Big Business Strikes Back: The Class Struggle from Above. The Neo-Liberal “New Order”

       Bankers, agro-business elites, commercial mega owners, manufacturing, real estate and insurance bosses and their financial advisers, elite members of the ‘ruling class’, have launched a full-scale attack on private and public wage and salary workers,and small and medium size entrepreneurs (the members of the ‘popular classes’).  The attack has targeted income ,pensions, medical plans, workplace conditions, job security, rents, mortgages, educational costs, taxation,undermining   family and household cohesion.

     Big business has weakened or abolished political and social organizations which challenge the distribution of income and profits and influence the rates of workplace output.  In brief the ruling classes have intensified  exploitation and oppression through the ‘class struggle’ from above.

       We will proceed by identifying the means, methods and socio-political conditions which have advanced the class struggle from above and, conversely, reversed and weakened the class struggle from below.

Historical Context

          The class struggle is the major determinant of the advances and regression of the interests of the capitalist class.  Following the Second World War, the popular classes experienced steady advances in income, living standards, and work place representation. However by the last decade of the 20th century the balance of power between the ruling and popular classes began to shift ,as a new ‘neo-liberal’ development paradigm became prevalent.

      First and foremost, the state ceased to negotiate and conciliate relations between rulers and the working class:  the state concentrated on de-regulating the economy, reducing corporate taxes, and eliminating labor’s role in politics and the division of profits and income.

        The concentration of state power and income was not uncontested and was not uniform in all regions and countries.  Moreover, counter-cyclical trends, reflecting shifts in the balance of the class struggle precluded a linear process.  In Europe, the Nordic and Western European countries’ ruling classes advanced privatization of public enterprises,  reduced social welfare costs and benefits, and pillaged overseas resources but were unable to break the state funded welfare system.  In Latin America the advance and regression of the power, income and welfare of the popular class, correlated with the outcome of the class and state struggle.

      The United States witnessed the ruling class take full control of the state, the workplace and distribution of social expenditures.

     In brief, by the end of the 20th century, the ruling class advanced in assuming a dominant role in the class struggle.

      Nevertheless, the class struggle from below retained its presence, and in some places, namely in Latin America, the popular classes were able to secure a share of state power – at least temporarily.

Popular Power:  Contesting the Class Struggle from Above

      Latin America is a prime example of the uneven trajectory of the class struggle.

      Between the end of World War Two and the late 1940’s, the popular classes were able to secure democratic rights, populist reforms and social organization.  Guatemala, Argentina, Uruguay, Brazil, Mexico, Venezuela were among the leading examples.  By the early 1950’s with the onset of the US imperialist ‘cold war’, in collaboration with the regional ruling classes launched a violent class war from above, which took the form of military coups in Guatemala, Peru, Argentina, Venezuela and Brazil.  The populist class struggle was defeated by the US backed military- business  rulers who, temporarily imposed US agro-mineral export economies.

      The 1950’s were the ‘golden epoch’ for the advance of US multi-nationals and  Pentagon designed regional military alliances.  But the class struggle from below rose again and found expression in the growth of a progressive national populist industrializing coalition,and the successful Cuban  socialist regime and its followers in  revolutionary social movements in the rest of Latin America throughout  the 1960’s.

      The revolutionary popular class insurgency of the early 1960’s was countered by the ruling class seizure of power backed by military-US led coups  between 1964-1976  which demolished the regimes and institutions of  the popular classes in Brazil (1964), Bolivia (1970), Chile (1973), Argentina (1976) , Peru (1973) and elsewhere.

Pinochet Military Junta, Chile 1973

     Economic crises of the early 1980s reduced the role of the military and led to a ‘negotiated transition’ in which the ruling class advanced a neo-liberal agenda in exchange for electoral participation under military and US tutelage.

      Lacking direct military rule, the ruling class struggle succeeded in muting the  popular class struggle by co-opting the center-left political elites.  The ruling class did not or could not establish hegemony over the popular classes even as they proceeded with their neo-liberal agenda.

          With the advent of the 21st century a new cycle in the class struggle from below burst forth.  Three events intersected:  the global crises of 2000 triggered regional financial crashes, which in turn led to a collapse of industries and mass unemployment, which intensified mass direct action and the ouster of the neo-liberal regimes.  Throughout the first decade  of the 21stcentury, neo-liberalism was in retreat.  The popular class struggle and the rise of social movements displaced the neo-liberal regimes but was incapable of replacing the ruling classes.  Instead hybrid center-left electoral regimes took power.

     The new power configuration incorporated popular social movements, center-left parties and neo-liberal business elites.  Over the next decade the cross-class alliance advanced largely because of the commodity boom which financed welfare programs, increased employment, implemented poverty reduction programs and expanded  investments in infrastructure.  Post-neoliberal regimes co-opted the leaders of the popular classes, replaced ruling class political elites but did  not displace the strategic structural positions of the business ruling class..

      The upsurge of the popular class struggle was contained and confined by the center-left political elite, while the ruling class marked time, making business deals to secure lucrative state contracts via bribes to the ruling center-left allied with the conservative political elite .

      The end of the commodity boom, forced the center-left to curtail its social welfare and infrastructure programs  and fractured the  alliance between big business leaders  and center-left political elites.  The ensuing economic recession facilitated the return of the neo-liberal political elite to power.

     The big business ruling class learned their lessons from their previous experience with weak and conciliating neo-liberal regimes.  They sought authoritarian and, if possible rabble rousing political leaders, who could dismantle the popular organizations, and gutted popular welfare programs and democratic institutions, which previously blocked the consolidation of the neo-liberal New Order.

The Neo-Liberal  New Order

      The neo-liberal “New Order” differed substantially from the past in several significant features.

      First neo-liberal programs under the New Order were based on highly repressive leaders – they did not merely depend on ‘market discipline’ and state promoted programs.  Authoritarian political regimes established a framework to finance, protect and promote the consolidation of neo-liberal systemic changes.

     Secondly, political ascendancy of the New Order relied on a coalition of ruling class elites, conservative upper middle-class property and professional groups and downwardly mobile lower middle classes fearful of personal and economic insecurity and the breakdown of the old social order.

      Thirdly, the New Order was led by a demagogic leadership that called on  direct political intervention, by  retired and active military and police officials backed by armed landowner militia , lumpen street fighters ( private gangsters) willing to intimidate leftist workers, landless peasants and unemployed trade unionists.

     Fourthly the New Order elites mobilized the mass base of religious fundamentalists by targeting ‘marginal groups’(gays, people of color, feminists,immigrants etc) who were portrayed as enemies of  the family,nation and religion.

      Fifthly ,the New Order deflected popular discontent to leftist corruption,immorality and impotence to combat crime in the streets.

       The New Order is built on perpetuating neo-liberal ruling elites by destroying the political,social and economic institutions and rules of the previous electoral order(‘democracy’).

In a word , big business led class struggle from above was not interested in free market ‘reforms’, the want it all-power ,profits,and privilege-without obligations,regulations or constrains.

The Future of the Neo-Liberal “New Order”

     The  authoritarian New Order has gained powerful patrons in rulers like US Presidents Trump and Brazilian President Jair Bolsonaro.  They have neo-liberal allies in Argentina, Central America , Europe , Asia and the Middle East.  They have embraced a powerful message of political-military bullying of traditional allies , economic warfare against dynamic competitors and a glorified vision of national grandeur to its mass followers.

      Initially, the business elites prosper,  the stock markets rise, taxes are  lowered and state subsidies fuel euphoria and hopes among the masses that ‘their turn is next’.  Profits and  police state ‘law and order’, link the business elite with the affluent middle class.

      The combative popular classes are demoralized and disoriented by failed leaders and the retreat of social movements and trade unions from the  class struggle

      In contrast the international alliance of the authoritarian big business neo-liberals has a vision of globel , regional and national power.

     However sustaining their advance is conditional on dynamic economic growth and overcoming cyclical economic crises; on subverting class struggle from below; on finding substitute adversaries, as older ones lose thru mystifying appeals.

      The corruption of upwardly mobile middle-class rabble rousers will disillusion their voluntary followers. Arbitrary  police and military repression usually extends to extortion and intimidation beyond the drug slums to the middle and working-class neighborhoods.

      The authoritarian New Order usually begins to decline through ‘internal rot’ – uber- profiteering and flagrant abuse of work.

      The rightist rhetoric turns against itself as its followers engage in invidious distinctions.  The ruling class looks to shed its authoritarian shock troops and replace them with technocrats., free marketeers and malleable bourgeois politicians.  The left and center-left looks to attract a new generation of followers in the street protests and seeks to form alliances with readily available opportunist politicians.  A new political cycle takes shape – but will a new popular class struggle emerge?

Comment on Global Research Articles on our Facebook page

Become a Member of Global Research

Articles by: Prof. James Petras

Disclaimer: The contents of this article are of sole responsibility of the author(s). The Centre for Research on Globalization will not be responsible for any inaccurate or incorrect statement in this article. The Centre of Research on Globalization grants permission to cross-post Global Research articles on community internet sites as long the source and copyright are acknowledged together with a hyperlink to the original Global Research article. For publication of Global Research articles in print or other forms including commercial internet sites, contact: [email protected] contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of "fair use" in an effort to advance a better understanding of political, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than "fair use" you must request permission from the copyright owner.

For media inquiries: [email protected]