There have not been few attempts at establishing economies to serve peoples’ wellbeing and the protection of the environment. However, in one way or the other, these economies were undermined by neoliberal reactions that sanded down their fragile pillars. Why they were not able to endure and strengthen? How can these embryonic attempts be extended giving way to sustainable dynamics of popular base and environmental protection?
Let’s start analyzing the neoliberal reaction that prevails in many countries; its effects, implications, how it is sustained and the punishments and weaknesses it presents. From there, we will extract some past reforms that were addressed when leaving neoliberal phases, confident that such experience can serve to address deeper and more sustainable transformations.
The neoliberal reaction
Once established its control of the State, the neoliberal reaction hurries to dismantle those institutions that would have been established to defend or extend popular rights. They aim at improving the rate of return of the economic power adducing that it is the main growth engine and that when mobilized it will spill over the rest of the society. Capital flow regulations are minimized; existent value appropriation mechanisms are not altered; the State is reduced by lowering taxes to the economic power and simultaneously reducing social spending; job is flexibilized and the workers’ real salaries drop; the protection of the environment loses prevalence; liberalization of markets advances subduing local economies to an unequal international competition; sovereign indebtedness increases reaching alarming levels and so does the burden of interests and the consequent loss of decisional sovereignty at the hands of financial creditors. With the variations that each situation imposes, the setback in peoples’ welfare and the protection of the environment is occurring today in almost every place.
Its results are at plain sight: huge distributive regression, widespread unemployment and underemployment with a tough growth in poverty and indigence; maximum financialization of the economy (almost every dimension of social life is commoditized); multiplication of businesses and shady deals of powerful groups that, with the tax evasion and capital flight towards tax havens they practice, they sterilize a very large part of the national potential for development and reinforce the explosive concentration of wealth; a dysfunctional productive matrix and inequitable value chains are established; inequality expands without control making countries slide off to recurrent systemic instability; minorities concentrate decisional power, operate manipulating wills and molding subjectivities based on misinformation, deceit, threats and persecutions; opposing voices are silenced and a hegemonic thought is enshrined as the only and permanent truth; political representativeness and confidence in justice and security forces are seriously affected; captured democracies are multiplied.
From derailing the microeconomic to the submission of the national production
Small and medium enterprises, and also many large ones, face a serious change in situation and, even worse, in perspectives. They face a depressed domestic demand as result of the regressive distribution of income and the concentrating impulse; imports increase more and more by the dismantling of the protection of the local industry (protection that every central economy imposed to defend their infant industries); monetary authorities impose high interest rates adducing that they are needed to curtail inflation (little they achieve in the short term, and in the medium term they maliciously proceed destroying demand without encouraging local production, with a not always explicit addition: the huge greed of speculators and financial entities that obtain returns at extraordinary rates). Local enterprises no longer have subsidized credit lines at their disposal (“subsidies” are stigmatized even though when efficient and prudently applied can help redirect the course of the economy towards peoples’ welfare and the protection of the environment). They also face higher costs due to the increase in public utility rates (owners of those monopolies are rewarded by extracting value from producers and consumers). They suffer hard tax pressure (they are part of the so-called “perejiles”—patsy or fall guy in English slang—because while they are charged with taxes the largest enterprises, as stated before, with malice aforethought evade their tax responsibilities and flight capitals to tax havens). To cap it all, they face threats from new agreements on free commerce with international powers that have decades of technological, financial, and commercial advantages already established and that are very difficult to confront especially when they preserve open or concealed protectionist barriers.
Faced with that change in situation, local enterprises adjust their structures to subsist; even those who do not want to do it are forced to reconvert because those who do not adapt to the imposed orientation are at serious risk of disappearing. What is clear is that enterprise owners are the ones who will survive, not the workers that are fired or those subjected to the so called labor flexibilization that carries with it loss of purchasing power of salaries and worsening of labor conditions, with labor unions in retreat and some leaders betraying their bases as they become co-opted or bought by the concentrated power.
Options directed towards peoples’ wellbeing and protection of the environment
It is worth noting that before the neoliberal reaction got imposed, popular-base economies could not eliminate the pillars of the economic and decisional concentration. They tried it to some extent, half-heartedly some might say, others consider they did what was possible. They stopped half-way, suffering the destabilizing wearing out that the factual powers always practice. They were reforming efforts with transformational aspirations that provided valuable advances in terms of popular clarification and cultural struggle, though they were not able to change the prevailing correlation of forces.
These efforts should not be undermined because they seeded the craving for new paths. However, to secure sustainability of transformations it is needed to dismantle the pillars of the unbridled process of concentration and reverse the resulting impious inequality.
Challenges ahead are neither few nor insignificant. What is essential is played in the field of politics where the disproportionate power exercised by concentrated groups with the complicity of sectors of politics, media, judiciary, and some think-tanks that provides them with ideological coverage, needs to be tackled. The resources and information they handle allow them to co-opt the corrupt and opportunist, being those politicians, judges, journalists or popular TV hosts. They even manage to fragment the popular field encouraging the harmless and chasing the leadership they fear.
The master key of any transformation geared towards serving peoples’ welfare and protecting the environment is, thus, political in nature (in its multiple dimensions) and includes the strategic effort of uniting the popular field through the clarification of majorities and building organizations that are capable of aligning diverse interests. We must work with a dynamic approach (non-static) because interests evolve and transform with time. Furthermore, concentrated power does not rest and permanently adjusts its strategies to submit and dominate.
New transforming policies
The organizing principle of the proposed transformations is not anymore maximizing profit of capital owners, financialization of the entire economy, and commodifying all possessions, but rather enhance people’s wellbeing and protect the environment. The entire productive potential of a country is what generates wealth and income and that potential must be materialized by promoting that the totality of productive resources gets mobilized with fair compensations for the effort done. The aim is an organic growth far from huge economic, social, and environmental unbalances that lead to recurrent crises of the external sector, asphyxiation of the domestic market, concentration of income in those who evade most of their tax responsibilities and flight abroad the results they obtain in the country. Those same minorities force the scientific and technological development to serve their interests and condition the educational systems to avoid the emergence of critical thinking that might feed the feared process of popular clarification.
A handful of large multinationals controls international commerce; huge financial groups can mobilize in seconds billions of dollars, euros, or yens to appropriate the opportunities that might emerge in almost any corner of the world; even more, they have the ability of “generating” opportunities that serve their interests, through the manipulation of markets, circumventing regulations, destabilizing governments and imposing the aforementioned complicities. Those commercial measures that were, and at certain point are still in use, by central countries are banned in emerging or laggard economies.
In this context, a critical aspect is to dismantle the value appropriation mechanisms that exist in our countries. If we fail to do so, we will fall once again into only redistributive income policies without transforming the prevailing productive structure and the economic functioning that have been defined in accordance with decisions adopted by the powerful economic groups in their own benefit. The structure thus imposed to the national productive matrix and the way main value chains and international economic relations operate, make non-central countries slip off into inequalities and recurrent phases of systemic instability. To stop that perverse dynamic we must solve sectorial and external sector bottlenecks that generate a labile productive matrix, as well as inequalities that occur within value chains, questions that the market is incapable of managing on its own.
Generating conditions for investors to invest does not work. What matters is who invest and where they invest: measuring the impacts and consequences; in addition, where do accumulated returns go and how those who have internalized an unbridled greed influence over the ever more concentrated decisional power. Is it that there are no other investors with other rationalities and purposes? Wouldn’t this change by strengthening medium productive ventures of popular base? We know that there is organizational engineering to productively integrate workers and today dispersed small entrepreneurs. First and second (holding) level cooperatives, popular base franchises, community traders and supermarkets, locomotive agro-industries, diverse types of family base agriculture, workers-recovered enterprises, export consortiums, among other organizational modalities are available to give way to new generations of producers orientated towards protection of the environment while serving their communities’ wellbeing. The challenge is establishing an effective and comprehensive support system to those emerging actors that could be organized around the conformation of developers and trusts specialized in economic activities of popular base.
It is about dismantling the mechanisms that the concentrated power uses to appropriate the value that its members do not produce while influencing on the process of generation, retention, and reinvestment of value that peoples produce. This relates to who manages and allocates domestic savings, not easy questions that include tax and public spending structures, promotional policies, strict regulation of sovereign indebtedness, management of monetary policy and the rest of public policies (health, education, science and technology, sanitation, environmental protection, citizenry security, housing and territorial organization, among many others) that influence the social functioning.
None of these policies, measures, and projects can define by itself the values and orientations that guide their course. They can have a great margin of independence regarding management but what weighs and defines its actions is the aforementioned orientating principle: we organize ourselves so that the powerful and accomplices can maximize their profit betting that afterwards such concentrated profit will spill welfare over the entire society or, instead, we advance transforming structures and ways of functioning so that the potential for development that nests in our peoples and not in any minority can help to protect the planet and permanently enhance everybody’s wellbeing.
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