January 26, 2004,
For a few months in the early 1990s I lived on the Isle of Dogs. This is a district of London, three miles east of the Tower and the old City of London (which is now a financial hub). For a long time the Isle of Dogs was a working-class district, a region of docks and wharfs backed by miles of grimy, cramped rowhouses. The Luftwaffe flattened a fair portion of the docklands in WW2, and the Isle of Dogs suffered along with the rest. After the war it recovered, until container shipping came in and the stevedore unions protected and feather-bedded themselves into extinction. By the 1970s the place was a desolation. Then along came the government of Margaret Thatcher (Whom God Preserve!) They declared large stretches of the docklands, including the Isle of Dogs, to be an enterprise zone, with tax breaks and money incentives, and regulatory waivers for developers. Financial firms from the City moved their offices there, as did the Daily Telegraph, favorite newspaper of every British conservative, and of several American ones, too. Stylish residential developments were built to accommodate the young futures traders, financial analysts, network managers, and journalists who serviced these firms people like me. (Yes! I was once productively employed!) The Isle of Dogs* was transformed.
Not all the locals were thrilled by this turn of affairs. There was a lot of grumbling from the local Cockneys, upset to see their fish and chip shops make way for tony restaurants, their grimy, cozy, smoky pubs invaded by smooth-faced young men with hundred-dollar haircuts, braying in suburban accents for Chardonnay by the glass. There was some resistance, even some vandalism of the bright new developments. One example particularly caught my eye I walked past it every day. On an old brick wall by the waterside someone had spray-painted in letters two feet high the words: KILL YUPPIE SCUM.
This came to mind week when I was reading about the Summit of the Americas held in Monterrey, Mexico, January 12 and 13. It comes to mind, in fact, any time I am confronted with "economism" that is, the belief that mankind is a rational economic animal, seeking only to improve his material lot in life. The Cockneys of the Isle of Dogs certainly had their lots improved by the gentrification of the 1980s. Instead of living in a decaying slum where nobody had two nickels to rub together, they found themselves the inhabitants of a cutting-edge urban development with countless entrepreneurial opportunities to tap into some of the cash that was sloshing around. Some of them did so tap, and did very well for themselves; others, those who had the good fortune to own their homes, cashed in at the top of the development market and moved out to greener pastures in the suburbs. Others the un-entrepreneurial and un-propertied got themselves a can of spray paint and headed for the nearest wall. KILL YUPPIE SCUM. Economic self-interest is indeed a powerful force in human affairs. Alas, it is not the only one.
The Summits of the Americas are held every three or four years. Their aim is to promote the Free Trade Area of the Americas (FTAA), an effort begun in 1994 to unite all the democracies of the hemisphere in a sort of super-NAFTA. The original schedule called for all negotiations to be complete by January 2005. George W. Bush's main policy goals at this year's summit were:
To get a firm commitment to the January 2005 deadline for final agreements.
To firm up the requirement that the FTAA embrace only democratic nations by banning "corrupt" governments from future summits.
He got neither, and in fact his reception was altogether frosty, in spite of his having floated his Illegal Immigrant Protection Act proposals the week before. The reasons for this tell us a great deal about the likely direction of world events over the next few years.
Leszek Kolakowski famously observed that Marxism was "the greatest fantasy" of the 20th century (which, of course, ended in 1989). Certainly egalitarianism of one sort or another was a dominant political theme all through that century, from the redistributionist welfare states of the West, to the kibbutzim of Israel, the state-socialism experiments in Africa, the consensus ethnonationalism of Japan, and the explicitly Marxist states of the second world. This large theme played out in various ways in Latin America, from the brutish parody of European welfare-populism in Perón's Argentina to the victorious Marxist-egalitarian insurgents of Cuba.
The story of the past quarter-century a convenient starting marker would be the election of Margaret Thatcher on May 3, 1979** has been the triumph of what is loosely called neoliberalism, a belief in open markets with minimal restraints on trade between nations, free movements of peoples, and the dismantling of huge state-owned enterprises and regulatory bodies. This has been a very wonderful thing, and I shouldn't like to leave you with any misunderstanding as to how I feel about it. I am old enough to remember the previous regime, at least in England, and believe me, neoliberalism is way better than what went before.
As is the nature of all human things, though, the new synthesis has generated a new antithesis. Neoliberalism has its dark side. When neoliberalism was first promoted in China by Deng Xiaoping, it was launched with the slogan: "To get rich is glorious!" So, indeed, it must have seemed to the cowed, brutalized survivors of Mao Tse-tung's 30-year experiment in egalitarian communism. And so it is: Personal wealth produces a great deal of vulgar display and vapid hedonism, but it also patronizes great art, gives the leisure for public service, and supplies the wherewithal for works of charity.
The dark side of neoliberalism is inequality. Every country that has embraced the new order has seen the gap between rich and poor grow wider. Not all of us have entrepreneurial talents; not all of us very few of us, in fact have the ability to get rich. Now of course, a rising tide lifts all boats, and the neoliberal order has blessed not only those who enriched themselves, but hundreds of millions of others, too. Not only has it lifted us up, it has supplied us with a plethora of goods and services that did not exist 30 years ago, and that would never have been brought into existence by any state-managed bureaucracy, or any Dictatorship of the Proletariat, or any of those labor-industry-government partnerships so fondly imagined by leftist economists of the 1970s.
Undank ist der Welt Lohn, however: "Ingratitude" is humanity's middle name, as Margaret Thatcher and many others have learned. A non-entrepreneurial, non-rich Chinese peasant or ex-employee of a sold-off state factory is inclined to remember not the privations and horrors of the Mao period, but the all-pull-together camaraderie and egalitarianism. One thing I noticed, living in Maoist China, was that the drab, constricted, poverty-stricken "iron rice bowl" lifestyle of the place actually suited quite a lot of people rather well. Those people are now better off than they were (and their kids are much better off than their parents were), but often less happy. Even in the USA, of all countries the one least infected with economic envy, I hear a lot of grumbling about the huge class of wealthy people spawned by the neoliberal revolution. "Back in the 1950s, it was easy to get into the middle class," I hear. There is actually a great deal more to be said about propositions of that kind, but a lot of people believe them neat, without the qualifications.
These discontents are especially strong in countries with weak legal and constitutional traditions, where rising wealth has inevitably brought rising corruption. That, of course, brings us back to Latin America. A further aggravation in this region is the ethnic divisions that plague it the problem of "market-dominant minorities" described so fearlessly in Amy Chua's book World on Fire. Under the PC regime here in the USA we can barely speak about these matters; but without some understanding of them, the rise of anti-neoliberalist leaders like Hugo Chavez in Venezuela and Luiz Inacio Lula da Silva in Brazil cannot be understood. The "market-dominant minorities" of Latin America are the tall, pale-skinned European-ancestry elites typified by Mexican President Vicente Fox; the discontented and disaffected losers at the wrong end of neoliberalism are the descendants of Indians and black slaves, typified by the guy mowing your lawn, who, you may have noticed, in spite of being Mexican, looks nothing whatever like Vicente Fox. (In an e-mail exchange with a paleocon acquaintance following George W. Bush's January 7 immigration proposal, I grumbled that it was all a conspiracy to let Vicente Fox export his unemployment problem. "His race problem, too," replied my correspondent.)
Still, Latin American leaders don't need a race problem to cause them to feel the tug of anti-neoliberalist sentiment. Corruption and a history of lawless bad politics will do the trick all by themselves. At the Summit of the Americas, in between Vicente Fox lecturing our president on the need for yet more openness towards "undocumented workers," Hugo Chavez explaining how Franklin D. Roosevelt used Keynesian policies to pull the USA out of depression, and Brazil's Lula arguing for "fair trade not free trade" (Lula defines "fair trade" to be that which "favors people's needs, not corporate profits"), here came Argentina's President Kirchner demanding an apology from Bush for the administration's previous declaration of "concern" about ties between Argentina and Cuba. Argentina has no race problem, the original colonists having taken the precaution of exterminating all the indigenous Indians, and the country's land being so fertile as never to have required much slave labor.
I very much doubt the backlash against neoliberalism has the potential to take us all the way back to state-dominated economies, though one or two countries may be unlucky and find themselves back in 1970. Neoliberalism may, though, have reached the end of its tether given as much as it can give to the world, which has been a very great deal. I don't believe the anti-neoliberal backlash can destroy what we have gained; but I do think it will be a growing force in world affairs over the next decade or two, and that those who believe that the advance of neoliberalism will continue indefinitely are in for some disappointments, in Europe, in the Americas, even in Asia. To get rich is indeed glorious. The appeal of KILL YUPPIE SCUM has never quite gone away, though. To judge from the Summit of the Americas, it may be gaining ground.
* The name, by the way, is an etymological mystery. Just across the river to the south there is a foot tunnel you can walk through is Greenwich, site of a royal palace in Tudor times. There is a story that Henry VIII kept his dogs on the island. A simpler explanation is that the island, marshy and mostly uninhabited till the 19th century, was a haunt of ducks. Yet another theory says that "dogs" is a corruption of "dykes." The Isle of Dogs is not, by the way, an island, except in a strictly technical sense. It is a peninsula formed by a wide loop of the river Thames.
** The BBC clip says May 4; but that was a Friday, and actual voting in England takes place on a Thursday.