Collapse of Neoliberalism: Oligarchs in America and Russia Face a Crisis Once Seen as an Opportunity

While Russia has suffered substantial defeats in Ukraine, Vladimir Putin may be eyeing the end of his rule. There are similar tough things about Donald Trump, Steve Bannon and their GOP cronies.

As the world watches its 40-year experiment with neoliberalism crumble, Republicans in the United States and Putin in Russia face a crisis they once thought was an opportunity.

Neoliberalism was brought to America in 1981 by Ronald Reagan with his “Reagan Revolution,” and brought to Russia in the 1990s by the IMF.

It is an economic and political system where the regulation of a nation’s economy is largely taken away from the government and entrusted to the biggest, richest and most powerful economic players, be they billionaires, corporations or the of them.

It achieves this by:

  • Reduced role of government in protecting consumers, communities and small businesses – deregulation
  • Drain the power of labor – destroy labor movements and let corporations go anywhere in the world to find the cheapest labor available, i.e. “free trade”
  • Allow the virtually unlimited acquisition of wealth by the top 1% – massive tax cuts;
  • Privatize core government functions, outsource them to private corporations – for example, half of Medicare is now privatized thanks to George W. Bush’s Medicare Advantage scam, and half of America’s electrical systems have been privatized
  • Promote the formation of monopolies and oligopolies by refusing to enforce anti-trust and other anti-predation laws, as Reagan did in 1983.

Neoliberalism has now been tried, in a big way, in Chile, Russia, Iraq and the United States, as I document in The Hidden History of Neoliberalism: How Reaganism Drained America.

In each case, the result was a total or near-total shift to oligarchy or power by a small handful of the morbidly wealthy and their corporations. The problem of the oligarchy, as I explained in The Hidden History of the American Oligarchy: Reclaiming Our Democracy from the Ruling Classit is an inherently unstable and essentially transitory form of government.

Rarely lasting more than a generation or two, oligarchies usually dissolve into strongman fascism on the right or are shattered by popular democratic uprisings on the left. This is the essence of the settling of scores facing both Russia and the United States.

In Chile, when Pinochet was deposed, the people demanded democracy, although Pinochet’s legacy and his neoliberal constitution left political, social and economic landmines in the path of the democrats who are currently being destroyed in efforts to rewrite their constitution.

In Iraq, the Bush/Cheney/Rumsfeld-imposed oligarchy has dissolved into the current corrupt and strong neo-fascist government that now rules that country, especially as Nouri al-Maliki has consolidated most of the power political and economic affairs of the nation in his own hands and those of his closed circle.

In the United States, Reagan imposed neoliberalism with the so-called Reagan Revolution in 1981. Since then, five Republicans on the Supreme Court have imposed on the United States the neoliberal theory that big money should control politics, legalizing the political corruption with their corrupt ruling Citizens United and its predecessors.

The result has been oligarchy here for the past 30 years or so, with great wealth determining most of our political decisions. Even the programs that might pass, like the bipartisan infrastructure bill and Biden’s Cut Inflation Act, had strong neoliberal elements — demanded by Joe Manchin — requiring nearly all he money they distribute goes into the hands of generally for-profit corporations.

Since the Reagan Revolution, America’s oligarchs have demanded massive tax cuts for themselves, largely free access to the nation’s mineral and fossil wealth, and an end to laws and rules protecting consumers, the environment, and small businesses. businesses.

For four decades, the US government has largely complied, eviscerating the middle class and crippling the ability of Congress to pass meaningful legislation that could reverse our neoliberal experiment.

Thus, the American oligarchy is now in a crisis phase, on the verge of swinging into the fascist state envisioned by Donald Trump, Steve Bannon and the current GOP leadership, or reverting to a pre-Reagan democratic state such as promoted by President Biden. and progressives within the Democratic Party.

Trump’s failure to win re-election dealt a blow to his vision of a fascist and strong America, which is why he continues to assert that he didn’t actually lose.

The fascist movement within the GOP, what President Biden has identified as the “semi-fascist” “MAGA Republicans,” has shrunk the party — over the loss of Trump — but radicalized the authoritarians in its base, dragging the possibility of an increase in domestic violence.

In Russia, when Gorbachev let communism crumble, he imagined that the new Russia would become a fully modern democratic socialist state modeled, as Gorbachev himself put it, on Sweden and the other Nordic nations.

George HW Bush, Bill Clinton and the IMF had other ideas, however, and demanded neoliberal “shock therapy” in exchange for IMF loans. Gorbachev and Yeltsin complied, concentrating this nation’s wealth in the hands of a few hundred oligarchs and setting the stage for the rise of ultra-oligarch Vladimir Putin.

Putin tried to impose a Mussolini-style fascist regime on Russia, but for fascism to work, the government and its leaders must be perceived by the people as essentially all-powerful. Fascism requires fear.

“Force” and infallibility, or at least the appearance of it, are essential to fascism. Russia’s partial defeat last week at the hands of the Ukrainians has led Russian politicians to do what was previously unthinkable: call on Putin to step down.

Fascist leaders never survive defeat, and their systems rarely survive without a clear and consistent transition of power from one strongman to another. It is therefore a moment of maximum danger for President Putin.

It is still unclear if he will do something terrible and dramatic like try to start a nuclear war to cling to power, or if he will be arrested/deposed, or resign with the promise of a golden parachute.

How he leaves may well determine whether a strong new leader emerges capable of tipping Russia completely into fascism, or whether the people – especially the rising Russian generation now who are connected to the world – will try the idea again. of Gorbachev’s democracy.

The fathers of neoliberalism, Mises, Hayek and Friedman, all moved on to this great deal in the sky; their legacy is a weakened and oligarchic America, a self-governing China – which rejected neoliberalism and instead embraced the model of Alexander Hamilton American dietand a badly destabilized Russia that could trigger World War III.

And now, there’s a judgment coming. The next few years, amid the global crises of climate change and economic instability, will determine the future course of governance around the world. And the failures of neoliberalism are hitting Russia and the United States particularly hard.

This is an extraordinary time to be alive and a vital time to become an activist on behalf of democracy, wherever you live.

About Jimmie T.

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