There is a Greek tale that shines a bright light on the present: it is a comedy by Aristophanes, performed in 388 BCE, entitled Plutus. The person referred to by this name is none other than the god of wealth and money, the ‘god of dosh’.1 He is cast as an old man in rags, blinded by Zeus, wandering the roads. Whereas Plutus is invariably represented as blind because he distributes wealth randomly, to rich and poor alike, the character in this play reserves his beneficence exclusively for people who are wealthy, if not swindlers and miscreants. Cured of his infirmity by the god Asclepius’s treatment, he promises abundance to all. Well may ‘Penia’ (Poverty) object that if all poor people became rich, there would be no one left to work: the promise of universal wealth is more powerful. Everyone celebrates Plutus being cured. The play ends in a kind of ‘inverted apotheosis’:2 to a dance rhythm and in torchlight, a solemn procession makes its way to the Acropolis to install Plutus in the Temple of Athena and the City.
In Plutus’s triumph the comedy discloses a veritable ‘topsy-turvy world’.3 For the god of dosh to be consecrated guardian of the goddess’s sanctuary is something that undermines the very foundations of the polis. The latter was constituted by the consecration of Athena’s supremacy over private powers – the great aristocratic families in thrall to the terrible lex sanguinis. It is these very powers that are relegated to an altar located below the Acropolis. Suffice it to say that the goddess has a very strong bond with the polis. She is not just one divinity among others. As Hegel puts it, Athena the goddess is Athens the polis, or the real spirit of citizens as it lives in and through the institutions of democracy.4 The reversal dramatized by Aristophanes (Plutus at the top of the Acropolis) indicates that what the cult of money and a frantic desire for wealth affect is the very heart of political democracy. If everyone ends up succumbing, it is because the poor are promised wealth spread universally, not blindly reserved for the rich and reprehensible.
Reading these pages written 2,600 years ago, it is difficult not to think of Greece’s fate today. For several years, its governments, whether willingly subservient or seeking to resist before finally caving in, have striven to satisfy the inexhaustible thirst of the god of financial markets – a Plutus long completely freed from the limits of cultivating the land and, indeed, from any real production, and solely concerned to endlessly increase the costs of his own upkeep. So much so that some architects of the Troika’s privatization plans could envisage auctioning off the Parthenon itself.5 In this sense, neoliberalism is the inversion realized; it really is the ‘topsy-turvy world’ invoked by Aristophanes. The financialization of the economy is the direct result of neoliberal policies. Through financial profit, investment funds and large banks corner a growing share of the wealth produced by the ‘real’ economy. Far from being a perversion or a form of parasitism, financialization must be considered as a set of power relations wherein societies and their institutions, like nature and subjectivities, are subjected to the law of accumulation of financial capital.
But, some may object, why should democracy be threatened by this autonomization of money, now abandoned to its overweening self-confidence (hybris)? And why should it die from the promise of universal wealth dangled before the poor by Plutus? On account of the universal corruption this is bound to produce? What, then, is to be understood by ‘democracy’ – the power (kratos) of the people (demos)? Very simply put, the word kratos means superiority or victory in a war against internal enemies as well as external ones. It can also signify the triumph of an opinion in an assembly. But it always involves a victory won in a confrontation. Thus, in the polis it is ‘a word of ill repute’, which democrats themselves are loath to use because it suggests that the power of the people is not power exercised by the people as a whole, but proceeds from a victory over the oligarchical ‘party’ by the popular ‘party’.6 If this is so, it is because, once in power, democrats themselves succumb to the ‘fantasy of a polis one and indivisible’ and endeavour to stamp out the internal war to which they owe their position. Such war is appropriately termed stasis – a word that in Greek means both ‘position’ or ‘standing position’ and violent insurrection or ‘sedition’. That the pejorative sense of ‘sedition’, even open civil war, ended up prevailing cannot obscure the fact that, in a polity based on popular participation, any political position – indeed, politics as a whole – was in a sense ‘seditious’.7 So today we must recall the original meaning of the word ‘democracy’: not peaceful conflict management via consensus, but power conquered by one part of the polity in a war against the oligarchic enemy.
Does such power define a specific political regime? As regards the constitutional history of Athens, this regime was established in 403 BCE. Henceforth the people ‘made themselves supreme in all fields; they run everything by decrees of the Ekklesia and by decisions of the Ekasteria in which the people [ho demos] are supreme [ho kraton]’.8 In a more conceptual sense, demokratia is the name of the regime where power is exercised by the mass of the poor, unlike oligarchy, where power is held by the wealthy minority: ‘Wherever men rule by reason of their wealth … that is an oligarchy, and where the poor rule, that is a democracy.’9 This remarkable definition of democracy, generally omitted from the list of scholarly senses of the term,10 makes social content, rather than number, the essential criterion. That Plutus is installed in the Acropolis by a majority of citizens, as in Aristophanes’ comedy, makes no difference and does not turn an oligarchy into a democracy. A regime where a majority composed of the wealthy exercises power should not be termed a ‘democracy’, any more than a regime where a minority of poor people rules should be called an ‘oligarchy’.
Here, the people or demos is not identified with a large number, or even with the totality of citizens, but with the mass of the poor, so that in and of its very essence democracy consists in the power of the poor. Similarly, oligarchy does not consist in the power of a small number (the ‘few’ or oligoi), but essentially in that of the rich (poroi). To which it should be added that ‘democracy’ designates a ‘skewed’ constitution: in it, the poor rule with an eye to their own benefit as poor people, not with a view to the common good. Only government of the poor for the poor warrants the term.
The irreplaceable merit of this contrast between democracy and oligarchy on the basis of social interests is that it starkly reveals, if only negatively, the oligarchic essence of ‘neoliberal governance’ and its ferocious opposition to democracy construed as ‘sovereignty of the masses’. Strictly speaking, this form of governance does not represent a new ‘political regime’ to be added to the traditional classification, but a hybrid mode of exercise of power consisting in rule by a small number or elite, in the sense of an expertocracy, and for the wealthy, in the sense of its social purpose. This is what we wish to analyse to render the strangeness of our own situation intelligible.
It is amazing that people are not more astonished by the reinforcement of the logic that generated one of the worst crises since that of 1929. And while the latter led to profound political and doctrinal challenges, nothing of the sort has occurred since 2008. In a celebrated article of July 2008 on the ‘end of neoliberalism’, Joseph Stiglitz echoed Keynes’s famous text The End of Laissez-Faire, written in 1926.11 With this comparison, he suggested that the 1930s scenario was in the process of repeating itself. We know how things turned out. Neoliberalism, while widely discredited among ever broader swathes of the population, while provoking multifaceted resistance, was radicalized under the cloak of the crisis. It did not merely show resilience. Frustrating the most optimistic prognoses, it did not collapse, did not give way to a new mode of regulation. It did more than survive: it grew stronger by radicalizing itself. The 2008 crisis, which for many should have ushered in a post-neoliberal moderation, facilitated a neoliberal radicalization. In a remarkable essay entitled The Strange Non-Death of Neoliberalism, the British sociologist Colin Crouch posed the key question: why did neoliberalism emerge from the crisis stronger than ever?12 Neoliberal radicalization is one of the most striking phenomena of the present. Its maxim? The worse things go, the more they must go on. Lower taxes for the wealthiest and their counterpart – increases for the majority – are not to be abandoned by governments just because they have not delivered the promised results. On the contrary: the same course must be maintained, because those reductions and increases were insufficiently large.
Let us briefly recall a few facts. The financial crisis of 2008 choked off growth, increased unemployment, and led to a significant loss of wealth: 23 per cent of eurozone GDP and 10 per cent of global GDP. It brought about a spectacular increase in government debt: in France, it rose from 64 per cent of GDP in 2007 to 82 per cent in 2010, and in the USA from 65 per cent to 93 per cent; on the global scale, it swelled from 53 per cent of GDP to 70 per cent, or an increase of 54 per cent between 2007 and 2011. The member-states of the European Union mobilized 4,500 billion euros, or 37 per cent of GDP, to avert the collapse of the banking system.13 While the final cost of the rescue package was much lower, let us note the size of the sums that had to be made available to avoid the abyss.
Eight years after the onset of the crisis, inequalities are on the rise, capital volatility is just as marked, the sacrifices required of the least well-off multiply, the state of the labour market continues to deteriorate, trade unions are weak, the Left is in pieces, what remains of social democracy is in its death throes in many countries and the Extreme Right has the wind in its sails. Europe is fragmenting, splitting apart, becoming discredited. Xenophobia is spreading; political and climate refugees die in the sea and on the roads; countless lives are wrecked by unemployment. Meanwhile, share prices have reached new heights before falling back; derivative products have proliferated; bonuses are on the rise again; shadow banking, which conducts credit operations in the utmost obscurity, has taken over from classical banks; and hedge funds, on the lookout for any prospect of quick profits in markets, have carved out a sizeable role alongside institutional investors. The global financial system is still threatened by the bursting of eminently foreseeable bubbles: the ‘weapons of mass destruction’ (Warren Buffett) that are derivative products circulate freely; central banks have injected 13,000 billion dollars to no effect other than enriching private banks and fueling new bubbles.14 Tax havens, where 20–30,000 billion dollars evading any taxation are parked, prosper as never before, eluding even the most feeble control and supervision. Finance, real estate and the political world continue to live in close symbiosis. Not since the nineteenth century, with its shady bankers and robber barons, has money made government policy so subservient to its dictates. The political and economic oligarchies have imposed a solution to the crisis: getting the great mass of wage-earners and pensioners to reimburse the sums injected to save the financial system from collapse and restart capital accumulation. Populations are thus plundered on a gigantic scale to repay a debt they never contracted. This truly is the ‘topsy-turvy world’ invoked by Aristophanes, but one that has become a system.
In these conditions, crisis fuels crisis in an endless spiral. The radicalization of neoliberalism largely consists in this logic of the self-feeding or, to be more exact, self-aggravation of crisis. If the capitalist economies of the ‘centre’ have become at once more unstable and less dynamic, it is because burgeoning inequalities and precarity, bound up with increased competition and unproductive financial accumulation, block growth and prevent any drop in mass unemployment. Even IMF economists now concede that growing inequalities are damaging to economic growth.15 Rather than pursuing more egalitarian and more ecological policies that would sustain popular demand, governments, under pressure from big corporations and banks, persist with ‘competition policies’ in their own backyard and against their peers. These reduce the share of wages in value added, depress demand and weaken organized labour. What is striking is the destruction of any counterweight, any opposition or any stabilizer.
The more the dominant logic prevails, the more it destroys anything that might check it, the more it is reinforced in accordance with a truly infernal logic. It has undermined the collective power of wage-earners, who no longer possess the ‘bargaining power’ to defend institutions of social protection, their purchasing power, or labour law. It has exploited the willingness of the governmental Left to discredit all the auxiliary forces that seek to come to terms with this ‘Left’ (some ecologist groups, and the ‘accommodating’ and opportunistic fractions of the old communist parties). It has even succeeded in compromising fledgling forces like Syriza in Greece. Above all, it is everywhere engaged in undermining the very foundations of liberal democracies, even including electoral legitimacy. And this not by organizing a ‘Chile-style’ coup d’état, but by threatening the destruction of banks and the economy – blackmailing populations over their livelihoods.
A symbolic and political coup, executed in masterly fashion by a sizeable troupe of conformist economists and journalists, has transferred responsibility for the crisis of private finance to the state. The state is denounced as the cause of bank failures, public deficits and the crisis of the euro, when it was the state that created market finance in the 1980s and then contributed, as a partner, to triggering the crisis of that same finance. Swollen government debt afforded an ideal pretext for blaming excessive wage demands, a surfeit of civil servants and unaffordable state handouts. As for the disasters of financial speculation, they were no longer an issue. Hot money now circulates just as freely and causes ever more serious destabilization. The systemic banks have regained control, especially in France under a purportedly ‘socialist’, highly obliging government, restoring their margins thanks to fulsome policies of monetary easing that pave the way for new crises in the future. Governments’ instinctive response, to rescue a toxic system, turned into a new argument for reducing social protection, lowering wages and fortifying the power of capital.
The crisis has become a veritable method of government, accepted as such. Since the late 1970s, the ‘difficult times’ announced by rulers have served as the pretext for implementing what they called ‘courageous policies’. The watchword of a triumphant neoliberalism was to strike the opponent without respite: ‘The trick is to keep doing outrageous things. There’s no point in passing some scandalous piece of legislation and then giving everyone time to get worked up about it. You have got to get in there and top it with something even worse, before the public have had a chance to work out what’s hit them.’16 The recipe has been tested many times since. But the trial period of neoliberal governmentality (to adopt Foucault’s formula) is over. Experimentation is now systematic, and crisis has become the main lever for reinforcing neoliberal policies. Thus, to paraphrase Churchill, it might be said that for neoliberalism, every obstacle is an opportunity. The disciplinary weapons of the financial markets have made it possible to pitilessly punish all transgressors of programmes of wage deflation, labour market flexibilization, privatization, and public expenditure reduction. Should a government take ‘bad decisions’, it would immediately be penalized by the refusal of loans or a downgrade in the credit rating awarded by the ratings agencies, which would ipso facto raise the interest rates payable to lenders. The Greece of Syriza is, once again, the prime example.
Governments have not hidden their submission to these ‘ratings agencies’, which they claimed, not so long ago, to want to subject to criteria of transparency and honesty. Quite the reverse, they have endowed these financial actors, which with state connivance have played such a prominent role in globalization, with terrifying power. They have indeed accorded them absolute power, the better to demonstrate their own powerlessness to resist them. At issue was the credibility of states in the eyes of ‘markets’, elevated via the ‘ratings agencies’ into the ultimate arbiters. What is more, European states have made themselves the direct agents of financial repression of those states that do not follow the road of absolute submission to creditors’ demands. The crisis revealed that government was merely the factotum of financial capitalism. As Rawi Abdelal has so clearly shown, once states had empowered capital in the 1980s, by establishing rules of maximum liberalization, it was henceforth capital that must be protected by the state, not populations.17 Government by crisis takes advantage of straitened circumstances for the benefit of the classes which live off capital, in one way or another. Some wish to preserve and even extend the conditions most conducive to financial profit globally; others look to increase direct pressure on wage-earners in the businesses they control.
As to the ‘miracle’ of government debt, it enables the transfer of resources from the poorest to the wealthiest thanks to the austerity measures implemented by states. This is the logical consequence of the policy of financing the state by borrowing on financial markets. To shift the cost of the crisis from private shareholders to taxpayers – in other words, moving from a crisis of private debt to a crisis of ‘sovereign debts’ – was a masterstroke of government by crisis. This method of government has been perfected and systematized. The horizon of neoliberalism has long been ‘zero taxes’ for big business, compensated for by transferring the whole tax burden onto poor and average households. This mechanism has had consequences of the utmost significance for accelerating financialization of the economy and its chronic instability. Insufficient household demand has been masked by private debt and the luxury expenditure of the wealthy classes (residential property, artworks, luxury products, large cars, yachts, etc.), fuelling so many speculative bubbles that artificially inflate GDP at the expense of universally useful public expenditure.
This system of oligarchic interests produces and reproduces the crisis, feeds off it, and finds in it the motor of its expansion. In such a world, the rulers’ political methods and strategies are focused solely on enhancing competitive capacity, itself dictated by the rationality of capital which (as Marx showed) is that of surplus. The accumulation of value at one pole of society presupposes less at the other pole. Such polarization has not always been so pronounced in the history of the forms of capitalism – thanks, in particular, to the mobilization and organization of the dominated. Today, however, it has become the hallmark of neoliberal societies. The logic of dumping prevails in the process of generalized competition: social dumping for wage-earners; fiscal, regulatory and judicial dumping for businesses. The latter, with the support of banks and states, vie for ‘fiscal attractiveness’, ‘competitiveness’ and ‘flexibility’. Behind these terms lies the wholesale victory of multinational firms, which continually lobby national or local authorities for tax breaks, subsidies, regulatory exemptions and protracted wage deflation. The consequences are the social, environmental and subjective ravages that fuel anger, despair and resignation, and which foreshadow more or less modernized political forms of fascism corresponding to the sense of abandonment felt by impoverished populations.
There are good reasons for that sense of abandonment. Neoliberalism is a vast enterprise of neo-proletarianization that takes the form, inter alia, of subordinating companies to shareholders (imposing new conditions of employment and new work constraints) and placing populations in thrall to the banks that finance housing, ‘health capital’, ‘educational investment’, ‘old-age risk’ and, of course, consumption. What we are witnessing is a new stage in disciplining. This no longer simply involves enclosing labour-power in factories, in the manner of the old industrial capitalism – an enclosure of the working class that is expanding dramatically in emerging countries. It also entails blackmail over jobs, financial constraints, a perfectly justified fear of inadequate resources for health, education and other services, and a climate of generalized social fear. What has been called the ‘risk society’ is in fact a ‘society disciplined by risk’.
We can now appreciate why the vocabulary of ‘crisis’ is problematic. The term is used to describe and analyse the disastrous effects of a policy of generalized crisis. But it is also employed to justify this policy. There is unquestionably a veritable systemic crisis. It is correct to note that the term ‘crisis’ has lost its original meaning – a moment of disequilibrium and disorder, calling for a decision or judgement – and has come to signify a permanent state, a regular condition rather than the disruption of an equilibrium.18 But this remains too general. It is necessary to distinguish two things. The system is indeed in crisis and this crisis is as chronic as it is total; no aspect of reality is exempt, because neoliberal reason spares no dimension of human existence. But the formula also signifies that the system feeds off crisis, that it is reinforced in and through crisis. It must be remembered that neoliberal policies are not adaptations to objective logics imposed from without, like natural laws, even if they present themselves as such. Instead they strive to construct situations and intensify dynamics that indirectly compel governments to accept the consequences of their own previous policies. And this literally infernal logic leads to the pursuit of policies that further aggravate the situation. The hypothesis of a ‘shock doctrine’, advanced by Naomi Klein,19 is only an approximation to this reality. Certainly, every natural disaster, every economic crisis, every military conflict and every terrorist attack is systematically exploited by neoliberal governments to radicalize and accelerate the transformation of economies, social systems and state apparatuses. But this strategy is not so much the product of a global conspiracy as the development, by way of self-preservation and self-reinforcement, of a normative logic that has irreversibly shaped the conduct and mentality of all political and economic ‘decision-makers’, and which has systematically undermined potential countervailing forces.
It is not only ideology, or some particular policy, that is neoliberal. Once the process of neoliberalization of societies and mentalities has attained a certain threshold, it is social reality itself which has become neoliberal. As Marx never tired of repeating, it is not the representation that inverts reality; it is reality itself which is inverted. It is reality that takes the form of a system of constraints on individuals, which subjects all putative ‘realists’ and ‘pragmatists’ to its iron law. This is how the ‘social-democratic Left’ has scuppered itself over the last thirty years. It has not simply been the victim of a reality imposed on it, prompting it to renege on its old redistributive and egalitarian ambitions. Since the 1980s, it has been to the fore in applying neoliberal rationality. French ‘social democracy’ played a crucial role in liberalizing finance and trade, fostering the transition to a new economic and political phase where ‘capital rules’.20
This ‘Left’ has adopted the right-wing ‘software program’ almost in its entirety: the fetish of currency stability, the desire to reduce taxes and social expenditure, labour market flexibility and, above all, the quasi-constitutional primacy of the principle of competitiveness. A prisoner of this logic of free circulation of capital and competition, it invariably ended up acceding to the demands of capital and rejecting those of labour. Clinton, Blair, Bérégovoy, Prodi, Jospin, Schröder, followed by Hollande and Renzi, were zealous architects of neoliberal society. And it is precisely this new role of the ‘Left’ that explains its collapse in numerous countries, sometimes to the point of disappearing from parliament (as in Poland in October 2015), and the simultaneous rise everywhere of new conservative, nationalist, and sometimes explicitly quasi-fascist forces.
Neoliberal policies are systematically favourable to capital. Competition between capitals on a world scale presupposes generalizing the policy of competitiveness. And, in its turn, such a policy assumes waging continuous war on every obstacle to the freedom of capitalists and the valorization of capital. The whole set of apparatuses, rules and mechanisms that the wage-earning class succeeded in imposing by its struggles and the power it acquired is the target of the ‘war of the wealthy’ today. Like it or not, in this ‘war’ the initiative is held by the forces of oligarchy and the fight is therefore asymmetrical. The term ‘crisis’, used for thirty or forty years to denote an objective mechanism independent of human action, conceals a political war with a multiplicity of actors, private and public, national and global. From this standpoint, politics as the exercise of power is nothing other than the form in which the class war is relentlessly waged by the politico-financial oligarchy. Its stake is the organization of society and its method is economic. It aims to transform, and sometimes to destroy, the social institutions that ensure relative autonomy – individual, familial and, more broadly, collective – from the labour market and subordination to capital. The main objective is ill-concealed by moralistic arguments about the ‘virtue’ of austerity. It consists in undermining, to the point of eliminating, everything, especially from the mid-twentieth century onwards, which enabled individuals not to be utterly dependent on capital and markets. This war has the more general effect of deactivating any capacity for autonomous collective action by society.
Neoliberalism actively works to undo democracy. It does so by imposing, little by little, piece by piece, a comprehensive normative framework that enrols individuals and institutions in an implacable logic, defeating any capacity to resist and fight. And this logic does not diminish over time, but grows stronger. It is the anti-democratic nature of the neoliberal system that largely accounts for the crisis spiral. The challenge to democracy takes various forms that broadly pertain to what Wendy Brown has aptly called a general process of ‘de-democratization’, emptying democracy of its substance without formally abolishing it. It is the parliament in Athens that votes the austerity measures which destroy the Greek economy and make debt a noose strangling society. In the absence of any room for manoeuvre, political confrontation with the neoliberal system is becoming inevitable. Once again, we must draw all the lessons from Greece. The issue is not whether unduly harsh policies should be softened, or whether Greece or some other country should exit the euro. The issue is much bigger and more universal. The struggle that has begun aims to regain the initiative in the class war, so as to defeat the oligarchy and establish democracy. This confrontation obviously requires a strategic analysis; and that involves returning to the neoliberal project and the way neoliberalism has imposed itself as a system.