by Michael Angulo, Grant Chamness, Sean Gordon and Salome Tash | Freie Universität Berlin
photo: King Leopold II – main responsible for the genocide in the Congo in which approximately ten million people were killed
The capitalist motivations of 19th and 20th century colonialism have been the driving force behind a system of systematic, worldwide exploitation that has persisted through time. Colonialism, neocolonialism, and neoliberalism are all a product of the persisting need of capitalist world powers to control wealth, political ideology, and strategic geographical locations. Colonialism, neocolonialism, and neoliberalism are all different stages within the same historical trajectory of capitalistic exploitation. Although the methods of exploitation differ slightly in nature within this evolving structure of global capitalism, the similar motivations and the use of violence in order to gain economic advantage underpins all three.
Although this paper will mostly follow the common capitalist motivations for exploitation through colonialism, neocolonialism, and neoliberalism, it is important to recognize that colonialism was not the first system of greed-based exploitation. Walter Rodney’s How Europe Underdeveloped Africa documents the origins of exploitation due to material greed. He traces exploitation and underdevelopment through the development of societies around the world.
The first stage of human organization was communalism in which land and resources were shared relatively equally among the population. Rodney writes, “Property was collectively owned, work was done in common, and goods were shared equally” (6). Thus, the first collective living arrangement was nearly completely separated from the defining features of capitalism. However, this separation of features would soon be dramatically unraveled by the next phase of human collection, slavery.
Slavery, which came about due to the unequal balances in control over resources and technology, was one of the defining foundations of the systems that eventually created capitalism. Rodney explains, “[Slavery is] caused by the extension of domineering elements within the family and by some group being physically overwhelmed by others” (6). Once communities began to become disproportionately powerful, they were able to physically control other people and communities. Most wealth of this time was generated from farming, since people were largely dependent on farms for survival. Therefore, strong groups of people that could control slaves became wealthy, putting many slaves to work on farms. (Rodney 7) While modern capitalism may not physically overwhelm people, the massive unequal distributions of wealth today accomplish practically the same control. The next stage in this evolution was feudalism.
After slavery came feudalism, in which a few wealthy landowners controlled the majority of wealth and land. Rodney describes, “Agriculture remained the principal means of making a livelihood, but the land which was necessary for that purpose was in the hands of the few, and they took the lion’s share of the wealth” (6) Just as in capitalist society today, wealth was created by many people for the advantage of a select few. Rodney emphasizes the similarity between slavery and feudalism, “Just as the child of a slave was a slave, so the children of serfs were also serfs” (7). Simply put, the system had not fundamentally changed; feudalism produced the same system of controlled labor with little change in freedoms and well being. Landowners still profited the same way as they had with slaves. Instead of buying and selling slaves, landowners acquired labor through the purchase of existing farm land. For example, “When the manor changed hands, the serfs had to remain there and provide goods for the landlord – just keeping enough to feed themselves” (7). Although people were technically not slaves, they were bound to their work with no hope of escape, and they would never receive a fair share of the profits they themselves produced.
Feudalism eventually morphed into capitalism. Capitalism came about because the majority of wealth was no longer generated on farms. The largest sums of wealth being generated in society came from machines, factories, and mines (Rodney 7). However, even though the means of wealth generation changed, the control of wealth generating industries still lay in the hands of the few. In fact, the wealthy landowners, merchants, and craftsmen of the feudal era were the class that financed the industrial advances and ultimately became the next ruling class. A defining feature of capitalism is that the means of producing capital are controlled by a few people, and that the products of labor are unequally given out (Rodney 7). This means that despite a completely new system, motivations did not change, and power, money, and influence still lay in the same hands.
Regardless of system, the motivation to create wealth despite human cost did not change. After communalism, the system of practically every european society has revolved around the creation of wealth for the few, at the expense of many. Despite the large gap of time which spanned between the introduction of communalism and capitalism, the methods of exploitation, economic advancement, and physical control did not change significantly.
In order to further clarify the scope and content of this paper, this section will outline the framework of the paper, while defining key terms.
We will begin by starting with a case study of colonialism in the Belgian Congo. Colonialism is the explicit act of controlling a populace and its resources using colonies with the purpose of economic and political exploitation. The motivations of these exploitations are capitalist in nature. The case of the Belgian Congo thoroughly illustrates the underlying capitalist motivations of colonialism. Additionally, it shows that these motivations can be easily covered and misrepresented to control public opinion. Finally, this study shows how limitless ultra-violence is just another tool to meet expectations born from fierce financial greed.
These capitalist exploitations will prove to reverberate through time, and will manifest themselves again through neocolonialism and neoliberalism. To demonstrate the timeless and adaptive nature of these motivations, we will present a case study in which colonialism evolves into neocolonialism. Specifically, we will dissect how French colonialism naturally transformed into the neocolonialist, American occupation of Vietnam and ultimately the Vietnam War. As in the Belgian Congo, violence was implemented to a gruesome maximum. Full-scale war, and genocide were just necessary tools of domination. Propaganda and government dishonesty ensured that the true neocolonialist motivations remained hidden.
In the last portion, we will outline the ways in which the exploitative practices of colonialism are now institutionalized at the international level, and how state actors have given significant power to transnational corporations. This system of corporate control, and the laissez-faire nature of world markets, is what enables powerful neoliberalist countries to continue the legacy of exploitation established by colonialism and neocolonialism. The actions of the International Monetary Fund, and World Bank, are instrumental in the institutionalization of capitalist driven exploitation.
Belgian Congo and Colonialism
An apt example of capitalism creating the impetus for a global system of exploitation can be found in the historical example of the Belgian Congo. The Congo was one part of the African continent that was not colonized by a traditional European power such as the United Kingdom or France, but rather relative newcomer to the European stage, Belgium. Belgium’s history as a colonizing power is particularly noteworthy because the economic stage in which Belgium came to acquire colonies was capitalist in nature, which contrasts to the mercantilist era in which the United Kingdom and France first became colonizing powers. Therefore, with Belgium we can fully see the influence capitalism had over the colonizing process.
For the purpose of analyzing the role that capitalism played in the colonialist process, we first should define imperialism in this context.
According to political economist Jan-Frederik Abbeloos,
… imperialism can be interpreted as a scaling-up of trading and investment opportunities, opening markets that had otherwise perhaps remained closed to outside economic activity. The purpose of imperialism is not to connect these new markets to a global goods and factor market but to incorporate them into different, self-contained imperial economic networks, connecting the metropolis with its periphery (Abbeloos, Belgium’s Expansionist History between 1870 and 1930: Imperialism and the Globalisation of Belgian Business)
This process of imperialism was key to the exploitative nature of colonialism. Colonialism, despite any propaganda otherwise, was never intended to connect new markets into the global economic system with the societies in Africa as equal players. The reality was that African land and resources were to be subjugated into the colonizing country’s economic system purely for the colonizing country’s benefit. This reality was what determined that Africa would be purposely underdeveloped for Europe’s benefit.
Belgium itself played very little role in colonizing the Congo, the actual colonizing process was orchestrated by one man, King Leopold II of Belgium. Leopold was, according to historian Adam Hochschild, annoyed with Belgium’s lack of colonies. “For [Leopold], colonies existed for one purpose: to make him and his country rich. ‘Belgium doesn’t exploit the world,” he complained to one of his advisers. ‘It’s a taste we have got to make her learn.’” (Hochschild, King Leopold’s Ghost) Leopold would devote the majority of his reign to making Belgium acquire a taste for colonies, his desire for colonies not at all shared among the ruling elite within Belgium initially.
According to Jan-Frederik Abbeloos,
Industrial and financial groups showed a lack of enthusiasm for Leopold’s colonising plans. Belgian industrialists might have been encouraged in their efforts to penetrate foreign markets by the acquisition of Belgian Congo by King Leopold II in 1885, but the colonial project itself had few supporters. The real push for foreign direct investment was yet to come in 1885 and the export of goods, capital and know-how was still predominantly European orientated. When the real worldwide export of capital came, Belgian investors were more interested in the industrialising areas of the capitalist periphery than in looking for protected, distant and unlocked colonial markets in Africa (Abbeloos 114)
Belgian industrialists were far more interested in exploiting the resources of Europe, where industrialization was still an ongoing process. The capitalist exploitation of Europe was not yet complete, colonialism was not yet a necessary process to ensure the continuing expansion of profits. It would be later, following King Leopold II’s reign that Belgian industrialists would begin to see the value of exploitation of the Belgian Congo.
Leopold II devoted the majority of his time as reigning monarch overseeing the establishment of the Congo Free State by his agents and its legitimization as a political entity within the European popular and political spheres. King Leopold funded the exploration of the Congo by explorers such as Henry Morton Stanley, whose successful mapping of the region of the Congo basin would stoke interest at home among the European elite and public through reports by the European media.
The same explorers hired by Leopold II, namely Stanley, were also ordered to sign unfavorable treaties with Congolese chiefs that granted Leopold ownership of the land that the Congolese tribes inhabited. The treaties’ contents were not understood by the Congolese leaders, as the leaders were all illiterate. As a result, the chiefs had no idea that they were signing away all rights to their land and trade in the eyes of European legal parlance. The treaties compensated these chiefs for the cession of land and all trading rights with gifts such as clothes and alcohol. To the societies within the Congo basin, the idea of signing away essentially all rights to the very land their societies had dwelled on for generations on pieces of paper was unfathomable. These unfavorable treaties formed the legal basis on which King Leopold II and his compatriots would exploit Congolese land and labor.
The exploitation of the Congo Free State was accomplished largely through the initiative of King Leopold II, but it was not accomplished by him alone. Belgium was too small in size, population, or military projection to be able to fully control such the resources of such a large, resource-rich and populous area. Therefore, Leopold II allowed for capitalists and agents from other European nations such as the United Kingdom and France to take part in the exploitation of the Congo. Leopold II received a large share of the income from the Congo, in respect to his status as “proprietor” of this region of the continent. (Encyclopedia Britannica) He would later use this wealth gained from the exploitation of resources and labor from the Congo to fund the construction and expansion of grand royal palaces and avenues at home in Belgium.
Following the massive outcry towards the callous violence inflicted upon the Congolese peoples under King Leopold’s control of the Congo Free State, the Congo Free State then became the Belgian Congo. This transformation would usher in a shift in Belgian interest in the colonies, transforming the Congo from the personal affair of King Leopold II into a full-fledged colony of Belgium. “After the Belgian take-over, Congo gradually reflected the colonial satellite pattern of production, serving primarily as a source of raw materials for the metropolis while importing most of the manufactured goods required.” (Abbeloos 116) This shift from the Congo being a source for one man’s profits to being a source of raw materials for industrial expansion while also importing many of Belgium’s manufactured goods meant that the Congo was then firmly in the same role in the capitalist system as other European colonies were.
The methods that Leopold II and his agents used to subjugate the inhabitants of the Congo Free State into a profitable economic system were maintained by the Belgian administration, a system that exploited the land obtained through unfavorable treaties signed with Congolese leaders via Congolese labor. The idea of paying Congolese laborers a wage comparable to European laborers was impalpable to Leopold II and later Belgian administrators, because the narrative of “uplifting the African savage” that had been crafted and repeated by Leopold had implied that the African would be rewarded for his labor through the teaching of European manners and civilization, esoteric concepts that allowed for practically non-existent financial recompense to the Congolese laborers and therefore the growth of massive profits for first Leopold II, then later Belgian capitalists.
European companies operating in Africa were free to increase production and maximize profits by any means they wished by the terms of the concessions they received, and so they did so by pushing the Congolese people into a dehumanizing labor system. This system was legitimized by talk of uplifting the “lazy” native, “… if Africans were made to help out in the ivory-gathering, why that too, Heaven forbid, was not to make a profit, but to rescue these benighted people from their indolence. Talk of the lazy native accompanied the entire European land grab in Africa, just as it had been used to justify the conquest of the Americas…” (Hochschild 281) This talk of uplifting the natives fit into the explicit narrative of “civilizing” Africans that Europeans had created to justify the establishment of formal colonies in Africa, putting a veil over the actual motivation of generating profits for capitalists back at home.
The European companies which had received concessions in the Congo levied quotas on the villages within their territories, the soldiers working for these European companies often took female hostages to ensure the Congolese provided their labor. The threat of violence was used to keep villages in check, with the implicit guarantee that the female hostages taken by European soldiers would be harmed if the villages did not cooperate, which did occur sometimes regardless of whether or not the villages did cooperate.
According to a historian noted for his work on the Belgian Congo, Adam Hochschild:
If you were a male villager, resisting the order to gather rubber could mean death for your wife. She might die anyway, for in the stockades food was scarce and conditions were harsh. “The women taken during the last raid at Engwettra are causing me no end of trouble,” wrote Force Publique officer Georges Bricusse in his diary on November 22, 1895. “All the soldiers want one. The sentries who are supposed to watch them unchain the prettiest ones and rape them.” (Hochschild 385)
The removal of the vast majority of adult Congolese from many villages meant that there was not enough labor available within these societies to perform agricultural or hunting roles, meaning that food production in Congolese societies dramatically declined. The combination of mass murder, famine, and psychological traumas inflicted upon the Congolese peoples in the pursuit of profit resulted in the deaths of millions of Congolese. In the words of Hochschild, “… according to the [census] estimates, that during the Leopold period and its immediate aftermath the population of the territory dropped by approximately ten million people.” (Hochschild 547)
The extraction of natural resources from the Congo by Congolese labors for miniscule wages exemplifies the exploitation inherent within the capitalist system. The expansion of profits within Europe and increasingly sophisticated means of production meant that the European bourgeoisie were then inclined to find new ways of fueling economic expansion to generate further profits. The usage of forced labor in initially the Congo Free State and later the Belgian Congo compared to the wages that European laborers received for the extraction of natural resources played a large part in the massive profits that European capitalists made in Africa (Rodney, How Europe Underdeveloped Africa).
European capitalists received their profits from Congolese labor in the form of large monopolistic multinational corporations, these corporations being unlike the forms of business back in Europe. These corporations were larger and more impersonal. This time of widespread colonial exploitation of the African continent was the dawn of monopoly business in the world. At the time these large corporations were forming, the US and Europe were both organizing their production through forms of organization such as individual- or family-owned businesses. These grotesque, oversized institutions that came to exist first and foremost in Africa were the means by which European and later American capitalists extracted the wealth of the African continent.
The exploitation of the Belgian Congo was but part one nation’s history in one stage of capitalist exploitation of the globe. It would be followed by a violent process of decolonization in which European powers lost the majority of their colonies and nation-states were formed within the continents of Africa and Asia. This process of decolonization initially threatened to upheave the purposeful underdevelopment of Africa and Asia to the benefit of white industrialized countries in Europe and North America, but capitalism would not be unhinged. It would instead transform itself into a neocolonialist system as seen in Vietnam.
Vietnam and Neocolonialism
As has been argued in the previous section, the system of capitalism is intertwined with the colonial system established by the European states over communities in Africa, Latin America, and Asia. In this system, colonies were deliberately underdeveloped so that European colonialists could exploit them for material and political gain. In other words, the relationship within this global system explicitly enabled the dominance and exploitation of one group over another.
The tumultuous history of Vietnam necessitates a deep understanding of the worldwide shift from colonialism to neocolonialism, as well as the nature of neocolonialism. The US structured relations with Vietnam, as well as every other former colony, around the legacies of exploitation inherent during the colonial period. This ultimately restructured colonialism into a new system known as neocolonialism. This neocolonial method, instead of liberating and empowering former colonies, sought to oppress them in an equally harsh, yet more implicit manner.
Before going further, it is useful to establish a conception about neocolonialism to frame an understanding of this evolving system. Neocolonialism can be defined as a system where the state is “in theory, independent and has all the outward trappings of international sovereignty” (Nkrumah, Neo-Colonialism, the Last Stage of Imperialism). However, neocolonialism does not deliver on its promises of self-autonomy, as the state’s “economic system and thus its political policy is directed from the outside in” (Nkrumah, Neo-Colonialism, the Last Stage of Imperialism). Fundamentally, neocolonialism has congruent motivations with its proto-form, colonialism, as it focuses on the exploitation of one group of people over another for economic and political gain; however, there are differences in the methodology of the two. Neocolonialism is a deeper-rooted, obfuscated, and indirect form of exploitation. Rather than implementing systems of control where the colonizer directly rules over the colonized, neocolonialism projects a façade of self-autonomy. Because of this characteristic, neocolonialism is a dangerous and inflexible form of control. By utilizing clandestine methods such as rigged elections, propaganda, and silencing dissidents, neocolonial powers obfuscate their mechanisms of power and therefore make anything short of systemic revolution inadequate as a tool of change.
An understanding of the effects of neocolonialism on Vietnam must begin at an earlier point in history, with the country’s first extended contact with the West. This relationship of exploitation began with the French occupation and conquest of the area known as Indochina – which embodies current day Vietnam, Cambodia, and Laos – in the 1850s. By 1884, the French had devised the Treaty of Hue, which established the framework for its colonial administration in the region. Congruent with other colonizers, France manufactured its colonial policy to fulfill capitalist motivations to “[exploit] the area’s natural resources and [open] up new markets for manufactured goods” (Logevall 5). For decades, France underdeveloped Indochina – stealing resources such as rubber, minerals, and labor – while simultaneously justifying their actions by claiming that they were “bringing modernity and civilization to the Indochinese people” (Logevall 7). But naturally, the core motive for colonization was the mechanisms of the capitalist system. It was these hopes of profit and power that advanced France down a path of brutality and domination over Indochina.
Historical circumstances provided the spark for a shift in the international power structure away from colonialism. The atrocities of the First and Second World Wars proved to devastate the entire global community – colonized states and colonizing states alike. In particular, the Second World War led to a massive disruption in the balance of international power. At the center of this new international system were the USA and the USSR, both of which battled in a bipolar struggle for hegemonic dominance over differing visions of what should constitute the global system.
Despite the historical circumstances, it was ultimately the innately human desire for self-determination that led to the colonies’ independence. Amidst this global political chaos, former colonies identified an opportunity to shed themselves of the chains imposed on them by Western European nations. Oftentimes, the colonial powers waged war against the former colonies to try to force them into a state of submission; however, the West could not extinguish the undying fortitude of the oppressed communities. In the case of Vietnam, their push for independence and self-determination reached a boiling point in 1946 with the First Indochina War. For eight years, Vietnamese forces waged a costly war against the occupying French, inspired by the victories of other former colonies in Africa and Asia. The French, aided militarily and economically by the United States, engaged in brutal warfare against Vietnamese fighters and civilians. From France’s perspective, every person within the Indochina colony represented a threat, and thus they believed the violent oppression of the Vietnamese was permissible and justified. Yet, by 1954, the Vietnamese forces emerged victorious, expelling the French administration from Indochina. Nationalist sentiments echoed throughout Indochina and the greater colonial world, as many saw this as a fundamental restructuring of the global political system that subjected colonies under the colonists. However, this victory came with hefty conditions: most importantly, the West would split Vietnam into two. The northern portion, operating under a communist system, would be controlled by the Viet Minh, whereas the southern portion, dominated by capitalism, would be controlled by the “State of Vietnam.”
At this point, the US, coming from its advantaged position following the Second World War, sought to expand its realm of control to include Indochina. The stated reasons for involvement in Indochina – amongst other geopolitical regions – was to thwart the spread of communism and uphold the values of capitalism – most notably, free and open markets. However, if one digs deeper into this rhetoric, it is difficult to differentiate where the goals of the former colonial powers deviate from the US. The US, much like the colonists before it, focused on increasing both its economic and political power by exploiting underdeveloped states. By building this sphere of influence, the US initiated the shift from colonialism to neocolonialism. Under the neocolonial framework, the US could manipulate the neocolonial states so that they were not “master[s] of [their] own destiny;” rather, their policies would serve the interests of the US in increasing their international power vis-à-vis the USSR (Nkrumah). In other words, the shift from colonialism to neocolonialism did not change the nature of the beast: it merely altered the language used to justify exploitative actions. At the core, capitalism was still the driving force that would lead to the exploitation, oppression, and slaughter of millions of non-European peoples. Yet now, the West operated under the guise of curbing communist expansion rather than enriching the mother countries.
Taking the reins of the French colonial administration, the US had considerable influence in structuring the government of South Vietnam. At the head of this manufactured government was Ngo Dinh Diem, an unpopular and draconian politician with a complicated relationship to the US. It is highly likely that the US manipulated Diem’s election in South Vietnam, as even President Eisenhower remarked that “in the countryside, where 75 to 80 percent of South Vietnamese lived, Diem failed to cultivate broad popular backing” (Logevall 682). Of course, rather than allowing free elections, “the US would not allow” the Vietnamese autonomy if it meant the country supporting socialism (Davies, Vietnam 40 years on). Naturally, when Diem was elected, dissatisfaction was widespread: he alienated nearly all his electoral base, whether it be through oppressive surveillance, arbitrary arrests of suspected dissenters, or costly regulations on landowners.
The citizens in South Vietnam overwhelmingly favored a united Vietnam; many supported the North Vietnamese leader Ho Chi Minh and the communist policies he championed. However, because of the desires for political and economic hegemony held by the US the possibility of a unified Vietnam would be unrealized. In the neocolonial framework, the US’s manufactured government in South Vietnam would make zero compromises with North Vietnam, and by extension, not safeguard the interests of its citizens. This division of Vietnam represents the core conflict between neocolonialism and self-determination that all former colonies faced in the decades following their de facto independence. South Vietnam, being the neocolonial counterpart to the North, became the arena where colonialism restructured itself into neocolonialism to uphold the forces of exploitation, violence, and underdevelopment.
Yet even with these methods of political oppression, the neocolonial project in South Vietnam could not be realized. The US, responding to Diem’s warnings of threats of insurgency from the North, gradually increased its military presence throughout the early 1960s. The situation was constantly intensifying, as the North Vietnamese government began buttressing their forces in the event of an attack from the South. Finally, in 1964, the Gulf of Tonkin incident, which was historically disputed North Vietnamese attack on a US destroyer, provided the US with the excuse needed to exert direct power over Vietnam. Within five years, “more than 500,000 US military personnel were stationed in Vietnam,” a number that would continue growing as paranoia about the number of insurgents in South Vietnam gripped the US government (Encyclopedia Britannica). The North Vietnamese, who stated their objective as being one of reunification and autonomy for all Vietnamese people, was ignored as the conflict escalated. Instead, the US responded to the growing resistance with extremely grotesque war crimes, including massacres against civilians, widespread raping and looting, the tracking of kills as a barometer of military success, and bombings throughout the country.
This stark heightening of the intensity of the war yet again underscores the exploitative nature of the neocolonial system. When the clandestine operations of installing the South Vietnamese government headed by Diem failed to reach the American goals of political and economic domination over Indochina, US policy ultimately devolved into outright violence. The extent of this violence is staggering: an estimated “2 million civilians on both sides and some 1.1 million North Vietnamese and Viet Cong fighters” were killed during the brutal warfare (Encyclopedia Britannica). With the advent of the television and radio, Americans and Europeans worldwide were forced to bluntly confront the horrors of the global system that they had created: the capitalistic exploitation that had evolved from colonialism into neocolonialism.
It was only at this point that critics from the West vented concerns against the brutal oppression occurring in the Vietnam War. Sadly, the criticisms were often misguided and superficial. True, critics highlighted how the war revealed “the racist, hypocritical, and malicious nature of US imperialism… so fully;” however, to limit the scope to only criticize US foreign policy misses the underlying cause (Shibata 52). It was at this crucial moment that critics should have extended their scope of analysis beyond the foreign policy of the US and into a greater evaluation against capitalism as a system of exploitation and underdevelopment. Indeed, it is the forces of capitalism that created the incentives for states to build the colonial system and subsequently for the US to restructure the system of domination into the neocolonial system.
However, seldom were critics from the West willing to engage critically with the fundamental structure of the capitalist system that motivated profit-seeking at the dignity of the life and liberty of millions of non-Europeans. This is because any substantive critique of capitalism would be undoubtedly met with ostracizing and silencing. For that reason, critics interpreted the war not as an inherent flaw of the capitalist system, but rather as an isolated policy blunder that the US government could reverse. Therefore, the West did not initiate any dialogue that could lead to substantive systemic change. Surely, the negative public opinion of the Vietnam War in the United States contributed to the gradual scaling back of forces and the eventual victory by North Vietnam; however, because the perpetrators of the violence – the West – were unable to reflect on the underlying factors for why the war developed originally, real progress was impossible. Ultimately, even though many condemned the war’s brutality, the West still championed capitalism as the dominant global economic system.
Unfortunately, this lack of self-reflection meant that the system of exploitation traced from colonialism through neocolonialism would not be eradicated: “three decades after the communists emerged as victors in the war, [Vietnam is] now a fully integrated member of the globalized capitalist economy” (Davies, Vietnam 40 years on). Instead, just as the restructuring from colonialism to neocolonialism occurred, a new system – which still had the same motives of political and economic oppression – would take its place. Just as before, the capitalist system of exploitation evolved into something more implicit, more institutionalized, and more resilient than before. This time, it would resurface as neoliberalism.
Neoliberalism and the Developing World
Capitalism as a concept has always been synonymous with freedom and opportunity in the Western world. But for nations plagued with centuries of colonial exploitation, neoliberal capitalism has only meant a continuation of these exploitative systems. The recent period between 1980 and the present has marked the rise of neoliberalism as the world’s driving economic and political ideology, which has only widened the inequalities between developing and developed states, a disparity born in the colonial era and reinforced during the neocolonial period. The unequal distribution of wealth is also extremely prominent between the elite classes and the masses of Western nations, which supports the assertion that neoliberal capitalism is designed to benefit the few, despite what its founders and supporters may claim. Neoliberal policies have institutionalized colonial and neocolonial practices at the international level, meaning that rather than individual nations using extreme brutality and force to extract resources from a colony for the benefit of a single colonizing nation, the modern era has seen the emergence of a global network of exploitation. It is helpful to analyze America’s role in the spread of neoliberalism as it has both enacted neoliberal policies domestically and used its position as world hegemon to advance neoliberal policies throughout the world. It is almost impossible to study neoliberalism in depth without looking at the United States . There is significant overlap between neocolonial and neoliberal practices, which include their motivations such as economic gain and maintaining world dominance, however, in this section we will look at the techniques that support the dissemination of neoliberalism such as changing social values, disempowering labor, and reviving international institutions.
Neoliberalism’s rise to the forefront can be seen as a response to Keynesian economics, which had been the dominant economic policy of the United States and the West since the end of World War II. Neoliberalism was implemented in order to keep traditional power structures from the neocolonialist era in place because they had begun to shift due to the political and social movements of the 1960’s and 1970’s. As labor unions fortified their influence and environmental restrictions became more rigid, “the corporate capitalist class felt intensely threatened both politically and economically… [and] they desperately wanted to launch a political project that would curb the power of labor”( Harvey). This political project can be described as the implementation of neoliberal policies in order to secure and maintain world influence and power. While Ronald Reagan and Margaret Thatcher are often thought of and described as the pioneers of neoliberalism, its most fervent support has come from the elite corporate class that greatly benefits from neoliberal economic strategies. Corporate managers have heavily influenced the political sphere by developing close relationships with government officials in order to ensure that their interests are protected. This can be done through lobbying, giving large campaign contributions and through a practice known as the revolving door, in which policy makers transition from jobs in government to lucrative positions in the industries they were previously regulating. These practices along with neoliberal policies helped to solidify corporate power.
The liberalization of the American economy began in the Carter Administration as the new President heavily deregulated the transportation and financial industries. Beginning in the 1980s, Reagan and Thatcher continued to promote and institute neoliberal policies by initiating supply side economics (tax-cuts for the wealthiest citizens) in their respective nations. They also used their countries’ position as the world’s leading economic powerhouses to support organizations such as the IMF and World Bank in order to implement these same policies worldwide. It is no surprise that these structural adjustments forced upon developing nations have only benefited the elite classes in the West, as the cycles of exploitation and dependence that were put in place during colonial times were renamed, restructured, and modified to fit present times.
The first step in the “political project” was to convince consumers that neoliberal legislation would increase overall economic output and in turn put more money into the pockets of everyday Americans. Attaining economic independence as a consumer became an increasingly important idea during the onset of neoliberalism. Political actors responsible for the rise of neoliberalism convinced the average person that government regulation and overreach were the main contributors to financial hardship, and that true “individual liberty can only be properly achieved through market freedom” (Hickel). The neoliberal theory claims that the consumer is in charge, that his or her demands dictate what is supplied and keeps the market at equilibrium without the need of government interference. However, this is far from reality. Without protectionist measures that government bodies implement, such as safety standards for products and preventing monopolies, consumers are exploited by large corporations that take in massive profits because of their ability to cut corners. This rhetoric that created the idea of the sovereign consumer implied that the true motivation behind the liberalization of the economy was to create sustained utilitarian economic growth. Just as colonial powers used the façade of missionary work and racial superiority as a justification for their exploitation of native peoples, those that promote neoliberalism have kept up the pretense that it would lead to increased market efficiency by protecting the sovereignty of the consumer. However, just as the true motivations behind colonialism were gaining land, labor and natural resources, the true motivation behind neocolonialism, and its predecessor, neoliberalism, is to maintain the influence and power of the Western elite. Changing the rhetoric in order to create new social values that prized individual economic freedom as supreme was a crucial step in the acceptance and spread of neoliberalism.
Labor has been systematically exploited for much of human history and although more egregious methods such as outright slavery are thought to be a thing of the past, more and more workers today in many parts of the world are subjected to shocking mistreatment due in large part to globalization and neoliberal practices. During colonial times labor was acquired through brutal violence and suppression, but because these practices are no longer acceptable in modern society, corporations had to secure cheap labor through other means. In order to carry on with the “political project” (neoliberalism) that the corporate class had put in motion, first labor unions came under attack. These organizations were discredited and subjected to political attacks to create an increasingly corporate-friendly economic structure. As unions began to lose their influence, corporations enjoyed more freedoms and profits. Ronald Reagan assisted corporations during his administration as he set new precedent that companies could stand up to labor unions when he fired “12,000 federal air traffic controllers who went out on strike” (Hirsh). As politicians aligned themselves with big businesses, union membership in the United States began to decline from more than 23 percent in 1980 to 10.7 percent in 2016 (Bureau of Labor). While membership was on a downward trend even before Reagan was elected, he helped to accelerate and continue the process which led to workers losing necessary protections and suffering from stagnant wages.
Corporations also began pressuring state actors to sign free trade agreements, essentially allowing businesses to move to countries with fewer regulations on working conditions and the environment. These transnational corporations are almost exclusively owned by citizens of Western nations and they profit from utilizing inexpensive labor in developing nations that were oftentimes formerly colonized areas. The most significant example of this is the North American Free Trade Agreement (NAFTA) signed by President Clinton in 1993, which established free and open trade between Canada, The United States, and Mexico as well as opened the door for future trade agreements that “[shoved] American workers… into the neoliberal global labor market” (Faux). Corporate managers could now follow the cheap labor to Mexico or threaten to leave the U.S. if their American employees refused to work for lower wages. This resulted in the loss of 700,000 American jobs, stagnated wages and vast inequalities in income that are seen in North America today as “wages and benefits have fallen behind worker productivity in all three countries” (Faux). NAFTA has become a “symbol of the global race to the bottom,” where businesses (such as factories) now compete with one another to offer the most inexpensive labor, allowing corporations to make huge profits at the expense of workers (Faux). Labor is crucial to production but it also accounts for above“50% [of overall costs] in most industries today,” which gives the corporate elite reason to propose neoliberal practices that cut costs on labor despite what it does to the average person (Domhoff). Inexpensive labor has always been a valuable resource and the elite class has been able to retain power and wealth by exploiting workers on a global scale through neoliberal policies.
The institutionalization of colonial practices in the modern world can also be analyzed by examining the revival of organizations that promote the Washington Consensus, such as the IMF and the World Bank. The final step in the “political project” was to impose neoliberal policies on other nations through international institutions in order to continue the cycle of dependency from the neocolonial period. These agencies were created in the Bretton Woods Agreement following World War II in an effort to rebuild war- torn Europe but were empowered in the 1970’s in order to provide aid and loans to the developing world. The International Monetary Fund (IMF) and the World Bank target less-developed countries in order to create global economic growth; however, the methods used to achieve these goals differ. The IMF ensures the stability of the international monetary system by monitoring the economies of member countries and providing conditional loans to countries in financial trouble, whereas the World Bank focuses on reducing poverty by offering nations loans on easy terms. These organizations were created as a way to level the playing field between nations that benefited, and those that suffered, from centuries of exploitation. However, as we will see, they have actually exacerbated the problem. It is also important to note that both the IMF and the World Bank deal with developing nations from a Western perspective, meaning these institutions are there to save nations from their own mistakes and instill the idea that in order to prosper they must follow the advice of developed states. This is similar to the belief held by colonizers, that they were helping to civilize the people they oppressed.
The IMF is the most formidable proponent of neoliberalism as it requires countries to adhere to a set of structural adjustments when accepting loans. These conditions include opening up the markets with no barriers to trade, privatizing sections of the economy, cutting government spending, and devaluing the country’s currency. A year after gaining independence from British colonial rule, Jamaica became a member of the IMF and has become one example, out of many, of the damage that the IMF’s neoliberal policies can inflict upon the developing world. The debt crisis of the 1970’s hit the country hard and forced it to borrow close to $500 million from the IMF, essentially putting the agency in charge of the country’s future economic decisions. The IMF enforced austerity measures such as slashing government spending on public services and devaluing the Jamaican currency in order to increase competitiveness of exports and encourage imports. These measures did not help to kick-start the already struggling Jamaican economy but rather directly contributed to high unemployment rates and most notably to the suffocating debt that the country is still obligated to pay back today, as Jamaica’s “debt-related payments constitute[d] some 126 percent of national income” (Biron). As the IMF and the World Bank stringently enforce neoliberal policies upon the developing world, the question arises of whether these agencies know that these requirements do more harm than good. The countries responsible for the Washington Consensus ideology that the IMF advances, such as the United States and Britain, “have experimented with neoliberalism in their own economies, [but] they have also aggressively – and often violently – forced it on the postcolonial world, and in even more extreme measures” (Hickel). If the countries that promote these policies refuse to practice them domestically, it can be argued that structure of neoliberalism is used to disproportionally favor the developed world by institutionalizing the methods of exploitation and fostering dependence of the developing world. The international monetary organizations that protect the interests of the West have contributed to the unequal distribution of wealth that plagues the world today. According to the Economic Journal, “the top 3 billionaires have the same wealth as all of the Lowest Developed Countries put together” (Hickel). This inequality has become a pattern since the rise of capitalism, which has its roots in the colonial practices of exploitation. This cycle has been embraced and carried on by the modern corporate class in order to maintain wealth, dominance and control established many years before in colonial times, by changing social values, institutionalizing the exploitation of labor and allowing transnational organizations to prosper.
Although the system of exploitation traceable through colonialism, neocolonialism, and neoliberalism has continuously restructured itself to remain a resilient factor of international relations, hope for change cannot be lost. Just as this system was constructed, it can be deconstructed if appropriate measures are taken. However, for this to happen, radical change to the system itself, rather than aspects of the system, must be taken. This revolution requires two preconditions: one, the revolution must come about first and foremost through changes in education; two, the revolution must empower and support those who are oppressed through empathy, understanding, and unity.
As Paulo Freire highlights, any hopes for revolutionary change must be accompanied by a change in how we think; most notably in an abolishment of the established banking model of education (72). Under the banking model of education, students are mere objects subservient to the teacher by “receiving, filing, and storing the deposits” that are dictated to them (Freire 72). This style of education, which promotes no original thought, nurtures a spirit of complacency among students, and upholds the oppressive and exploitative global system that has been traced through colonialism, neocolonialism, and neoliberalism. Through the banking model, it is impossible to be an agent of revolutionary change; even those who can identify problems within the system itself are limited to making changes within the system, not to the system itself. The banking system is therefore oppressive in its fundamental nature, as it “negates education and knowledge as processes of inquiry” (Freire 73). If the banking system remains the dominant form of education, the systems of oppression will continue restructuring themselves as historical circumstances change. There will never be avenues for true liberation.
However, if the manner of education evolves away from the banking model and towards an inclusive, inquiry model known as liberating education, the structures of oppression can be defeated. This requires students to be willing to critically reflect on the world around them and to become equals with the teacher, so that “people teach each other” (Freire 80). In other words, both the teacher and the student are active subjects within the education system. This way, experiences and perspectives can be shared in an open and mutually enlightening dialogue. Vanquished will be the dogmatic styles of teaching that reinforce prejudice and complacency. With liberated minds, humans will, together, peel away the layers of confusion that mask the oppressive political and economic superstructures of our world today. Surely, this will not be an easy or automatic task. There are many reinforcing institutions that prohibit this education of liberation from developing, as it poses a critical threat to the established system of exploitation. Yet still, if communities are exposed to the harsh truths throughout history and present in contemporary times, even micro-level adjustments to the way we educate one another – such as within individual classrooms and between individual people – will the wave of liberation wash over the people.
Beyond restructuring education, there must be a movement to empower those who are oppressed. Change cannot come only from those who are privileged enough to not have been the direct victims of the systems of exploitation that exist. Surely, it is only the “power that springs from the weakness of the oppressed” that can be strong enough to lead to a complete restructuring of the world (Freire 44). In other words, it is necessary for the oppressed to have the center stage in any revolutionary movement, as it is their lived experiences that can provide the proper direction on the path to human liberation. When the oppressed have a platform to share their experiences, the Western world will be enlightened to the nature of exploitation that has become so institutionalized and removed from their own lives that they never have to confront it. Only when the oppressed have this platform can there exist a “restoration of true generosity” that is a prerequisite to overthrowing the systems of exploitation (Freire 45). Ultimately, for those who have not been the direct targets of oppression, the primary role will be to support, understand, and empathize with those who have been most harshly affected by structures of exploitation.
Although the systems of oppression traced through colonialism, neocolonialism, and neoliberalism most directly affect people outside the Western world, the entirety of humanity is dehumanized in this process. As material beneficiaries of exploitation, Western civilization has inherently lost the ability to treat other communities as human, and therefore has limited itself to a role of the oppressor. Under the current world system, the West cannot step out of this role; it is paralyzed in its need to exploit others. Therefore, everyone – even the West, whose economic backbone is built upon the oppressive nature of the capitalist system – will gain from revolutionary change to the system. It is from this perspective that people must be willing to stand up against oppression. Communities that are not direct targets of exploitation must realize that “a civilization that chooses to close its eyes to its most crucial problems is a stricken civilization” (Césaire 31).
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