Du Bois vs. Neoliberalism.
--W. E. B. Du Bois, The Souls of Black Folks
What is today viewed as globalization is not in fact a new phenomenon as the writing of W. E. B. Du Bois attests. Dr. Du Bois understood the impacts of what today we call neoliberalism, its damages, its causes, the interests it serves, and the way it divides the working class and undercuts the progressive movements with horrible consequences at home and abroad. These remain our themes today, though we would add "and women" in brackets where Dr. Du Bois wrote only "men," and we would include ethnicity and religion as part of the discussion of the color line.
The color line is present today in the racial profiling of African-American motorists on the New Jersey Turnpike. It is present in the treatment of Los Alamos National Laboratory's Wen Ho Lee, falsely, outrageously, and dishonestly prosecuted for allegedly selling nuclear secrets to China. These charges were found to be false only after humiliating Dr. Lee and treating him most abominably. We have racial profiling in the jailing of Pastor Rabih Haddad, assistant imam and well-known ecumenical leader in the Detroit area, who is today being held in solitary confinement, in a six-by-nine-foot cell, with a camera constantly on him, and is allowed only one fifteen-minute call to his family every thirty days. We know about him because the ACLU and Congressman John Conyers have taken up his case. They are now suing to force Attorney General Ashcroft to open dosed hearings that bar his family as well as the press. His crime is to be co-founder of the Global Relief Foundation, which without any evidence is listed as a terrorist organization. We do not know the names of thousands and thousands of other Muslims and Arabs who have been jailed for no greater offense than seeming suspicious to agents of the state. The consequences of racist policies at home and around the world set the terms of capitalist control and make neoliberal austerity against the working class easier to impose by playing on racial fears and divisions.
Neoliberalism is an accumulation strategy, a specific growth model that comes complete with its extra-economic preconditions. It is a return to the liberalism of the free market that was the reigning orthodoxy until the Great Depression, when the ideas of John Maynard Keynes and the policies of the welfare state were accepted by a weakened capitalist class to save the system from its then obvious failings and serf-destructive tendencies. Keynesianism, and the domestic agendas that accompanied it, were partly a reflection of the strength of the working class after the defeat of fascism. They reflected, as weft, the capitalist's need for collaborative class relations in the immediate post-Second World War period, during which many of the leading capitalist states were struggling to recover from wartime devastation.
Globalization has undermined the strength of nation-based social formations, as permeable borders have been encouraged by transnational capital and international finance has set about reorganizing the world economy. Mobile capital is now able to minimize the taxes it pays everywhere, bringing on fiscal crisis for individual states. It uses its leverage to impose general austerity, cut public services to finance tax cuts to the rich, and demand privatization--which involves selling state assets to transnational capital, and contracting with for-profit companies for services once provided by the state. As a result, services are reduced, as are the wages and benefits paid to the workers involved. At the global level, debtor nations are required to repay foreign banks for loans made to local elites. Other aspects of neoliberalism include: the World Trade Organization (WTO) forcing open the markets of developing countries for transnationals while allowing the rich countries to create barriers excluding agricultural and labor-intensive manufactured goods where the poorer countries have the comparative advantage; and the International Monetary Fund's (IMF) insistence on financial liberalization which has resulted in financial crises in most countries of the third world. The demands of these global political-economic institutions are used to force the privatization of electricity, postal services, and now water. These institutions, which reflect the demands of the rich states, insist, on the grounds of supposed free-trade principles, that firms based primarily in the developed countries should retain monopolistic control of intellectual property, such as the patent protection for drugs used in basic medicine, along with other technologies which, if made more feely available, would promote the welfare of the poorest countries. This mock "laissez-faire" attitude extends to the environment and to the acceleration of global warming and other destructive policies fostered by the greed of transnational corporations.
Part of neoliberalism is the marginalizing of the democratic process. Governments can no longer choose their economic policies. The IMF and WTO force governments to follow their policies. These governments can neither properly tax transnational capital nor follow autonomous development strategies. There is also a process that we may call venue shifting in which the relatively more democratic international institutions are deprived of resources and decision-making powers in favor of those where the rich countries are decidedly more powerful. Thus there is a shift of decision-making authority away from the UN General Assembly toward the IMF, where votes are distributed according to each country's financial contribution (and where the United States is the only country with enough votes to veto a decision of the rest of the world's nations). The World Bank and WTO have likewise expanded their powers in comparison to the earlier structure of the General Agreement on Tariffs and Trade. Responsibility for education, the environment, and health care are being shifted from UNESCO and the World Health Organization (WHO) to the World Bank, which is given the economic resources denied to the United Nations. The bank increases its spending on health care without asking questions about tobacco or making demands on the pharmaceutical companies--questions once raised by the WHO, which led the United States to withdraw its funding.
All of these global governance institutions come into the process of running the world after capital has set the terms under which government policy makers can act. The way this works is that policies are first discussed by corporate leaders in groups such as the Business Roundtable in the United States and its counterparts in Europe and Japan. Then there are meetings of the working groups of such organizations as the TransAtlantic Business Dialogue, making detailed proposals that they pass on to their national negotiators and monitoring them to be sure they get what they ask for. There are also discussions by the elites of broad political and economic matters, at such gatherings as the World Economic Forum (WEF). If you still wonder what the WEF is about, it is described by the conference's spokesperson Charles McLean as "a global town hall of leaders from different sectors of society" who come because of "a shared commitment to the forum's mission of improving the state of the world." I leave it to you whether your sector of society is in fact represented at this elite gathering of the people who run the world.
Du Bois on Globalization
What is called globalization, it has already been noted, is nothing new. As Du Bois wrote, Europe had begun to look "with covetous eyes" toward Africa as early as the fifteenth century when the Portuguese gained a foothold in Morocco and thereafter Henry the Navigator's ships set out to conquer new worlds and by 1487 had taken possession of a slice of the African coast. Other European predators soon followed Portugal. They prosecuted the slave trade and in the late nineteenth century carried out the partition of Africa driven by their lust for diamonds, ivory, copper, and rubber.
Du Bois organized the First Pan African Congress in 1919 with the American Secret Service at his heels and the State Department denying Negroes passports to attend. He did so in the face of the NAACP's fear of getting involved with Africa, given their concern to be good Americans. He courageously wrote about the class and racial dimensions of imperialism. In April 1923 he stated in The Crisis.
In China, Japan and India, In Egypt and South and West Africa, in the West Indies and in America, there is a growing determination on the part of colored laborers that they are not going to remain the victims of modern industrial development. The greatest post-war problem is whether white laborers are going to recognize the demands of these dark laborers for equal consideration, or whether white capitalists and employers are going to continue to play off black and white labor against each other and thus seek to exploit and develop Asia and Africa simply for the benefit of the privileged classes of the white world.
It is interesting to note that the Pan African meeting could be held in France over U.S. and British opposition because the French prime minister, Georges Clemenceau, had to worry about black voters who, following the French colonial policy, were considered "little Frenchmen." The downside of this arrangement was that the participants from French colonies were proud to be French and did not criticize colonialism. After independence it was from this class that the local rulers were selected and their ties to the former mother country cemented. Under neocolonialism they were able to cut deals with the imperialist powers to the detriment of real independence and autonomous national development.
To continue Du bois' exploration of the class and racial dimensions of imperialism today we would want to highlight the role of local elites, comprador classes in the so-called third world, who cooperate with transnational capital and benefit from the exploitation of their own people. We might also want to look at immigration and the use of racism in this regard to lower the wages of all workers. Specifically, we might comment on the implicit decision in the United States to use immigrants to take jobs which otherwise would go to African-Americans and other people of color disproportionately consigned to the bottom of the class structure. This includes invitations to better-educated foreign workers in preference to training American citizens to do technical and professional jobs associated with the information economy.
In basic industry, note the recent indictment of Tyson Foods, the nation's largest meat processor, on charges that it conspired to smuggle in illegal immigrants to work at its plants. We should remember that until fifteen or twenty years ago unionized workers earning eighteen to twenty dollars an hour staffed meatpacking plants in the United States. They are now staffed by nonunion workers from Central America who are paid six dollars an hour for work on unsafe and speeded-up assembly lines. Because they are undocumented these workers can be threatened in the same ways blacks were in the era of legalized segregation. We could cite other areas where immigrants have been brought in to force down wages, compelled to endure unsafe working conditions, and used to break strikes as black Americans once were.
This is not simply a U.S. phenomenon. Malaysia has long relied on foreign labor. Its substantial Chinese and Indian minorities first arrived to work in the mines and rubber plantations. It now draws hundreds of thousands of Indonesians to do the dirty, demeaning, and dangerous work that Malaysians look down on. The present recession has brought violence against immigrants and efforts to expel them.
Despite the claim to a greater degree of modernization, essentially the same process can be seen in Europe where anti-immigrant feelings combined with continued high unemployment have dramatically impacted politics--contributing to post-Nazi Joerg Haider's rise to influence and Silvio Berlusconi's fascistically inclined government in Italy. After race riots in Britain, a government commission was apparently shocked to find that whites and ethnic minorities had become deeply divided--leading separate lives with no social or cultural contact and no sense of belonging to the same nation. In the Netherlands and Denmark right-wing parties have gained strength by linking immigration with crime and taxes, bringing anti-immigrant politics into the mainstream.
Neoliberalism at Home
When Du Bois did his pioneering study, The Philadelphia Negro, at the start of the twentieth century he was the first sociologist to investigate the lived experience of black Americans. In the field of urban sociology, as in so much else, he was a pioneer. Du Bois was up-front about the damage racism and poverty do to the psyches of black folks, and how this damage produces alcohol abuse, violence, and criminal behavior in the low-income African-American community. These topics are handled with much greater circumspection today out of respect for racial feelings. Yet, his less liberal attitude represented a greater and more truthful condemnation of racial oppression in capitalist America.
Our society today, which is infinitely richer and vastly more able to meet the needs of its people, is in fact meaner. In the neoliberal, free market, risk society, in which individuals must compete on a structurally unequal basis, services are cut to provide tax cuts to the rich. A recent article in the New York Times described a horrendous crime that typifies the very ordinariness of the disintegration of low-income communities. A thirty-two-year-old counselor was beaten with a phone, dragged down two flights of stairs, and set on fire by a group of girls in her charge at the Mount Pleasant Cottage School in Westchester. As the reporter wrote: "But rather than being an example of one disconnected episode, the hour long assault reflected the increasing number of violent, emotionally disturbed children in the New York metropolitan area being placed in residential treatment centers that are no longer able to handle them. Faced with stagnant budgets, poorly paid staffs and long waiting lines for facilities," the system snaps. The kids have become more aggressive even as the funding is cut. The staff turnover is 42 percent a year at this center although the counselor was a six-year veteran. The kids wake up to find a new worker caring for them over and over again. The staff psychiatrist spoke about the need for more staff training knowing it will not happen. The starting pay for childcare workers is $20,000 a year--less than the kids make at the local mall as part of their independent living requirements.
Neoliberal policy is not just something that has been imposed on the poorest countries. It has also been embraced, to varying degrees, in the rich ones with consequences for the most disadvantaged, which Du Bois discussed at great length in his writings. In the current downturn we are seeing the same sort of last-hired, first-fired pattern and scholars will once again do studies showing how, as unemployment rises, the kids of laid-off workers do worse in school. Today we can separate statistically the effects of overcrowded, underfunded schools from the additional impact of the economy as family stress affects kids. Parents who lose their jobs become more irritable, disciplinary styles become more arbitrary and punitive. In addition to the detrimental effects of low-wage work and poverty, adolescents in families where parents have lost jobs are statistically even more likely to be delinquent and use drugs. Nutrition, healthcare, and school readiness deteriorate for young children in families with declining income compared to other kids who are otherwise similar.
What does this have to do with neoliberalism, which many continue to see only as what happens to poor countries? The truth is that the same policies which are being pushed on the third world have been voluntarily embraced by elected officials in U.S. society. An extreme form of this is the latest Bush budget with its vast increase in military spending, tax cuts for the rich, and accelerated service cuts for everyone else. There is, of course, much to say about all this. The Presidents Bush, father and son, represent a particular sector of the ruling class, the oil and gas folks with strong ties to the military and the intelligence services whose business it is to keep countries friendly to Exxon, Mobil, and the rest of the gang. The politics of bribery and violence come most naturally to such an industry. Overthrowing governments and terrorizing indigenous peoples is part of their day's work. This is all the easier because of the access the industry has always enjoyed to the highest reaches of the executive branch of the U.S. government. President Eisenhower's secretary of state, John Foster Dulles, was from Standard Oil's law firm, Sullivan and Cromwell, and personally took charge of replacing Iran's democratically-elected government, of reforming Prime Minister Mossadegh, with the Shah. This initiated the anti-Americanism that continues today under a repressive regime of political Islam. Shift forward exactly fifty years and we find an administration dominated by off corporation executives naming a former consultant to U.S. off companies to run Afghanistan and presumably approve the pipeline to the Caspian Sea. This is something that the oil companies have wanted for some time. Yet they were unable to create conditions under which it would be possible until the recent U.S. military intervention in that country. A number of court cases are targeting the U.S. off companies: in the case of Unocal, for complicity with murder and forced slavery in Burma; in Indonesia, for the murder and torture of activists by special military units financed by Exxon-Mobil to protect their interests in that country; and, for the infamous murder of Ken Sari Wiwa and other Ogoni activists in the Niger Delta with the complicity of Shell. The nature of the industry requires that it go into countries and gain control of their petroleum resources by hook or by crook, bribery, and violence. It therefore helps to have a U.S. Marine Corps and an interventionist pro-oil administration.
With an entire administration drawn so heavily from this one powerful sector of U.S. capitalism we can expect more wars in the Middle East and destabilization in other places oil is found. This is required not only to protect oil interests. The wider capitalist class, transnational corporations and international banks, all make their demands on an administration put in charge partly through their money and influence. Wealth extraction is furthered by neoliberal policies, which force these economies to conform to the design of capital. Not all that much has changed on the most essential levels from the early writings on the subject by the man whose contributions and life work we celebrate today. The system remains. The struggle continues.
Under the Headline 'Let's All Go to the Yard Sale"
A shock programme of economic reforms signals a radical departure for Iraq. The changes, announced by the country's provisional rulers [appointed by the United States under the current U.S. occupation], at the annual World Bank/IMF jamboree in Dubai, could see its ... economy transformed abruptly into a virtual free trade zone....
Investors in any field, except for all-important oil production and refining, would be allowed 100% ownership of Iraqi assets, full repatriation of profits, and equal legal standing with local firms. Foreign banks would be welcome to set up shop immediately, or buy into Iraqi ventures. Income and corporate taxes would be capped at 15%. Tariffs would be slashed to a universal 5% rate, with none imposed on food, drugs, books and other "humanitarian" imports....
--The Economist, September 27, 2003
This is an edited version of a talk delivered at a conference dedicated to W. E. B. Du Bois, "Challenging the Color Line: Confronting the Issues of Race and Class in the Era of Global Capitalism," New York University, February 23, 2002.
William K. Tabb teaches economics at Queens College, City University of New York. He is the author of The Amoral Elephant: Globalization and the Struggle for Social Justice in the Twenty-First Century (Monthly Review, 2001), Unequal Partners: A Primer on Globalization (The New Press, 2002), and Economic Governance and the Age of Gobalization, forthcoming from Columbia University Press. He can be reached at firstname.lastname@example.org.