitals of the West. Freed from the constraints of bureaucracies and welfare States, Western countries, in particular the US under Clinton and the UK under Blair, openly repudiated socialism and began championing an alternative to both the Left and the Right. 

Ideologically hazy, Third Way liberalism became a front for the new agenda; in Sri Lanka, it came to be known as ‘neoliberalism with a human face.’ The assumption underlying these trends was that, with the demise of communism, both the Global North and Global South would usher in progress and development in an increasingly interlinked world. This was taken by political commentators to be a vindication of the tenets of liberal democracy, including the rule of law, and of course the free market. 

Liberal democracy 

As I have mentioned in a previous column, despite essential differences of opinion, the end of history thesis and the clash of civilisation thesis both underscore a confidence in Western liberalism. After all, the point in Huntington’s book isn’t so much that civilisations are pitted against each other as that conflicts between them require a greater force that can set things right. Huntington may have cautioned against misplaced faith in liberal democracy, but that did not necessarily delegitimise liberal democracy in the first place. Perhaps the most amusing conclusion to come out of all these developments was Thomas Friedman’s so-called Golden Arches Peace Theory. 

With more than a wink at Kant’s famous suggestion that republics would never wage war with each other, Friedman contended that no two countries with McDonald’s outlets would ever raise the battle-cry. That in itself was a carry forward from the distinction Benjamin Barber once drew between McWorldism and Jihadism, a distinction Andre Gunder Frank later showed to be patently false. Of course, Friedman has not lost any candour or colour since his theory, so grandiloquently announced, rammed into a wall: less than a year after he expounded on it, NATO invaded Kosovo, an irony considering that Belgrade had been among the first capitals of the Soviet Union, or perhaps the first among them, to open a McDonald’s outlet. Friedman’s thesis, and its unravelling, points us to how misplaced liberal dreams used to be back then. 

It also points us to other problems, pertinent to the Global South. The idea that a coming together of the world would eventually solve the problems of the world, problems as relevant then as now, like poverty and terrorism, was premised on the belief that these issues required general and across-the-board solutions. Old as they would have been, they were now seen as requiring a completely different approach.

 Accordingly, in the minds of liberal idealists, there was no further need for organisations which had been set up during the Cold War to reinforce South-South cooperation. In other words, the poorer countries of the world could find their way out of grinding poverty, not through multilateral and bilateral initiatives that would ensure social equity and justice for the Global South, but by being part of a new world order led by the West. 

Trade by comparative advantage 

Speaking at a BCIS forum in 1997, the late Gamani Corea highlighted a fascinating paradox: while speaking for the establishment of a global community, influential NGOs and advocates of multilateralism were calling for the abolition of entities like UNCTAD. Such entities, as Corea clearly noted, had been set up to focus on development issues relevant, and specific, to the Third World. By doing away with those institutions, the most avowed globalists were insinuating that the only way out for the Global South lay in linking with the North. 

This new strategy would, in effect, entail a shift from campaigns for fairer commodity prices for Third World countries to the neoclassical doctrine of trade by comparative advantage. Corea was right in sounding the alarm against these shifts in development strategy. And yet, even in Sri Lanka, he was probably in the minority. 

The Government of the day, along with the Opposition of the day, had by now subscribed to the new world order; thus, while Anura Bandaranaike could passionately argue in support of the Non-Aligned Movement barely a decade earlier, now, ensconced in the party that had deprived his mother of her civic rights, he called for its burial, arguing that its time had come and that we needed to move on from our earlier foreign policy in favour of ‘bilateral trade and economic relations.’ 

The point I am trying to make here is that, in the guise of promoting multilateralism, the victors of the Cold War sought to globalise and internationalise what they believed had won them a place in history. They thought the end of that War had legitimised capitalism and felt that this in turn legitimised neoliberal globalisation, which they sought to enforce across the Global South. Accordingly, initiatives such as the NonAligned Movement and UNCTAD were felt as unnecessary and even cumbersome: the new world had no use for them, because the problems of the world were apparently no longer limited to poorer regions. 

Free market economies 

Ironically, while belittling Third World initiatives to propel growth across the Global South, the Global North continued with outfits and organisations set up during the Cold War and, theoretically, no longer needed in the post-Cold War conjuncture. Prime among these, of course, was NATO. Former Soviet Union countries that transitioned to free market economies, which espoused the cause of liberal democracy, felt it to be in their interests to join an outfit that was much more of a Cold War relic than UNCTAD and NAM. 

They did not see any contradiction here. Indeed, far from viewing the spread of liberal democratic ideals and membership of a Cold War outfit as two prospects, proponents of the new order saw them as two sides of the same coin. Supplementing this was another, bigger issue. Neoliberal globalisation, or rather the globalisation of neoliberalism, ruptured the less affluent societies. Despite recording impressive growth rates, both the Global South and Global North began to feel the heat from liberating the market, indeed the economy, from the Government and welfare state. 

While that may have propped up an affluent middle-class in these societies, it did so at a tremendous cost: the withdrawal of the State from essential services. The disparities that this enabled cut through countries: the difference between average incomes of the richest and the poorest countries, today, stands at a factor of 177. Of course the effects have been felt differently by both sides. On the one hand, as the Patnaiks have noted, neoliberal globalisation enabled a kind of neocolonialism that keeps Third World countries tethered to low export prices, while forcing them to import capital goods at inflated prices; on the other, it facilitated the migration of capital from First World to rapidly developing Third World countries, speeding up deindustrialisation in parts of the West and provoking populist, xenophobic backlashes. 

Those backlashes have succeeded in generating feelings of discontent across the Global South, particularly in regions like South Asia, fuelling up their variant of populist politics that the pandemic has unravelled. The pandemic, in turn, has made us aware of the inequalities buttressing this so-called multilateral order. The US response to India’s desperate requests for vaccines, to give one example, tells us where we are, and where they are. 

Underscored by phenomenal growth rates across Asia, as well as the demoralisation of the Left everywhere, advocates of neoliberal globalisation sought to remake the world in their image. In this they were doomed to fail. Flushed with hubris, they laid all bets on the world conforming to their rules. In doing so, they believed there was no longer a need for Third World initiatives. Today, things have come full circle. Divided, ruptured, and broken up like never before, liberal democracy as envisioned by neoliberal globalists has not brought about what it promised. The results have been only too dismally clear. 

The writer can be reached at [email protected]

By Uditha Devapriya | Published: 2:00 AM Dec 2 2021

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