July 04, 2005
IMF, Jordan and Hegemony: A Rebuttal of Sorts (Updated)
Let me engage for the first time a co-author, in particular ridemycamel in regards to his entry on the IMF.
I’ll say first of all it is intelligent, well-written, clear and concise. Incredibly wrong-headed and trapped in leftist twaddle, but well-written. I thank the author in advance for what I am sure will be an interesting reply and while I am going to whack him up side the head a number of times, it is with all due respect.
From the top then:
Financial Aid, the IMF, and Historical Structures: The Case of the Bread Riots in Jordan
Some of the most fascinating aspects of financial aid-- in my opinion-- are the often implicit regulations that come along with it, and how it re-shapes and re-forms the societal structure of a developing country.
If only. If only international development aid “reshaped” or “reformed” developing countries, we might have a point of discussion. However, it doesn’t. Quite the contrary.
This can be viewed particularly well in the majority of resource-poor MENA countries. By examining the history of financial aid in Jordan during the 1990s, for example, you can clearly see how the flow of financial aid was based as much on the political decisions of the Jordanian monarchy as it was on the country’s needs.
Well, welcome to the world of realpolitik. Monies flow for reasons of State Interest. Of course defining a country’s needs is not as evident as it might seem – indeed it is quite far from evident when one leaves the abstract and enters into the hurly burly of real exchanges and limited resources. Does one help the Beni Hamada weavers? Or is it the water infrastructure? Or is it the government bureaus and their archaic and abusive procedures that most need reform? And how?
Nothing self evident in practice.
This aside, I grant right from the get go that international assistance (and in particular American) flowed to Jordan for political and not abstract reasons. What is not granted is that this was some pure imposition from on-high.
What is even more intriguing is how this aid has changed the historical structure of Jordanian society and removed the bargaining power from the hands of the subaltern groups in the Kingdom and into the hands of the capitalist powerbrokers in Amman and Washington.
This really is twaddle.
Aid changed the historical structure of Jordanian society? Aid?
Well, amusing as this assertion is, let’s ask first what the bloody hell is meant by the terms supra?
Subaltern groups: This appears to mean the conservative tribes of the South (and East) that largely continue to monopolize power in the Kingdom. Bedouin with old historical tribal ties to the Hashemites (themselves not from the region). I suppose it can also mean the remainder of the East Bankers, the Northern Jordanians crammed up in the more fertile and wet North West (widely speaking), be they the Arabic speakers or the historically non-Arabic speaking refugees from the Caucasuses, the Circassians (etc). It would be bizarre if the author means the West Bankers crammed into camps – Black September rather ended such pretensions.
Of course the East Bankers have dominated the public service (if the phrase is not a complete joke in this context) sector of the rancid “Arab Socialist” state, while the West Bankers, excluded from the fat and easy jobs in “public service,” were stuck in the private sector – and lots went to the Gulf to make money. Jordanian in the Gulf usually means West Banker origin.
Capitalist Powerbrokers in Amman: this risible phrase likely means the wealthy largely West Bank (Palestinian) origin families that now dominate the private sector, Shoman, Nuqoul, Ghrandour, Musri, etc. Calling them capitalist seems a bit much, however. Well, one has to grant they are in the private sector.
Since these historical structures were largely created out of the wreckage of Ottoman rule it’s hardly something to moan about if the evolution of society means Jordan is moving on.
This change is best viewed through the two bread riots that erupted in Southern Jordan in 1989 and 1996. Both riots were almost identical in nature, yet the monarchy’s response to each crisis was unique. The changes in the response of the monarchy towards the bread riots are best explained by how different social forces are incorporated or excluded in the global neo-liberal historic bloc, and the way historical structures are shaped, satisfied or frustrated in the process of this hegemonic formation.
Or perhaps one might actually look at drivers in a critical framework, rather than simply assuming the answer.
But let me give a hint. 1990. A purely Arab event. Changed a number of dynamics. That would be something to reflect on. But more in a moment.
The ability of the Jordanian monarchy to remain in power following the country’s independence is astounding, particularly given that the region has witnessed a number of other governments in the region falling to revolutions of nationalism, Islamism, and socialism. The Hashemite monarchy’s stronghold can be attributed to its alternating usage of strategic co-optation and coercive force to internalize and resist the opposition.
Fair enough, but in shorter, clearer form, the Hashemites have historically been smooth operators who know how to cut deals and have been pragmatists. Squash the opponent and then invite him to the table for some scraps.
Good realism, really. Hard to criticize.
Despite its resource-poor economy, the Jordanian government was able to finance large public spending with help from the regional Arab oil economy through petro-dollar aid and labour remittances.
For a time. For a time.
Or put differently, Gulf governments donated to the Hashemites the resources to preserve a quasi-traditional order that was convenient for them, and the West Bankers who had little access to wasteful State patronage at home at least got work permits in the Gulf during its classic boom years.
Access to these external financial resources was a critical aspect of the Hashemite regime’s security. During this period, Jordan established itself as a semi-rentier state that could afford the political costs of suppressing dissent through its neo-patrimonial ties: the Jordanian state became a central supplier of employment and social welfare programs, and was able to finance subsidies on basic consumer goods.
Nothing bloody semi about it. Jordan is and was a rentier state, period.
State lives off of external rents in fact – transfers, kick backs from its Gulf friends, and of course most recently payments from the United States.
It did not, however, build up a sustainable economy, it built up a wasteful, inefficient, state dominated patronage economy based on subsidies from outside.
With the fall in oil prices and the beginning of the 1980s oil recession, however, petrodollar aid to the Kingdom dried up, and unemployment fell far beyond the absorptive capacity of Jordan’s large public sector (Rivlin & Even 2004: 22).
Good times, they stopped rolling. Inevitable, really. Easy money never, ever lasts.
One should recall parenthetically the easy money of the book was as much at the expense of the developing non-oil producing world as the Western nations.
Regardless of these shocks, Jordan remained politically unwilling to reduce spending or impose austerity measures, and continued to borrow increasing amounts of money from foreign lenders. It was not until the spring of 1989 that the regime finally agreed to a five-year plan with the IMF for ‘economic adjustment and stabilization’. In order to reduce public expenditure, the IMF pressured the government to immediately cut subsidies on consumer goods, a policy that broke the implicit social contract between state and society.
Well, let’s put this in its full light. The IMF pressured the Jordanian Government to ratchet back its spending across the board to sustainable levels as a condition for the IMF stepping in with cheap interim financing (as opposed to the government going broke and the whole edifice collapsing at once, or in the [rather unlikely] alternative, having to borrow from private sources at private rates reflecting its risk).
Reduction in subsidies is but one feature of an IMF conditionality package. Of course, since it is so much fun to use outsiders and foreigners as the scapegoat for hard decisions, and because governments (i) rarely cut security spending – sovereignty and all that, (ii) like to use the tear jerking bread riot to beat the IMF conditionalities off – rarely apply these things in the framework of an abstract decision maker.
The public reacted to the cuts with riots that erupted in the southern cities of Jordan, killing eight people and injuring around 100 (Rivlin & Even 2004: 38). The riots eventually spread to other regions in the country, and turned into violent protests against the government in the form of attacks on banks and government institutions. In response, King Hussein immediately fired the government and announced plans for political liberalization in return for the public’s acceptance of economic liberalization (Hinnebusch 2003: 9).
Small spring, smart move.
Political liberalization was not intended as a move towards ‘democracy’ by any means; rather, its purpose was to strengthen the business elite, while also creating more potential partners in the form of the powerful Islamic opposition by incorporating their political party within his government (Fandi et al. 2004: 115). As one of the key advisors to King Hussein remarked: “liberalization was intended to invite more guests into the living room for ‘coffee talk,’ with a few welcome to stay for dinner. None were to be invited into the kitchen, though, and certainly none were welcome in the rest of the house” (quoted in Lucas 2003: 139).
More twaddle now.
Strengthen the business elite, via political liberalisation? Rubbish. The business elite does not need to be strengthened by political liberalisation, not then at the very least. The State Firm management business elite of the time were already part of the club (and dominant in the economy), and circa 1989 the Palestinian/West Banker dominated private sector was hardly of a nature to need “political liberalisation” to strengthen it – except perhaps as a gesture to signal it was welcome to join the State firm club. Strikes me the fellow arguing this, this Fandi cited to, is making an absurd and frankly business and economics illiterate argument. Political liberalisation was clearly intended to be a rebalancing and safety value, beyond that I find a claim that it was aimed at “strengthening the business elite” tout court, absurd.
Events took a similar turn in August 1996, when a $100 jump in the international price of wheat left the government with little choice but to remove further subsidies if it wanted to preserve its access to external financial resources from the IMF (Greenwood 2003: 261). Almost immediately, violent demonstrations took place in the southern region of the Kingdom. Just like the riots of 1989, the demonstrators attacked public property, private banks, and expensive vehicles (Rivlin & Even 2004: 40). This time, however, the government offered no concessions; King Hussein went on television threatening to use an “iron fist” and any other means necessary to quell the disturbances (Ryan 1998: 61).
Well, here we have a purely political view of an economic and financial event. Having not taken a recent look at Jordanian historical statistics, let me simply note the insufficiencies.
First, there is the assumption that the IMF is the driver here. Maybe yes, maybe no. Circa 1996, I don’t recall Jordan’s balance of payments, but let me suggest that rather than running to the IMF suggestion, one look to see if rather the Government was not looking to preserve its own finances, rather than being forced into another payments crisis as the near disaster of 1989 (which nearly brought down the financial system). The changed economic dynamic of course is there, the private economy circa 1996 has grown substantially since 1989, and much of that due to a serendipitous chain of events: an Arab dictator driving some tanks over a border, Jordan’s Palestinian origin citizens indulging in their cunning ability in choosing the wrong political horse to back, the King of Jordan wrong-footing himself against his usual habit, expulsions and capital flight to a relative safe-haven, one with newly quasi-liberal policies. Should I spell this out? Hints are Iraq, Kuwait, 1990, Jordan.
What is striking about the government crackdown, however, was that the Islamist opposition was treated almost benignly. In his televised speech, King Hussein claimed that the Islamist opposition had behaved responsibly, despite the fact that they had been blatantly opposed to the price hikes before the bread subsidy was even lifted. This concept of incorporating the opposition demonstrates Antonio Gramsci’s idea of the need for the hegemonic group to move beyond its own corporate interests and to represent their ideology as being in the universal interest of everyone-- even the Islamist opposition.
Well leaving aside that, being an economist, I fail to see the argument here. The Islamist opposition (who precisely?) treated “almost benignly.” What does that mean? Not as harshly as the author would have liked? Not pounded into the earth? The phrase is a tricky little one. That the Islamists, for populist reasons, openly opposed removal of bread subsidies is of no surprise. The substantive question is, did they behave reasonably “responsibly” in relationship to other groups. Were they willing to do some deals in the background. Quid pro quo. If yes, well, I don’t need failed Italian Communists to explain the political calculus to me. All open questions.
Another attempt to incorporate Islam within the neo-liberal historic bloc is evident in the Jordanian private sector’s heavy investment in Islamic commercial banks; the Jordan Islamic Bank for Finance and Investment alone attracts close to 10% of the deposits of Jordan’s private sector elite (Henry & Springborg 2001: 189). Singh (2002) notes that “the regime, via repression and co-optation, had successfully crippled the Jordanian left’s ability to effectively mobilize its traditional constituencies” (Singh 2002: 76).
This is purely silly twaddle. I have no idea what the “neo-liberal historic bloc” is – I suppose it means free market economies that actually deliver something to their populaces, but I leave that to the author to define.
As for the “heavy” investment of the “private sector” in Islamic commercial banks, with the highly dodgey statistic of “close to ten percent” of “private sector elite.” – I am unaware of bank statistics that speak in such terms as “private sector elite” – this has fuck all to do with “incorporating” Islam into some neo-liberal bloc or other Leftists twaddle, it’s private money acting rationally.
Primo, the Jordanian banking sector – and here I can speak with authority as, well, I bloody well worked with them – is dominated by “Western” style banks which pay interest on deposits, charge interest on loans and the like. Indeed one in particular, Arab Bank, a West Bank / Palestinian origin institution holds something like 60 percent of deposits based on the last Standard & Poor’s reports I looked at (some 3 years ago I confess, but not likely to have substantially changed although the newly aggressive posture of foreign banks such as HSBC, Standard Chartered, and National Bank of Kuwait, among others may have moved this a bit).
Secundo, the Jordanian government licensed Islamic banks – which are by no means of any necessity attached to Islamist politics (indeed Western banks with a view to capitalising on the fat margins one can gain have opened “Islamic windows”) – well before these events. Turning to the actual facts – available in English and Arabic from the Central Bank of Jordan – one finds that the Jordan Islamic Bank for Finance was duly licensed in 1979. Yes. 1979. Since there is only one other Islamic bank licensed (c. 1997), I am hard pressed to see some real scheming here. Both remain small, marginal players, whatever the source quoted asserts. I note that nothing about having Islamic banks supports the assertion that this is engaging “Islam” in a “neo-liberal” “bloc.” Not unless one confounds mere financing of private sector activities with “neo-liberalism.” (whatever that means in substance)
Now as to share, I note from the Bank’s 2004 annual report which one can find online, that the rather inadequate disclosure indicates that the bank had a share of 10.4 percent of total deposits in the system, an 11.3 percent share of “credits” made, and a 7.3 percent share of total assets in the system. Rather a far cry from 10 percent of some imaginary elite deposits, above all in the context of a country with a bank penetration rate in the 80-90 percent range.
As for the Jordanian left being crippled, good, bloody ineffectual fools they are. However, that they were crushed has far more to do with their “solutions” being merely bankrupt calls to go back to the failed policies of the past than the State.
Between 1989 and 1996, the State (which included both the business elites as well as the monarchy) exploited IMF-led neo-liberalism to strengthen their hegemony over the subaltern classes within Jordanian society. For instance, in the second half of the 1990s, to reduce the government’s budget deficit, the regime carefully selected public enterprises for sale to “strategic investors.” Greenwood (2003) notes, however, that the term ‘strategic investors’ refers to “extremely wealthy Jordanians who enjoy social and political ties to the Palace” (Greenwood 2003: 262). Thus, unless the companies were sold off to foreign investors, the government often raised the minimum bids on economic enterprises to the point where only elite clients of the monarchy were able to participate in the bidding process.
The State includes business elites as well as the Monarchy?
Well, that is a most odd assertion. I am at a loss to understand such a definition, but I suppose it makes sense in some alternate Leftist universe. Certainly the State has sucked in some private talent, and has begun to listen to the private sector in regards to what is needed to achieve economic growth. I suppose one could confuse that for being “part of the State” in some empty sense.
Leaving that aside, the IMF hegemony talk is pure leftists twaddle of the worst sort. Hegemony? What is termed hegemony here is otherwise known as market oriented reforms to try to create a climate where economic growth can be achieved before the bloody country collapses on itself. Of course, one could continue with the failed, resource wasting policies of the Arab socialist past (read Vampire state creating past), but that would require one to be deluded or retarded.
The examples cited really have zero to do with IMF per se, or even market reforms as such, but in the clubby rent-seeking habits of the past, which have proven rather hard to shake.
Regarding privatisations, despite the scare quotes around “strategic investors” the concept is quite unproblematic. If you are off-loading the resource wasting inefficient behemoths of the State sector, you should bloody well find a way to attract investors with the financial and operational acumen to turn them around. Else you end up with a bleeding, inefficient, uncompetitive under-capitalised behemoth that will most certainly die.
Now, as to the actual execution of the privatisations, I have no examined that in detail, but I know there are complaints of corruption. Given my actual business experience in country, and given the history of Jordan’s rentier economy, with all the habits that go with it (patrimonial rewards as it was so delicately put in terms of the approved period), one should not be surprised if on closer examination the privatisation process was less than fully transparent. The tied sales noted supra are not a problem of “liberalism” – quite the contrary, they are the problems of the patrimonial state, the old school as it were. The Approved Era. Only now expressed through less “ideologically correct” means.
The hegemonic importance of the IMF in restructuring states cannot be overstated (Peters 2005: 19).
This really is leftist cant and twaddle. Of course it can and most frequenltly is in delirious excuse seeking exercises by anti-IMF leftists with little understanding of international capital markets, money or even basic economics.
Through its use of mechanisms such as conditionality, consent building, as well as the co-optation of opposition through new discourses, it promotes the production and reproduction of neo-liberal hegemony within nation states, thereby structurally displacing their sovereignty. The result has seen both “a disarticulation of state structures and a reinforcement of those discipline-and-control functions of the state necessary for the functioning of transnational capital, wherever it seeks to operate” (Green 2002: 46).
Let me translate this.
“I don’t particularly understand the economic drivers behind what the IMF does, nor do I understand alternative consequences, but I know I vaguely want some idealised socialist order. Ergo, I shall use a bit of wooley humanities jargon to create a ‘critique’ that merely says: I don’t like what the IMF does or says, nor the consequences of the failure of socialist thought, so I shall exaggerate immensely its power as an excuse.”
The IMF has a function, promoting international financial stability, mitigating the risks of contagion, ensuring the when a payment crisis arrives the state in question does not go brutally bankrupt, and ensuring the follow up. No one is forced to go to the IMF. They go to the IMF when they are BANKRUPT. That means, can’t pay the bloody bills, means if they were a company, it’s liquidate or restructure time. No more cash.
As it happens, in the bad world of limited resources, running up debts far above what one can pay back has consequences, including (i) people not giving you any more money unless they have ulterior motives (i.e. political ones) and never want to see their money again, (ii) you have to radically reduce your expenditures.
Really very simple. Without the IMF it would be far, far, far more brutal. People like me would be in charge. No ability to pay, you get no money. Damages the private sector as well, where real wealth is generated, their ability to get credits and capital generally is damaged. Economy grinds to a halt. Rather looks like FSU as it went through its collapse.
Blaming the IMF for conditionality and telling one to reduce expenditures (discourses I guess in academic speak, to hide the plain facts) because you can’t bloody afford your present consumption given your income, well that is blaming the doctor for you being sick. Period.
The rest is mere leftist twaddle.
Any critical assessment of global capitalism should begin by acknowledging the power the US exerts in shaping and putting forth a neo-liberal agenda. For instance, Jordan immediately felt the repercussions of its pro-Iraqi stance during the Gulf War: foreign aid was cut off and the Jordanian port of Aqaba was blockaded by US-led frigates to prevent supplies from reaching Iraq via the Iraq-Jordan border, inflicting heavy damage on the Jordanian economy (Andoni & Schwedler 1999). Jordan soon enough realigned its position to suit Washington, and aid resumed its regular course.
I’d love to know what the neo-liberal agenda is. Do I get one for the Holidays?
Now, as to the example cited, that’s got fuck all to do with a neo-liberal agenda, it’s called warfare. One’s ideology doesn’t effect that. If your enemy has a port that is allowing supplies, you bloody well blockade it. Nothing liberal, neo-liberal, communist or whatever about it. Certainly it hurt Jordan, but that’s part of the pain for choosing the loser (especially a serial incompetent who ran around pointlessly invading neighbours without ever getting it right in 30 years of country impoverishing idiocy – that would be Sadaam (let me add as the necessary parenthetical I was no more a fan of 2003 than of Sadaam’s idiocies)).
Further, the US used the mechanism of consent-building to pressure Jordan into a peace treaty with Israel in 1994.
Fair enough. However, what else was Jordan going to do? It’s nice Gulfie friends were more than a wee bit pissed off at the Hashemites over the small mistake about backing the Moustachioed Incompetent in Baghdad over them, needed the money. State of war with Israel, however emotionally satisfying wasn’t getting anything done. Better a cold peace.
Despite public criticism from both the Islamist opposition as well as other subaltern groups within society, Jordan signed the treaty. This redeemed Jordan in the eyes of Washington, and it was instantly re-invited back into the neo-liberal world order.
Neo Liberal World Order?
The US “declared Jordan a non-NATO strategic ally, wrote off $900 million of its debt, and raised aid levels progressively…to the point where Jordan became in less than a decade the fourth largest recipient of US economic and military assistance in the world-- $1 billion over three years” (Kassay 2002: 55).
Well, best to get bribed by someone with money than someone without money if you need the money. I merely shrug.
Jordan had thus realigned itself and had signed on as an enthusiastic participant in the neo-liberal world order (Ryan 1998).
Again this empty term, neo Liberal World Order. Neo-Liberal: scare word (or phrase if you wish)
The day after lifting the 1996 subsidies, an IMF donor meeting in Paris promised more than $1 billion over the next three years, and Japan began negotiating a $90 million soft loan to finance Jordan’s budget deficit (Andoni & Schwedler 1999: 41). The acceptance of Jordan’s elite class of the norms of this new world order earned it the praise and support of the IMF and other financial institutions. In fact, merely three days following the violent riots, the IMF issued a statement claiming that Jordan “continued to make impressive progress.” At the time, however, Jordan was as vulnerable as ever: 26 per cent of the Jordanian population suffered from absolute poverty, unemployment was at 25 percent of the population, and real wages continued to fall as public sector jobs were cut (Bouillon 2002).
Here we have evidence of rational behaviours.
Leaving aside the abusive undefined use of “elite class,” what would one expect the IMF to do to support necessary reforms? Tell the Jordanian Government they’re weak sons of bitches?
Rather more to the point, that Jordan was poor c. 1996 is apropos of nothing. It was poor in 1979 as well. The prior system had already proven unsustainable (indeed our very own author admits such supra, even if he doesn’t realise it). Public sector weight, producing little, had to be cut.
The above figures point to the problems arising out of the Jordanian economy’s incorporation into the neo-liberal historic bloc. Through means of coercion, persuasion, bribery, and the impersonal functioning of economic mechanisms and institutions, the US-led neo-liberal hegemony has drastically limited the government’s capacity to conduct autonomous social policies for the protection of their populations, and has thus muted resistance of the subaltern Jordanian classes. Robert Cox (1996) rightly observes that the state system in the new world order is “coming to act more as a support to the opening of the world to global finance and global production, less as a means of defense of the welfare of local populations” (Cox 1996: 516).
No the above merely points out the author lacks a rigorous grounding, indeed any grounding at all, in economics, and a vision of the world rather caught up in the utterly fantastical left-academic world.
Coercion, persuasion, bribery, and impersonal functioning are all features of any state system properly speaking.
As for the Government’s capacity to conduct autonomous social policies “for the protection” of the population, it’s not the bloody United States or this khayali Neo-Liberal World order that limits the capacity – it is the lack of resources of the country itself relative to the pretensions of the nanny-state that grew up in the 1960s and 1970s.
The resources are not there. Period. As for this Robert Cox twit cited, the real defense of local populations is when countries grow, get wealthier and develop the means to support aspirations. Like Taiwan, South Korea, etc.
As a final thought, it occured to me that I might sound like an IMF true believer. I am not. IMF is an institution that does a specific kind of job, I accept that it comes with its own blind spots and the like. Rather quite simply my dear blog co-author, although a smart fellow (or gal as the case may be, we don't know each other yet here) has not made any of the right arguments against IMF policies.
Now, of course we came at this with utterly different perspectives. I am a running dog of capitalism (wasn't that the charming phrase of the day), I believe ridemycamel is not, as such.
Nevertheless, I rather suggest that even Left view attacks on the IMF that start from weak data and premises, and rely on more "linguistic tricks" and word play than on on the substantive economics will invariably be without much weight.
To throw a bone, it may very well be the case that IMF conditionalities are not well-conceived in some cases, as in Jordan, due to unrealistic ideas about the responsive capacity of the country in question.
However, to get right down to it, Jordan would not have come under such conditionalities if the country had not effectively bankrupted itself. I should think that I am not being excessively "neo-liberal" to observe that any system that can not pay for itself is doomed (ex of course it recieving massive bribes from outside). The prior system, far from "defending" anyone, merely set up an unsustainable set of expectations and an economic fabric ill-adapted to Jordan's real productive capacity or potential. That served no one's long term interests, although it was surely a fun ride so long as petrol dollars flowed to support it.
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First of all, thank you for taking the time to comment on my paper. As a 21 year old recent graduate in Economics and International Development, it's rare that someone like me gets such strong criticism on their work, and I'm very glad and flattered that my paper has received such well thought out critical analysis.
Now, to put the paper in context. My entry consisted of a small part of a research report I had done for one of my classes: Global Development Finance. The requirements for this paper were that we were supposed to examine a case in the history of global finance from a political economy perspective. We were asked to incorporate a theory into our work, and use that to critically analyze a particular case study.
I chose to look at the bread subsidy riots from a Neo-Gramscian perspective. I may have made a mistake by hastily cutting the report short for this entry, and so a lot of my proof was lost. If you are interested in reading more leftist banter, I can send you the essay in its entirety. Speaking of which, you commented on my use of the word "State" to include private interests. This is the Gramscian definition of the State. For Gramsci, the State should be understood not just as the apparatus of a distinct government institution operating within the public sphere (or simplistic notions of state = government), but also as a social relation that is part of the private sphere of civil society through which hegemony functions (Gramsci 1971: 261). I will get to the concept of hegemony later on, when I tackle your favourite phrase: neo-liberal world order/hegemony.
What's funny is that in that particular class I was known as the "neo-conservative" hawk; everyone else wanted to "bring about the socialist revolution", while I merely wanted to work with the tools of the current world-system. So I find it quite funny that now I'm being labelled the crazy leftie! It was definately more fun being known as the neo-con :)
Secondly, it seems my paper has been taken entirely out of context, and I now regret cutting it short. In fact, the essay was highly critical of the Jordanian monarchy, rather than the IMF per se. The original title was: "Historical Structures and the Price of Bread: Examining the Impact of Neo-Liberal Hegemony on the Social Relations of Production in Jordan, 1989-1996".
Ahh, yes now let's get to 'neo-liberal hegemony'. Neo-liberalism as it is understood by us commies signifies the fact that the currect economic system we are operating borders on what is called "market fundamentalism"; i.e. the view that the market is flawless and there is no such thing as market failure. The market can fix everything and operate on equilibrium, and so leaving everything to market forces will yeild the most efficient results. In academia, I have understood that the term 'neo-liberalism' mean something close to the 'Washington Consensus'.The economist John Williamson coined the term “Washington Consensus” in 1989. He said it stood for ten policies: measures to promote trade and foreign direct investment, fiscal discipline, fewer subsidies, tax reform, liberalized financial systems, competitive exchange rates, privatization, deregulation and measures to secure property rights.
Now, from a development perspective, we understand that this system is very flawed. Money rarely does trickle down to those who need it the most (the poorest sections of society), because, by examining it from a market fundamentalist perspective, it may not be profitable to "invest" in areas that do not yeild profit. Looking at the case of privatization, for instance, when one privatizes something like public transport, who is to say that the private company coming into the market will want to set up bus stations in remote villages? That sort of thing.
So, moving from there: neo-liberal hegemony. Hegemony is understood by Gramsci as the permeation throughout society of an entire system of values, attitudes, beliefs and morality that has the effect of supporting the status quo in power relations. Hegemony in this sense might be defined as an 'organising principle' that is diffused by the process of socialisation into every area of daily life. To the extent that this prevailing consciousness is internalised by the population it becomes part of what is generally called 'common sense' so that the philosophy, culture and morality of the ruling elite comes to appear as the natural order of things. So, neo-liberal hegemony means that the ideas of neo-liberalism have been taken as given without being put under the lens of scrutiny. The IMF is at fault here for persuing neo-liberalism as the only way towards economic growth and development. By critiquing this ideology I do not look for the solution in communism or any such tripe. I am merely asking for readjustments to this "markets-rule-all" way of thought.
Now, I know you are going to say this is not economics but sociology, or politics, of english lit or whatever it is. Now of course, this is political economy...political economy stems from the idea that economics does not operate in its purest form. You commented yourself on this, saying it is the world of Realpolitik. So really, we're all on the same dance floor here. Nothing works in pure economics terms. Thus, sometimes it is important to speak in theory to understand some of the other forces that are operating in the global economy.
I hope this put the paper in a bit of context. My entry may sound like it was written in a "fantastical left-academic world" because it WAS written within that context. That is no reason to completely throw it away, because whether you agree it or not I believe it does offer many valid observations and points of analysis that could possibly be worked on and improved.
Anyway, that is all; I hope I tackled some of the issues raised. If there is anything else you would like me to address, please let me know. I wasn't sure whether to make this an entire in itself or whether I should just post it as a comment, but I figured it related little to the MENA, and so threw it in the comments section for now.
Until our ideological beliefs collide again,
Posted by: ridemycamel at July 5, 2005 02:45 AM
It certainly didn't read as a blog post, and that it wasn't written as one certainly makes it less bizarre, and makes the author seem less silly. But rewriting it would have been good, but perhaps overly ambitious.
Posted by: David Weman at July 5, 2005 03:34 AM
The colloquial blog style of writing can actually promote intellectual rigor. It makes it harder to fol others or yourself that some bullshit is a coherent argument.
Posted by: David Weman at July 5, 2005 03:44 AM
Neoliberal is a useless, meaningless term, and when people use it, it's usually a signal that one can disregard them, that they're not serious people. With all due respect. I'm not saying you're not serious. Possibly possibly - a bit clueless.
Do you regard for example the counterpunch crowd as serious people?
Posted by: David Weman at July 5, 2005 04:29 AM
David - any reason UAE state telco Etisalat would be blocking your website?
http://fistfulofeuros.net is proxy-blocked here. From Google's cache, it doesn't appear to be overrun with porn, gambling or massage parlour ads.
I'm wondering if the dynamic filter is putting an unsavoury interpretation on "fist"...
Posted by: secretdubai at July 5, 2005 05:12 AM
Mr. Weman, with all due respect, I don't feel you have any right to call me clueless, or to use sweeping statements such as calling "neo-liberalism" a useless term just because you yourself might not believe in it.
As such, I feel no need to take your comments with any seriousness, nor to answer any of your questions, until you cut the crap and start commenting with well-thought out information.
After all, it has become all to easy these days to post presumptious comments without any proof that you possess any knowledge about what is being discussed.
Posted by: ridemycamel at July 5, 2005 05:16 AM
Well, fair enough. I stressed 'possibly' though.
Posted by: David Weman at July 5, 2005 05:21 AM
Chill, chill, chill all.
The reply comment deserves a comment itself. Will get to that.
Posted by: The Lounsbury at July 5, 2005 05:30 AM
It has to be the idiocy of the filter and the unsavoury interpretation (suggesting.... something), for DAvid's site, Fistful of Euros largely is about... well Euro land, the EU and the like.
Posted by: The Lounsbury at July 5, 2005 05:44 AM
I was a bit inadvertently aggressive actually. Sorry.
I don't have time for a proper answer, and indeed I'm not as knowledgeable as others. Maybe later.
Something to chew on: neoliberal is most often a term of abuse masquerading as a descriptive term.
Posted by: David Weman at July 5, 2005 05:48 AM
I agree. Frankly my initial reaction to our ridemycamel essay was more negative than my eventual comments. Certain turns of phrase, while now understanding the context, are rather typical of empty posturing rather than clearheaded analysis. Neo Liberal being one of them.
Not that the odd bit of abuse masquerading as something else is out of character for me, but in re the backing substance, I believe the key indicator for ridemycamel should be that his sources got a number of underlying facts plain wrong.
But more on this when I get a moment. Have to get real work done.
Posted by: The Lounsbury at July 5, 2005 05:53 AM
secretdubai is Istara??? Oh!
Re the blocking: Funny. My name gives us referrals lots of hits from people who can't spell. Also we had a post about Laetitia Casta's breast. Not that that explains anything. I'm close to missing my train now...
Posted by: David Weman at July 5, 2005 05:56 AM
Yes, it's odd this site block. It may well be a blip, because much of the censoring is supposely done via an American company. The UAE then adds its own special touch, censoring out sites such as Arabtimes.com and various Israelia.
Perhaps it dislikes fists nearly as much as the James Bond film Octopussy?
Posted by: secretdubai at July 5, 2005 03:31 PM
Looking at the case of privatization, for instance, when one privatizes something like public transport, who is to say that the private company coming into the market will want to set up bus stations in remote villages? That sort of thing.
This is the classic case. I'm not sure why central cities have to be gutted to subsidize rural places that will never be able to fend for themselves, but for now that seems to be the model we're working with, and for some reason both extremes of the political spectrum think it's just dandy to send metric craploads of money down the rathole of rural subsidies.
First of all, society has no interest and should have no interest in subsidizing backward areas. The only interest society should have in backwards places is in getting the people who live there to get out. Not forcibly mind you, just by the gentle art of making it clear that trying to maintain people in uneconomic backwaters isn't in anyone's best interests.
And there are market solutions to such out of the way places. Network television doesn't reach? Well, cable has been around for half a century, and these days there's satellite.
No phone service via land line? Cell phones can serve remote areas far more cheaply.
As for public transport, even in densely populated areas this is usually subsidized. But at least densely populated areas give you a return on that investment via all kinds of economic development that can't happen in backwards, rural places because it would simply be impossible: there is no critical mass for any sort of viable market for most goods, just to take one factor into consideration. Ergo, no interest - public or private - in providing an expensive public service like regularly scheduled transportation to people who live in the sticks. Not that that stops their representatives from making sure they get it, as that continuing disaster known as Amtrak here in the US amply illustrates.
Posted by: pantom at July 5, 2005 10:25 PM
You see, that is a very difficult argument to make. The word 'backwards' is all quite relative. What is moving forwards to you may be moving backwards to someone else. It isn't an analytical tool to judge where private interests shouold be invested.
In fact, it is often the case that rural areas can be more economically and environmentally efficient than large urban areas. It's purely a matter of perception, and thus your argument falls flat on its face.
Posted by: ridemycamel at July 6, 2005 01:48 AM
That's pure hand waving.
Rural areas might "possibly" be more efficient in some places at some times, but you have to bloody well define what you mean.
By the data, rural areas in the Middle East are not at all efficient. Very low value added, intensive and in fact damaging production. They are, in a word, backward by any non-mealy mouthed non-academic use of the word.
Pantom rather put his finger on the problem, what the final cost-benefit of any given service is. Total economic cost and benefit. Subsidizing unsustainable rural lifestyles in Jordan for example, where due to modern medicine population pressures are intense, is not long run sustainable, if only on a water basis. There is no real interest in keeping Bedou Bedou, except some naive culturalist fantasy.
Posted by: The Lounsbury at July 6, 2005 05:17 AM
I should note that I am working on a general reply to the long comment, however, need to get a report out asap.
Posted by: The Lounsbury at July 6, 2005 05:21 AM
One of the things I always liked most about Communist academic historian Eric Hobsbawm was his willingness to use (and defend) the term "backward."
Posted by: Jackmormon at July 6, 2005 12:04 PM
*Hits forehead* Marxist academic historian.
Posted by: Jackmormon at July 6, 2005 03:41 PM
Subsidizing unsustainable rural lifestyles in Jordan for example, where due to modern medicine population pressures are intense, is not long run sustainable, if only on a water basis. There is no real interest in keeping Bedou Bedou, except some naive culturalist fantasy.
Bedu in Petra being a good example. They started doing well for themselves when tourism kicked in, then in dry years (eg the last few, with Pal/Is, WTC and the Iraq war) they were nearly destitute. Government provides schooling for kids and medical care, so there is no disincentive for them to stop producing children, which they do in numerous quantities, according to our Jordanian guide: "because they have nothing else to do." Limited industry, limited agriculture, and a few goats.
Posted by: secretdubai at July 6, 2005 04:24 PM
What about the economic disincentive of having to actually feed the kids? Or is that somehow counterbalanced by other incentives (besides the actual activity that leads to procreation, of course)?
Posted by: Eva Luna at July 6, 2005 06:12 PM
Would be interested to know whether family size of Bedouin were constrained by resource/economic considerations in the past and whether current conditions (schooling/medical care) have reinforced past practices. In other words, have they always produced large family sizes or is this a more recent phenomenon?
Sedintary, agrarian societies generally produced relatively large family sizes when conditions were favorable. But I am not familiar with how that trend traslates in environments where nomadic herding was/is common.
My guess - there has always been a preference for large families; but only a select few families were fortunate/wealthy enough to achieve that goal given the rigors of the environment and high mortality. It's only with the advent of improved health services, medicine, etc. that have enabled more people to achieve their preference for larger family sizes.
Posted by: eponymous at July 7, 2005 02:20 AM
let me first say what a great site this is and that I enjoyed reading many of the posts and comments here, and would like to contribute my own (hopefully with as little snarky comebacks as possible).
But first let me make sure I understand what you mean here. When you speak of subsidising the unsustainable lifestyles in Jordan, do you mean their free education, health, (public transportation in their villiages?!!), farming and livestock production policies, or do you mean any sort of subsidy for rural areas is wasteful? which rural areas are you talking about? the badia? or something a little closer to the urban cities?
As for the family size, this Jordanian guide that was mentioned who dryly stated "they have nothing better to do", but there must be more to it than that. As with everything, it is a cost / benefits issue. More children make the tribe larger and stronger. they help raise the livestock. they find some unskilled work somewhere. they join the army. they become policemen or some other civil service, or they become government officials. at the same time it is relatively cheap for them to have these kids. also keep in mind these are Bedu, birth control has not really been introduced to their way of life yet.
There is no real interest in keeping the Bedu Bedu. maybe, but I dont believe the Bedu who remain in the badia make up a significant number for anyone to care.
Posted by: sun-rype at July 7, 2005 06:38 AM