Duménil: Neoliberal trends setting up a terrible future of inequality and exploitation for the workers
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. Joining us again from Amherst, Massachusetts, from the PERI institute studio, is Gérard Duménil. He’s an economist at the University of Paris and is the author of the upcoming book The Crisis of Neoliberalism, from Subprime Crash to the Great Contraction. Thanks for joining us again, Gérard.
GÉRARD DUMÉNIL, ECONOMIST, UNIVERSITY OF PARIS WEST: Thank you.
JAY: Say you’re an ordinary working person in Canada, the United States, one of the European countries. What should you be demanding from your politicians now, given the state of things?
DUMÉNIL: Well, you see, what’s happening now—I explained before what neoliberalism is about, which is a restoration, the tremendous increase of the income of the richest fractions of population. Okay? Now, this mechanism led to a major crash, to a major crisis. And what are they doing? They are trying to transfer the costs of the crisis to the people; they are trying to use the circumstances of the crisis to increase, you know, the [inaudible] of neoliberalism. Okay? So what we need, obviously, is resistance, you know, on the part of the population. They must refuse completely, you know, any sort—this kind of transfer of the cost of a crisis which was not caused by them on their shoulders, okay? Let me give you an example in the case of a country of Latin America, because I think it’s really interesting. In 2001 in the country Argentina there was a very major crisis, a very big crisis. So let me tell you what happened in this country. I am at the end of World War I now, and I will say the purchasing power, what you can buy with what you get in one hour of work, let’s say it’s 100. In 1974 it was 220. Do you know where they are now? Ninety-five. Okay? Just to tell you that if a government, if a society, if upper classes use the circumstances of a crisis to encroach on the purchasing power of worker, they can do that, absolutely, tremendously and absolutely frightening manner. I’m not saying that now they will divide the purchasing power of worker by two in Greece or in the United States; I’ll just tell you that things like that happen in the world. Okay? So worker have to be absolutely careful, you know, to resist to what is happening now. Worker are not responsible for the present crisis, and these classes are using the present crisis in order to transfer the burden on the popular classes in order to impose even more, you know, to a larger degree, the [inaudible] of neoliberalism on that. So what is needed now is, of course, resistance. But it’s very easy, you know, from a university to tell the people, “You need to resist; it’s extremely important for you.” The real difficulty is to do it. Okay? And it’s so dangerous, as you know.
JAY: So in terms of public policy, take, for example, in the United States, what are some of the things people should be demanding from their politicians in terms of public policy on the economy?
DUMÉNIL: We have to demand regulation, you know, the limitation of the financial mechanism, because this was one of the determinants of the present crisis. And, of course, you know, all these classes and institution, banks and everything, they are resisting to that. It’s absolutely necessary to regulate. You know, it’s impossible to let those people act, you know, freely. It’s extremely dangerous. And the consequence, as we see, will be on popular classes. Okay? This is one aspect. But of course also, you know, neoliberal globalization, in the sense of capability to invest everywhere, the capability to delocate industry to any places in the world, must also be limited. Okay? I think it must be limited because you see what’s happening in the United States, for example; I mean, industry is disappearing, disappearing at a tremendous speed. And you know the story of the auto, you know, industries and everywhere. Now you see manufacturing industry, as we say, in United States represent only 10 percent of production. It’s losing, losing, you know, in size that absolutely incredible size.
JAY: So how should that be addressed? ‘Cause that’s something people talk about all the time here, the gutting out of industry. But they blame it on the issue of wages. So, if anything, the solution here, as took place in the supposed saving of Detroit [inaudible]
DUMÉNIL: But this is a very good example. You see the logic here, okay? Wages are 10 times, 20 times lower in other country. Okay? So if we want to keep our industry, we need to diminish wages. That’s exactly the story that I said, as I said, you know, with Argentina. Okay? So it’s absolutely necessary to resist to that. But, I mean, at least now, you know, local industry must be protected. Okay? This is absolutely necessary. This is contrary to the interests of big transnational corporation. Okay? This will serve also the interests of other corporation which are still producing under US territory. If you face that, they are going to tell you, “Oh, you are a nationalist, you are reactionary,” and so on. But, well, you know, what is liberality of the present system? It’s absolutely impossible [inaudible] for example let’s take Europe, to stop speaking about the United States. It’s impossible to introduce a competition between worker in Romania and France. Why? Because the average cost of one hour of labor in France is €28. In Romania it’s €3. Okay? So we, our progress, is we are internationalists. We open the frontier between Romania and France, okay? But you can see the consequences, of course, for workers in France. This is absolutely impossible. And second, you know, maybe this is good at some point for workers in Romania and this is good for worker in China, but we must say something: these kind of trends are preparing a future, for even the working class of these countries, which is a terrible future, because this is not a future of security of employment, this is not a future of social production; this is a neoliberal future which will be exported to country like Romania or like China. So maybe in the short run this might help these worker, but at the cost, you know, of the situation of worker in more advanced countries. But, anyhow, for all the workers of the world this is preparing absolutely terrible future, which will be a future of the neoliberal world, which is a future of inequality, which is a future of absence of social protection, which is a future of tremendous exploitation.
JAY: But then don’t you get into these kind of nationalist trade wars again? I mean, isn’t there some other alternative in terms of demanding—? For example, the whole question of unionization in countries like Romania and other places, I mean, if you just get into protectionism, then doesn’t that lead to—?
DUMÉNIL: Okay. This is a propaganda of our governments. You know, of course, you know, this is exactly what they are saying: you are nationalist, you are a protectionist, you’re a—. But it’s absolutely impossible to open right away all frontieres [borders] between country which are completely unequal. The problem is not now, of course, nationalism in this sense; the problem is to organize exchanges among countries. Okay? I’m not saying that we should stop any kind of foreign trade. This would be completely ridiculous. And countries of the Third World, you know, need to export, countries of the Third World. So what we need is to negotiate agreement between various countries, taking into account the advantages of popular classes in each country. And this can be done, you see. I’m not saying that we should grow bananas in France, okay? So we need to import. We also need to export a number of thing. But this must not be done under the principle of the World Trade Organization; this must be done under the negotiation of trade agreement between country of various level of development, taking into account the mutual advantage of various of the popular classes, of the various countries, because this discourse about “You are protectionists, you are nationalists” is exactly Margaret Thatcher “There is no alternative.” Either you are neoliberal and you work 100 percent in the interests of capitalist classes, or you are a reactionary of neoliberal. I personally say no, okay? There is another world, another manner of organizing people, okay? And this is actually the message of the alter-globalist movement. There is another manner, you know, to organize the world among various people than the neoliberal matter, because the neoliberal manner is only the advantage of upper classes.
JAY: Thanks for much for joining us, Gérard.
DUMÉNIL: Thanks to you.
JAY: And thank you for joining us on The Real News Network. And don’t forget the Donate button up here or down there, because we don’t have a neoliberal model, and we can’t survive without your donations.
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