End Neoliberal Capitalism!

Change the System Now!


The time has come.


Leaders of the G20 will be meeting today to discuss, in the light of the global financial crisis that threatens to disrupt the global economic system itself and cause massive recession, resolutions to re-regulate the capitalist economies of nation-states. Taking their lessons from the wake of the United States‘ housing bubble collapse and financial meltdown, they sought to discuss the appropriate mechanisms for multilateral and domestic intervention of governments to stem the contagion of recession throughout the world. Once again, they are faced with the fact that the market, by itself, cannot serve as a reliable medium of production and exchanged, and that the state, as mandated and participated by the people, must flex its visible arm to discipline free market’s invisible hand.


Clearly, we have been vindicated.


Since the inception of the neoliberal paradigm to resolve the 1970s capital stagnation, social movements around the world already warned that the policies of financial and trade liberalization and giving free hand to the market through deregulation and privatization will only result not only in massive inequality and misery to the poorest, but will also facilitate further disconnection of economic activities to the consumption needs and the production activities of the people. This has happened, and we are now seeing the juxtaposition of the immense wealth creation with the ever-growing social inequality amid the widening gap of the artificial, financial economy from the real economy of production.


Now that the bubble of financial investments on housing has burst, we already know that the primary impulse of capital actors would be to retrench and protect whatever it has. Unfortunately, the way the world economies had been restructured by neoliberalism is that when these capital actors refuse to invest in enterprises, employment would decrease and that would translate to greater public misery. The livelihood, survival, and dignity of the working people is dependent on the whim and the “risk calculation” of capital holders.


The neoliberal capitalist system is thus, by its very nature, a poverty-creating system. A system that facilitates the transfer of wealth from the poor and the middle class to the rich via policies such as regressive taxation, maximum economic liberty, and retreating of the government from social and essential services, which is purportedly transferring capital to those who are proven to have optimally used it, is a system that only widens the gap between the rich and the poor. Unfortunately for the rich, it is primarily the poor which consumes the products the enterprises they owned produces – and with the deterioration of the poor’s capacity to consume, overcapacity and overproduction is an inevitability.


The American solution to this conundrum is the solution which precipitated the current crisis: credit. Unable to consume with their deteriorating wages, the people resorted to credit in order to claim their “American dream”, a good house in a clean suburb as a prerequisite to a good life. But the neoliberal system cannot escape its prerequisite for survival, which is the capacity of the people to pay its debts. With the growing unemployment and decreasing wages due to liberalist trade agreements such as the North American Free Trade Agreement (NAFTA), this prerequisite was gradually wiped out, forcing the people to renege on their credits such as those meant to pay for their mortgages. Unfortunately for the American capitalists and banking institutions, they already speculated and inflated the value of these mortgages – so much so that this massive mortgage reneging translated to collapse and bankruptcy.


This is the quagmire G20 will be trying to solve today. A start of a series of summits and meetings, they are to come out with concrete policy prescriptions and directions to reverse the global downturn.


It is frightening however, that as they are trying to resolve the problems caused by neoliberalism, they are resorting back to neoliberalism itself – a completion of the project towards global market fundamentalism. For the food crisis, for example, the solution for problems caused by trade liberalization such as decreasing production leading to increasing prices had been the further lowering of tariffs. For the financial crisis, the solution to revive the financial market is for governments to bailout the troubled banks and investment houses, facilitating a further transfer of public money to private capital actors.


Thus, it is incumbent to us in the social movements to prevent the neoliberal resurgence. We had enough of neoliberal capitalism, and never again should the whole world be governed by such a bankrupt and damaging ideology. We must call on our governments to reject any solution that puts prime on the market rather than on people, on capital rather than on labour, and on stability rather than transformation. Beyond mere re-regulation of the system, we should have a re-regulation on the direction of system change, and a re-regulation implemented by the state and powered by people’s grassroots’ participation and deliberation.


Now, more than ever, is the time to re-echo our calls. The credibility of the neoliberal capitalist system is in tatters; now is the time to strike.


G20 is putting a pause on neoliberalism. It’s time we put a dot on it.

–united statement from the recently done “Emergency Conference on Global Crisis and Alternative” for the November 15 G20 World Summit Meeting–


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