As postscript to the series that began three weeks ago in this column, I wish to start this piece with observations and reflections that take neoliberalism on its own terms, in its own ideological self-understanding, especially with the role of our megabanks. Thus, strictly in terms of technocratic efficiency and the benefits that derive from the connection of our national economy to global circuits for the movement of capital funds across the whole world to make businesses and enterprises grow and prosper, the protectionist regulations and practices of the pre-neoliberalism period in Nigeria are uncontestably inferior to the facilities and services offered by the “free trade” financial services of the present period. To put this in a more positive formulation, it does not hurt a developing country like Nigeria to have megabanks that can move capital easily and expeditiously across the whole world; indeed, it makes a crucial area of our national economy keenly competitive both regionally in West Africa and also globally in the centers of the inter-state and international financial services industry.
But this is true and valid only if one looks at technocratic efficiency in isolation, without extending the claims that one makes for the banking and financial services sector in Nigeria to the national economy as a whole. Perhaps it does something to our sense of collective national pride when see television advertisements around the world that feature Nigerian megabanks like GTB, Zenith, Eco Bank, First Bank, Union Bank right there among the foremost banks in the world, but has this made a real difference in the lives of the vast majority of Nigerians in their tens of millions? These Nigerian megabanks declare huge annual profits but this fact does not in the least translate to extension of credit and loan portfolios on a significant scale to the most vital and needy sectors of the national economy like farming and small scale enterprises. As a matter of fact, as in the rich countries of the world where the financial services enterprises consistently declare huge profits that are of inverse relationship to the economy as a whole, the very period that has seen the growth and the expansion of megabanks in Nigeria has seen a sharp widening of the gap between the haves and the have-nots, a phenomenon that is known to development sociologists as growth without development. This is in fact the ultimate indictment of neoliberalism nearly everywhere in the world: consistently huge profits that widen the gap between the few super rich and uncountable hundreds of millions of the poor around the planet, a gap of social inequality that exists as muchbetween nations as within nations. Permit me to dwell a little on this particular factor of the impact of neoliberalism nearly everywhere in the world, rich and poor nations alike.
We know enough now about neoliberalism to know that the cause of its tendency to widen the gap of inequality between the rich and the poor everywhere in the world and to foster growth without development derives from the fact that the “economy” in which for the most part it operates is a shadow economy almost completely without any meaningful connections to the real economy. In the real economy, the goods and services that sustain life and make human existence pleasurable and dignified are produced and traded: food, clothing, medicines, houses, transportation, sanitation, entertainment and leisure and the instruction of the young. In the shadow economy, no goods, products or services that anyone can eat or use are produced and traded. The bulk of what is produced and traded are services based on speculation on securities and derivatives on huge debt and loan portfolios. This unregulated or indeed unregulatable degree of speculation in neoliberalism’s shadow economy attracts far greater finance capital than investment capital that goes into the real economy. This, in essence, is what “financialization” means in neoliberalism: we are in a phase of global capitalism in which money creates more money without having contributed much to goods and services in the real economy. At previous historic stages of capitalism, finance capital was tied to something other than and beyond itself.
In the mercantilist phase, money or finance was tied mostly to trading and commerce. In industrial phase of large scale factory production, it was tied to making industrial goods and heavy machinery, the machines that make other machines. In the third industrial revolution that produced advanced micro-processes to probe deep into the oceans, the heavens, the seas and the deep interiority of human genes, finance was and is largely devoted to making and doing things that both human beings and the heavy machines we make cannot do. I should perhaps add here that money devoted to making more money as an end in itself is not new and has always been around in all the previous historical stages of capitalism. However, with the full maturation of neoliberalism, it becomes more than peripheral and secondary; it becomes the dominant mode of global capitalism.In this respect, perhaps the ultimate question that we can and must pose to neoliberalism is this: whatever the unprecedented levels of technocratic efficiency in the generation of wealth, whatever the highly impressive rates of growth under neoliberalism, who benefits, who suffers; whose bellies are full to bursting and whose bellies are bloated, not with nourishment or satiation but with the unreal and artificial kwashiorkor of destitution.
Not too long ago, at the height of the global ideological hegemony of neoliberalism, the world was for the most part divided into two halves: one half comprised creditor nations that ‘restructured’ debtor nations; the second half comprised debtor nations that were ‘adjusted’ by the creditor nations. Here is another formulation of that decisive division of the world into two halves: nations that were “SAPPED” and those that did the “SAPPING”. If we are looking for the signal moment for the rise to world hegemony of neoliberalism, that was the moment.
Fortuitously, that is not the end of the story and we are beginning to see a world that will gradually put neoliberalism behind it. This is because the map of the global political economy that once divided the world into creditor nations that restructured debtor nations on one side and on the other side debtor nations that adjusted has changed radically.
Now, nearly all the nations of the world are debtor nations, with only a few like China and Germany still being creditor nations. The most important aspects of this change in the global political economy of neoliberalism is that most of the nations of the world are being SAPPED now. For me personally, it has been quite an experience to have seen and lived through the effects and consequences of being SAPPED in both the poor nations and the rich nations. Concretely, it has been a revelation to see and hear the protests of anguish and desperation that we have been making in our part of the world since the 80s now being made by tens of millions of people in the global North. And here I am talking not only of the most obvious cases like Greece, Spain, Portugal and Finland but even of Britain, France and the Scandinavian countries, not excepting the United States itself, the heartland of global capitalism and the center of gravity of the global ideological hegemony of neoliberalism. We could say that since what they used to do to the peoples of the poor countries of the world, the rich counties of the global North are now doing to their own people, the chickens have come home to roost. But there is no cause for gloating when all the working people, all the poor people of the world are catching hell from the ravages of neoliberalism.
No countries, no peoples like being SAPPED! Peoples, unions, professional associations and mass movements are fighting back, not only physically as in the so-called Occupy movements but also at the level of ideas and ideology. I would go so far as to state that, at certain fundamental levels, neoliberalism is now in a sort of retreat, a sort of self-reappraisal as advocates and defenders of the welfare state, of social democracy and protection of the public sector from complete privatization and deregulation are fighting mightily against the parties of the Right and the Center that are still sold on neoliberalism.
As a matter of fact, Nigeria is one of the few countries in the world in which all the ruling class parties and the majority among members of the political class still believe that neoliberal ideas and policies are here to stay forever in a quite remarkable divergence to what is happening in many other parts of the world. The very worst of these apostles and champions of neoliberalism in the Nigerian political class actually still believe and loudly declare that the problem with neoliberalism in our country is the fact that we have not gone far enough in embracing and applying its ideas and policies!
In the months, years and decades ahead of us there will be time enough to deliberate carefully on what will come after neoliberalism, specifically in our country but also in our region and the rest of the world. The point is what is to be done now, at this moment when a new formation of the ruling class has come to power on the slogan of change, change, and change. Change without transformation, growth without development? In other words, more of the same with neoliberalism? Nasir El Rufai, will you please speak up?
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