Economic dictatorships

Jorge Majfud
Tuesday, Mar 28, 2023

From France to Uruguay, not by chance, neoliberal governments have proposed a pension reform that adds years to the retirement age (two in France; up to five in Uruguay).

The narrative that justifies raising the retirement age is twofold: (1) People live longer and, therefore, have to work more; (2) If these “necessary and painful reforms” are not carried out, the system will be defunded and the country will lose competitiveness in the world since other countries have applied these same measures, necessary for the financial class and painful for the productive classes. The same discourse, plus a third threat, has been repeated for decades in the United States: (3) Social Security (invented by “the communist president” Franklin D Roosevelt during the Great Depression) is not sustainable, so we must raise the retirement age and, as far as possible, privatize it. It does not matter that it is and always has been self-sustaining. Social security is just that: insurance, not risky investments.

Privatization was first put into practice in peripheral countries. The destruction of Salvador Allende’s socialist democracy 50 years ago and the imposition of the Augusto Pinochet dictatorship had the declared intention of preserving the freedom of capital and using this country as a laboratory for the neoliberal theories of Friedrich Hayek and Milton Friedman. The ‘Chilean Miracle’ was noted for its social and economic crises, despite the tsunami of dollars from Washington and large corporations. The semi-private pension model was brought to Uruguay in 1996 and it only took 20 years for it to fail. The damn state should have come to the rescue of those harmed by investment geniuses.

The difficulty that a single country, be it France or Uruguay, can resist this acceleration of the robbery of the working classes is due to the fact that these neoliberal policies have a global reach. Countries are held hostage by big capital that migrates from one country to another in a matter of hours, terrorizing populations with the threat of another economic crisis and forcing their rulers, democratic or not, to kneel before these feudal lords. On the other hand, the largest financial institutions in the world, such as the IMF and the World Bank, are allies of this mafia. The World Bank defines itself as a development bank, but its practice indicates the opposite: It is at the service of the benefits of capital, informing to the minute which countries are planning to vote on a law to protect their workers or to control banks with regulations. Thus, its partners and clients can protect their investments by transferring their millions from a sovereign country to a more friendly one, better placed in the ranking of ‘business freedom’, another of those old functional fictions.

Since the 1980s, the productivity of workers in the United States and around the world has been steadily growing, while their wages have remained stagnant or have lost purchasing power. You don’t have to be a genius to understand where this difference between productivity and salary went. But they want more.

Another tender explanation for legislating against the will of the people consists of the classic idea that it is not the unions that govern but the elected governments. But in France alone, 70 per cent of the population is against the pension reform, and its “government elected by the people” refuses to listen. This deafness is classic and, in turn, is justified by another ideology: “The government must act responsibly, not demagoguery.” Again: responsibility before the capital of harassment; demagogy for exercising democracy, giving the people their right to decide.

All this could be solved with a more direct democracy system, something that many of us have been writing about for decades, especially with the new digital tools. If the French could decide in regular referendums, the massive demonstrations and urban destruction that have been going on for weeks would not have occurred in France. But common citizens have no other effective tool than rebellion, in violent cases. Obviously, this idea of direct democracy is dangerous because it is an idea in favor of a real democracy.

As history shows, capitalism is by nature undemocratic. It has developed from the brutality and carnage in its colonies; it has been strengthened by slavery; it has been consolidated with the multiple military dictatorships in Asia, Africa, and Latin America. Even lately, he has been more than comfortable with Chinese communism. When capitalism coexisted with liberal democracies, it was not because it was a democratic system but because it is a great manipulator, to the point of convincing half the world that democracy and capitalism are the same thing, since both are based on freedom. What he forgets to clarify is that democracy refers to the freedom of the people and capitalism understands it as the freedom of capital, that is, of the dictatorial elite that today not only owns most of the world’s wealth but the control of the global financial system and the near monopoly of the dominant media.

The French have a long tradition of social protest, but they can also afford to riot in the streets since few will accuse them of being underdeveloped. Uruguayans, despite their long tradition of democratic institutions such as education, health, and individual rights, are much timider in their claims. Its oligarchy, like all of them, also has a long tradition of stigmatizing the advances of real democracy, accusing any popular demand of being communist (a recipe inoculated by the CIA in the 1950s and which survives 30 years after the cold war) at the same time. They do it in the name of democracy and freedom.

The (re)solution for France is not easy in an international context kidnapped by the masters of capital who demand and even convince their slaves to work more years for the same ration and, moreover, to do so of their own free will. For Uruguay, due to its context and its size, it is more than difficult. But in both cases, if resistance to economic dictate succeeds, they could set themselves up as dangerous examples.

For these reasons, the only long-term solution is the union of a new current of Non-Aligned Countries or those associated by common interests (cultural and economic) such as Latin America, for example.

But of course, we all know that the centennial solution of imperial capitalism has been the disunity, demobilization, and demoralization of the colonies and their own workers. So long as this ideological inoculation that today, in the former colonies, nationalist movements are on the rise.

Excerpted: ‘Political Democracies, Economic Dictatorships’.