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Neoliberalism is the Default Ideology of Oligarchic Nation States

Sometimes a word or concept can exist for decades in relative obscurity until an event or set of circumstances suddenly brings propels it into public prominence. The concept and label of “neoliberalism” as understood today has been around since the early-1970s (or even earlier), but started attracting popular attention only in aftermath of the 2008-2009 global financial crisis. Since that time, hardly a week goes by without an article in some well-known online magazine or blog invoking it (almost always derisively) as the main explanation for what is wrong with the world today.

To be fair, they are quite correct about the association of this ideology with the systemic socio-economic malfunction seen in capitalist countries today. But they seem to make the mistake of believing that neoliberalism is specific to capitalism. As I will show you, functionally identical ideologies can arise in various types of large and impersonal human organisations ranging from pre-industrial feudal nation states to communist countries.

My first example is China between 221 BC and 1912 AD. As most of you know, pre-1912 (or even pre-1949) China was a pre-industrial society with the odd distinction of being a intermittently functional nation-state. Let us start by comparing the quality of life for the median resident of that part of the world before the creation of imperial china by the conquests of Qin Shi Huang to that which existed between the creation of that political entity to its ultimate dissolution in 1912. While we can certainly use written records to do that, they do suffer from the twin biases of who wrote them and which records survived. A somewhat more objective estimation can be done by studying and comparing the archaeological artifacts from various eras in chinese history.

Doing so reveals a rather odd fact that is almost always glossed over in popular accounts of chinese history. This odd fact relates to the changing numbers and quality of archaeological artifacts- specifically that high quality objects of everyday usage are far more common and geographically widespread in the earlier(pre-imperial) eras of chinese history. The imperial era of chinese history was marked by increasing levels of craftsmanship but a far more restricted geographical distribution of such artifacts. While there are various ways to interpret this trend, the most obvious and logical explanation is that imperialization and centralization of chinese society let to a reduction in the quality of lives of the median person while greatly enriching a few. Curiously this trend continued, with a few hiccups, until the middle of the 20th century to the extent that china became a byword for widespread poverty and deprivation.

So why did centralization of china cause an almost continuous reduction in the quality of life for its median residents?

Let us move to our next example- the former communist state of East Germany. As many of you know, this entity was famous (or infamous) for many things- from mass spying in its own citizens, it’s oddly large olympic medal hauls to its iconic mass-produced car known as the Trabant. While this particular car was the butt of many jokes- both inside and outside that country, its history provides one of the best insight into the dysfunction of that now-defunct state.

For starters, the Trabant was actually a relatively advanced design when it was launched in 1958, with features such as front wheel drive, unitary construction, composite bodywork and independent suspension. Even the decision to use its now infamous two-stroke engine was not out of place in mid-1950 era europe. Yet for some reason, the government of east germany was “unable” to either advance the design or produce enough to satisfy the demand of the median resident of that country. So what went wrong? Why did the design get frozen and why could they never make enough to satisfy public demand. Even more curiously, numerous attempts and committees to update the design or create a better new one were either unsuccessful or blocked for lack of resources.

The popular explanation for the inability of east germany to update or redesign their main privately-owned automobile relies on explanations such as paying post-WW2 reparations to Russia, shortage of labor, shortage of money, shortage of technology and a host of other reasons that make people from capitalist countries feel good about themselves. But what if that was not the case? Why did all those supposed shortages have no effect on the production of military hardware or products for export? Why did such shortages never hamper the ability of the government to intensively spy on its own people? Why was there never any shortage of money and resources for the armed forces, official police or its numerous secret services?

Why did all these supposed shortages and resource constraints in east germany only affect the quality of life of the median resident of that country?

Now let us consider out third example, post-1991 USA. While the decline of the USA started in the mid-1970s, it is clear that the fall of communism in east-european countries accelerated the process. It is no secret that the quality of life for its median resident (esp white) has progressively gone done in the last two decades- but especially since 2008. So what is behind this transformation? Well.. there are many theories. Some blame it on feminism, others blame it on immigration and yet others blame it on technology. But are those really the reasons behind the decline?

Isn’t it odd that the government is willing to spend more than a trillion dollars on a pretty shitty military airplane project like the F-35 while simultaneously proclaiming its inability to pay for maintaining public infrastructure like roads and bridges. Or take the amount of money spent on incarcerating people versus the amount spent on funding universities. Isn’t it odd that the former is seen as far more important than the later? And why is there never any shortage of money to pay for more police personal in contrast to the perpetual shortage of money for providing effective social safety nets? I could give you many more examples.. but my main point is that the spending patterns, behaviors and priorities of the american state are now almost identical to the defunct east german state. But why?

Why would a supposedly successful and avowedly capitalistic country follow the same general trajectory as a defunct totalitarian communist country?

Well.. it comes down to the structural properties and basic characteristics of large and impersonal hierarchical groups. All such groups, irrespective of their professed ideologies, are remarkably similar in their general organisation, goals and trajectories. In the absence of an external or internal existential threat, all large hierarchical groups function like a ponzi-scheme in which clever or lucky people leverage the state monopoly of force to rob, exploit, impoverish and abuse people who are more vulnerable than them. Whether they do so by quoting from the works of Marx, Lenin, Hayek or Friedman is irrelevant. Nor is the type of society relevant as virtually identical behavior is seen in large impersonal hierarchical societies ranging from the pre-industrial China to post-industrial USA. Similarly supposedly free market systems dominated by capitalists are functionally identical to supposedly rigid system dominated by ideologues.

All nation states, irrespective of their professed ideology, exist to legitimize extortion, abuse and monopoly on lethal force for the purpose of enriching the already powerful and rich at the expense of everybody else in the system. Centralization simply, if noticeably, accelerates this process.

Neoliberal ideology is basically a democracy-specific justification for the fundamental behavioral trajectory of centralized and unopposed nation states.

What do you think? Comments?

  1. P Ray
    January 9, 2015 at 5:44 pm

    I figure you’re on to something here.
    As people started to use (gold-backed) money, barter started to go out of fashion.
    And then,
    (fiat) money supplanted barter.
    Therefore, the “good” craftsmen and artisans, went to the city centres, leading to the lack of good quality earthenware in the countryside.

    And of course,
    who had the most (fiat) money?
    The politically connected and influential, who were located near their power source, the government … in the centre of the nation.

  2. January 11, 2015 at 5:59 pm

    I hope gas gets cheaper and cheaper…

    …and the stock market crashes…

  1. January 11, 2015 at 5:58 pm

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