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CRITIQUE OF NEOLIBERAL CAPITALISM
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- THE UNDEMOCRATIC NATURE OF NEOLIBERALISM
- STRUCTURAL ADJUSTMENT POLICIES IN DEVELOPING NATIONS
CRITIQUE OF NEOLIBERAL CAPITALISMNoam Chomsky is a very vocal critique of capitalism, specifically the neoliberal initiatives popularized by President Ronald Reagan. Chomsky argues that neoliberal policies have been implemented to benefit only the wealthiest members of American society, and have significantly impaired the ability of millions to overcome poverty. Neoliberal initiatives are characterized as free market policies that promote market activity with minimal governmental interference. The policies are directed towards encouraging private enterprise and consumer choice. President Ronald Reagan’s tax cuts are a prime example of neoliberal policies: the tax cuts were directed towards the wealthy members of society in an attempt to encourage entrepreneurship. Chomsky refers to neoliberalism as capitalism without the gloves on, and argues that such policies are detrimental to both democracy and social welfare. THE UNDEMOCRATIC NATURE OF NEOLIBERALISMOne of Chomsky’s primary arguments against neoliberalism is that is destroys democracy. He offers two warrants for this assertion. First, he points out that neoliberalism requires the government not to interfere in the workings of the economy. Under neoliberal doctrine, it is believed that the marketplace should determine environmental regulation, prices, wages, and so on. Thus, following the principles of neoliberalism, a democratic government is not allowed to act in anyway that affects the marketplace. Chomsky explains the problem with this situation when he points out that democracies are suppose to represent the will of the people, and give them a voice over the policies that affect them. Economic issues, though, often have the greatest impact on people, but neoliberalism does not allow for any governmental action. Issues of resource planning or the location of business is thus left up to the whims of the business owners, who can choose to move their factories at any time despite the unemployment that may result. Chomsky argues that it is undemocratic to allow individuals to make decisions of such social importance without any interference from a democratically elected government. Ultimately, following the neoliberal doctrine, democratic governments have very little control over important issues involving the economy. According to Noam Chomsky, this lack of control is one of the primary reasons that voting participation is declining. He argues that when voters see the lack of control they have over important economic issues, they lose the desire to vote. The voters know that regardless of their vote, the government will continue with its policy of protecting private interests and refusing to interfere in the market. In fact, Chomsky believes that the US government prefers the low level of participation so that the existing social order is not disturbed. The poor and minorities, the ones who tend to be hurt most by neoliberal policies, are overrepresented in the non-voting population. When these groups do not vote, it is easier for the federal government to continue with its policies that benefit primarily the wealthy. Chomsky believes this is one reason that the two political parties have resisted electoral reforms that would encourage more voting participation or the creation of new political parties. Secondly, Chomsky argues that neoliberal initiatives undermine democracy by creating severe social inequality. As a key example, Chomsky notes that the United States is the wealthiest nation in the world. However, at a time of soaring profits, poverty continues to be a persistent phenomenon in the society. Over the past fifteen years, businesses in the United States have posted record profits. However, at the same time, incomes for the majority of workers have either stagnated or declined, making income inequality the highest it has been in seventy years. Furthermore, the United States has the highest level of child poverty out of any industrialized society. Chomsky argues that this economic inequality destroys the possibility for political equality. Wealthy business owners can easily gain more political power through campaign donations and media advertisement, neither of which are available to the average citizen. As a result, politicians are more likely to adhere to the interests of the wealthy (the ones who finance their elections), than the interests of the working class. STRUCTURAL ADJUSTMENT POLICIES IN DEVELOPING NATIONSUnfortunately, as Chomsky explains, the United States has not only adopted neoliberal policies, but it has thrust them upon developing nations. Following World War II, when the United States was the dominant force in the international economy, it sought to enact trade policies that were beneficial to its economy. Chomsky explains that the US government, along with international financial institutions, developed structural adjustment policies based on the ideals of neoliberalism. These structural adjustment policies were steps that developing nations had to take in order to receive a loan from the World Bank. Referred to as the Washington Consensus, the structural adjustment policies required countries to liberalize their trade and finance laws, not allow governmental interference in the market, end inflation, and privatize all businesses. Chomsky argues that these structural adjustment policies severely harmed the economies of the developing nation because they were unable to control important economic issues. He explains that every developed nation has used governmental interference in order to protect its businesses and benefit the people. Even the United States developed with significant governmental protectionism of its primary crops, such as cotton. However, the structural adjustment policies offer governments no alternative. Chomsky notes that these policies are to blame for the Asian economic crisis, as governments were forced to cut public spending at the time when they needed it the most. For these reasons, Noam Chomsky believes that capitalism is an unjust system. He believes that it is essential workers have control over their social, political, and economic lives. Thus, he offers as an alternative anarcho-syndicalism. 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