24 September, 2020

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Neoliberalism Vs The Nation & The State: The Real Culprits In Sri Lanka

By Vijithamuni Ranasinghe

In an article to Colombo Telegraph (20.11.2018), Dayan Jayatilleka has attempted to re-interpret the meaning of neoliberalism and exonerate several former Presidents from the responsibility of being champions of neoliberalism. While doing so, he has constructed an abstract contradiction (main fight in Sri Lanka) as between neoliberalism and the nation. It is not a sustainable proposition in the context of standard definitions of neoliberalism, facts relating to Sri Lanka’s politics or the relevant academic-policy discourse. 

Jayatilleka – whose controversial appointment to the diplomatic post in Moscow took place while President Sirisena was hatching the constitutional coup with Mahinda Rajapaksa against the incumbent government of Ranil Wickramasinghe – states that ‘Neoliberalism is not the capitalist market economy. Neoliberalism is not mere privatization –the crucial question being what is privatized and what is not. Neoliberalism is not the Open Economy. It is perfectly possible to practice an Open Economic policy, which is not neoliberal. This is what Presidents Premadasa and Rajapaksa did’ (Jayatilleka CT 20.11.2018). He further says Neoliberalism ‘cannot be understood as a checklist of economic policy measures such as privatization’ (CT 20.11.2018). 

To the readers who are familiar with neoliberalism through academic learning, deep reading and reflection, these comments come as a surprise because they go against the current wisdom –even at its simplest form- on the subject. Jayatilleka’s views have the potential to mislead, especially the younger generation, who are in the process of learning about the economy, nation, state and similar topics as part of studying political science, political economy, sociology, international relations and the like. Though the author states that neoliberalism cannot be understood as a checklist, most commentators including well-known academics in the international arena use such checklists when discussing the topic (see examples given later in this article).

The views described in Jayatilleka’s article require critical scrutiny by fair-minded Sri Lankans and others concerned about the economic and social development policies adopted by governments since 1977, their impact on the society and social relations plus the crises in the economy and polity evident today as a result of competing and contradictory power relations in the body politic.  Politicians and parties who held power in governments formed after 1977 by following neoliberalism while distorting it with state, party, ruling class and family interference – have brought about the economic crisis facing the nation today. 

When a former academic and a self styled political scientist distorts an important concept like neoliberalism that has implications for the economy, policy, politics and society, it is far more important to understand what neoliberalism is before considering who is more neoliberal? It is also useful to examine the effects of neoliberalism, associated economic policies and state behaviour over the last 40 years rather than to debate, which President was more neoliberal, based on a distorted interpretation of the principal concept/ideology. 

Most of us were not born yesterday.  People have memories to understand that all Presidents and governments since 1977 facilitated neoliberal economic policies as the founding principle and guide for economic development while curtailing welfare benefits enjoyed by the people under Westminster system of governments that was in place since Sri Lanka gained independence from colonial rule though different kind of dependencies – both internal and external – developed later on.  

What is neoliberalism?

According to Smith, Neoliberalism is an ‘ ideology and policy model that emphasizes the value of free market competition. …. it is most commonly associated with laissez-faire economics’. She says that ‘neoliberalism is often characterized in terms of its belief in sustained economic growth as the means to achieve human progress, its confidence in free markets as the most-efficient allocation of resources, its emphasis on minimal state intervention in economic and social affairs, and its commitment to the freedom of trade and capital’(N. Smith: accessed on 22.11.2018).  

According to another source,  ‘Neoliberalism supports fiscal austerity, deregulation, free trade, privatization and greatly reduced government spending. Neoliberlism is often associated with laissez-faire economics, a policy that prescribes a minimal amount of government interference in the economic issues of individuals and society. It is usually characterized by its belief that continued economic growth will lead to human progress, its confidence in free markets and emphases on limited state interference’ (Investopedia)

In another article, the author explains the concept in the following way:

“Neoliberalism” is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practice and believe: that competition is the only legitimate organising principle for human activity. (The Guardian 2017)

The same article alerts us to a more concerning aspect:

‘…The extent to which a language formerly confined to chalkboard simplifications describing commodity markets (competition, perfect information, rational behavior) has been applied to all of society, until it has invaded the grit of our personal lives, and how the attitude of the salesman has become enmeshed in all modes of self-expression’ (The Guardian 2017).

The words used by proponents of neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations (Monbiot 2016). 

Under Neoliberalism competition is seen as the defining characteristic of human relations and it redefines citizens as consumers, whose democratic choices are best exercised by buying and selling. In this context, 

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve. (Monbiot, G. 2016).

While highlighting that neoliberal policies are beset by market failures, Monbiot further states that ‘the greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector’ (2016). 

Perhaps the most applicable statement of Monbiot to the contemporary governance crisis in Sri Lanka is the following:

Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics. (Monbiot 2016)

Above extracts are more than enough to understand the meaning of neoliberalism and consequences of adopting a neoliberal policy without having to rely on politically biased re-interpretations of neoliberalism in relation to the Sri Lankan context by someone like Jayatillake.  Moreover, they explain how the economic crisis brought about by adopting neoliberal ideology and associated policies can bring about a political crisis due to the reduced role of state and the hidden hand of the market controlled by self made billionaires of all sorts.

Alternative to Neoliberalism: Is it the State?

When Jayatilleka states that ‘At the heart of neoliberalism is not a list of economic polices but precisely the questions of the Nation and the State’ he goes against the mainstream interpretations of neoliberalism that gives priority to the market.  Though it is true that the victory of Trump and Brexit implies a kind of regime change by those affected by neoliberal policies in USA and the UK, it is premature to generalize the current and potential future resistance to neoliberalism elsewhere as coming from the states with populist leaders who exploit the situation alone. 

In fact, populist leaders in Sri Lanka have not used anti neoliberal feelings among the affected classes as such. Instead, they used anti-minority sentiments to their political advantage. This is because they knew that it is better to go with the flow instead of attempting to formulate an alternative economic and social development model by strengthening national economy and society or for that matter empowering the disempowered masses. Where is the economic dividend from neoliberal policies adopted by previous governments that included Sirisena’s until October 26th? Do multinationals pay taxes? Can’t we settle our national debts with the taxes coming from the private sector that has been given priority and a free hand?  

Which camp is objectively closer to that of the state-led Chinese model of a viable alternative to neoliberalism and neoliberal globalism, and the Russian-Chinese-Eurasian perspective of an alternative globalization?  This is a question that Jayatilleka poses. Jayatilleka is alluding to a future scenario where a Putin (and Chinese) style government is proposed as a suitable model.  Unless the present coup by Sirisena-Rajapaksa is defeated, we may in fact see a future government led by Rajapaksa even surpassing Putin when it comes to human and political rights violations and promotion of a selected few to become billionaires.

First of all the Chinese model of economic development cannot be considered as opposed to neoliberalism and neoliberal globalism.  They are intertwined. Therefore, if under Mahinda Rajapaksa an economic model similar to China or even Russia is introduced in the future, it will be intertwined with market based on neoliberalism. I do not believe that he will reject foreign investors, multinational corporations and the like purely for political ideology. He did not do so the last time around even though it is a contradiction in Mahinda Chinthanaya and associated practice.

Though China and Russia have strong states while placing limits on human rights of their citizens, they also have not so free markets. Power relations have centralized both in the polity and the economy through the communist party in China and an Oligarchy in Russia. To imagine a future Sri Lankan state and nation in terms of a model existing in China and Russia (we should add North Korea and Suharto regime to the list) on the basis of an imagined threat to the nation and its sovereignty from those countries where markets operate with the support of democratic governments on a global scale is simply day dreaming.  It is an exercise in trying to write history before history.  

The Main Contradiction

The distinction made by Jayatilleka between neoliberalism and resistance to it from certain states is not the main contradiction today. The main contradiction is between those who possess corporate and political power, the latter of who function as brokers for international capital vs. those millions who are subjected to exploitation by the very market system and governments culminating in disempowerment and even dispossession. This contradiction can produce a range of resistances against the politico-economic combine depending on the place and time. 

When people who lose their traditional livelihoods due to mega development projects in India and other countries or developers encroach forests affecting the livelihoods of forest dwelling tribes, they organize resistance. When women working in Free Trade Zones are only given a living wage, their unions organize resistance. When governments increase taxes or commodities affected people organize resistance. Peasants in Mexico and other Latin American countries go on street marches to protest about their living conditions and even dispossession. Students in Sri Lanka become radicalized about an uncertain future and the low quality of education. Such resistance is not between states but between the states and the people whose living rights have been robbed by the system of governance and the market.  

We may see more of these in Sri Lanka  if the current crisis is not resolved through established constitutional, judicial and parliamentary provisions without interference and unruly intimidation. The crisis itself has been created as a result of neoliberal economic policies followed by governments in the last 40 years and the level of borrowing, waste, corruption and misguided policy planning. 

Conclusion

There is no doubt that Sri Lanka has been transformed from a society with a longstanding culture and identity or a civilizational force to a global market place-darling of the West, USA, China and India. This is the outcome of neoliberal policies followed by all governments since 1977. The destruction of Sri Lankan social fabric, social attitudes, values and norms, as well as the framework of social relations and their foundations evolved through thousands of years of indigenous civilization due to the expanding neoliberal economic doctrine and its faithful application through market friendly policies and programs should be considered as the main contradiction in Sri Lanka. Not the fake contradictions spoken about by Jayatilleka in a realm of cozy imagination far removed from reality. It is simple to understand whom the culprits of bringing in the crisis Sri Lanka is facing today. It cannot be neoliberalism alone. The net result is that the nation has been mortgaged and made hostage to various forces-local and foreign.

For Sri Lanka and Sri Lankans, their democratic rights are far more important than having to live under a regime that takes its lessons from China, Russia or for that matter some Muslim countries. Economic development should and can be achieved without having to sacrifice democratic rights and freedoms of people. The country and the nation need patriotic leaders who move forward with the people, especially those who have been made victims of globalization and neoliberal free market economy; leaders who do not rely on a select group of technocrats, professionals, non-career diplomats, and fellow politicians to govern; leaders who do not seek personal prosperity by undue means and look after their well being at the expense of disempowered workers, peasants, teachers, nurses, policemen, and many others (excluding Buddhist monks who rely on Rajapaksa patronage).

Readers need to distinguish between Jayatilleka’s political project of wanting to create a Putin style Rajapaksa vs. political science and indeed correct definitions of neoliberalism.

Further Readings

Investopedia – https://www.investopedia.com/terms/n/neoliberalism.asp -accessed on 22.11.2018

Metcalf, S. 2017. Neoliberalism: the idea that swallowed the world, The Guardian (18 Aug 2017)  https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the-world -Accessed on 22.11.2018

Monbiot. G. 2016. Neoliberalism –the ideology at the root of all our problems, The Guardian  (15 April 2016) 

Smith. N.  Encyclopedia Britannica.  https://www.britannica.com/topic/neoliberalism  – Accessed on 22.11.2018 https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot – accessed on 22.11.2018

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Latest comments

  • 3
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    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

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    he did not get a job as a university lecturer be cause he was a loose cannon who could misguide students
    no one believes in the stuff he writes as he continues to sing for his supper

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    This is an interesting one, I approached this not knowing who was right, Dr. Jayatilake or the author of thie piece. A little seaching on the internet revealed that Neo-liberalism is what Dr. J describes: Neoliberalism does not like regulation, does not like socialism, does not like state hand-outs and does not like government interference in the market. Do say that Prime Minister Rajapakse did not interfere in the market is unbelievable. In fact it is Ranil W’s policies with its trade agreements with India and Singapore that exemplify the glorification of market forces over working towards the interests of Sri Lankans, ie Nationalism.

    Here is a quote from Dayan’s article:

    “These are the three reasons why they are not and by definition cannot be neoliberals or practitioners of neoliberalism. How can they retain their peasant support by permitting the abolition of land ceilings and the opening up of the land market to foreigners? How can they survive by allowing the scrapping of labor laws? How can they retain their support base by allowing the stripping of agrarian subsidies? How can they keep their popularity by allowing preferential tariffs which discriminate against local industry? How can they permit the rollback of all national boundaries and barriers which permit unfettered flow of capital and a swamping on the domestic entrepreneurs?”

    This article then is another thinly veiled anti-Rajapakse propaganda piece, as far as I know.

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    The need of the hour is definitely not a ‘split-hair’ discussion about the theory of ‘Neo-liberalism’- a waste of time indeed.

  • 3
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    A person does not need some critical or analytical thinking to understand what DJ said or did not say. All you need is little bit of common sense and ability to understand the true personality of a person. Does it really matter this fake self centered low life is for or against neoliberalism???? This guy is probably sipping high end /top shelf wine and smoking cigars while dishing out his hypocritical views. The sole purpose of his writings are to elevate his status so that he can get to such positions at the cost of deserving civil/foreign services personal.

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    I’ve already sent a reply and am awaiting its posting, as I hope you are too, dear readers!

  • 3
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    Sri Lanka’s economy based on Tea , Tourism, cheap labour to Middle East and hand outs from IMF and World bank and now selling infrastructure assets to India and China.

    and …Dr DJ is pedaling is trying to hoodwink with his pseudo intellectualism of NeoLiberalsim , State Nation bullshit….

    The country is in a limbo shit…with a fake PM and a fake Cabinet….

    lets discuss Neo Liberalism…..bullshit Dr DJ

    .

  • 2
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    Here Vijithamuni Ranasinghe discusses an article by Dayan Jayatilleka in CT of 20 November 2018.
    Commenter on the said Dayan article described him as a follower. He gate-crashed to lead a Tamil Liberation movement EPRLF but flipped over to R Premadasa side just in time. He now masquerades as an adorer of MR-team.
    .
    Dayan uses opinion contrary to his as markers to stay in the MR-team radar.

  • 2
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    Dayan dont you think one is enough do we need another in name of reply. You can write all you want but cannot fool every one. Lankans may be so retard that you may look like a Einstein to them but the rest can see through your fake persona. Looks like you just dont give up on confabulating.You sure are a master of alternate facts. Is that the major of your doctoral research??? Did you go to the same school as Kelly Ann.

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    Some say Mrs Dayan Jayathillake is more bright than Dayan who is stupid. I agree.

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      vinodhini kalupahana:
      Have to disagree with you. Would anyone of any intelligence and integrity cohabit with the likes of Dayan Jayathilaka? They are two peas in the same pod.

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    Recall Dayan Jayathillake to Sri Lanka from Moscow as we have an illegitimate government now (basically no government at the moment, except Ranil is the legal Prime Minister)

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