The Fall of Communism and the Rise of Neo-Liberalism in Eastern Europe and the Third World.

In one long revolutionary wave, the East European regimes of ‘really existing socialism’ have been swept away in the past two years. Communism as a living political movement no longer exists, and anticommunism is therefore no longer an essential element of bourgeois ideology in the West. Eastern Europe, the Soviet Union, and most of their former allies in the Third World (angola, Ethiopia, Vietnam), are swiftly being reintegrated into the world economy, their social structures overturned to accommodate their insertion into the global capitalist class structure.

In these formerly socialist countries, neo-liberalism has become the predominant ideology legitimating the privatization of the state-controlled economy and the substitution of the market for the social provision of basic welfare. For Europe as a whole this has set in motion processes of economic and political liberalization and mass migration (Holman, 1992).

an earlier meaning of the term neo-liberalism was actually quite similar to the notion of corporate liberalism (Harris, 1972; Cox 1987). a related cause for misunderstanding may be the renewed popularity of the term in the USa where ‘liberalism’ had the same connotations as corporatism in Europe, and where ‘neo-liberalism’ designates those political forces which try to revive the liberalism of the Kennedy era, but pragmatically incorporate many of the conservative criticisms of traditional american liberalism (Rothenberg, 1984).

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It can be said that neo-liberalism is “the politics constructed from the individual, freedom of choice, the market society, laissez-faire, and minimal government. Its neo-conservative component builds on strong government, social authoritarianism, disciplined society, hierarchy and subordination, and the nation” (Belsey, 1986, p.173). The combination of the two is not nearly as contradictory as it sometimes seems. as a concept of control, neo-liberalism is the formulation of an identifiable fractional interest in terms of the ‘national’ or ‘general’ interest. Neo-liberalism is the fundamental expression of the outlook of transnational circulating capital.

In the West, the high tide of the ‘Reagan revolution’ and ‘Thatcherism’ seems to have receded with the political retirement of their namesakes, Ronald Reagan and Margaret Thatcher. Untrammeled international competition, the celebration of the market, of wealth and self, anti-communism and anti-unionism; all these are no longer propagated as ‘revolutionary’ in the sense of challenging a prevailing consensus of a different content, but they are now part of normal every day discourse, self-evident, near impossible to contradict or even doubt.

History conceived of as a struggle of ideologies has come to an end, as Fukuyama (1989) would have it. In short, the end of history appears to have resolved any remaining internal contradictions within international capitalism (other than straightforward competition), and to represent the triumph of the ideological tendency articulating these orientations, neo-liberalism. Its victory means that its radical tenets have themselves become the new ‘normalcy’.

This transnational revolution took place against the background of the crisis of world capitalism of the 1970s, which necessitated a far-reaching restructuring of the economic, social and political conditions for capital accumulation. Neo-liberalism was evidently the hegemonic project, which guided this restructuring and shaped its trajectory.

In the period from the First World War to the 1950s the productive capital perspective (Polanyi’s principle of social protection) was dominant at the national level; in this era, the hegemonic concept of control was that of state monopolism. Money capital was still principally engaged in international operations, but the crisis of the 1930s led to its curtailment by state authorities.

Gradually, and definitely following the Second World War, (US) industry expanded on an atlantic plane, albeit in a highly regulated setting. a welfare state concept, the highest form of Polanyi’s principle of social protection constructed around the productive capital viewpoint, combined aspects of expanding production with a measure of reliberalization in the international sphere. Trade, however, held priority over money capital (in line with the hegemony of the productive capital view). The comprehensive concept defining the new normalcy and general interest at this stage was corporate liberalism.

In the crisis of the 1970s, finally, a struggle ensued which resulted in the triumph of neo-liberalism. Neo-liberalism reaches back to the abstract and cosmopolitan money capital perspective so prominent in liberal internationalism, but industry has meanwhile outgrown its national confines. The paradigmatic scale of operation of industrial capital today is global, at least in tendency. at the same time we witness a relative disintegration of the national framework into multiple local and regional frameworks, leading some observers to speak of ‘globalization’ as the typical trend of the new era.

The crisis of the latter half of the 1970s cannot be traced to any one single incident, or to any one isolated dip in the normal business cycle. It was a fundamental crisis of ‘normality’ affecting all aspects of the post-war order: social relations of production, the composition of the historic bloc and its concept of control, the role of the state, and the international order. Efforts to resolve this crisis necessarily acquired a comprehensive quality. as Stuart Hall has said,

“If the crisis is deep—‘organic’—these efforts cannot be merely defensive. They will be formative: aiming at a new balance of forces, the emergence of new elements, the attempt to put together a new ‘historic bloc’, new political configurations and ‘philosophies’, a profound restructuring of the state and the ideological discourses which construct the crisis and represent it as it is ‘lived’ as a practical reality: new programmes and policies, pointing to a new result, a new sort of ‘settlement’—‘within certain limits’. These new elements do not ‘emerge’: they have to be constructed. Political and ideological work is required to disarticulate old formations, and to rework their elements into new ones”(Hall, 1983, p. 23).

The new concept of control emerging out of this constructive effort to deal with the organic crisis of the 1970s nowadays we call neo-liberalism. It should also be mentioned that neo-conservatism provides the neo-liberal bourgeoisie with an effective ‘politics of support’: moral conservatism, xenophobia, law-and-order, the family, are the themes which provided the basis for a relatively stable electoral coalition, which even today seems to have relegated social-democracy to the past for good.

The precise mix of elements (free market ideology and neo-conservatism, destructive and constructive) varies from country to country, depending on the political conjuncture and the country’s particular place in the world order of the 1970s. The rise and consolidation of the neo-liberal project—which involved disciplining labor through establishing a new core-periphery structure of labor relations, subordinating the global productive grid to profit criteria established by money capital, and confronting the Third World and the Soviet bloc with a new Cold War—were not realized at once.

Even for its most ardent protagonists, neo-liberalism’s ‘rationality’ transpired only gradually and through a process of trial and error. Furthermore, as will become clear from the following chapters, a hegemonic project is not absolutely and exclusively victorious. Elements which are alien to the hegemonic concept can and most likely will persist due to particular historical circumstances, as with the tenacity of liberal internationalism in Britain during the Fordist age, or with the persistence of corporate-liberal structures in the Germany of the neo-liberal 1980s and 1990s.

References

Belsey, a. (1986). The New Right, social order, and civil liberties. In R. Levitas (ed.) The Ideology of the New Right, Cambridge: Polity Press.

Cox, R.W. (1987). Production, Power, and World Order. Social Forces in the Making of History, New York: Columbia University Press.

Fukuyama, F. (1989). The End of History?’, The National Interest, Summer: 3-18.

Hall, S. (1983). The great moving right show. In S. Hall and M. Jacques (eds) The Politics of Thatcherism, 19-39, London: Lawrence and Wishart.

Harris, N. (1972) Competition and the Corporate Society, London: Methuen.

Holman, O. (1992). Introduction: Transnational Class Strategy and the New Europe. In O. Holman (ed.) European Unification in the 1990s: Myth and Reality, International Journal of Political Economy 22(1), Spring 1992:1-22.

Rothenberg, R. (1984). The Neo-Liberals. Creating the New american Politics, New York: Simon & Schuster.

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