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Economy

Neoliberalism And The Rise of Upper Class Power

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The years of 1978-1980 as a revolutionary change in the global’s social, political and economic history. In that era “Neoliberalism” emerged a theory of political economic practices that come up with that human success could be advanced through liberating individual entrepreneurial freedoms and skills within an institutional setup attributed by strong private property rights, free markets, and free trade. It finds to bring all human practice into the domain of the market. The role of state has to protect these practices. And for that purpose state would stimulate the police, military and other legal institutions to ensure the safety of private property rights and free trade.

The primary try with neoliberal state origination happened in Chile after Pinochet’s coup in1973. The coup, in opposition to the democratically elected government of Salvador Allende, was supported by domestic trade elites endangered by Allende’s drive towards communism. It was sponsored by US corporations and US Secretary of State Henry Kissinger. It suppressed all the social movements and political organizations of the left. A bunch of economic specialists known as ‘the Chicago boys’ since of their connection to the neoliberal speculations of Milton Friedman, then teaching at the University of Chicago, was called to help reproduce the Chilean economy.  The US had supported preparing of Chilean economists at the University of Chicago since the 1950s as part of a Cold War program to prevent  left-wing propensities in Latin America. Chicago-trained economic specialists came to overwhelm at the private Catholic University in Santiago. Amid the early 1970s, trade elites formed their resistance to Allende through a bunch called ‘the Monday Club’ and created a working connection with these economic specialists, subsidizing their work through research institutes.

Pinochet took these economists into the government, where their first work was to arrange loans with the International Monetary Fund. It was not the US, moreover, that compelled Margaret Thatcher to require the spearheading neoliberal way she took in 1979.

Embedded liberalism is a term for the worldwide financial framework and the related worldwide political introduction as they existed from the conclusion of World War II to the 1970s. The framework was set up to bolster a combination of free trade with the opportunity for states to upgrade their arrangement of welfare and to control their economies to decrease unemployment. In that system, the state would have ownership on health, education, coal, steel and automobiles industries. Embedded liberalism conveyed high rates of financial growth in the progressed capitalist nations amid the 1950s and 1960s.  Labour unions and political parties of the left had a really genuine impact inside the state apparatus. By the conclusion of the 1960s embedded liberalism started to break down, both globally and inside domestic economies. Signs of a genuine emergency of capital accumulation were all over apparent. Unemployment and expansion were both flowing everywhere,  Financial emergencies of different states (Britain, for example, had to be safeguarded out by the IMF in 1975–6) come about as tax incomes plunged and social expenditures taken off. Keynesian policies were not working.  The Bretton Woods framework of fixed trade rates sponsored by gold saves had fallen into disorganized. But when growth fallen down within the 1970s, when real interest rates went negative, then upper classes all over felt undermined. The coup in Chile and the military takeover in Argentina, supported internally by the dominant classes with US bolster, provided one kind of solution. Overall, neoliberalization was from the start  a project to gain the restoration of class power.

The IMF and the World Bank from there on became centres for the proliferation and requirement of ‘free market fundamentalism’ and neoliberal universality. In return for debt rescheduling, obligated nations were required to implement institutional changes, such as cuts in welfare consumptions, more flexible work market laws, and privatization. Hence was ‘structural adjustment’ designed.

Margaret Thatcher, for example, assaulted a few of the settled in shapes of class control in Britain. She went against the aristocratic convention that dominated in the military, the judiciary, and the financial elite within the city of London and numerous sections of industry, and sided with the  entrepreneurs and the dominant riches. She backed, and was usually backed by, this new class of business visionaries (such as Richard Branson, Master Hanson, and George Soros). How neoliberalism penetrated ‘common-sense’ understandings. The impact in many parts of the globe has progressively been to see it as a  needed, even entirely ‘natural’, way for the social arrange to be regulated. Any political development that holds person liberty to be respected is defenseless to joining into the neoliberal fold. The around the world political changes of 1968, for case, were strongly arched with the crave for more prominent individual freedoms. This was certainly genuine for students, such as those enlivened by the Berkeley ‘free speech’ development of the 1960s or who took to the streets in Paris, Berlin, and Bangkok and were so savagely shot down in Mexico City shortly before the 1968 Olympic Games. They requested of the freedoms from parental, corporate, bureaucratic, and state limitations. But the 1968 development too had social justice as a essential political objective. Many political thinkers said that left movements failed to recognize or stand up to, let alone rise above, the inherent tension between the quest for individual freedoms and social justice.

This thought by comparing the neoliberal turns within the US and Britain in the crises a long time of the 1970s. This summed to a overthrow by the financial institutions against the democratically chosen government of Modern New York City, and it was every bit as successful as the military overthrow that had prior occurred in Chile. Riches was redistributed to the upper classes within the midst of a financial crises.

For instance, that Felix Rohatyn, the merchant banker who brokered the bargain between the city, the state, and the financial institutions, had the restoration of class power. The only way he could ‘save’ the city was by fulfilling the venture investors while degrading the standard of living of most Modern Yorkers. But the restoration of class control was nearly certainly what investment bankers like Walter Wriston had in mind. In the interim the venture financiers reconstructed the city economy around monetary activities,

Working-class and ethnic-immigrant New York was pushed back into the shadows, to be ruined by racism. In arrange to realize this objective, businesses required a political class instrument and a well known base. They in this manner effectively looked for to capture the Republican Party as their claim instrument. The Prominent universities such as Stanford and Harvard, liberally financed by corporation, got to be centers of neoliberal project.

In England, the Thatcher phenomenon would without a doubt not have emerged, let alone succeeded, in case it had not been for the serious crises of capital accumulation amid the 1970s.

In that financial crises, Labor government did not turn to IMF, but choose cutbacks in welfare state expenditures. Aftermath, the Labour government fell, and within the election that taken after Margaret Thatcher won a critical majority with a clear mandate from her middle-class supporters. Overall, neoliberal project consequences during Thatcher’s government brought inflation, unemployment and public institutions, nationalized industries were privatized. On other side, the Asian crisis of 1997– 8, for instance, was to bring developmental states more in line with framework of neoliberal practices. States like Taiwan and China that had not liberated up their capital markets exploited far less within the financial crisis of 1997–8. Brazil, Chile, Argentina, Mexico all faced financial crises under neoliberal policies.

Worldwide growth rates stood at 3.5 percent or so within the 1960s and even amid the crises of 1970s down-turned as it were to 2.4 percent. But that scarcely touches 1 per cent since 2000 demonstrate that neoliberalization has openly unable to support worldwide growth. As we can see the net worth of the 358 wealthiest individuals in 1996 was ‘equal to the combined income of the poorest 45 per cent of the world’s population 2.3 billion people’. In 2017 A Oxfam international revealed that eight men own the same wealth as the 3.6 billion people who make up the poorest half of humanity. In last neoliberal project cannot solve masses socioeconomic and political issues  rather than it supports war economy projects in third world countries. It supports capitalism which destroying natural resources, animal species and which sucking poor labor’s blood.

Muhammed Ashfaq. pursuing PhD in Culture And Social Anthropology from university of Milano-Bicocca Italy.

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Future of Mid Size Business Economies & Bureaucracies of the World

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The Agrarian age morphed into an industrial age over a millennia, sometime later industrial age advanced to computer age in another century,  but now from cyber-age to advance into a new paper-less, cash-less, office-less and work-less age seems like an arrival in the coming days.

As if, like a revenge of The Julian Calendar, time like a tsunami drowning us in our own depths of performance, challenging our lifelong learning and exposing our critical thinking but only forcing us to fathom the pace of change, swim or drown.

Flat earth finally accepted as a sphere after a million years, but nowin the future, possibly, more like a digital cube of six parallel dimensions, a new perception of world-economic-order appears.Awaits a new horizon, where in simultaneous synchronization the digital platform economies, where borderless skills expanding boundary less commerce and productivity standards worthy of globally competitive edges. This is when transnational global public opinion selects the future of national economies driving global-age triangulating of latest new upskilling crushing old thinking and old models. 

Visible primarily to the entrepreneurial mindsets, therefore such thinking always searches for collaborative assemblies of all of the various talents and skills required to mobilize national programs to advance such transformations for common good.  National mobilization of entrepreneurialism expands the commonality and clarity of vision across the nation for a unified goal.  Digitization creates platforms and ease of operations.

 Some 200 nations are struggling for answers to the post pandemic recovery; only miniscule percentages have the critical meritocracies levels fit enough to uplift front line economic development agencies and navigate their midsize economies.  The majority of nations are simply drowning in fermented bureaucracies, outdated-mindsets, fearful of change and deeply silent to face new narratives but still methodically slowing local midsize economies and strangling global growth.

The global economic damage now openly visible primarily caused by lack of digitization, absence of understanding national mobilization of entrepreneurialism on platform economies and lack of global-age skills are all creating economic havoc, therefore, with all solutions, almost free digitization and blueprints available only meritocracy will save face.

Bureaucracies leave no room to fight the climate change issues; national treasuries badly need thriving midsize business economies to fund the climate change fights. Now the growth of small medium businesses, blocked by bureaucracies across the world, with no room to fight climate change urgently needs meritocracy across governments of the world, creating global-age speed of progress to save the future.  Investments on such digitalization, mobilization and transformation gaps are not necessarily impossible amounts of new funding from treasury but rather a call for political leadership with skillful execution and mastery of mobilization. What is stopping and where are the solutions?

The world economies are visibly suffering while political leaderships shy to dig deep on the root cause. The election cycles only repeated. Change postponed. Missing now are the post pandemic bold new narratives not for finger-pointing but collaborative amalgamation of talents and resources to fit the new world. No nation can do it alone.

What takes seconds in digital age processing is taking weeks and months in paper-based, floor-by-floor, rubber-stamping-approval-culture, creating chasms of digital-divides already struggling with mental divides. The magnitudes of losses of opportunity at certain geographical points are 1000 times greater than replacement costs of a brand new economic development agency.

However, de we let the trees fall in the forest, no matter how critical the tactical needs of advancements or how urgently the answers needed, each aspect calling for multilayered global scale virtual events to table solutions, here are three bold suggestions; 

ONE: Forest fires always put out by creating more selected fires; study deeply, government and bureaucracy with visible skill gaps need undisturbed bureaucracy and to remain parked, while creating a far superior brand new meritocracy centric digital firefighting unit to act at the top and bring required results. The motivated and transformational talent will percolate towards the top.

TWO: Fear of exposure of talent is the number one fear of digitization. When procedures linger for decades on paper-based processing the management skills slowly end up only as a single rubber-stamp. Digitization eliminates that instantly, hence the resistance. No redundancy policy will save the day; all departments ensured staying provided upskilling and reskilling meticulously observed to create the digitization transformation.

THREE: Incentivizing all frontline management of all midsize business economic development and foreign investment attraction and export promotion bodies is a requirement of time. The world is spinning too fast and opportunity losses are extremely large, here creative entrepreneurial mindset required. Observe the power of entrepreneurial mindset in the driver seat, deploy national mobilization of midsize economies, accept upskilling as a national mandate, and digitization as national pride.

Conclusion: No need to panic, as the swing of the global pendulum on real value creation productivity, performance and profitability is the true driver of grassroots prosperity, capable enough of solving global climate change challenges and keeping the global economic order. Needed are the new bold and open narratives by the global institutions, like, UN, IFC, WTO, OECD, UNIDO, ICCWBO, Worldbank, chambers and trade groups, and major global Banks and to apply an entrepreneurial mindset criterion in dialogue to figure out applicable options. Economic development leadership across the world also has some new thinkers and visionary rising to claim their roles in this future.  

The challenge is to find the right mindsets, as scratch-n-sniff policies out of old dysfunctional case studies and insecurity based academic feasibilities will only take another decade to the next pandemic.  Time for action is right now, like today.

The rest is easy. 

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Afghan crisis: Changing geo-economics of the neighbourhood

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The Taliban takeover of Afghanistan has caused a rapid reshuffle in the geo-economics of South, Central and West Asia. While the impact on the Afghan economy has been profound, triggering inflation and cash shortage, it’s bearing on Afghanistan’s near neighbourhood has wider far-reaching consequences. The US spent almost $24 billion on the economic development of Afghanistan over the course of 20 years. This together with other international aid has helped the country to more than double its per capita GDP from $900 in 2002 to $2,100 in 2020. As a major regional player, India had invested around $3 billion in numerous developmental projects spanning across all the 34 provinces of Afghanistan. Indian presence was respected and valued by the ousted Afghan dispensation. With the US, India and many other countries deciding to close their embassies in Afghanistan and the US deciding to freeze Afghanistan’s foreign reserves amounting to $9.5 billion, the economy of the country has hit a grinding halt. IMF too has declared that Kabul won’t be able to access the $370 million funding which was agreed on earlier. The emerging circumstances are ripe for China and Pakistan to cut inroads into the war-torn country as the rest of the world watches mutely.

Beijing’s major gain would be the availability of Afghanistan as a regional connector in its ambitious Belt and Road Initiative (BRI) linking the economies of Central Asia, Iran and Pakistan. Afghanistan is already a member of the BRI with the first Memorandum of Understanding signed in 2016. Only limited projects were conducted in Afghanistan under the initiative till now due to security concerns, geographic conditions and the government’s affinity towards India. Chinese officials have repeatedly expressed interest in Afghanistan joining the CPEC (China Pakistan Economic Corridor), a signature undertaking of the BRI. CPEC is a $62 billion project which would link Gwadar port in Pakistan’s Baluchistan province to China’s western Xinjiang region. The plan includes power plants, an oil pipeline, roads and railways that improves trade and connectivity in the region.

China also eyes at an estimated $1 trillion mineral deposits in Afghanistan, which includes huge reserves of lithium, a key component for electric vehicles. This mineral wealth is largely untapped due lack of proper networks and unstable security conditions long-prevalent in the country. Chinese State Councillor and Foreign Minister Wang Yi hosted Taliban representatives in late June in Tianjin to discuss reconciliation and reconstruction process in Afghanistan. Taliban reciprocated by inviting China to “play a bigger role in future reconstruction and economic development” of the country. After the fall of Kabul, China has kept its embassy open and declared it was ready for friendly relations with the Taliban. It had also announced that it would send $31 million worth of food and health supplies to Afghanistan to tide over the ongoing humanitarian crisis. Pakistan, a close ally of China, has on its part has sent supplies such as cooking oil and medicines to the Afghan authorities. Pakistan having strong historical ties with the Taliban will possibly play a crucial role in furthering Chinese ambitions..

The immediate economic fallout of the crisis for Iran is its reduced access to hard currency from Afghanistan. After the imposition of US sanctions, Afghanistan had been an important source of dollars for Iran. Reports suggest that hard currency worth $5million was being transferred to Iran daily before the Taliban takeover. Now the US has put a freeze on nearly $9.5 billion in assets belonging to Afghan Central Bank and stopped shipment of cash to the country. The shortage of hard currency is likely to affect the exchange rates in Iran subsequently building up inflationary pressure. Over the years, Afghanistan had emerged as a major destination for Iran’s non-oil exports amounting to $2billion a year. A prolonged crisis would curb demand in Afghanistan including that of Iranian goods with a likely reduction in the trade volume between the two countries. In effect, Iran would find itself increasingly isolated from foreign governments and international financial flows.

India had been the wariest regional spectator watching its $3 billion investment in Afghanistan go up in smoke. Long-standing hostility with Pakistan has prevented land-based Indian trade with Afghanistan and the Central Asian Republic’s (CAR’s). Push by India and other stakeholders for setting a common agenda for alternate connectivity appears susceptible at the moment. India has been working with Iran to develop Chabahar port in the Arabian sea and transport goods shipped from India to Afghanistan and Central Asia through the proposed Chabahar-Zahedan-Mashhad railway line. India is also working with Russia on the International North-South Transport Corridor (INSTC), a 7,200 km long multi-mode network of ship, rail and road routes for freight movement, whereby Indian goods are received at Iranian ports of Bandar Abbas and Chabahar, moves northward via rail and road through Iran and Azerbaijan and meets the Trans-Siberian rail network that will allow access to the European markets. According to the latest reports, the Taliban declined to join talks with India, Iran and Uzbekistan on Chabahar port and North-South Transport Corridor, which has cast shadow on the Indian interests in the region. India’s trade with Afghanistan had steadily increased to reach the US $1.5 billion in 2019–2020. An unfriendly administration and demand constraints may slow down the trade between the two countries.

With the US withdrawal, the CARs would find their strategic and economic autonomy curtailed and more drawn into the regional power struggle between China and Russia. While China has many infrastructure projects in Central Asia to its credit, Russia is trying to woo Central Asian countries into the Russia-led Eurasian Economic Union (EEU), though so far it was able to rope in only Kazakhstan and Kyrgyzstan. CARs would need better connectivity through Afghanistan and Iran to diversify their trade relations with Indo-Pacific nations and to have better leverage to bargain with Russia and China. Uzbekistan, the most fervent of the CARs to demand increased connectivity with South Asia, expressed its interest in joining the Chabahar project in 2020, which was duly welcomed by India. The new developments in Afghanistan would force these countries to remodel their strategies to suit the changed geopolitical realities.

The fact that Iran is getting closer to China by signing a 25-Year Comprehensive Strategic Partnership cooperation agreement in 2020 adds yet another dimension to the whole picture. India’s hesitancy to recognize or engage with the Taliban makes it unpredictable what the future holds for India-Afghan relations.

The hasty US exit has caused rapid reorientation in the geopolitical and geo-economic status-quo of the region. Most countries were unprepared to handle the swiftness of the Taliban takeover and were scrambling for options to deal with the chaos. The lone exception was China which held talks with the Taliban as early as July, 28 weeks before the fall of Kabul, to discuss the reconstruction of the war-torn country. Chinese Foreign Minister Wang Yi also took a high-profile tour to Central Asia in mid-July which extensively discussed the emerging situation in Afghanistan with Central Asian leaders. Since the West has passed the buck, it’s up to the regional players to restore the economic stability in Afghanistan and ensure safe transit routes through the country. Any instability in Afghanistan is likely to have harrowing repercussions in the neighbourhood, as well.

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Economy

Turkish Economy as the Reset Button of Turkish Politics

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Democracy has a robust relationship with economic growth.  Barrington Moore can be seen as one of the leading scholars focusing on the relationship between political development and economic structure with his book titled “Social Origins of Dictatorship and Democracy” first published in 1966. According to Moore, there are three routes from agrarianism to the modern industrial world. In the capitalist democratic route, exemplified by England, France, and the United States, the peasantry was politically impotent or had been eradicated all together, and a strong bourgeoisie was present, and the aristocracy allied itself with the bourgeoisie or failed to oppose democratizing steps. In Moore’s book, you can find out why some countries have developed as democracies and others as dictatorships.

It can be argued that economic development facilitates democratization. Following this argument, this article is an attempt to address the Turkish case with the most recent discussions going on in the country. One of the most powerful instruments used by the political opposition today is the rhetoric of “economic crisis” that has also been supported by public opinion polls and data. For instance, the leader of İYİ Party Meral Akşener has organized lots of visits to different regions of Turkey and has been posting videos on her social media account showing the complaints mostly centering around unemployment and high inflation. According to Akşener, “Turkey’s economic woes – with inflation above 15%, high unemployment and a gaping current account deficit – left no alternative to high rates.”

Another political opposition leader, Ahmet Davutoğlu raised voice of criticism via his social media account, saying “As if monthly prices hikes on natural gas were not enough, they have introduced 15% increase on electricity costs. It is as if the government vowed to do what it can to take whatever the citizens have.”

A recent poll reveals that about 65 percent think the economic crisis and unemployment problem are Turkey’s most urgent problems. Literature on the relationship between democracy and economic well-being shows that a democratic regime becomes more fragile in countries where per capita income stagnates or declines. It is known that democracies are more powerful among the economically developed countries.

The International Center for Peace and Development summarizes the social origins of democracy in global scale as the following:

“Over the past two centuries, the rise of constitutional forms of government has been closely associated with peace, social stability and rapid socio-economic development. Democratic countries have been more successful in living peacefully with their neighbors, educating their citizens, liberating human energy and initiative for constructive purposes in society, economic growth and wealth generation.”

Turkey’s economic problems have been on the agenda for a long time. Unlike what has been claimed by the Minister of Interior Affairs Süleyman Soylu a few months ago, Turkish economy has not reached to the level which would make United States and Germany to become jealous of Turkey. Soylu had said, “You will see, as of July, our economy will take such a leap and growth in July that Germany, France, England, Italy and especially the USA, which meddles in everything, will crack and explode.”

To make a long story short, it can be said that the coronavirus pandemic has exerted a major pressure on the already fragile economy of Turkey and this leads to further frustration among the Turkish electorate. The next elections will not only determine who will shape the economic structure but will also show to what level Turkish citizens have become unhappy about the ongoing “democratic politics.” In other words, it can be said that, Turkish economy can be seen as the reset button of Turkish politics for the upcoming elections.

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