The Role of Nationalism in Supporting Economic Neoliberalism

Neoliberal (or free market) globalization is merely one type of globalization. The neoliberal variant of globalization is currently dominant causing it to be confused or mistaken with globalization in general. Economic neoliberalism is supportive of economic globalization, but is firmly opposed to political globalization. Economic neoliberalism supports individual freedom, in particular, freedom from market-inhibitory forms of government intervention. However, it supports market-enabling government intervention to protect property rights and enforce contracts. Neoliberals oppose interventions for the purpose of reducing market failures and redistribution of income and wealth. Neoliberals advocate dismantling national policies on most economic issues and to confine as many market-inhibiting taxes and regulatory powers as possible to the state or provincial level where they will be constrained by the need to compete for mobile workers and businesses. This forces jurisdictions to compete for investment by providing the types of neoliberal policies that investors and corporations prefer.

Conservative think tanks like the American Enterprise Institute (AEI) have many projects that support economic neoliberalism. AEI supported a 1980 study on the emerging ‘social cost’ arguments against smoking in support of the tobacco industry, and more recently supports various studies that cast doubt on global warming. More than 20 AEI staffers served in the George W Bush administration. In 2000, the Institute set up its federalism project that produced position papers on American federalism, with particular interest on federal and state business regulations, and the role of the court to promote states to compete for corporate business interests. In 1990 the Institute hired Charles Murray and received the Bradley Foundation support for The Bell Curve. Murray’s work on welfare in Losing Ground was very influential over welfare reform in the 1990s. Murray reintroduced social Darwinism which had been in vogue in mid-19th century into acceptance by the 21st century economic elite.

Neoliberalism has not succeeded in reducing either poverty or inequality. From the perspective  of the international capitalist class it has failed in terms of the system itself. It has not recreated the conditions for capital accumulation which existed during the Great Boom. Above all, it has failed consistently to increase the rate of profit. To the extent that it has intermittently done so, it has not achieved rates comparable to those between 1948 and 1974. Accumulation has increasingly come to rely on increasing productivity on the one hand (making fewer people work harder) and decreasing the share of income going to labour the other (paying workers less in real terms). The suppression of real wage levels in Canada and the US has encouraged the very dependence on borrowing that has now entered crisis. This debt load is not physically sustainable indefinitely.

This debt has become a means for consumers to add to their ‘possessions’, as morality accounts imply. Rather it has been driven by their need to maintain liquidity through loans, mortgages, unsecured credit and the like, precisely to meet the costs of the ultra-commodified world neoliberalism has created. Payment of minimal required is very expensive. But an economy that requires systemic debt to maintain expansion is scarcely a healthy situation. The real success of neoliberalism has been to transfer wealth and resources to the ruling class and its hangers on. However, capitalism can only survive through expanding production, not mere personal enrichment.1

One of the main arguments of the neoliberal era has been centred on the decline of nation states and governments as actors in the economic sphere, replaced by decentralized market networks, multinationals, corporations and a new class of economic elites. The promise of the ‘borderless state’ or ‘the end of the nation state’ has not come to pass, and indeed nationalism and nation states remain in place. While the new economic elite may appear cosmopolitan on the surface, their riches have been amassed with the active assistance of state machines committed to national interests. How does the economic neoliberalism interact with the national political unity of the state? Neil Davidson’s answer: despite the mythology of free competition between capitalists, competition itself drives a self-interested desire on the part of each capitalist to use non-economic means to gain advantage – a function classically given to states on the world stage. If there was a single global state managing all inter-capitalist competition around the world, there would be no ‘outside’ for the capitalist to seek advantage.

Basically states cannot be reduced to such managerial functions within the anarchy of competition. They are also sites of ideological attachment. The drive of competition is always towards the subversion or breaking of rules, yet capitalists in general tend to play within the rules – but conservative think tanks are at work promoting changes to these legal rules and regulations embodied in the nation. Nationalism is not only important to unify local groups of capitalists, but it also helps capital to fragment the working classes. As Luckas puts it, nationalism binds “the individual members of those classes as single individuals as mere ‘citizens’ to an abstract state reigning over and above them.” At one level in the alienated circumstances they face under capitalism, workers seek out a collective consciousness, and national identification can become one spontaneous expression of this when class consciousness becomes anger over falling further behind economically.2

The same disruptive forces of capitalist competition that bring capitalists together within the framework of nations also acts to sharpen exploitation and oppression for the working class, thereby weakening the ideological hold of nationalism as it fails to deliver for them, instead acting as the enforcer of the ruling class interests. In these circumstances the economic elite and the politicians they own consciously work to re-enforce nationalism ideology. Thus neoliberalism pursues pro-capitalist programs which create disruptive changes to society. On the other hand, people want constancy in their lives, which leads them to support a fairly conservative social agenda along with nationalism. Donald Trump promised to govern for all: attacking refugees, providing a narrative on border security that includes a wall, and shops serious action on climate change as damaging to the ‘national interests.’ To do this Trump had to draw on and adapt longstanding national tropes: America keeps losing, the need to make America great (again), I will build a strong military (that we won’t have to use), I will protect your social security.3

Neoliberalism, with its combination of market anarchy and workplace despotism, is also projected as a new world where discipline and conformity in the office or factory are counterbalanced by a potpourri of gratifying and pleasurable consumer choices. It further destabilizes social order by promising and then ‘dashing’ hopes of individual liberation. Here nationalism plays the role of filling the gap that consumerism can never satisfy, providing placebo compensation for the uncertainty and instability of modern life, social cohesion beyond the fragmentation of the marketplace, and encouraging allegiance to the interests of one’s national ideology. As neoliberal capitalism fragments social experience, nationalism becomes ever more important in gluing the working class to their rulers. It tends to reinforce the existing social order and the interests of the ruling elite. The ‘new’ economic policy of the Trump administration is no more than national neoliberalism serving the interest of financial capital and globalized elites in the redistribution of wealth upward. It is necessary to challenge this ideology.

What are the hallmarks of a reform movement? Core values include grassroots democracy, inclusivity, ecological sustainability, and social justice. A key pillar of democracy is the free flow of information between citizens and all spheres of government which requires locally responsible and independent mass media. Grass roots democracy means all citizens have the right to express their views and have the capacity and opportunity to directly participate in environmental, economic, and social decisions. Inclusively is about supporting the rights of all people. Everyone should have the opportunity for personal development and be able to fully participate in society without discrimination. Identity politics is not part of this message. Under ecological sustainability and social justice policies must counter the patterns of human production and consumption in the global economy where driven by the pursuit of economic growth at any cost that have resulted in increased inequality. A more equitable distribution of resources should eliminate poverty.

The economic elite seek to influence election results through various activities that include gerrymandering, obfuscation, such as Trump’s partisan voter fraud commission, and nationalism. Democracy is key to change because the working class, in particular, understands democratic activism to be the most effective tool they have to attack extreme inequality and maintain a check on the power of elites. Reformers need to mobilise the vote. The basis of reform policies is to seek amelioration of the negative effects of capitalism within the bounds of the system and its state. This effort is about social forces advocating greater government intervention in the economy for the purpose of reducing market failures, a more equal distribution of income and wealth, and guaranteeing adequate revenue to fund quality public services. These need to be incorporated as national policies to counter a race to the bottom amongst states or provinces as they attempt to attract or retain economic activity in their jurisdiction.

1 Davidson, Neil. Nationalism and Neoliberalism.

2 The Curious Marriage of Neoliberalism and Nationalism. (16 Jan 2011)

3 Borosage, Robert L. (27 Aug 2015) Trump’s Tropes.

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