Neoliberalism
By lucas@endneoliberalism On 6 Apr, 2013 At 01:41 AM | Categorized As Neoliberal Alert, What is Neoliberalism? | With 0 Comments

WHAT IS NEOLIBERALISM?

Neoliberalism is the extreme right-wing ideology that has guided the post-WWII era known as Globalization. In theory, Neoliberalism is a libertarian ideology that believes in leaving markets free from government intervention in order to foster peace and prosperity through resource efficiency. In practice, globalization created a global monopoly in every industry through decades of military and IMF interventions. Neoliberalism, at the far-right, is as totalitarian and economic inefficient as communism.

WHY DO WE NEED TO END NEOLIBERALISM?
The current economic equilibrium allows the One Percent to profit from human and environmental destruction. Even if some business leaders wanted to do good, the legal and economic framework forces businesses to take advantage of an economic equilibrium that prices resources and labour too cheap to discard. This is the economic equilibrium left by decades of military and IMF interventions.

Prices need to reflect externalities and government must use its power to tax, regulate, and spend to foster an economic equilibrium that motivates businesses to produce real value. It is possible to have a peaceful and prosperous global economy. Entrepreneurs worldwide are coming up with some of the greatest innovations known to men that can push our economic potential while allowing us to live in harmony with the planet and ourselves. Unfortunately, these innovations cannot compete in a market where profitable corporations continue to be subsidized with trillions of dollars and military power.

End Neoliberalism, Tax & Regulate The One Percent disarms Neoliberal myths such as trickle down economics, job creation, freedom from tyranny, and shows how corporations need and control big government through lobbysim, campaign financing, and revolving doors. The goal of this book is to create the intellectual framework that allows us to make good decisions about our future based on optimal solutions rather than invalid ideological fundamentals.

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Introduction: The Totalitarian Global Monopoly

We need to understand how corporate globalization came into existence and what the current economic equilibrium means to efficiency and freedom in order to fix our economic, environmental, and sociopolitical issues. We cannot tax and regulate the One Percent just because they are earning a lot of money. Taxation and regulation cannot be implemented as a fundamentalist ideology. There are times when certain economic activities need to be liberated, times when they need to be regulated and taxed, and times when they need to be supported.

The current market equilibrium allows the One Percent to profit from environmental destruction and human abuse. The current market equilibrium is far from perfect because Globalization did not follow a natural capitalist process, neither was it peaceful. With the use of military interventions and IMF bailouts to international banks that had financed dictators worldwide, Neoliberalism manipulated the economic equilibrium to provide vast natural resources, cheap labour, and market domination for a small group of multinational corporations.

All of Latin America and Africa fell into a serious depression in the 1980’s and could not pay the large debts that US-backed dictators had left. IMF Structural Adjustment Programs bailed out international banks and refinanced the debt of poor countries in exchange for market liberalization policies that provided the multinationals with legal access to cheap commodities and new markets. By the mid 1990’s, Structural Adjustment Programs were also failing the East Asian Tigers and Russia.

During this 20-year period of global deindustrialization, the One Percent increased their fortunes as multinational corporations picked what governments and small businesses had left. With a wave of mergers and acquisitions, the global economy became very centralized. Today, the sales of the top 200 corporations are bigger than the combined economies of all countries minus the biggest 91. Over half of their sales are in just 5 economic sectors, and corporate concentration in these sectors is very high.2


 David C.Corten writes in When Corporations Rule the World that “when five firms control more than half of the global market, that market is considered to be highly monopolistic.” Kurten then points to an Economist article that shows five-firm concentration in twelve industries. In consumer durables, the top five firms control nearly 70 percent of the entire world market in their industry. Five firms control more than 50 percent of the global market in automotive, airline, aerospace, electronic components, electrical and electronics, and steel industries. Last, five firms control more than 40 percent of sales in the oil, personal computers, and media industries.3 Market concentration is also high in the agricultural sector. Anil Netto finds that “Syngenta, Bayer, Monsanto, BASF, Dow and DuPont together control 85 percent of the annual pesticide market valued at 30 billion US dollars. Three companies (Cargill, Archer Daniels and Bunge) control nearly 90 per cent of global grain trade while DuPont and Monsanto dominate the global seed market.”4

The Economist article was published in 1993, before the world experienced the second wave of mergers and acquisitions, which was specifically a wave of cross-border mergers and acquisitions that “accelerated after 1996 and reached a peak of $828 billion in 2000.” 5 Furthermore, a 2011 University of Zurich study created a web of ownership and integration from all 43,060 transnational corporations and found 1,318 companies at the heart of the global economy from which 147 companies formed a ‘super entity’ that control 40 per cent of wealth.6 For example, WalMart is Procter & Gamble’s biggest customer and from the merger between P&G and Gillette, WalMart and P&G sell us almost everything.7

Some economists refer to David Ricardo’s comparative advantage theory to advocate the efficiencies provided by specialization and s economies of scale, but the size of current corporations and their total control of the global market is nothing like Ricardo envisioned. Trade does not exist between businesses from different nations in a world where nations are forced to specialize in areas that serve the interests of a few multinational corporations. In many instances, it is not even multinational corporations specializing and controlling a specific market (ei: cars, cosmetics, energy, or media) anymore, instead a few conglomerates control a portfolio of whole industries.

Unilever owns more than 1,000 brand names worldwide in foods, beverages, cleaning agents, and personal care. Its main competitor, Procter & Gamble, owns 50 Leadership Brands that represent 90% of P&G sales in pet foods, cleaning agents and personal care, and Nestle owns approximately 6000 brands in beverages, food, pet products, and pharmaceuticals. Other examples are Siemens, 3M, Hitachi, Mitsubishi, and General Electric.

Mitsubishi and General Electric are the perfect definition of a mega-conglomerate. The Japanese conglomerate participates in mining, shipbuilding, telecom, financial services, insurance, electronics, automotive, construction, heavy industries, oil and gas, real estate, foods and beverages, chemicals, and aviation among others. GE participates in water, energy (Oil, gas, nuclear, solar panels), financial services, healthcare, electric, aviation, rail, and software and lighting. GE even owns one of the largest media company in the world, NBCUniversal Media, which the company recently divested into a partnership with Comcast, which now owns 51% of NBC Universal while GE owns 49%.

The integration between industrial conglomerates and media conglomerates deserves more attention than the scope of this book, but it is clear how Neoliberalism allows the One Percent to manipulate both supply and demand in a highly communist fashion.

Back in 1983, about 50 corporations dominated U.S. media. Today, six corporations (GE, Time Warner, Viacom, CBS, Newscorp, Time Warner and Disney) control 90% of the media in the United States.8 Many of these belong to the eight global giants (AOL Time Warner, Disney, Fox News, Viacom, Seagram, General Electric, Sony, and Bertelsmann), which own more than 70% of the global market, according to Robert Waterman McChesney, professor at the University of Illinois and leading voice on mass media and communication. In particular, AOL Time Warner, Disney, and Fox News, own more than 50% of the combined total of the eight companies.9

In Impeach The President, The Case Against Bush and Cheney, the authors ask how media transmitted the lies of the Bush administration that led the country into the illegal invasion of Iraq without even the most basic journalist scrutinization, and one of their key findings is a Sonoma State University research that shows that there are only 118 people who comprise the entire membership of the 10 major media corporations, who, in turn, sit on the corporate boards of 288 national and international corporations, and four of the top ten media corporations in the U.S. have GDG-DoD contractors on their boards of directors. More specifically these are William Kennard from New York Times and Carlyle Group, Douglas Warner III from GE (NBC) and Bechtel, John Bryson from Disney (ABC) and Boeing, Alwyn Lewis from Disney (ABC) and Halliburton, and Douglas McCorkindale from Gannett and Lockheed Martin.10 As we will see in Chapter 7, the revolving door between government and the conglomerates is also very high.

It is laughable when right-wing pundits claim that Neoliberalism provides choice. The largest 200 multinational corporations are the sole economic players and the monopoly they acquired artificially allows them to abuse natural and human resources at an alarming rate as resources are extracted in mass throughout the world, sent to sweatshop at Free-Trade Zones, transported to the shelves of big superstores, and discarded in a short span. Neoliberalism, at the far right, and Communism, at the far left, are as totalitarian and economic inefficient. They are both centralized systems of production that submit resources and people to the needs of the One Percent through force. The richest 200 corporations could not exist as they do today without the use of dictatorial repression and IMF programs.

Economic growth is also a delusion. Global GDP skyrocketed from $1.34 trillion to $60.6 trillion in only four decades, but GDP counts every economic transaction, whether it is treating diabetes, cleaning oil spills, or even war. Paul Hawken writes in Natural Capitalism that “$2 trillion of the $9 trillion spent in the US annually is wasted, meaning that money spent does not give value, while half of the entire GDP is attributed to some form of waste”.11 Hawken’s 1999 estimate does not attribute trillions of dollars wasted on illegal wars and bailouts as the US economy experienced greater diminishing returns during the past decade.

Inefficiency is an inherit characteristic of a monopoly, whether it is a private or public monopoly. In just half a century, we have almost run out of oil, water, rain-forests, fisheries and every resource that sustains our mediocre way of life. The richest 1% grabbed 40% of global wealth while 80% of humanity was forced to live on less than $10 a day and 22,000 children die each day from poverty related causes12. Eight million children dying every year from policies inflicted by the totalitarian Neoliberal era sadly put the Holocaust second by far.

Neoliberalism isn’t so much an American empire as it is a corporate one. The American people suffer the same living conditions as the rest of the world. It can be explained using simple economic theory why the average American is working more hours for a smaller income: A larger supply of cheap labour, energy, and resources, made artificially possible through corporate friendly dictators and decades of bailouts to international banks allowed corporations to move their factories abroad.

Americans are made to believe that their country needs profitable corporations, and the more profits these corporations make the better, even if it means sending jobs away, destroying pristine lands, and killing innocent people in other countries. The heavily subsidized corporate monopoly is now experiencing increasing diminishing returns and wealth never trickled down. The world will not get out of the current economic and environmental crises with further Neoliberal policies, characterized by deregulation and tax incentives for rich corporations, because Neoliberalism will led to producing more of the same junk and the misery that comes with it.

The world needs a decentralized economy and greater competition at the local level for resources to be used efficiently. Decentralization will not happen on its own when the economic equilibrium allows the multinationals that run the world to exploit and move resources at a fraction of their true cost. Even if a good-hearted CEO wanted to do good, the legal framework requires putting profits first, hence bringing the economic equilibrium to a value-proposition using progressive taxation, regulations, and spending seems like a no-brainer. The problem is the extreme and invalid rhetoric being used by those who wage war on Change.

The world needs governments that are free from ideological inclination and corruption, governments that promote progress using honest critical thinking, and governments that are held accountable for their failures and crimes. End Neoliberalism, Tax & Regulate The One Percent provides a solid foundation to progressive governments that need to counter-attack the invalid arguments of the extreme right in matters of regulation, taxation, and spending. The same progressive foundation prevents governments from sliding too far into the left, as it recently occurred in countries like Argentina and Venezuela.

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WORKS CITED

Anderson, Sarah and Cavanagh, John. Top 200: The Rise of Global Corporate Power. 2000. Corporate Watch. Global Policy Forum. http://www.globalpolicy.org/component/content/article/221/47211.html 2 Ibid3 Korten, David C. When Corporations Rule the World. Second Edition. 2001. A copublication of Kumarian Press Inc. and Berrett-Koehler Publishers, Inc. 4 Netto, Anil. GMO Seeds: ‘MNCs Gaining Total Control Over Farming’. December 12, 2007. IPS News. Global research. http://www.globalresearch.ca/index.php?context=va&aid=7602 5Evenett, Simon. The Cross-Border Mergers and Acquisitions Wave of the Late 1990’s. February 2004. University of Chicago Press. NAtional Bureau of Economic Research. http://www.nber.org/chapters/c9545 6 Stefania Vitali, James B. Glattfelder, Stefano Battiston. The Network of Global Corporate Control. Public Library of Science. 26 October 2011 http://www.plosone.org/article/info%3Adoi%2F10.1371%2Fjournal.pone.0025995#s3
7 Fishman, Charles. The Wal-Mart Effect. How the World’s Most Powerful Company Really Works – and How It’s Transforming the American Economy. 2006. Pinguin Press. 8 Lutz, Ashley. These 6 Corporations Control 90% Of The Media In America. Business Insider. June 14, 2012 http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6#ixzz2L1tFuDlr
http://www.businessinsider.com/these-6-corporations-control-90-of-the-media-in-america-2012-6#ixzz2KvdTIxGQ9 Robert McChesney. Rich Media, Poor Democracy: Communication Politics in Dubious times. (History of Communication). University of Illinois Press; Second Edition edition (August 23, 1999)
10 Peter Phillips, Denis Loo. Impeach the President: The Case Against Bush and Cheney. Seven Stories Press (October 3, 2006)
11 Hawken, Paul; Lovins, Amory; Lovins .Hunter. Natural Capitalism. 1999. Little Brown, & Company. 12Shah, Anup. Poverty Facts and Stats. September 10, 2010. Global Issues http://www.globalissues.org/article/26/poverty-facts-and-stats

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