The origins and formation of ‘right-wing populism’ from the point of view of Marxist economics and their impact of these processes for Africa must be understood from observing the world market from an internationalist and multinational point of view.
The policies of ‘right-wing populist’ movements come from the big multinational financial and productive capitals, not from the local national bourgeoisie. This big financial and productive capital has as a goal the elimination of the fragmentation to the concentration and centralization of value, which is being caused by multinational production itself, at least as it has been functioning until now.
In addition, the international bourgeoisie has an understanding of East Asia’s economic ascension, right wing populists see these regions advance in the multinational market (where East Asia is now the centre of industrial production on the planet), as a result of the intervention of the state in the economy. It is from this characterization (and these goals) that they define themselves as ‘nationalists’ or ‘anti-globalists’, but always within the frame of multinational capital and competition.
Let me illustrate this with a couple of examples.
Both Hungary and Poland, or even Austria, have intensified the economic activity of their sovereign wealth funds or equivalent funds, for the investment of state capitals within their economies. In the same way, Hungary and Poland are characterised by the nationalization of certain companies and assets, and by the great support of the state through state and public subsidies (coming mainly from the structural funds of the European Union, which are composed of state and public European budgets) to subsidize multinational companies and their operations within their countries, as well as social spending in general.
That means it is simply inaccurate to argue that they are ‘protectionists’ or ‘nationalists’ in the classic sense of the 20th century.
So, the convergence of the Viktor Mihály Orbán government in Hungary or the Polish government with certain multinationals is as great as any other globalised economy, but it is focused on state interventionism. It is worth restating the point. These governments see East Asia’s success and the ability to now compete at the multinational level as almost entirely due to their state-led or state-oriented support or intervention. Therefore, these ‘populist’ governments promote this economic perspective to prevent the fragmentation of concentrated and centralised capital.
It is also important to stress that multinationals arriving in different regions and countries, are producing growth and the development of mainly small and medium industrial enterprises. So, in East Asia the overwhelming majority of industrial companies are small and medium sized, instead of factory-scale, and they are vertically integrated through outsourcing or portfolio investment, which means part of the profits stays within those companies and is not automatically ‘repatriated’ to the multinational, in turn this benefits the host country and companies, and creates the possibility that the Asian Tigers, China or India, or even Turkey, Israel or South Africa, of developing multinationals themselves.
Trumps Tariffs and Brexit
Another example comes from Brexit and the trade war between United States and China, provoked by Donald Trump’s tariffs. None of these policies make the slightest economic sense for either the internal markets of England or the United States. The first ones to oppose and criticize Brexit or US commercial tariffs have been precisely the local big, medium and small bourgeois from those countries, for which inputs, raw materials and means of production, as well as exports, are all affected.
While multinational capitals who can produce anywhere in the world remain largely ‘immune’ from these policies. When production was located inside the nation-state, protectionism made sense, but with the internationalisation of the division of labour and multinationals, it can only affect the internal markets and not the companies with production sites all over the world.
Let’s look at these processes in a little more detail. Through tariffs (and Brexit, hard or soft, will produce tariffs for trade between England and the European Union) multinationals accomplish the deterioration of the conditions of production for their respective competitors and at the same time promote the movement of multinational production to regions more favorable to their interests.
This ‘movement’ of multinational production could stop the ‘spill over’ of productivity, knowledge and profits to those centres or possible centres of world production (for example, against China’s growth, in the case of the US trade war). So, we see in this process a way of preventing the fragmentation and competition at the level of the world market. From this follows that American multinationals are moving their productions sites from China to Vietnam or Malaysia, for example.
Again, it has to be stated that it is impossible to understand these policies (both Brexit or American tariffs) without appreciating that they come in part from multinational capital, as a form of intervention in the multinational market, not at the level of nation-states, but at the international and multinational level.
I would argue that we are seeing a shift from commercial freedom characteristic of the World Trade Organization, for example, and the extensive phase of the internationalisation of the division of labour in late capitalism to an intensive phase based on the intervention of the state at the level of the world market. From this follows the resurgence of the state by ‘right-wing populism’, as economic intervention increases the role of the state as a centre or point of concentration of power (which has come to be known as ‘neo-fascism’).
Contradictions, questions and solutions
As I have already argued, the world centre for industrial and high-tech production (in East Asia), is not composed of factory-scale companies or processes, but of small and medium sized companies. In the same vein, the biggest component in intra-regional trade in East Asia, as the industrial centre of the world, is not based on finished products, but intermediate parts and components, which come and go from Vietnam to Malaysia, or from South Korea to China, etc. On top of this, it is the state and sovereign wealth funds, for example, which allow this concentration of power to take place. From Singapore to Vietnam, each has working mutual funds or wealth funds of different types, and they all have intensified their involvement in the economy in recent years.
All bourgeoisie economic analysis and research on the multinational market from recent years is questioning neoliberal policies, and describing not without surprise, the incredible performance of economies and multinationals where countries have state-led types of policies for their own multinationals (subsidies, trade barriers, lower interest rates, etc), like India or China, and how this seems to be working much better than Western non-interventionism for the growth and rise of those countries. This change in perspective is a change in bourgeoisie consciousness, in the face of the incredible ascension of Asia as a real competitor, and the possibility of reproducing the same success in the West through the same state-oriented policies (from which wealth funds are just one example).
Poland and Hungary are not the only European countries expanding production through state funds, but we see the same processes from Turkey or from Persian Gulf states, or even India and China. Turkey’s president Recep Tayyip Erdoğan recently formed the first sovereign fund in the country, under his own personal management. Similar processes can be seen in Gulf States, with funds under the control of their royal families, or under Hussein el-Sisi and the state-military elite who are in charge of Egypt’s industrial sector.
Even Jair Bolsonaro’s Brasil has immediately focused on pension funds reform, which would allow private investment through those funds, just as we have seen in Austria, Hungary or Poland where state funds are starting to invest in the private and multinational sectors.
We need to remember that even though the US and UK still maintain hegemony in terms of the financial control of assets at the multinational level (demonstrated in Gerard Duménil and Dominique Lévy’s 2018 book), it is the Chinese financial sector which surpasses the Triad in terms of revenue and profits; they may control fewer assets, but are producing the largest revenues of all and China is doing this through exactly these types of sovereign funds. By ‘Triad’ I mean the three historically dominate centres of the world economy from the late 1940s until the end of the 20th century: the United States, the European Union and Japan.
How do these wealth funds work? Wealth funds are very similar to bank capital, which is the definitive characteristic of financial capitalism. But the difference is that it is not based on dividends, and you don’t need to work around stocks and dividends from specific companies, but you can participate on the ‘pool’ of financial assets invested in different companies all at once, getting a percentage of total profits or revenues controlled by the wealth fund.
This allows for a faster way of diversification and centralization of profits and value, even more resolutely than bank capital in some senses. Instead of a stock which represents a percentage of the profits for a single company, etc, the percentage you own on a wealth fund is equal to a percentage of the profits not only for one company, but for all the profits from all companies the wealth fund finances all at once.
‘Right wing populism’ or ‘nationalism’ has meant a turn to the state and its financial assets and capabilities, in stark contrast with neoliberalism, where all talk was about a minimal state. It is crucial to point out the historic discrepancy between neoliberal ideology (that states that the state should not interfere with markets) and the neoliberal political projects and practices (that actually reshapes the state, assigning to it clear fields of action, private property right protection, fiscal incentives, privatisation of the public etc.)
Alain Lipietz (1997) actually studies how job deregulation and reduction of the state’s involvement is stronger in the Triad, where the flexibilization occurs at the level of the job market and not the internal productive process, and the opposite happens in the Global South: the state is more involved comparatively (although there are also examples of privatization, structural adjustment programs, etc, in Africa or Asia!), the flexibilization occurs at the internal level of the production process, and not at the level of the job market which is highly organized and centralized, etc.
The same process where sovereign wealth funds from the Global South turn into competitors at the multinational level,is at play when multinational production fragments itself into small and medium companies through ‘spill overs’: state-led economies perform better in the world market by subsidizing their multinationals. Equally sovereign funds from countries with state-led economies have the biggest concentration and centralization of financial assets.
The consensus among bourgeoisie economists is that state subsidizing of multinationals is the reason for the Asian miracle, and the reason they even entered the multinational market in the first place. This means an intensified competition, both for the market and the state. The whole Huawei controversy or the trade negotiation between the US and China over state subsidies, show the motives and the purpose of ‘right wing populism’.
This explains the convergence of libertarianism with conservative statism in the United States, where Trump erases regulations at the same time as his administration applies tariffs. It may also explain the United Kingdom’s Tory government’s announcement of the end of austerity, and the possibility of state planning.
Falling profit rates
These processes, I would argue, can only be explained by the fall in the profit rate (and its different multiple causes) within multinational companies, which makes it impossible for multinationals to simply buy up companies and integrate them vertically as their own. The companies are instead forced to reduce costs through outsourcing, in combination with ‘offshoring.’ The state, in this situation, turns into a point of comparative and relatively high concentration of capitals, compared to the reigning fragmentation throughout the rest of the economy, where the rate of profit keeps falling, or where the economy continues to fragment into small and medium companies.
This explains the historical rise of sovereign and wealth funds in peripheral economies of the South, allowing them to become real competitors at the multinational level against the Triad. It is these processes that force or propel the formation of this ‘right-wing populist, ‘anti-globalist’ or ‘nationalist’ movements.
Of course, state intervention or fragmentation are not the real causes of East Asia’s rise nor of the increasing competition at the multinational level. From a Marxist point of view, the historical fall in the profit rate hits the Triad and developed countries the hardest, in terms of its expanded reproduction. Why? In Marxist terms this is because of a bigger organic composition: more expensive equipment and raw materials (constant capital) compared to the labor component (variable capital), which causes the fall in the profit rate itself.
The process is relatively simple: if profit is derived from what is extracted from ‘the labour component’, it is in the economies of the Triad with a high concentration of constant capital that we see profit rates in a historical, downward spiral. The difference between the profit rate and the accumulation rate (gross investment) is considerably smaller than in peripheral or underdeveloped countries.
As the 20th century Polish revolutionary and Marxist economist Henryk Grossman explained, even if the profit rate falls immediately after the organic composition of capital rises, it can maintain itself above the accumulation rate and sustain expanded reproduction, but only for a while. After a certain period, the profit rate will be inferior to the accumulation rate, and this is where troubles begin: expanded reproduction needs to be held back, which is precisely what neoliberalism is.
Instead of big investments and rising wages to augment profits and productivity, we see the opposite: the cutting costs rationale, and the reduction of real wages. In peripheral or underdeveloped countries, constant capital was cheaper, and so organic composition was lower and profit rates higher. This allows for extended reproduction to have more space to develop in peripheral countries instead of in the Triad.
As it has been shown, the fall in the profit rate works with different causes, specifically the exploitation rate, the unemployment rate and the new value rate in conjunction with the financial variable (the reduction in the financial profit rate), to create crises (See Carchedi, 2017).
These issues are of such vital importance to capitalist development that they must be explained carefully. The difference between the profit and accumulation rate was greater, so peripheral countries were suddenly in the position of sustaining expanded reproduction, as we have seen in the Asian Tigers or China and India, while the Triad had to immerse itself in the cutting-costs rationale of neoliberalism to hold back expanded reproduction. This is the crux that explains East Asia’s resurgence against the West today, in Marxist terms. Just as neoliberalism is not the cause of the crisis, rather the reaction by the bourgeoisie to the reality of the historical fall in the rate of profit since 1973/4, so ‘right-wing populism’ is a reaction against the consequences (state interventionism and fragmentation at the multinational market level) of that very same historical process.
The processes at work in the Global South
The internationalisation of the division of labour of late capitalism integrated the bourgeoisie of the Global South not only into the financial aspect of imperialism, but into its multinational aspect, through the emerging industrialisation of areas of the South. This took place through the so-called ‘Taylorism’ and ‘peripheral fordism’, as Alain Lipietz’s described it in 1997.
This caused the political erasure of the so-called progressive bourgeoisie in the South, which also eliminated the conflict between anti-colonialist ‘bourgeois’ movements from the Third World and the Triad. It was a huge triumph for the Triad’s class project to have finally eliminated this faction al conflict between anti-colonial layers of the bourgeoisie from the South and themselves.
It eliminated reformist, social democratic and import-substitution programs in the South, precisely because industrialisation was now realised by multinationals, instead of their own nationalistic and anti-colonial projects and at the same time integrating them within the circuits of multinational capitalism.
The internationalisation of the division of labour of late capitalism first defined by Ernest Mandel, seems to have had two different stages: an expansionist stage, with the conglomerates boom of the 1950’s and 1960’s, and the industrialisation and vertical integration of productive processes all around the world.
Today we enter a stage where expanded reproduction shrinks or contracts (due to the fall in the rate of profit), and multinationals stop integrating vertically in the classic and strict sense, and decide to outsource or seek portfolio investments as the main way to diversification.
Portfolio investments are different from Foreign Direct Investment and vertical integration in the sense that they allow for the Southern bourgeoisie to stop being simply passive investors, and allows them to start to behave like active investors, integrated not only as minority partners of multinationals, but as members of the multinationals themselves.
The first stage of the internationalisation of the division of labour saw the Southern bourgeoisie’s integration into financial capital in a passive way, but the end of the expansive phase of late capitalism has allowed them to turn this relationship upside down: the Triad’s bourgeoisie turns into passive investor, and the South has taken charge and control of the multinational means of production.
These processes have seen the integration of the anti-colonialist class faction of the South, into the industrial and multinational class faction of the multinational Triad over the last forty years. This has also changed the character of the Southern bourgeoisie from a simple ‘comprador’ class, into a managerial multinational faction (not a new class, as Duménil and Lévy argued in 2018) which deals and controls directly in the businesses of the Triads multinationals.
The Southern bourgeoisie is still a ‘small partner’ of the Triad or what Paul Baran described in the 1960s as the lumpen-bourgeoisie, but instead of a nation-state bourgeoisie, which produces for its own internal market, or trades the imports and exports of its internal economy, or produces agricultural products, etc, it now controls the means of production of major multinational assets. In a word, the South’s bourgeoisie has stopped producing for its internal market only, and started to produce for multinationals.
If we follow Karl Marx’s work, The 18th Brumaire of Louis Bonaparte, there are two contradictory tendencies here: the absorption of the Southern bourgeoisie into a single international class (with all of the unevenness and dependency that continues to characterize this class), and at the same time, the revulsion based on the increasing competition this multinational integration produces.
This means the international bourgeoisie moves from away from the conflict that characterised 20th century anticolonialism and industrialisation/import-substitution, to act as a unified faction or class under the financially dominant faction of the global class. At the same time, it integrates heterogeneous factions into multinational competition, acting not as a dominant minority faction, but as an entire class.
This contradiction between governing as a faction or as a class, explains precisely the mixture of fascistic characteristics, and democratic and republican elements. If you govern as a whole class, you govern through parliamentary and democratic dialogue on how to run society. If you govern as a particular faction among others, you will try to impose your faction’s view on the others, and rule above your own class. The internationalisation of the division of labour in late capitalism, eliminating the internal factional conflict between the Triad and the Third World, creating at the same time an intensification of competition and control from multinational capitals seem to be explained by this enormous historical development.
These processes explains the entire political climate and movement to the right, and the virtual disappearance of a progressive bourgeois element from Central America to Africa itself – the transition from progressive (bourgeois) struggles to the so-called neoliberal age. This represents an intensification of the class struggle between a more compact international bourgeois class, and a proletariat with a smattering of allies in parliaments or in mainstream political parties.
Finally, to Africa
For Africa, this divergence in expanded reproduction related to the fall in the profit rate – which produces the phenomenon I have just described – has enabled the economic ‘boom’, just as it facilitated peripheral countries on the continent attempting to transform themselves into Asian Tigers, or to see the so-called BRICS as a vehicle to their development and growth, etc.
It does not mean that profit rates have not fallen in Africa or other peripheral countries, it rather means peripheral countries, because of their own underdevelopment, can expand reproduction more decisively than their central and metropolitan counterparts.
This demonstrates how capitalism feeds off ‘backwardness’ itself. We should remember as well, that the so-called economic ‘boom’ in Africa has not translated into the improvements in the lives of peasants and workers, rather the improvement of the economic figures for certain extractive companies on the continent. The boom in GDP growth rates has not translated into higher living standards for workers and the poor on the continent.
At the same time, Africa has something very valuable to teach to the rest of the world: Africa, more than any other continent, thanks to its fragmentation of land and smaller commercial integration, knows very well what it means when the state is in relative terms, a bigger point of concentration of capitals compared to private merchant or financial capitals. Just like in Asia or Latin America, the state in Africa turns into a great possibility for the bourgeoisie to accumulate bigger sums of capital quickly, and dispose of them in any way they want, if they have the state-power to do so.
Like sovereign wealth funds today, Africa knows what it means for the state itself to turn into a medium for capitalist enrichment and profit making, and not a neutral ‘people’s state’ which eliminates class contradictions. This turns the fight (even the electoral fight) for the state into a bitter struggle of factions, which, as we know, has already led to disastrous scenarios (from civil wars, to total state repression) or to apparently ‘progressive scenarios’ – until recently Ethiopia was the poster-boy of this ‘success’ – which hides exactly the same process of using the state and state-funds to finance private and multinational production.
At the beginning of his administration, Trump was accused of wanting to turn the US into a ‘Third World strong-man government’, which besides the racist undertones of the comment, was essentially correct. The concentration of power in the state, plus the concentration of specifically economic power in the state, which seems to be the characteristic of ‘right wing populism’, is indeed very common to us here in the so called ’Third World’ – with the fragmented character of agriculture, land tenure, and commercial integration, etc.
Africa understands this world better than others, since the continent has a long history of seizures of state power in order to control the economic concentration and centralization of state budgets, assets and capitals.
At the end of this short essay I should repeat myself: ‘right wing populism’ shows how capitalism feeds off backwardness. The cheapest solution for multinational companies is to control the state in order to stall falling production (a movement very similar to the international bank and state budgets bailouts that happened during the 2008 crisis). The world may now be facing Africa’s recent history. Do Africa’s decades of trauma confront metropolitan and central countries, as the road where they are now heading?
This article was first published in the Review of African Political Economy Journal.
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The Art of War by Other Means: Books as Propaganda
Louis Allday writes how book publishing from the 1960s became an important weapon of strategic propaganda by the CIA and other intelligence agencies. The new website Liberated Texts aims to provide a platform for reviews of works of ongoing relevance that have been suppressed or misinterpreted in the mainstream since their release. Allday argues that books remain powerful tools that have the ability to fundamentally transform one’s worldview.
‘Brecht said, “hungry man reach for the book.” Why? Because to get rid of hunger, you have to get rid of the system that produces hunger, and to get rid of that system you must understand it and you can only do that by reaching for the book.’ ~ Prabhat Patnaik
In November 1965, the Deputy Director of the CIA was sent an in-house book review by the curator of the Agency’s Historical Intelligence Collection. Its subject was Kwame Nkrumah’s seminal work, Neo-Colonialism: The Last Stage of Imperialism, first published in London earlier that year. The review largely focussed on “The Mechanisms of Neo-Colonialism”, the chapter in Nkrumah’s book that was said to have most “caught the eye of the press” and was “of greatest interest to the CIA”.
Within the book, Nkrumah analyses in detail the techniques through which modern imperialist powers achieved the objectives they had previously accomplished through overt colonialism and identifies the United States as the worst offender in this regard. In doing so, Nkrumah named names and drew attention to the neo-colonial role of, among others, the CIA, US Peace Corps, USIA and USAID. The tenor of the review is largely neutral, but the author’s concern with both the book’s contents and Nkrumah as a figure more broadly are not hard to discern beneath its superficially objective tone. It concludes by reporting that copies of the book had been sent to a number of CIA departments including the African Division of the Deputy Directorate for Plans (DDP), the Agency’s clandestine service and covert action arm, for study and “whatever action these components consider advisable”.
Only three months later, in February 1966, Nkrumah was deposed as President of Ghana in a coup that was engineered by the Agency. The late June Milne, Nkrumah’s editor, literary executor and long-time confidante, believed that because Neo-Colonialism had demonstrated the workings of international finance capital in Africa in such detail, the exposure its publication constituted was “just too much… the last straw” and led directly to the decision to depose Nkrumah in a coup.
Milne’s speculation is well-founded, not only because of the undeniably explosive content of Nkrumah’s book, but because senior figures within the CIA were already well aware of the dangers of such material to US interests. In the words of its Covert Operations Director in 1961:
Books differ from all other propaganda media, primarily because one single book can significantly change the reader’s attitude and action to an extent unmatched by the impact of any other single medium… this is, of course, not true of all books at all times and with all readers – but it is true significantly often enough to make books the most important weapon of strategic (long-range) propaganda.
As such, the Agency acted accordingly and developed an extraordinary level of control and influence within the publishing industry. Details of the extent of this reach were revealed to the public in 1975 by the Church Committee, a US Senate investigation into the activities of a number of US intelligence agencies, including the CIA. The most well-known revelations of this committee include details of the now infamous CIA-run programmes MKULTRA, COINTELPRO, Family Jewels and Operation Mockingbird. Less well known are the details it contains on the Agency’s clandestine control over book publishing and distribution which, as per the committee’s findings, enabled it to:
(a) Get books published or distributed abroad without revealing any U.S. influence, by covertly subsidizing foreign publications or booksellers.
(b) Get books published which should not be “contaminated” by any overt tie-in with the U.S. government, especially if the position of the author is “delicate.”
(c) Get books published for operational reasons, regardless of commercial viability.
(d) Initiate and subsidize indigenous national or international organizations for book publishing or distributing purposes.
(e) Stimulate the writing of politically significant books by unknown foreign authors-either by directly subsidizing the author, if covert contact is feasible, or indirectly, through literary agents or publishers.
Utilising this immense influence, before the end of 1967, well over 1,000 books had been produced, subsidized or sponsored by the Agency. Of these works, 25 percent were written in English, with the remainder in a number of different languages published around the world. Sometimes these books were published by organisations backed by the CIA without the author’s knowledge, while others involved direct collaboration between the Agency and the writer.
Frequently, books were published in order to bolster the US imperialist narrative about enemy states, for example, the Agency produced a number of works about China that were intended specifically to combat the “sympathetic view of the emerging China as presented by Edgar Snow”. As the committee’s official report stated, an American who read one of those books, purportedly authored by a Chinese defector, “would not know that his thoughts and opinions about China are possibly being shaped by an agency of the United States Government”. The Agency’s concern extended to book reviews which it utilised to refute the attacks of critics and promote works that it had sponsored. On at least one occasion, a book produced by the CIA was then reviewed in the New York Times by another writer also contracted by the Agency.
In the time that has passed since the revelations of the Church Committee, technological developments have transformed the way in which people consume information globally. The internet has become a new battle ground of propaganda and has been subject to comparable levels of infiltration and manipulation by the CIA and other intelligence agencies. The idea that books remain the most important weapon of strategic propaganda, as determined by the CIA in 1961, would now be contested by many.
However, the terrain of contemporary publishing implies that US intelligence agencies have not ceased to be concerned with the power and influence of books as objects of propaganda. Take one example, since the US’ proxy war against Syria began a decade ago, a raft of books supporting the imperialist narrative have been published, many of them by ostensibly radical and leftist publishers. In many cases, these books are then endorsed and reviewed by an affiliated network of magazines and podcasts, while other works that go against the hegemonic narrative are reviewed negatively or simply ignored entirely.
It is with this historical context and lamentable present reality in mind that the website Liberated Texts was recently established. The site aims to provide a platform for reviews of works of ongoing relevance that have been forgotten, underappreciated, suppressed or misinterpreted in the cultural mainstream since their release. Of course, not all of the works reviewed on the site will have been subject to overt suppression or silencing by imperialist intelligence agencies – the reasons why books that go against prevailing ideas usually do not receive the attention and readership they deserve are countless – but all remain relevant and deserve a wider readership. The same is true of works that do not get translated into English for political reasons, such as the late Domenico Losurdo’s study of Stalin, which his English language publishers, Verso Books, have refused to translate and publish in spite of repeated requests for them to do so.
The life stories of prominent revolutionaries and thinkers are littered with references to how reading individual books or authors changed the trajectory of their life, and notwithstanding the dramatic shift in the educational and media landscape that has taken place in the decades since the publication of Neo-Colonialism, books remain powerful tools that have the ability to fundamentally transform one’s worldview.
Liberated Texts seeks to provide a home for all those people who still believe that to be the case and want to write about books they feel passionate about and believe – whether they were published 100 years ago or in the last few years – remain relevant to the issues of the present moment and deserve to be read and discussed more widely.
This article was published in the Review of African political Economy (ROAPE).
Decolonising Knowledge in the Medium of a Monolithic Language
Economic neologisms in the English language project an air of neutrality but in fact have no basis in the socio-economic realities of developing countries.
If we spoke a different language, we would perceive a somewhat different world.
– Ludwig Wittgenstein
Matters of form, usually viewed as ornament, are commonly in fact matters of argument.
– Deirdre N. McCloskey
This short article explores the construction of Economic Neologisms in English and their global impact on shaping implicit and explicit policies in countries around the world. I focus on how economic neologisms in the English language project an air of neutrality but in fact have no basis in the socio-economic realities of developing countries. This is demonstrated through explaining the role of English as an organised system of thought, the nature of academic English in economics and its influence on developing countries, a recent example of the use of Value of Statistical Life (VSL) in Pakistan based on a misguided comparison with the US, and the limitations of interpreting other languages in English.
English as an organised system of thought
One of the great successes of empire, binding its economic and cultural usurpation of the colonies, was the proliferation of English as a global language and as the only “official” language of the world. The strength of this legacy has defied time; the diverse geographies, languages and cultures of India are more strongly overcome by the use of English today than by any local language, signifying how English, as the language of the colonial state, took precedence over the many languages of India.
Although the Francophone sphere has remained a well-preserved niche, this enclave is no match for the global stamp of English. Outside the colonies, English has very much overshadowed the regionalism of the European Union (EU). International organisations such as the UN, the IMF and the World Bank continue to lean towards the ascendency of English, in spite of their charters of multiple languages. The rise of the Chinese language as a formidable opponent is uncertain.
As the most dominant currency, English is not particular to race, but cuts across class and geography. Its exclusiveness is not so much in the basics of the spoken word but in the intricacies of how it fuels knowledge. People across countries can communicate on some basic level using minimal English, but the source of its inaccessibility lies in the dense articulation of the language as a specialised realm of knowledge production. This is not straightforward, since many academics from developed countries do not use English as a first language; on the other hand, many in developing countries have learned it from their earliest years of education. Nonetheless, a distinction emerges in the use of English, not simply as a language of communication but as an organised system of thought. The empire’s proliferation of language reproduced a structure of socialisation, which streamlined a linear set of ideas as opposed to embracing diverse and alternative systems of thought.
The Russian linguist V.N Voloshinov, explored the origins of language as an inherently social phenomenon, and saw language as the most efficient medium of capturing the dynamics of material changes. He described the “word” as “the most sensitive index of social changes.” Importantly, for Voloshinov, the significance of words was not just limited to their representational role of capturing change but went beyond the symbolism, enabling a transformation, which added new dimensions and layers to a word’s original meaning.
‘‘[l]ooked at from the angle of our concerns, the essence of this problem comes down to how actual existence . . . determines the sign and how the sign reflects and refracts existence in its process of generation”
Voloshinov aimed to develop a theory of linkages between structure and agency in the framework of particular semantic frameworks. His emphasis here is on how signs are influenced; refracting the material and social existence of a phenomenon. The socialised impact of English, as an imperial language lies not simply in what it signifies but also in what forms its refractions take on. Patois and Pidgin English are some particular linguistic examples. Additionally, English has also been instrumental in exporting Anglo-American soft power to developing countries. This is visible especially in the formation and the role of media in developing countries. These derivative languages and effectively hollowed cultural influences are accompanied by the shaping of the global academic landscape, with English as the monopolistic medium for exploring knowledge. The consumption of the English language precedes consumption in any sphere of knowledge. In economics, the refractive role of English lies in how it shapes ideas and economic policies.
The medium is the message
As a conduit of pedagogy, the English language has a history of not simply conveying the message but actively creating it. Concepts like “western enlightenment”, “scientific rationality” of the market and a consequent linear vision of growth, encompass a message of neutrality because the language embeds an exclusivity, canonising a singular system of thought. This canonisation is fuelled by ideologies, which seek homogenisation across geographies; the “Washington Consensus”, for instance, was exported beyond Washington but never as a consensus. In addition, compared to other social sciences, economic concepts and neologisms carry the potential of shaping the entire direction of scholarship. A brief look at any basic course in the history of economic thought verifies this.
The ascendency of neoclassical economics and its impact in transforming the entire discipline to become an imitation of natural sciences had a reductive impact on the scope of economics as a social science. For Philip Mirowski, the pursuit of projecting economics as a “science”, borrowing metaphors from physics and resorting to mathematical formalism, is rooted in the Western tradition of economics. By imitating natural sciences and giving a central value to empiricism, neoclassical economics transforms how metaphors operate. This is evident in metaphors, which constitute the conceptual basis and pedagogy of economics using natural laws but ultimately bearing little resemblance to the social processes, which constitute an economy. Statistical rigour and mathematical proofs thus often take a life of their own by validating a seemingly value-free concept.
As a conduit of pedagogy, the English language has a history of not simply conveying the message but actively creating it.
If economics is considered as a repository of selectivity as well as of careful omissions, the responsibility of exploring the structure of metanarrative behind the curated message is a constant struggle for those outside this thought system. Other languages are inserted in the English language as loan words, strictly tied to culture (such as the Chinese concept of Guanxi or the Japanese business philosophy Kaizen). Words also sneak into English through a shared history of colonial/imperial experiences. However, “foreign languages” have no power to determine economic methods or produce similar neologisms. Economic concepts in English on the other hand are canonised, refracted and socialised as the most objective and rational ways of determining other concepts such as efficiency, growth and ultimately, ways of living life. The usage of the Value of Statistical Life (VSL) in context to the COVID-19 pandemic and its internationalisation as a “global policy” tool is of relevance here.
Interrogating the universality of economic neologisms: the value of statistical life (VSL)
The Value of a Statistical Life (VSL) is normally used to monetise fatality risks in cost-benefit analyses and reflects the amount of money that a society is willing to pay for the reduction in the probability of the loss of a human life. This human life is generally, a statistical, hypothetical person on a population-average basis and refers to the hypothetical victim of a circumstance or of a policy or the lack thereof, and fully discounts class, ethnicity, nationality, religion or other characteristics that such a person may or may not have. It is designed as an objective, value-neutral concept to be applicable in contexts, where cost-benefit analysis would enable a synthesis or reach an objective resolution, to an empirical evaluation of saving lives.
As a statistical measure of predicting fatality risks, VSL, like Ogden tables, etc., is a construct and subject to the broader operations of how an economy is structured. This method of assessing risks to human lives is ultimately a valuation exercise and the underlying ethical concerns are tied to how capitalist systems perceive value and public utility. This is important since the construction and adoption of VSL in the US has a complex history, rooted in its origins in the Cold War.
These considerations remain unexplored, especially in the internationalisation of the concept. For example, VSL for climate change, calibrated to different contexts of developing countries, is in widespread use. These calculations do not address the fact that climate change in developing countries has been primarily led by accumulative patterns initialised and deepened by developed countries, rooted in the history of colonialism. For those arguing for a long-standing case of climate reparations, such applications of VSL to developing countries would be akin to technical fixes that pay no attention to history. Tailoring the VSL to country-contexts also raises questions about the criteria of implementing VSL based on mitigating fatality risk. Although VSL has its origins in the Cold War, it has not emerged as a basis for measuring the fatality risks of soldiers or casualties in recent conflicts, for instance in the “War on Terror” in Afghanistan and the invasion in Iraq. Needless to say, in situations which are invariably related to the opportunity cost to human life, VSL is an objectionable measure.
“Foreign languages” have no power to determine economic methods or produce similar neologisms.
However, the current Covid-19 pandemic has revived the appeal of using economic modelling based on VSL. In a recent paper, Zachary Barnett-Howell and Ahmed Mushfiq Mobarak used VSL to advocate social distancing policies in some “developed” countries as opposed to others, in the developing world. Pakistan was one of those countries cited in the paper. The Government of Pakistan eased its lockdown on 9 May 2020, with the Planning Minister invoking this paper among other reasons to support the government’s policy stance. As a result of the ease of the lockdown, the infection count in Pakistan increased from 36,000 (April-May 2020) to 165,062 (June 2020). A full account of the paper, its critique and the situation in Pakistan has already been covered succinctly by Khurram Hussain and also debated by academics and activists here (in Urdu language). Without repeating the details of their critique, I summarise the bases for the largely erroneous use of VSL in this case, as follows.
Barnet-Howell and Mobarak’s estimated country-specific costs of mortality and use of VSL is based on another paper by W. Kip Viscusi and Clayton Masterman. The latter employed an analysis of data from the US Census of Fatal Occupational Injuries (CFOI) to value VSL, “to avoid hypothetical bias”. Referring to low to upper-middle income countries as “economies” as opposed to upper income “countries” Viscusi and Masterman conclude from a base US VSL of US$9.6 million, that different countries value human life differently. Following this paper, Barnet-Howell and Mobarak used this US VSL of US$9.6 million, to then discuss essentially Covid-19 policy recommendations, employing the VSL figures suggested for different developing countries.
A first problem with this analysis is that this value does not in any way reflect the value that the US society places on a human life vis-à-vis the Covid-19 pandemic. Instead, it is actually a representation of hypothetical costs to US policy makers and businesses, of making marginal improvements and mitigations to all those risks, be they in the workplace or by the quality of civic infrastructure and so on, which affect human life. Aside from issues of monopoly pricing across the wider economy, the US has the most artificially inflated healthcare costs in the world. It would follow that VSL (if indeed a normal good as Barnett-Howell & Mobarak seem to be insinuating) would thus be equally over-valuated.
For those arguing for a long-standing case of climate reparations, such applications of VSL to developing countries would be akin to technical fixes that pay no attention to history.
This situation is not true of other countries including emerging economies, in which different systems of goods and services pricings persist. Using this highly (and artificially) overvaluated US base VSL as a concrete foundation for “upper income countries” as the basis for an extrapolated comparison is thus unjustified. Alongside having amongst the highest global rates of infection and deaths, the United States also has one of the highest unemployment rates, and attendant social unrest, as a result of the pandemic. If anything, the Covid-19 pandemic shows that life in the US has become exceedingly cheap, and indeed far cheaper than one would have imagined merely a decade ago. The application of VSL in this manner assumes that monopoly pricing in the US is somehow a base condition by which to measure the rest of the world. Such attempts at valuation only serve to insinuate a global marketplace for human lives, almost imperialistically conforming to the norms of the American market and economy.
Methodological problems are often also problems of unchallenged ideas. Economic ideas, concepts and textbooks in English are translated and absorbed globally, in effect strengthening the canon as opposed to opening the space for careful examination. Translations are not interpretations. Describing the third world literature’s feeble attempts at expanding text in other languages, Aijaz Ahmad reminds us that a “mere aggregation of texts and individuals does not give rise to the construction of a counter-cannon . . . for the latter to arise there has to be the cement of a powerful ideology.”
Attempts at counter-ideology are made more complex by the fact that knowledge production in English reproduces the erasure of knowledge production in other languages; many academics writing in English in fact lose formal writing and speaking skills in their native languages.
For these reasons, decolonising knowledge in economics is a complex process since it entails excavating alternatives, which demands a reimagination of possibilities and limits. Being truly multilingual would mean equal attention to all languages. Separating the objectivity of the language from its message and pluralising and empowering pedagogical practices in other languages is a start.
Equality, Family and Unpaid Domestic Work: Kenyan High Court Ruling
The judgment of the Kenyan High Court joins a global constitutional conversation of how institutional inequalities within the family may be judicially redressed.
In an interesting judgment delivered earlier this month, the High Court of Kenya at Nakuru held that the housework and care-work performed by a female spouse (the plaintiff) entitled her to an equal share of the matrimonial property at the time of the dissolution of marriage. The facts of MW v AN were that the parties were married in 1990, separated in 2003, and divorced in 2011. The dispute centred on the fate of a house constructed at Nakuru. While the house was registered in the name of the male spouse (the defendant), the plaintiff argued that she had taken out extensive loans to finance the purchase of the land and the construction of the house. Moreover, despite having a job herself, she had been the sole caregiver in the family. The defendant, for his part, argued that not only had he bought the plot on his own, but had also been providing financial contributions towards the upkeep of his wife.
The High Court of Kenya at Nakuru held that the housework and care-work performed by a female spouse (the plaintiff) entitled her to an equal share of the matrimonial property at the time of the dissolution of marriage.
Justice Mumbua Matheka observed that Section 6(7) of the Matrimonial Property Act of 2013, matrimonial property “vests in the spouses according to the contribution of either spouse towards its question, and shall be divided between the spouses if they divorce or their marriage is otherwise dissolved.” In Echaria v Echaria, it had been held by the Court of Appeal that where there was a “substantial but unascertainable contribution” by both parties, a default rule of equal division would apply. The question, of course, turned upon the meaning of the word “contribution”.
In this context, Justice Matheka observed that “contribution” would have to include not only tangible financial contribution, but also the “unseen” contribution of housework and care-work. In paragraph 38, she observed:
This other part of mothering, housekeeping and taking care of the family is more often than not not given any value when it comes to sharing matrimonial property. It is easy for the spouse working away from home and sending money to lay claim to the whole property purchased and developed with that money by the spouse staying at home and taking care of the children and the family. That spouse will be heard to say that the other one was not employed so they contributed nothing. That can no longer be a tenable argument as it is a fact that stay at home parents and in particular women because of our cultural connotations do much more work (house wives) due to the nature of the job . . . hence for a woman in employment who has to balance child bearing and rearing this contribution must be considered. How do we put monetary value to that process where a woman bears the pregnancy, gives birth, and takes care of the babies and where after divorce or separation she takes care of the children single handedly without any help from the father of the children. . . . Should this court take this into consideration when distributing matrimonial property where the husband as in this case is left in the matrimonial home where the wife rents a house to provide shelter for herself and the children? I think it should count, especially where the husband has not supported the raising of the children, has not borne his share of parental responsibility.
Furthermore, this would have to be determined by evidence:
It is time that parties took time to give evidence, sufficient enough to support the value to be placed on the less obvious contribution. It is unfair and unjust for one party to be busy just making their money (the ‘seen’ income) while the other is doing two or three other jobs in the family whose income is ‘unseen’ and then claim this other one did nothing. This attitude is so entrenched we still hear women especially who are housewives say: sifanyi kazi (literally I do not do any work) simply because they do not leave the home to go earn money elsewhere.
Consequently, Justice Matheka held that notwithstanding the fact that the matrimonial property was registered in the name of the husband, the maximum “equality is equity” would apply, and that consequently “the property be valued, sold and each party have 1⁄2 share of the proceeds of the sale.”
Justice Matheka’s judgement is important because of the explicit recognition it gives to “unseen” and unpaid housework, within the context of domestic relationships; as has been well established by now, across the world and across societies, within the institution of the family, the burden of such work is gendered in nature (see, e.g., The Second Shift) – and often, unseen and unpaid domestic work by the female spouse is what “frees up” the male spouse to enter the labour market and engage in the kind of financially remunerative work that, ultimately, results in (for example) matrimonial property being bought with “his” money, and therefore registered in his name. Thus, departures from traditional notions of property are essential in order to do justice in and within the institution of the family.
It is important to contextualise this judgment, both within the framework of Kenyan and comparative law. In Kenya, the default position used to be (as in many other countries) that only financial contributions were to be taken into account in calculating respective shares in the matrimonial property upon dissolution of marriage. Explicitly seeking to change this, the Kenyan Constitution of 2010 contained Article 45(3), which – borrowed from CEDAW – states that, “Parties to a marriage are entitled to equal rights at the time of marriage, during the marriage and at the dissolution of the marriage.” In her book, Equality in Kenya’s 2010 Constitution (2021), Dr Victoria Miyandazi notes that the intention behind Article 45 was, inter alia, to address “harmful practices such as . . . unequal claims to matrimonial property upon divorce.” In Agnes Nanjala Williams vs Jacob Petrus Nicholas Vandergoes, the Court of Appeal directly applied Article 45 between two private parties to mandate an equal division of assets between the spouses, even in the absence of a statutory framework (“horizontal application of rights”).
Justice Matheka’s judgement is important because of the explicit recognition it gives to “unseen” and unpaid housework.
This position, however, was arguably overruled by the Matrimonial Property Act of 2013, which required judges to take into account the relative contributions of the spouses (as indicated above), but also explicitly specified that the word “contributions” included “domestic work, childcare, and companionship.” The Matrimonial Property Act was challenged by the Federation of Woman Lawyers on the basis that the displacement of the 50 per cent rule in favour of “non-monetary contributions” would restore the gendered inequality within marriage, based on the difficulty of calculating non-monetary contributions. This challenge, however, was rejected by the court.
In that context, the judgment in MW v AN is important, as it essentially restores the position of the default equality rule where there is evidence of “non-monetary contribution”, and allays fears that judiciaries that might not have entirely broken out of patriarchal norms will use the vagueness of the statutory clause to devalue housework or care-work.
Furthermore, this is a position that has been advanced by progressive courts across the world. Perhaps the most outstanding example is New Zealand, where the Property Relations Act of 1976 established a presumption of equal sharing at the time of dissolution, and specifically provided that financial contribution was not to be treated as weightier than non-financial contribution. In numerous judgments interpreting the Property Relations Act, the New Zealand courts have interpreted it with a view towards fulfilling the statutory purpose of achieving the “equal status of women in society”, holding, for example, that wherever the provisions of the Act were ambiguous, the default presumption would be in favour of the property being matrimonial/joint (and therefore, subject to equal division).
The judgment in MW v AN is important, as it essentially restores the position of the default equality rule where there is evidence of “non-monetary contribution”.
Indeed, Justice Matheka’s language is also remarkably similar to a 1992 judgment of the Colombian Constitutional Court. In Sentencia No. T-494/1992, the Constitutional Court was considering the eviction of a widow from the matrimonial home; the widow’s non-monetary contributions had not been taken into account in determining whether or not she had a legal interest in the home. The Constitutional Court noted that such a position would have the effect of “invisiblising” domestic work, and deepening inequalities within social relations. The court went on to question the “artificial” distinction between “productive” and “non-productive work”, and noted that refusal to factor in unpaid domestic work would violate the Colombian Constitution’s guarantee of equality and non-discrimination.
The judgment of the Kenyan High Court, thus, joins a global constitutional conversation of how institutional inequalities within the family may be judicially redressed; and it also, I submit, advances the goals of Article 45(3) – itself a fascinating constitutional provision. For these reasons, it deserves careful study by students of comparative constitutional law.
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