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Bond, Patrick (2009) Toss out those old shoes: Economically a dangerous period lies ahead, and civil society needs to take action
Civil Society column (The Mercury Eye) : -.

The great crash of late 2008 should have heralded the end of the
free-market economic philosophy, neoliberalism for short. So says the
2008 Nobel Economic Prize laureate, Princeton professor Paul Krugman.

Everyone's talking about a new New Deal, for obvious reasons, he told
his New York Times column readers. As in 1932, a long era of Republican
political dominance came to an end in the face of an economic and
financial crisis that, in voters' minds, both discredited the
free-market ideology and undermined its claims of competence. And for
those on the progressive side of the political spectrum, these are
hopeful times.

Is Krugman correct? To be sure, there are promised public works projects
in the United States and Europe, alongside ludicrous bail-outs of
hedonistic financiers.

But those who consider ourselves progressives should first acknowledge
that a dangerous period lies ahead, because of at least three factors:

  • Public policy will suffer owing to the financial sector crisis through
    intense austerity, pressures associated with extreme economic
    volatility, and a renewed lobby for micro-neoliberal strategies like

  • There remains unjustified faith in multilateral system solutions (from
    Kyoto climate change mitigation to Bretton Woods revivalism), faith
    which distracts us from the national-scale solutions that are feasible
    and just; and

  • A new threat arises, in the form of relegitimised neoliberalism and
    even imperialism, through the election of Barack Obama as US president.

  • The mid-November Washington meeting of the heads of state of the 20
    largest economies, including South Africa's Kgalema Motlanthe, was one
    example of illusory post-neoliberalism.

    At that G20 summit, International Monetary Fund managing director
    Dominique Strauss-Kahn suggested fiscal stimulus equal to 2% of gross
    domestic product - across the world, everywhere, everywhere where it is

    In reality, though, the IMF was treating South Africa like a typical
    Third World debtor, and on October 22 its staff filed several lengthy
    reports with these recommendations:

  • The South African government should run a budget surplus (the opposite
    of a fiscal stimulus);

  • It should privatise infrastructure and social needs - including
    electricity and transport;

  • The Reserve Bank should maintain existing inflation targeting and
    raise interest rates;

  • The treasury and trade ministry should remove remaining protections
    against global financial and trade volatility; and

  • The labour ministry should roll back workers' rights, including
    backward-looking wage indexation that protects people against inflation.

  • Ignoring IMF managing director Strauss-Kahn's expansive rhetoric, IMF
    staff suggested Pretoria adopt tighter fiscal policy to avoid
    exacerbating current account pressures.

    The apparent death of our own home-grown neoliberal project in
    September, personified by former president Thabo Mbeki's unceremonious
    departure, is misleading. Jacob Zuma appears intent not only on
    retaining finance minister Trevor Manuel as long as possible, but also
    preparing a collision course with his primary internal support base,
    trade unionists and communists.

    And Zuma's main opposition, former ANC chairman Mosiuoa Lekota, also
    confirmed his allegiance to neoliberalism and fiscal discipline,
    attacking welfare grants at a debate at the Centre for Civil Society
    hosted with Ashwin Desai on December 18.

    These are not merely localised betrayals of the Freedom Charter. The
    problem is worldwide, thanks to rising austerity pressure.

    Multilateral economic, political and climate arrangements that would
    allow Strauss-Kahn's proposed stimulus are simply not in place. The
    recent Poznan climate talks again revealed how dysfunctional global
    processes can be.

    During the height of the false prosperity, at the Gleneagles G8 meeting
    in 2005, numerous promises of increased development aid were offered by
    wealthy countries.

    But, according to Manuel, who also serves as the UN secretary-general's
    special envoy on financing for development: World military expenditure
    is estimated by the Stockholm Institute to have been $1.3 trillion (R12
    trillion) in 2007. Compare this to the $104 billion (R967 billion) spent
    on overseas development assistance.

    The institute reports that rich countries decreased their aid flows by
    4.7% in 2006 and 8.4% in 2007, in contrast to rising military spending
    of 3% in 2006 and 6% in 2007.

    The food and fuel shocks and global financial turmoil are a bellwether
    of the consequences of broken promises. They are a signal of our
    failure, Manuel lamented.

    Consistent failure is the only way to describe development aid, Bretton
    Woods Institution reform, the World Trade Organisation's disastrous Doha
    Agenda, international financial regulation as proposed at the G20
    summit, UN Security Council democratisation, and other crucial
    challenges the world elites have failed to tackle.

    Worse, neoliberalism may have another breath of life, with
    mouth-to-mouth resuscitation applied by Barak Obama and his econocrat
    team: Larry Summers, Paul Volcker and Tim Geithner. They are joined by
    the dreaded securocrats who championed the Afghanistan and Iraq wars:
    Robert Gates as US defence secretary, vice-president Joe Biden and
    Hillary Clinton as secretary of state.

    Until grass-roots civil society forces again gather their strength to
    mount a countervailing assault, as they did nine years ago against the
    World Trade Organisation in Seattle, national-scale challenges to global
    power are the only ways forward.

    From a national power base, various financial sector reforms can be
    pursued: imposition of exchange controls (such as in Malaysia in 1998 or
    Venezuela in 2003), financial nationalisation (as some European
    countries and even the United States, albeit with crony-capitalist
    corruption, are doing), and fiscal stimulation (as wealthier national
    states are generally being encouraged to do at present to avoid global

    But grass-roots activists are crucial, to prevent the ubiquitous state
    patronage of failed capitalists.

    To illustrate, the Treatment Action Campaign and Johannesburg
    Anti-Privatisation Forum have won, respectively, antiretroviral
    medicines needed to fight Aids and publicly provided water, and in the
    process to evict multinational corporations.

    The drugs are now made locally and on a generic not branded basis, and
    are provided free, a great advance upon the $15 000-a-patient-per-year
    cost of branded Aids medicines a decade earlier (in South Africa, nearly
    half a million people receive them).

    And after massive battles, water in Johannesburg is now produced and
    distributed by public agencies (Suez was sent back to Paris after its
    controversial 2001-06 protest-ridden management of municipal water). In
    April, a major constitutional lawsuit in the Johannesburg High Court
    resulted in a doubling of free water to 50 litres per person a day and
    the prohibition of pre-payment water meters.

    And speaking of recent court victories, two weeks ago, the US judicial
    system attacked the Bush state department's refusal of a visa to
    University of KwaZulu-Natal Centre for Civil Society founder Adam Habib,
    who is one of our country's most respected intellectuals and political

    Since 2006, Habib - like Nelson Mandela from 1963-2008 - has been
    considered a terrorist and cannot enter the US. But the state
    department has been ordered to provide reasons in public, no matter how

    Habib says, echoing Bush (while doubting the potential force of Islam's
    Iraqi insurgency): Bring 'em on.

    In the same spirit - and with the same target - as Habib's stubborn
    defence of his right to travel to the US, here's a good local
    opportunity for citizens to think globally, throw locally, to rid us
    of last year's bad experiences and express hope for a better 2009.

    The date: January 19, George W Bush's last day in office.

    The place: a block west of the Durban City Hall, near the US consulate.

    The event: a shoo-out protest called by the Centre for Civil Society,
    in solidarity with jailed Baghdad journalist Muntazer al-Zaidi, the
    brave shoe-chucker who, at a December 13 press conference, expressed the
    world's fury at a million unnecessary lives lost in Iraq by hurling his
    footwear at the American president.

    Following Al-Zaidi's example, UKZN honorary professor Dennis Brutus, who
    served as a member of the 2005-07 Bush War Crimes Commission, gets the
    first shoe-toss at our Bush stand-in.

    Expensive high heels and smelly old tackies are equally welcome.
    Leftover shoes will go to the Durban homeless.

    And we will leave open these questions:

  • If Robert Mugabe pitches up, will he throw or be thrown at?

  • And what fate awaits Hillary's stand-in, the day before she takes office
    and renews US petro-military adventurism shoed-in or shoed-out by
    Durban civil society?

  • # Patrick Bond is the director of the UKZN Centre for Civil Society.

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