What is postneoliberalism and are we there?

The discussion on the meaning of “post-neoliberalism” is not academic but political, points out Pablo Davalos, ex Economic vice minister of Ecuador when Rafael Correa was minister of the portfolio (during the government of Lucio Gutierrez), who is also advisor to CONAIE (the largest indigenous organization in Ecuador) and member of the Latin American Council of Social Science (CLACSO).

Other CLACSO scholars such as Norma Fernandez and Emir Sader, or the sociologist and political scientist Atilio Boron, have coined and used the concept of post neoliberalism to differentiate the new leftist governments in the region of those neoliberal governments attached to the Washington Consensus agenda, thus attempting to locate the Latin American progressive regimes in the new geopolitics.

Progressive governments changed the direction of public policy making it more inclusive and with greater social sensitivity, caring about social investment and poverty reduction. With these changes, the above experts generally tend to assume that any recovery of the State constitutes in a strong break with neoliberalism.

Davalos, however, does not agree with this interpretation.

Postneoliberalism as “institutional neoliberalism”

In a research on financial capitalism, French academics Michel Aglietta and Antoine Rebérioux say that the neoliberalism discourse and its appeal to the liberalization of capital markets and labor flexibility corresponded to the transition of capitalism from industrialization towards financialization.

In contrast, twenty-fist century capitalism is already deeply financialized: “it bets on risks, it produces, generates and establishes it as a condition for the world economy, because risk management allows you to create unimagined levels of profitability and exceeding even the profitability of financial speculation”, states Davalos.

Taking this into account, it is no longer the productive capacity of a society that is integrated into circuits of speculation and financialization, but society as a whole.

Thus, “the theoretical framework of classical neoliberalism is insufficient to understand the commodification and incorporation of all social life to the financial-speculative circuits and risk management of that speculation, because its episteme is bounded to the monetary and market mechanisms of circulation and production”.

For the Ecuadorian economist, the new framework (actually an expanded theoretical framework) to accommodate this new economic discourse are the institutions.

“This is the liberal vision of societies, in which institutions represent the rules of the game of individual actors who tend to maximize their selfishness. Consequently, the theoretical framework that emerges in the financialization and risk management is one that draws on the institutions as a whole of social and historical life”, he highlights.

Thus, traditional and monetarist neoliberalism is transformed into a “institutional neoliberalism”. It is a discourse that contradicts the traditional theory of neoliberalism, but obeys “to a pressure from the circuits of speculation and risk management of such speculation, to involve all social institutions in the speculative game”.

The State as an instrument of “accumulation by dispossession”

“Accumulation by dispossession” is a hypothesis originally proposed by Rosa Luxemburg and retaken by Marxist geographer David Harvey. Marx said that the period of primitive accumulation of capitalism was composed of moments of exploitation, looting, violence (dispossession). 

According to Davalos, accumulation by dispossession “is inscribed within an institutional frame acting as support to the financialization and risk management in speculative capitalism. The most important axis of the institutional fabric is the state. Without the state there is no support for this institutional frame and without that fabric financial speculation and risk management would lose one of its main straights”.

An example of this is the carbon market involving major Banks in the world and which generated in 2012 derivative instruments for about 200 billion dollars. All of this “would be impossible without the existence of the state and climate change regulations”, consequently institutional neoliberalism “needs the state as a key player in the global economy”.

The expert claims that postneoliberalism is then a complex process which, while appearing to establish a break with the Washington Consensus, continues with institutional and social changes essential to ensure accumulation in late capitalism.

“That which is in dispute is not merely monetary and fiscal colonization carried out by the IMF but the appreciation of the institutions by way of extractivism, environmental services industries, biotech, biofuels, multimodal transport axes, etc.”.