Market Authoritarianism

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"While capitalism has always been intertwined with autocracy, there is no doubt that neoliberalism accelerated a process which has hollowed out politics and citizenship in favour of the rights of corporations. Friedrich Hayek helped establish the popular myth that free markets were about freedom as he successfully set in motion a well-paid “march through the institutions” to change public opinion against regulations that discipline capital. However, the contradictions between a democracy supposed to serve and answer to the majority and a neoliberal plan that concentrates wealth and power in a few hands have never been overcome. Moreover, they have been exacerbated by a postwar economic reality of systemic overproduction that has periodically caused financial crises. In the process, time and again, wealth and power have won out over democracy and human rights. Orlando Letelier, TNI’s first director speaking on Chile in 1976 acknowledged this when he said the terror inflicted by Pinochet and his neoliberal reforms were not two distinct strands of politics but integrated: “Repression for the majorities and ‘economic freedom’ for small privileged groups are in Chile two sides of the same coin”.

Liberalising markets and giving corporations free rein requires disciplining labour, popular movements and limiting democratic accountability. This was openly admitted by the Trilateral Commission, set up in the 1970s by elites in US, Europe and Japan, that expressed its concern over an “excess of democracy” witnessed in the social movements of the time that had put “hierarchy, expertise, and wealth” under attack.Powerful individuals, such as Supreme Court justice Lewis Powell, in response called on US businesses to fund and organize political mobilisation to defend neoliberalism. His advice was certainly heeded as US businesses invested huge sums to create thinktanks, national campaign organisations and fund and buy elections – leading to the levels of corporate capture and financialisation of the economy that we witness today.

Financial capital has become particularly powerful, investing not in production that could create jobs, but in speculative schemes that reap huge profits but do little to improve welfare and create a highly fragile global economy. A Zurich university study that examined 43,000 TNCs showed that just 147 companies, mostly financial firms controlled 40% of them. The collapse of any these super-connected companies could cause systemic collapse, as we almost witnessed in the global financial crisis. The power of the financial elites has become more visible to people worldwide as the experiences that many developing nations in the South faced in the 1980s and 1990s through Structural Adjustment Programmes arrived in the North with the politics of bailouts for the banks and austerity for the people.This process has also been enforced transnationally, with bodies such as the European Commission, becoming the policemen for a market authoritarianism. This was brutally clear in the aftermath of Greek’s referendum in July 2015, when the 61% of voters who rejected the conditions of the Commission’s bailout deal, were told in no uncertain terms that democracy had no value if it meant challenging banks or financial markets. “Elections change nothing,” was how Wolfgang Schäuble, Germany’s finance minister put it. Or in the words of President of the European Commission, Jean-Claude Juncker “There can be no democratic choice against the European treaties”.

A 2014 study in the US that examined 1,779 policy outcomes over more than 20 years revealed how alienated public institutions have become from the public they supposedly served, when it found almost no correlation between public opinion and public policy.Public policy decisions had become almost exclusively the same as the views of corporations and elites. In many countries, the corporate capture of politics has also been accompanied by ever more outrageous cases of corruption coming to light, at the same time that work has become more insecure and wages stagnant or in decline.

The consequences of this neoliberal push globally has been a dramatic increase in inequality and social insecurity, a systemic undermining of collective organisations such as trade unions that supported and provided community and solidarity for working people, and a complete corporate capture of the political system. The result of this globally has been a complete collapse of the centre in politics and indeed a complete loss of legitimacy in the political system itself.

It is in this context that most Social Democratic parties – ones that tried to marry a commitment to globalisation and neoliberalism with a politics of empathy for those that lose out– found themselves unable to square the two. Most ended up embracing market authoritarianism and ending any advocacy for a politics of redistribution. They have proved unable to come up with solutions that address the way globalisation, including shifts in technology and work, are accelerating uncertainty and insecurity for millions of people, nor have they provided solutions to the global economic crisis that unfolded from 2007-2008 nor to the emerging environmental/climate crisis.

Many people worldwide, including increasingly the middle class, threatened and alienated by the political system have ended up in a political void. This has led many to embrace a victimising politics that blames and targets the ‘other’ (refugees, Muslims, drug-users, welfare recipients, Eurocrats),in which authoritarian solutions and leaders who promise to clean up the mess become ever more attractive. A politics that appeals to place, identity, emotion and sentimentality, while deliberately blaming certain ‘other’ groups,becomes appealing and is seen as a solution to peoples’ feelings of insecurity and anxiety.

It is also a politics that the state is able still to provide, as the market authoritarian disciplining of states has meant that one of the few areas governments still exercise considerable power is in the area of security. As social instability increases, states therefore all to easily default to the role of disciplining and dealing with the dispossessed.Politicians who promise more security can appeal to an alienated electorate, and if they come to power are able to wield a more powerful state security apparatus than ever before."


Draft Workshop report. Understanding and confronting authoritarianism. Amsterdam, 8-11 June 2017 TNI. October 2017 War and Pacification Project.

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