Hey guys this is me trying to explain neoliberalism, how it affects labour, and drawing parallels between neoliberalism here in the west with neoliberalism in the global south, looking at the Grenfell Fire and Rana Plaza Collapse.
Lets get into it.
Neoliberalism and the Global South
After countries had become independent of colonial control, they sought ways to promote their economic and social growth.
This initially began with development programmes promoted by Western institutions e.g. the World Bank and the IMF, that emphasised development led by and managed by the state (note how the colonisers are still trying to manipulate their former colonies so they can still profit from them smh). However, after failures occurred in economies across the world, the Western institutions put these failures down to the state-led development they had promoted and began to promote development via neoliberal policies.
The primary aim of neoliberal reforms is to reduce state power over the economy, and place power in the hands of the free market (private businesses).
- Privatisation: the transfer of government services and assets to private businesses
- Deregulation: the removal or reduction of state regulations
- Trade liberalisation: the reduction of barriers between countries when exporting and importing goods, opening up the markets of countries
These were to be conducted through structural adjustment programmes, where countries would be given financial loans to support themselves, on the condition that they opened up their markets and following neoliberal policies.
Neoliberalism promotes limited assistance from the government, while emphasising individual development and success, as it is argued that by pitting people/corporations against each other for development, it will intensify competition and in turn increase profits, promoting economic growth.
Through opening up the markets via trade liberalisation and deregulation, the government has limited control over foreign investment and involvement in the country. This has therefore led to an increase in multinational corporations largely from the West entering and setting up businesses in the Global South. These businesses thrive on the lack of government control, as it means they can evade laws protecting workers and the environment, allowing them to pay workers near nothing, pay less for ensuring safe working conditions, evade investment in ensuring their waste is safely disposed etc. This, in turn, allows them to maximise their profits.
Profits made from Western multinational corporations result in some of the profit filtering down to Western states, enabling their development, at the expense of workers in the Global South. Who said colonialism ended?
Neoliberalism and the West
It is very crucial to be aware that neoliberalism is a danger for people living in the West too, with recent governments having promoted neoliberal policies. For example we have companies such as Uber and Deliveroo being permitted to put workers on zero-hour contracts, using loopholes to evade providing essential monetary benefits such as sick pay, holidays, the right to unionise etc. Not only this, but there is the privatisation of education and health care, with private businesses buying public services, allowing them to control these areas, increase prices of these services and allow an unequal society to prevail, because private companies thrive on inequality.
From Grenfell to Rana Plaza
The grave consequences of neoliberalism can be seen through its victims.
In 2017, we witnessed the horrific murder of those living in Grenfell fire in London, as a result of flammable cladding that covered the building and led to the spread of the fire. This was largely a result of the ongoing deregulation of fire safety standards in homes in the UK, which allowed the abandonment of enforceable requirements buildings must follow to ensure they are safe. Building inspections also transitioned from local authorities to private inspectors, with these companies able to cut corners (and thus cut costs) w/o state intervention, alongside the ongoing competition created between private inspectors to provide cheaper and cheaper services, to secure more clients than the next private inspector. Had there been proper enforcement of building safety, the beautiful souls of Grenfell may still be here with us today. (you can read about neoliberalism and Grenfell here).
Now lets look at the Rana Plaza collapse, where 1, 138 workers were murdered as the 8-storey building cascaded. Multinational corporations invested in their clothes being manufactured in Bangladeshi factories. These corporations, aware of the lack of state regulation over their practices, demand maximum produce at minimal costs, offering shockingly low prices to suppliers, who are required to then somehow use these minimal costs to produce vast quantities of clothing in short spaces of time, provide a safe work environment, and pay workers. This is near impossible, and thus, in order to meet these demands, owners cut corners on health and safety, and wages.
There is also the increased competition between brands to sell clothes at the lowest cost possible, so they continue to demand produce made at low prices. Therefore, suppliers are in competition with each other to produce clothes at the lowest cost possible.
Moreover, replacing state regulation, many brands create their own voluntary ‘corporate social responsibility’ programmes. By introducing their own voluntary policies, this makes them accountable to themselves, as opposed to the government, allowing them to get away with their exploitative practices, with no sanctions due to the voluntary nature. With limited state regulation, allowing brands and suppliers to cut costs, a never-ending competition to reach rock-bottom prices, we can see how neoliberalism paved the way for the Rana Plaza collapse to take place .
Neoliberalism is a threat to all of us because it gives the multimillion multinational corporations, whose only priority is making more money than the next millionaire, significant power over our lives.