0
The Political Economy of the Global Crisis:
Neo-liberalism, Financial Crises, and Emergent
        Authoritarian Liberalis...
CONTENTS


1.   Relationship between Crises and Neo-liberalism — (constitutive
     and functional)

2.   Mechanisms behin...
(1) THE CONSTITUTIVE ROLE OF CRISES
IN THE EVOLUTION OF NEO-LIBERALISM

 Relationship: Crisis and Neo-liberalism
    Dys...
NEO-LIBERALISM WAS BORN OUT OF CRISES
                      Complex interaction of forces/events/phenomena...
            ...
NEO-LIBERALISM HAS EVOLVED THROUGH CRISES
                                     From crisis to crisis in the last 30 years....
NEO-LIBERALISM HAS DIED OF CRISES(?)
                                                 Cacophony of Crises:
               ...
Neo-liberalism: A strategy for market-led
     development, A blueprint for crisis management

Neo-liberal values: well-be...
In times of crisis,
 “assets return to their rightful owners”!

‘Financial crises have always caused transfers of ownershi...
The Cacophony of Crises Today

 Overproduction
 Finance (securitisation, speculative investments, Ponzi
  scheme)
 Envi...
(2) STRUCTURAL INSTABILITY OF FINANCIAL
MARKETS AND THE GREEDY ECONOMIC ELITES

  Mechanisms of Financial Crises and their...
COMPLEMENTARY FUNCTIONS, DIVERGENT NATURE
                 Financial capital       Production capital
                    ...
SHIFTING ROLES OF
                  MONEY ON THE REAL ECONOMY

“In the years preceding the First World War
there were in c...
Three basic and complementary mechanisms behind the conflicts
     between the real economy and the financial economy
    ...
THE HAMMURABI EFFECT
    (The Effect of Compound Interest)

“A shilling put out at 6% compound
  interest at our Saviour’s...
THE PEREZ EFFECT
Technological Revolutions and Finance Capital
                 Approximate dates of the installation and ...
THE MINSKY EFFECT
          (Endogenous instability and Ponzi Schemes)

        “destabilizing stability”: long periods o...
Ponzi Schemes

 Ponzi schemes (such as subprime loans)

    cause financial institutions to redefine the
     game
    ...
Greedy, corrupt, inept economic elites reinforcing
   financial market’s endogenous instability....

    “The poor decisio...
(3) FUNDAMENTALLY THE SAME RESPONSES
TO THE GLOBAL CRISIS

 SCHUMPETERIAN:
   ‘IT HAS TO BURN OUT ALONE’


 KEYNESIAN:
...
“Times of innovation ... are times
   of effort and sacrifice, of work
   for the future, while the
   harvest comes after...
“I sympathize, therefore, with those who
       would minimize, rather than with
    those who would maximize, economic
  ...
“Modern bourgeois society
  with its relations of
  production, of exchange
  and of property, a society
  that has conjur...
Demise of the Multilaterals?!?
               “Never again” became the slogan of a number of the affected
               g...
The World Bank, IMF and their G-20 allies:
     Using the global crisis to their advantage....


 G-20: IMF is back!
 Domi...
WORLD BANK: Exactly the same global neo-liberal project!
World Bank, Global Monitoring Report 2009: A Development Emergenc...
World Bank President Robert Zoellick (31 March 2009, prior to the G-20
Meeting): New Powers for the Multilaterals!

      ...
IMF: ‘An opportunity to make progress on seemingly intractable issues’
  IMF (February 2009), Initial Lessons of the Crisi...
ADB and ASEAN: Banking-as-usual for the private sector and
for free flow of capital, goods, services and investment



 Lo...
UN Commission of Experts on Reforms of the International
       Monetary and Financial Systems: Heterodoxy Rearticulated

...
Global Civil Society: “We told you so”




   “Another World Is Possible”

                                         30
Global Civil Society Challenge
and the Challenge to Global Justice Movements
 — ‘Another World Is Possible, Necessary’ —
 ...
States’ Bailouts and Resiliency Plans
                        (Bailouts for the poor???)


           Malaysia            ...
Crisis as a ‘Turning Point’
 CRISIS from Greek ‘krisis’
    “the turning point of a
     disease when an important
     ...
(4) EMERGENT AUTHORITARIAN LIBERALISM IN
EAST AND SOUTHEAST ASIA

            (Authoritarian Polity, Market Economy)




 ...
Lessons of the 1997 Asia Crisis


 Democratization may be stalled.
    Justification for authoritarian rule (e.g. ‘Asian...
CONCLUDING REMARKS

1. The Constitutive Role of Crises in the Evolution of
    Neo-liberalism

      i.   was born out of ...
As it shows, crises have so far been functional,
  rather than dysfunctional, to neo-liberalism:


   Crises reshape clas...
2.    The structure of financial markets is
     endogenously fragile, and the greedy
       economic agents exacerbate it...
3. The responses to the global crisis from the
   multilaterals, to regional organisations, to states to
   activists are ...
UN Commission of Experts on Reforms of the International
 Monetary and Financial Systems: Crisis as opportunity and danger...
4. There is a movement towards the strengthening
    of practices and institutions of “authoritarian
    liberalism” in Ea...
Thank you.... (“,)




               —Bonn Juego
— Johannes Dragsbaek Schmidt




                           42
Upcoming SlideShare
Loading in...5
×

Bonn Juego & Johannes Dragsbaek Schmidt (12 Nov2009) APISA-4

961

Published on

Bonn Juego and Johannes Dragsbaek Schmidt, "The Political Economy of the Global Crisis: Neo-liberalism, Financial Crises, and Emergent Authoritarian Liberalism in Asia", Presentation at the Fourth APISA Congress on "Asia in the Midst of Crises: Political, Economic, and Social Dimensions", Mandarin Oriental Hotel, Makati City, Philippines, 12 November 2009

Published in: News & Politics, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
961
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
13
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Bonn Juego & Johannes Dragsbaek Schmidt (12 Nov2009) APISA-4"

  1. 1. The Political Economy of the Global Crisis: Neo-liberalism, Financial Crises, and Emergent Authoritarian Liberalism in Asia Bonn Juego and Johannes Dragsbaek Schmidt Global Development Studies Aalborg University, Denmark E-mail: bonn@ihis.aau.dk / jds@ihis.aau.dk Presentation at the Fourth APISA Congress on Asia in the Midst of Crises: Political, Economic, and Social Dimensions Mandarin Oriental Hotel Makati City, Philippines 12 November 2009 1
  2. 2. CONTENTS 1. Relationship between Crises and Neo-liberalism — (constitutive and functional) 2. Mechanisms behind recurrent financial crises and the conflict between finance capital and real economy — (structure-agency contradiction) 3. Current responses to the global crises — fundamentally the same 4. Emergent “authoritarian liberalism” in East and Southeast Asia 2
  3. 3. (1) THE CONSTITUTIVE ROLE OF CRISES IN THE EVOLUTION OF NEO-LIBERALISM  Relationship: Crisis and Neo-liberalism  Dysfunctional or Functional (or both)  Nature of Crisis and Neo-liberalism  Born out of crises  Evolved through crises  Died of crises??? 3
  4. 4. NEO-LIBERALISM WAS BORN OUT OF CRISES Complex interaction of forces/events/phenomena... ...Mutually reinforcing tendencies  recession in the developed capitalist economies after 1973, the OPEC oil crisis, and the collapse of the Bretton Woods system  de-linking from the ‘gold standard’  internationalisation of financial markets as a result of the widespread abandonment of exchange controls  the massive increase in foreign bank lending to the Third World as consequence of the recession in the major economies  the growing stagnation of command economies  the shift from import substitution in favour of export promotion in the Third World and the rise of the NICs in East Asia  the imposition of structural adjustment programmes (SAPs) on the heavily-indebted Third World as conditionality attached to rolling over foreign debt  the restructuring of global production towards ‘post-Fordism’ and the growth of MNCs‫‏‬  the revolution in macroeconomic policy that resulted in the weakening of trade unions, the cutting of state budgets, deregulation, privatisation, etc.  the advances in ICT (as the new ‘techno-economic paradigm’)‫‏‬  Etc.... 4
  5. 5. NEO-LIBERALISM HAS EVOLVED THROUGH CRISES From crisis to crisis in the last 30 years....  National Developmentalism (postwar-1970s)  Crisis of Fordism/Keynesianism (stagflation)  Washington Consensus – 1st Generation Neoliberal reforms (1980s – mid-1990s)  Crisis of market fundamentalism of the Washington Consensus — ‘East Asian Miracle’ (8 HPAEs showing high growth and high equity with state intervention)  Post-Washington Consensus – 2nd Generation reforms (mid-1990s - 2009)  Cacophony of crises: financial crises, overaccumulation, overproduction, over-/under-consumption, climate change, ecological degradation, political legitimacy, global governance crisis, oil crisis, food price crisis, subprime crisis 5
  6. 6. NEO-LIBERALISM HAS DIED OF CRISES(?) Cacophony of Crises: RIP Neo-liberalism (1980s-2008)  Is neo-liberalism dead?  Depends on what we mean by ‘neo-liberalism’....  The neo-liberal form (i.e., market fundamentalism) is dead;  But not the substance of capitalism as a:  process of capital accumulation;  relations in which labour is subordinated to capital 6
  7. 7. Neo-liberalism: A strategy for market-led development, A blueprint for crisis management Neo-liberal values: well-being of the financial institutions over well- being of the people  E.g.  Debt crisis in Latin America (1982)  Crisis Response: SAPs  Financial Crises: Scandinavia (early 1990s); Mexico (1994); East and Southeast Asia (1997); Russia (1998); Argentina (2001); Turkey (2001- 02); US Subprime mortgage (2007-09)  Crisis response: ‘open’ international financial architecture  US subprime crisis (2007-09)  Crisis response: Bush-Paulson-Bernanke-Obama Bailout Programme (restore power of corporations; assure ascendancy of finance capital) 7
  8. 8. In times of crisis, “assets return to their rightful owners”! ‘Financial crises have always caused transfers of ownership and power to those who keep their own assets intact and who are in a position to create credit, and the Asian crisis is no exception....there is no doubt that Western and Japanese corporations are the big winners.....The combination of massive devaluations, IMF-pushed financial liberalization, and IMF facilitated recovery may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past fifty years anywhere in the world, dwarfing the transfers from domestic to US owners in Latin America in the 1980s or in Mexico after 1994. One recalls the statement attributed to Andrew Mellon: "In a depression assets return to their rightful owners”.’ —R. Wade and F. Veneroso (1998), ‘The Asian Crisis: The High Debt Model versus the Wall Street-Treasury-IMF Complex,’ in The New Left Review, 228 (1998), 3-23. 8
  9. 9. The Cacophony of Crises Today  Overproduction  Finance (securitisation, speculative investments, Ponzi scheme)  Environment  Climate (global warming)  Oil  Food (post-Green Revolution, the Great Hunger of 2008)  Governance (WB, IMF, WTO, states)  Etc. 9
  10. 10. (2) STRUCTURAL INSTABILITY OF FINANCIAL MARKETS AND THE GREEDY ECONOMIC ELITES Mechanisms of Financial Crises and their Effects on the Real Economy The
real
economy Financial
economy “Güterwelt” “Rechenpfennige” ”Black Box” Production Money/capital of goods and services THE CIRCULAR FLOW OF ECONOMICS 10
  11. 11. COMPLEMENTARY FUNCTIONS, DIVERGENT NATURE Financial capital Production capital Wealth-producing wealth Money and paper wealth Assets Fixed capital, Static property technical capital, “Investible” capital human capital, good will Tied to fixed assets, to Mobility Essentially mobile knowledge of products, Knowledge indifferent processes, capabilities, clients and markets Bias Quasi-liquid assets, Wealth-creating assets, SHORT-TERM GAINS LONG-TERM GAINS Socio-economic results will differ depending on the criteria that lead investment 11
  12. 12. SHIFTING ROLES OF MONEY ON THE REAL ECONOMY “In the years preceding the First World War there were in common use among economists a number of metaphors . . . 'Money is a wrapper in which goods come’; 'Money is the garment draped round the body of economic life’; 'money is a veil behind which the action of real economic forces is concealed’ . . . During the 1920s and 1930s . . . money, the passive veil, took on the appearance of an evil genius; the garment became a Nessus shirt; the wrapper a thing liable to explode. Money, in short, after being little or nothing, was now everything . . . Then with the Second World War, the tune changed again. Manpower, equipment and organization once more came into their own. The role of money dwindled to insignificance. . .” insignificance Arthur Cecil Pigou (1949) The Veil of Money, Macmillan pp.18-19 12
  13. 13. Three basic and complementary mechanisms behind the conflicts between the real economy and the financial economy (Financial Crises) 1. THE HAMMURABI EFFECT (Babylonia ca. 1795 – 1750 BC) • The Effect of Compound Interest. 2. THE PEREZ EFFECT (Carlota Perez, Venezuelan economist) • Technological Revolutions Create Financial Bubbles. 3. THE MINSKY EFFECT (Hyman Minsky, US, 1919-1996) • Liquidity preference turning point • + ‘bad projects’ killing credit to healthy projects. 13
  14. 14. THE HAMMURABI EFFECT (The Effect of Compound Interest) “A shilling put out at 6% compound interest at our Saviour’s birth would . . . have increased to a greater sum than the whole solar system could hold, supposing it a sphere equal in diameter to the diameter of Saturn’s orbit.” —Richard Price, English Economist, 1769. 14
  15. 15. THE PEREZ EFFECT Technological Revolutions and Finance Capital Approximate dates of the installation and deployment periods of the great surges of development -- 1771 to the present GREAT Technological Turning SURGE Revolution INSTALLATION Point DEPLOYMENT Core country IRRUPTION FRENZY SYNERGY MATURITY The Industrial 1st Revolution Britain 1771 1770s and early 1780s late 1780s early 1790s 1793–97 1798–1812 1813–1829 Age of Steam and Railways 2nd Britain (spreading 1829 1830s 1840s 1848–50 1850–1857 1857–1873 to continent and US) Age of Steel, Electricity and Heavy Engineering 3rd USA and Germany 1875 1875–1884 1884–1893 1893–95 1895–1907 1908–1918* overtaking Britain 1929–33 Age of Oil, Automobiles Europe 4th and Mass Production 1908 USA (spreading to Europe) 1908–1920* 1920–1929 1929–43 1943–1959 1960–1974* USA Age of Information and Telecomunications 5th USA (spreading 1971 1971–1987* 1987–2001 2001–?? 20?? to Europe and Asia) big-bang Crash Institutional recomposition Note: * Observe phase overlaps between successive surges. 15
  16. 16. THE MINSKY EFFECT (Endogenous instability and Ponzi Schemes)  “destabilizing stability”: long periods of stability lead to instability Types of financing 1. HEDGE financing • Low risk - can fulfill contractual payment obligation 2. SPECULATIVE financing • involves future renegotiating of the debt (rollover) • A typical speculative position consists on financing long term assets with short term liabilities. 3. PONZI financing • expected revenues can not afford even interest payments, and agents 16 are submitted to increasing debt
  17. 17. Ponzi Schemes  Ponzi schemes (such as subprime loans)  cause financial institutions to redefine the game  they no longer compete for market share but instead pull out in order to be more liquid.  In this way also, SOUND PROJECTS ARE REFUSED CREDIT, AND A DOWNWARD SPIRAL STARTS. (Charles Ponzi - police mugshot, 1910)  Third World debt/lending was also a Ponzi scheme.  Myrdalian ‘perverse backwashes’  Funds tend to flow from poor to rich countries! 17
  18. 18. Greedy, corrupt, inept economic elites reinforcing financial market’s endogenous instability.... “The poor decisions of holding company executives are the primary cause for the bond insurers’ problems, but the rating agencies also share responsibility. insurers’ The rating agencies encouraged the bond insurers to diversify into structured finance risks and gave them additional rating credit for doing so. The rating agencies understated the risks of the new strategy while earning much higher fees for rating these structures. structures. The rating agencies’ profits soared along with the growth in structured finance issuance. agencies’ Insurance regulators relied on the rating agencies and management teams to assess the risk of these new structures. The rating agencies were paid by the issuers of these securities and helped in structuring these exotic instruments to meet the ratings agencies’ insufficient standards for Triple A agencies’ ratings. The rating agencies only received their full fees if they approved the Triple A ratings for these transactions. The combination of aggressive risk taking by management, poor judgment by conflicted rating agencies, and over-reliance by regulatory authorities on rating agency judgment led to the current situation.” situation.” —William Ackman (14 Feb 2008), “The State of the Bond Insurance Industry”, Statement before a hearing of the US House of Financial Services Committee 18
  19. 19. (3) FUNDAMENTALLY THE SAME RESPONSES TO THE GLOBAL CRISIS  SCHUMPETERIAN:  ‘IT HAS TO BURN OUT ALONE’  KEYNESIAN:  ‘REPAIR IT’, but without encouraging the very behaviour that caused the problem in the first place.  MARXIST:  ‘REPLACE IT’ — overthrow crisis-ridden capitalist system; establish socialism, a democratic economic planning 19
  20. 20. “Times of innovation ... are times of effort and sacrifice, of work for the future, while the harvest comes after.... The harvest is gathered under recessive symptoms and with more anxiety than rejoicing.... [During] recession ... much dead wood disappears.” —Joseph Schumpeter (1939) Business Cycles 20
  21. 21. “I sympathize, therefore, with those who would minimize, rather than with those who would maximize, economic entanglement among nations. Ideas, For these strong reasons, therefore, I am knowledge, science, hospitality, travel inclined to the belief that, after the – these are the things which should of transition is accomplished, a greater their nature be international. But let measure of national self-sufficiency and economic isolation among countries than goods be homespun whenever it is existed in 1914 may tend to serve the cause reasonably and conveniently possible, of peace, rather than otherwise. At any rather and, above all, let finance be rate, the age of economic internationalism primarily national. Yet, at the same was not particularly successful in avoiding time, those who seek to disembarrass war; and if its friends retort, that the a country of its entanglements should imperfection of its success never gave it a be very slow and wary. It should not fair chance, it is reasonable to point out be a matter of tearing up roots but of that a greater success is scarcely probable greater in the coming years.” years.” slowly training a plant to grow in a different direction. — John Maynard Keynes (1933 [1972]) National Self-sufficiency 21
  22. 22. “Modern bourgeois society with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of “These are signs of the times, exchange, is like a sorcerer not to be hidden by purple who is no longer able to mantles or black cassocks. control the powers of the They do not signify that nether world whom he has tomorrow a miracle will called up by his spells.” occur. They do show that, within the ruling classes themselves, the foreboding —Karl Marx and Frederick Engels (1848) is emerging that the Communist Manifesto present society is no solid crystal, but an organism capable of change, and constantly engaged in the process of change.” —Karl Marx (1867) Capital, Vol. 1 Vol. 22
  23. 23. Demise of the Multilaterals?!? “Never again” became the slogan of a number of the affected governments. The Thaksin government in Thailand declared ist “financial independence” from the IMF after paying off its debts in 2003, vowing never to return to the Fund. Indonesia has said it will pay off all its debts to the IMF by 2008. The Philippines has refrained from contracting new loans from the Fund, while Malaysia defied it by imposing capital controls at the height of the crisis. Ironically, then, the IMF has become one of the key victims of the 1997 debacle. This arrogant institution of some 1,000 elite economists never recovered from the severe crisis of legitimacy and credibility that overtook it—a crisis that was deepened by the bankruptcy of its star pupil Argentina in 2002. In 2006, Brazil and Argentina, following Thailand’s example, paid off all their debts to the Fund in order to achieve financial independence. Then Hugo Chavez let the other shoe drop by announcing that Venezuela would leave the IMF and the World Bank. This boycott by its biggest borrowers has translated into a budget crisis for the IMF.” —Walden Bello (30 July 2007), “All Fall Down”, in Foreign Policy In Focus 23
  24. 24. The World Bank, IMF and their G-20 allies: Using the global crisis to their advantage.... G-20: IMF is back! Dominique Strauss-Kahn, Managing Director of the IMF, G-20 Press Conference, 2 April 2009 Maybe some of you were in the IMF press conference at the end of the Annual Meeting last October. And if some of you were there, then you may remember that what I said at that time is that IMF is back. Today you get the proof when you read the communiqué, each paragraph, or almost each paragraph – let's say the important ones – are in one way or another related to IMF work. 24
  25. 25. WORLD BANK: Exactly the same global neo-liberal project! World Bank, Global Monitoring Report 2009: A Development Emergency, p. xii. The report sets out six priority areas for action to confront the development emergency that now faces many of these countries. First, we must ensure an adequate fiscal response in developing countries to protect the poor and vulnerable groups and to support economic growth. Priority areas must be strengthening social safety nets and protecting infrastructure programs that can create jobs while building a foundation for future productivity and growth. The precise fiscal response needs to be tailored to individual country circumstances, consistent with maintenance of macroeconomic stability. Second, we must provide support for the private sector and improve the climate for recovery and growth in private investment, including paying special attention to strengthening financial systems. Helping small and medium enterprises get access to finance for trade and investment is vital for job creation. But the crisis has also underscored the importance of broader reforms to improve the stability and soundness of the financial system. Third, we must redouble efforts in human development and recover lost ground in progress toward the MDGs. We can do this not only by strengthening key public programs for health and education, but also by better leveraging the private sector’s role in the financing and delivery of services. In support of these efforts to help developing countries, the report emphasizes three key global priorities. Donors must deliver on their commitments to increase aid. Indeed, the increased needs of poor countries hit hard by the crisis call for going beyond existing commitments. National governments must hold firm against rising protectionist pressures and maintain an open international trade and finance system. Completing the Doha negotiations expeditiously would provide a much-needed boost in confidence to the global economy at a time of high stress and uncertainty. Finally, multilateral institutions must have the mandate, resources, and instruments to support an effective global response to the global crisis. The international financial institutions will need to play a key role in bridging the large financing gap for developing countries resulting from the slump in private capital flows, including using their leverage ability to help revive private flows. Source: World Bank, Global Monitoring Report 2009: A Development Emergency, p. xii. 25
  26. 26. World Bank President Robert Zoellick (31 March 2009, prior to the G-20 Meeting): New Powers for the Multilaterals! • “a WTO monitoring system to advance trade and resist economic isolationism, while working to complete the Doha negotiations to open markets, cut subsidies, and resist backsliding”; • “a monitoring role for the IMF, to review the execution of .. stimulus packages and assess results, calling for further action if necessary”; • IMF and World Bank Group monitoring of actions and results in the banking sector, with financial sector assessments to be extended to developed countries, “with the results published, taken seriously, and followed up”; • an overhaul of the financial regulatory and supervisory system” in which “most of the actual authority over regulation will rest with national governments”, but within which an expanded FSF [Financial Stability Forum] “could become another important institution of a stronger multilateral system, working with the IMF and the World Bank group on implementation” 26
  27. 27. IMF: ‘An opportunity to make progress on seemingly intractable issues’ IMF (February 2009), Initial Lessons of the Crisis for the Global Architecture and the IMF Bottom line. The crisis has revealed flaws in key dimensions of the current global architecture, but also provides a unique opportunity to fix them. On the flaws, surveillance needs to be reoriented to ensure warnings are clear, successfully connect the dots, and provide practical advice to policy makers. An effective forum for policy makers with the ability and mandate to take leadership in responding to systemic concerns about the international economy is key. Ground rules for cross-border finance need to be strengthened. And, given the growing size of international transactions, resources available for liquidity support and easing external adjustment should augmented and processes for using them better defined so they are more readily available when needed. These are all ambitious undertakings. But the damage wrought by the crisis provides an opportunity to make progress on seemingly intractable issues. The moment should not be missed. 27
  28. 28. ADB and ASEAN: Banking-as-usual for the private sector and for free flow of capital, goods, services and investment Loans under LIBOR for economic Towards a competitive ASEAN recovery, private sector single market by 2015 development, and open market (less on social protection) 28
  29. 29. UN Commission of Experts on Reforms of the International Monetary and Financial Systems: Heterodoxy Rearticulated  Joseph Stiglitz (Keynesian)  Jomo KS (critical political economist)  José Antonio Ocampo (Hirschmanesque)  Jan Kregel (post-Keynesian, Minskyian)  François Houtart (WSF activist) Global Economic Coordination Council and International Panel of Expert — New Credit Facility — system of risk management reform — new global reserve system — exit strategy from stimulus policies — etc..... 29
  30. 30. Global Civil Society: “We told you so” “Another World Is Possible” 30
  31. 31. Global Civil Society Challenge and the Challenge to Global Justice Movements — ‘Another World Is Possible, Necessary’ — “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” —Antonio Gramsci (1971) Prison Notebooks 31
  32. 32. States’ Bailouts and Resiliency Plans (Bailouts for the poor???) Malaysia Philippines First stimulus measure: increase capitalisation of a government investment company by USD 5 Economic Resiliency Plan billion (also to stabilise stock (ERP): PhP 330 billion exchange) 32
  33. 33. Crisis as a ‘Turning Point’  CRISIS from Greek ‘krisis’  “the turning point of a disease when an important change takes place, indicating either recovery or death”  People from left, right, centre look at the crisis the ‘Chinese way’ — i.e., an opportunity to advance their respective interests! 33
  34. 34. (4) EMERGENT AUTHORITARIAN LIBERALISM IN EAST AND SOUTHEAST ASIA (Authoritarian Polity, Market Economy) 34
  35. 35. Lessons of the 1997 Asia Crisis  Democratization may be stalled.  Justification for authoritarian rule (e.g. ‘Asian Values’)  Human Rights compromised.  Human rights obligations sidelined in the name of surveillance and internal security (Malaysia, Singapore)  The poor severely neglected.  e.g., ASEM Trust Fund failed to target the poor, workers, and the vulnerable, adversely affected groups. 35
  36. 36. CONCLUDING REMARKS 1. The Constitutive Role of Crises in the Evolution of Neo-liberalism i. was born out of the crises of the 1970s ii. has evolved through a series of crises over the last 30 years iii. died of the cacophony of crises culminating in the current global economic crisis. 36
  37. 37. As it shows, crises have so far been functional, rather than dysfunctional, to neo-liberalism:  Crises reshape class and social relations but in ways that perpetuate the hegemony of capital over labour and the preservation of elite rule.  Crises restrategize development plans of institutions from international organizations to states to further advance, not retreat from, market-led development.  Crises restructure states and societies in which social institutions are oriented towards the logic, requirements, and imperatives of neo-liberalism. 37
  38. 38. 2. The structure of financial markets is endogenously fragile, and the greedy economic agents exacerbate it. 38
  39. 39. 3. The responses to the global crisis from the multilaterals, to regional organisations, to states to activists are fundamentally the same through the years, with or without crisis.  But the catastrophic impacts of the crisis differ across social classes, among the poor, marginalized, vulnerable sectors. 39
  40. 40. UN Commission of Experts on Reforms of the International Monetary and Financial Systems: Crisis as opportunity and danger This crisis should be seen as an opportunity to engage in necessary reforms. Historically, moments of crises often provide a rare chance for fundamental reforms that would otherwise be impossible. But there is also a danger: existing power structures can seize hold of these moments of crisis and use them for their own benefit, reinforcing inequalities and inequities. There may be a inequities greater concentration of economic and political power after the crisis than before. This has happened in the past and seems to be happening in this crisis in certain countries, as the share of the too-big-to-fail banks has increased even further 40
  41. 41. 4. There is a movement towards the strengthening of practices and institutions of “authoritarian liberalism” in East and Southeast Asia. (Market economies embedded in authoritarian political framework) 41
  42. 42. Thank you.... (“,) —Bonn Juego — Johannes Dragsbaek Schmidt 42
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×