Introduction: Neoliberalism and its crisis
Now-a-days, nations throughout the globe are exhibiting a panorama that even mainstream media and the spokespersons of the world economy are being incapable to shadow the economic crisis that is permeating the entire world. Recently, the IMF chief K. Georgieva said, that, “in 2019, we expect slower growth in nearly 90% of the world. The global economy is now in a synchronized slowdown”. “In some of the largest emerging market economies, such as India and Brazil, the slowdown is even more pronounced; in China, growth is gradually coming down from the rapid pace it saw for many years”, she added. According to World Bank, the values of net trade balance in US and China are almost ‘-’ $600b and ‘+’ $200b, respectively, along with an Indo-China trade deficit of approximately $50b, where the trade balance of euro area is more than $500b higher compared to UK. The UN has recently declared its significant fund deficit due to non-repayment of 65 nations including a $1b still to be paid by the US. In India, the growth rate seems to be at its lowest since last seven years along with a very high fiscal deficit, may be as high as 10% as claimed by the former Governor R. Rajan, wherein more than $10b NPA has already been deleted from the account of central bank RBI.
Despite such severe situation, however, the Communist and Left forces are responding to it in their customary manner. Most of them including even those who claim neoliberal globalization to be responsible for it are relaxing on a note that global capitalism has still to come out of the 2008 sub-prime crisis. On the contrary numerous bourgeoisie economists have expressed their concern demanding serious makeover of the current economic policies.
In this context, through a series of articles, we will show that the present crisis of capitalist economy is an inevitable outcome of neoliberalism, which, being the newest phase of capitalism with an unprecedented novel trend in the mode of production, cannot but results in periodic crisis with increasing degrees of its strokes, and thus has no solution in terms of any reform.
‘Neoliberalism’ is conventionally regarded as a wrap up of a number of economic liberalization policies defined by four ‘D’-s: Deregulate (privatization and free trade), Destroy (demolition and dissolution of trade unions and rampant violation of labour laws), Decrease (tax exemption for the corporates) and Defund (fiscal austerity, reduction in government expenditure in social services, disinvestment). It is also considered that such policies were set out globally after the abolition of Bretton Woods system in 1971 by developing a worldwide TINA consensus (i.e. There Is No Alternative) in the leadership of the dominant nations.
However, it will be shown through this series of articles that ‘Neoliberalism’ is not mere set of policies that were taken up by the bourgeoisie governments, rather, it was a newly emerged phase of capitalism with qualitatively different and unprecedented characteristics, the central feature being a fundamentally new mode of production. The old days of capitalism, which was known to produce huge numbers of cheaper commodities at a time, has now been transformed into the new mode of producing costly commodities in relatively smaller numbers but repeatedly by updating or remodeling. We define the previous phases of capitalism by ‘ensemble mode of production’ and its neoliberal phase as the ‘temporal mode of production’.
The origin of crisis of capitalism in its previous phases was thus its large numbers of replicas of the cheaper products suffering from low demands due to even lower purchasing power of majority of the people. The Keynesian resolve to such crisis situation was nothing other than to enhance government expenditure in generating significant employments with moderate wage/salary and spending in social services. The aim of such prescription was to create a relevant numbers of consumers with that minimum level of purchasing power and a purchasing condition, respectively, for the huge numbers of cheaper commodities to be sold. In the era of neoliberalism through a transformation of production trend from ‘quantity’ to ‘quality’, or as we say from ‘ensemble’ to ‘temporal’ as its mode, however, capitalism requires the supply of higher amounts of money in the hands of smaller numbers of people as purchasers. Thus the Keynesian model is not at all compatible with the present phase of capitalism; rather to create the consumers of costly commodities, bourgeoisie state would require a transformation of a smaller section of the people into a neo-elite class leaving the other people in austerity. The austerity measures are thus not at all any policy to adopt by the bourgeoisie state but their compulsion to adapt with.
The repetitive scheme of production with newer applicative quality in this temporal mode of capitalism has led to generating enormous numbers of contracts regarding production and trade in future which has resulted in the birth of derivative trading in stock market. The fundamental essence of derivative trading is to make profit out of those commodities which are not even produced presently. This in turn has led to a makeover of capitalist overproduction from the ‘overproduction in ensemble’ of the previous days into the ‘overproduction in time’ in the current neoliberal regime. This is manifested as the global stocks trades overshooting the real world GDP resulting to periodic financial crises that further collapses the entire economy. In different cycles, such crises are emerged from different capitalist epicenters like Japan, US, UK, or even China. Moreover, such crisis is transported from one nation to the other through foreign trading in the post- Bretton Woods currency system and fatally affects the intermediate nations too. Recently, such crisis has reached so high at its level, especially when it has already engrossed the entire global network of neoliberal capitalism in more than 250 countries, it has no space left as a bin.
It is worthy to mention that the transition of previous phase of capitalism to neoliberalism does not take place by abolishing the productions in huge numbers, i.e. ensembles; rather by keeping them aside of a central tendency toward repetitively producing costly commodities, i.e. temporal. In fact, “acute and intense antagonism” exists between these modes which are highly inter-conflicting. Similarly, the contracts regarding the future productions and their trades do not permeate the financial regime by abolishing the present creation of enormous labour values and corresponding surpluses in the production sectors, rather, get compelled to fix a target to extract surplus value by exploiting human labour within a specified span of time in future. This in turn leads to a fascistic upsurge in several nations and deadly war conditions.
Finally, noting that Marx, in the Communist Manifesto, by describing how the past dead labour being invested as capital exploits the present living human labour, said that, “In bourgeois society, … the past dominates the present”, today, in the era of neoliberalism, we can say that capitalism, by transforming itself into a futuristic economy based on temporal mode of production, is claiming:
In the present bourgeois society, the past is dominating, not only the present, but also the future.