THE global financial crisis of 2008 reignited debate on the effectiveness of capitalist economic models to the contemporary global political order.While some argue that neoliberalism promotes efficiency, others feel it is to blame for the developing world’s slow economic progression.
Tendai Makaripe
Proponents of this view argue that neoliberalism, rooted in the ideas of Smith and Milton Friedman have perpetuated global inequality and entrenched the notion of white supremacy.
Writing in his book, Wealth of Nations, Adam Smith makes an interesting comment that summarises the real intentions of neoliberal practices.
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest,” Smith wrote.
From Smith’s writings, it can be picked that it is not benevolence that developed nations push for neoliberalism in developing nations but a desire to further their interests.
Neoliberalism, which grew in prominence between 1978 and 1980, a period referred to as a revolutionary turning-point in the world’s social and economic history, is premised on the Washington Consensus whose prescriptions of devaluation, privatisation, deregulation, austerity among others have been voluntarily embraced while in some cases, accepted in response to coercive pressures.
Neoliberal prescriptions, as they are brought to the developing world, require serious scrutiny before adoption, that is if ever they should be adopted.
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This is because inasmuch as they appear good on paper, they have little to benefit global south countries. If anything, history has taught us that these prescriptions leave developing States worse off.
They do not only economically hurt the global south but degrade its people. Cameroonian philosopher Achille Mbembe makes reference to what he terms necropolitics.
This is an extension of French philosopher, Michel Foucault’s concept of biopolitics which talks about how the powerful feel that they have the right to “make” live and “let” die.
Mbembe broadens this thinking to encompass the sovereign’s power ability to expose people to conditions so detrimental to health that they ultimately die.
When one looks at neoliberal prescriptions like austerity, it can be seen that they have the ability to hold and expose various people to conditions that make life highly precarious.
Austerity reforms in Ghana affected people’s access to health because of the introduction of user fees.
Academic James Pfeiffer in his 2019 study titled Austerity on Africa observed that the situation was dire in Ghana where significant reductions of 25% to 50% in hospital and clinic visits were recorded in Accra before plunging further to 80% in some rural areas during the first eight months of the introduction of user fees.
Patients paid for everything like gloves, anaesthetics, gauze, surgery, drugs, blood, scalpel and even cotton wool.
New mothers and their babies were literally held prisoner in health facilities until they settled their bills.
This is in line with Mbembe’s argument that some conditions are created in such a way that some members of society are relegated to slow death.
Instead of fighting to end poverty in many global south countries, neoliberalism positively conceives the poor as free agents who have the ability to escape poverty via the market.
It rejects pathological theories of poverty and sees the poor as equal to the rest of mainstream society and should be able to make market-based decisions that would improve their lives.
Failure of the poor to enter the market and compete equally with others is seen in the neoliberal perspective as a sign of weakness and the poor, particularly women, are viewed as deficient and immoral individuals who are incapable of taking full responsibility for their own fate.
The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages — such as education, inheritance and class — that may have helped to secure it.
The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Society is complex, comprising of “haves and have nots” which logically means the weak should be assisted to at least get by, but under neoliberalism, they are left to fight for their share against the powerful in the market.
Ultimately, people at the bottom of the socio-economic ladder have been less protected and have many needs that remain unmet.
Writing in his book, Trade is War: The West’s War against the World, Ugandan policymaker and political activist, Yash Tandon, described the contemporary systems of world economics and trade as the “West’s war” against the rest of the world similar to the way asymmetrical power and economic relations are sustained and promoted, poverty is globalised and the poor are kept fixed in their poverty.
This poverty entrenches global inequality and oppression of the weak by the powerful who reduce other beings to resources, usable and disposable for the sake of amassing profits.
It is no surprise that the world’s richest 500 individuals have a combined income greater than that of the poorest 416 million.
As they continue to amass wealth, their power to “define and rule” in the words of Ugandan academic Mahmood Mamdani increases, giving them authority to dominate “ignorant subjects” in need of enlightment making the domination morally acceptable.
It is ironic that capitalist countries that preach democracy have economic policies that move hand-in-glove with the logic of coloniality.
When neoliberalism makes reference to a “free market” one gets the impression that everything in it is free for everyone including the poor, yet capitalist economies use this to venture into the developing world’s markets to benefit from them, amass wealth thereby reproducing poverty and misery in countries of the global south.
With the opening up of markets to access foreign direct investment (FDI), developing States expose their labour force to exploitation, alienation and setting themselves against each other.
Neoliberalism, when combined with the concept of international division of labour, creates serious exploitation and inequalities especially on the part of workers.
This is why Karl Marx despised capitalism arguing that exploitation — and, therefore, alienation — are at their most intense under this system because capitalists are pushed by competition to exploit their workers more and more.
To them, labour is seen as a mere commodity while skill and creativity are destroyed by machinery and the division of labour, and the worker is reduced to the most miserable condition ever.
The net effect, according to Karl Marx, is a concept he called “alienation” where capitalists’ obsession with profits leads workers to be alienated from what they produce; alienated from themselves and the society is alienated from each other.
International organisations like the World Trade Organisation (WTO) take advantage of economic globalisation to push the neoliberal agenda which works against developing States.
It has been noted that current substantive WTO rules, as reflected in the Marrakesh Agreement, are biased in favour of developed States, something which the former director-general of the WTO, Pascal Lamy conceded in 2006. “The impression has also arisen that in the case of the multilateral trading system, [flaws in the system] have tended to work to the disadvantage of a certain part of the WTO membership, that comprising the developing countries,” he said.
Developing States, therefore, need to develop their own economic policies that address their problems like what the now late Thomas Sankara attempted to do in Burkina Faso.
Reliance on foreign policies to solve local problems should be disregarded as more often than not they are irrelevant and entrench domination and inequality.
