Neo Liberalism: An Enemy of Black Power in Africa?

There are quite a number of definitions of what neo liberalism really means. Since German scholar Alexander Rustow coined the term in 1938, it has had a number of different definitions through the years until now. Broadly speaking, neoliberalism incorporates policies such as the elimination of price controls, a deregulating of capital markets, privatisation, a considerable reduction in state influence and control on the economy, etc. This means that protagonists of neoliberalism will usually push an agenda where the market is free to do what it likes without any state intervention. And more often than not, neoliberalism and capitalism are inseperable. Some scholars have even suggested that neoliberalism is ‘hyper capitalism’.

In South Africa, it is interesting to note that protagonists of neoliberalism are mostly white people who, ironically enough, are generational beneficiaries of state control during Apartheid and the colonial period. It is no secret that the Apartheid government in South Africa intervened to make sure that white people prospered and black people barely even participated in the economy. There are some white owned multinationals that exist today, that were actively assisted by the Apartheid state. Yet when the democratic government introduces policies such as BEE and EE, policies necessitated by the fact that black people were deliberately prohibited from participating in the mainstream economy, the same people call it reverse racism and too much state intervention. But, is neoliberalism really the answer to the problems of Africa? Or is it just a hedge that shields white supremacy and provides a barrier to the accumulation of black power?

Many antagonists of neoliberalism prefer a socialist flavour to policies, especially in Africa where we are dealing with a mass base of people, black people and Africans, who are previously oppressed and were deliberately banned from accumulating wealth. Africans have been living a life of legislated regression and deterioration for centuries. Indeed, I am one of the antagonists of neoliberalism.

Such antagonism is met with fierce critique of any thought patterns with socialist propensity. Everyday we hear about the failures of socialist states and policies. to protagonists of neoliberalism, one failed socialist state is a failure of all socialism. Conveniently, no one mentions the failures of neo liberalism in the world.

Scholars agree that the Great Depression of the 1930s, which brought about high unemployment and extensive poverty, was as a result of economic liberalism. Intellectuals were organised in Paris in 1938 to renew liberalism. Among them were Louis Rouger, Walter Lippmann, Friedrich von Hayek, and Alexander Rustow. While they agreed on the failure of liberalism, they did not move away from it. Instead, they proposed a ‘new kind of liberalism’. Interestingly, when we analyse failed socialist states, we never propose a ‘new kind of socialism’. We rubbish socialism in its entirety.

Post World War II, Chile embarked on neoliberal reforms, led by a group of students that were exposed to Friedman, Arnold Harberger, and Hayek. These included privatisation, deregulation, and a reduction in the role of the state. The policies resulted in widened inequality, a negative impact on wages and working conditions of Chile’s working class. Germany, while embracing neoliberalism, insisted on placing humanistic and social values on par with economic prosperity. They aimed for both market economy and social justice. Protagonists of neoliberalism were outraged, calling this ‘inconsistent aims’.

David Harvey described neoliberalism as a class project designed to impose class on society through liberalism. David M Kotz informed that neoliberalism is “based on the thorough domination of labour by capital”. Sociologist Loic Wacquant argued that neoliberal policy for dealing with social instability among economically marginalised populations following the retrenchment of the social welfare state and rise of the punitive workforce, privatisation of public functions, decrease in collective working class protection via deregulation, rise of underpaid labour is the criminalisation of poverty and mass incarceration in the USA”. And that “by contrast, it is extremely lenient in dealing with those in the upper echelons of society, particularly when it comes to the economic crimes of the priviledged class”.

Neo liberalism promotes, consciously or sub consciously (I believe the former), exploitation and social injustice. It increases inequality, which, in South Africa, is racial. It promotes self over social collective.

The International Monetary Fund (IMF), the most influential proponent of neoliberalism for over five decades, has also admitted the failures of neoliberalism in its article titled Neoliberalism: Oversold?.  In this article, the IMF concedes that instead of delivering growth, some neoliberal policies have increased inequality.

Also, neoliberal economics have a negative distributional effect. In a country like South Africa that has a mass base of people that still have to ‘catch up’ economically, and a white and elite minority that enjoys a bulk of the wealth unjustly, the playing field will never be level if we continue to insist on the current neoliberal capitalist agenda.

Furthermore, in South Africa, where deregulation still exists to an extent, the private sector refuses to transform and transfer skills and wealth despite the albeit weak regulation system we have. I do not want to imagine the fate of the poor and working class in a completely deregulated South Africa.

Maybe it is time people rethink liberalism. Our right to self determination is at stake.

Linda Sidumo is a BCom graduate, a public servant, and chairperson of the Education Access Campaign (www.educationaccesscampaign.org). Views expressed are strictly his views and do not represent the views of any organisation or group of persons.