British politics in the last week has been consumed with talk of financial support to address the tremendous economic harm wrought by slavery in the Caribbean. Slavery, as a crucial link within the European takeover of the globe between the 15th and 19th centuries which facilitated industrial revolutions – or what historians term the ‘Great Divergence’ – was indelibly tied to the impoverishment of the Global South.
Ed Miliband’s stewardship of the World Bank as part of his brief as British Foreign Secretary makes one wonder how far his supposed opposition to neoliberalism extends. During the 1950s-1970s, decolonisation tended to take an economically protectionist form, with newly-sovereign states building up their own industries. Such policies had successes, enabling ‘Third World’ countries to generate their own consumer items rather than concede all raw materials to rapacious colonial overlords as before.
This changed in the 1980s when the United States and Western Europe imposed ‘structural adjustment’ programmes on the Global South via the World Bank, alongside the International Monetary Fund (IMF). As Jason Hickel argues, the IMF assumed the role of ‘global debt enforcer’ in that decade, offering to help poor countries finance their growing debts should they agree to programmes which redirected domestic cash flows onto debt servicing over public services, and forcibly opened ‘postcolonial’ economies to foreign goods which undercut local producers.[1]
It is worth scotching the common myth around this – that global poverty has dropped since the 1980s. In fact, much of this has to do with China and East Asia, some of the only places where such programmes were not imposed. Furthermore, if you take China out of the equation in the 1980s-1990s, you find that the global poverty headcount increased across these decades. Structural adjustment reimposed the economic hegemony of Global North – erstwhile colonial – creditors on the majority of the South while the few regions able to resist the neoliberalisation of the globe did make progress against poverty.
What does this tell us? That Antiguan spokespersons for recognition of the legacies of slavery into the present day are correct. Not only was much of Africa, Asia, and Latin America drained of natural resources to enrich a white Western few in, by the latest, the 19th century, but they were robbed of their brief episode of relative economic sovereignty in the 20th – when neoliberalism and structural adjustment reimposed a brutal regime of distant market discipline on fragile economies.
This regime inaugurated an era of the rule of multinational corporations. Such corporations simply upped sticks and moved to countries in the Global South where labour cost comparatively little, increasing their own profits – none of which these countries benefitted from – while political leaderships in these regions had to battle to attract foreign investment that now prevented an economic cataclysm by competing with each other to drive wages down.
This is the core of the logic of the contemporary world-system. Decolonisation threatened it, but neoliberalism doused the emancipatory promise of the 1950s-1970s in a sea of structural adjustment programmes legitimised by Cold War-era anti-communist paranoia. Poorer regions of the global economy are forced to shill themselves or their labourers and resources for the aggrandisement of a West whose consumption levels constantly increase.
Ed Miliband has recently highlighted – if not in as many terms – the malaise generated by neoliberalism on a global scale, pointing out that governments in sub-Saharan Africa spend more than three times as much on debt repayments as on education, and calling for international development banks to provide cheaper debt refinancing and longer repayment periods. This is a start.
However, it is imperative to emphasise to actors such as Miliband that the debts themselves are profoundly unjust. The Organization of Petroleum Exporting Countries grouped together and drove up oil prices in the 1960s as one exercise in improving the prices of their commodity exports in response to the paltry terms of trade tendered by the West. As part of the ‘Volcker Shock’, Paul Volcker, the chairman of the US Federal Reserve, then dramatically raised interest rates to try and stem inflation, massively increasing the debt-servicing payments that developing nations were paying as a result of having taken out commercial bank loans in US Dollars.[2]
Were developing nations wrong to have clubbed together to try and improve the prices of their commodity exports? No – their very economies had been systematically debased during colonialism to siphon off all primary products and raw materials for peanuts. The ‘Third World movement’, beginning with the Bandung Conference of 1955 in Indonesia, was about trying to recover something of not only their sovereignty but more fundamentally their dignity. Allowing these countries to labour under debts whose servicing payments vastly exceed the amounts of money they spend on public health and infrastructure is outrageous.
Calls for reparations and debt cancellation are inevitable because they are just and moral. Neoliberalism was a machine built by think tanks pumped full of rich men’s dollars which found a convenient argumentative foil – the loony theories of Milton Friedman, Friedrich von Hayek, and other such ‘libertarians’ – beneath which to obscure the fetid reconstitution of an imperial world order founded on extraction. History is important because it is not only past but present. A genuine socialism is a genuine internationalism and a genuine internationalism seeks to set all on a fair footing.
[1] Jason Hickel, The Divide: A Brief Guide to Global Inequality and its Solutions (London: Windmill Books, 2018), 153.
[2] Ibid, 136.
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