The neoliberal economic restructuring of Middle Eastern and North African economies laid the foundations for the Arab uprisings in the wake of the 2008 Financial Crisis. After decades of dropping trade barriers, lowering wages, and de-industrialisation, Arab governments had stripped their populations of the social protections necessary to cope with the increase in unemployment, commodity prices, and the stagnation of wages which were characteristic of the crisis. While the gutting of state industry and opening of trade policy paid dividends for those who were well connected to the state bourgeoisie, which developed during the state capitalist period, it left many vulnerable to international economic crises and reeling from a deepening sense of social inequality.

Neoliberal Ascendance

Neoliberalism, a holistic ideology that has come to dominate political discourse in an unprecedented way, rose to prominence in the First World as a critique of the state interventionist economic model as the period of Keynesian growth was exhausting itself. From a deep suspicion of the state, neoliberals understand the market to be the natural mechanism through which society should be organized. Crucially, they fail to take into consideration the social processes that created the market itself. These processes would not have been possible, as Karl Polanyi influentially argued, without the intervention of a strong state, which is also necessary for the market to continue to function.

The ascension of neoliberalism to the dominant ideological discourse has stamped alternative understandings of economic history firmly out of the popular consciousness. The cleansed version of economic history, discussed in Western capitals at length and with a teleological certainty that would not have been out of place in Stalinist propaganda, is however,  as politically driven as the Keynesian and Socialist nemeses neoliberals define themselves against. Neoliberalism simply redraws the market-state boundary in a way that is consistent with its own particular ideological components; a combination of political libertarianism and Austrian economics (considered archaic even when this union was cemented during the 1930s) which reflect firmly the social institutions of that time and place. As Ha-Joon Chang argues:

The ‘market rationality’ that neoliberals want to rescue from the ‘corrupting’ influences of politics can only be meaningfully defined with reference to the existing institutional structure, which is itself a product of politics. And if this is the case, what neoliberals are really doing when they talk of the depoliticisation of the market is to assume that the particular boundary between market and state they wish to draw is the correct one, and that any attempt to contest that boundary is a ‘politically-minded’ one. If there appears to be a fixed boundary between the two in certain circumstances, it is only because those concerned do not even realize that boundary is potentially contestable… In calling for the politicisation of the economy, the neoliberals are not only dressing up their own political views as ‘objective’ and ‘above politics’, but are also undermining the principle of democratic control [emphasis added].[1]

Effectively, neoliberalism has, using the force of Western capital, dragged the ideology of the far right into a new center. Jackson Lear, in a critique of Hillary Clinton’s autobiography, captures the neoliberal fantasy perfectly, arguing that in practice as well as theory:

The centrists tend to be at least as ideologically driven as the zealots they deplore. The core of their ideology is the belief that the US has a uniquely necessary role to play in leading the world towards an inevitably democratic (and implicitly capitalist) future. The process is foreordained but can be helped along through neoliberal policy choices. This muddle of determinism and freedom is a secular residue of providentialist teleology, held with as much religious fervour and as little regard for contrary evidence as other dogmatic faiths derided by self-styled liberal pragmatists… Clinton’s utopian faith depends on fantasies of a reified technology, unmoored from class and power relations and operating autonomously as a global force for good….

The collapse of the state-led model thrust the neoliberal ideology onto the rest of the world, riding a wave of decrees from international creditors and financial institutions. The institutions the peoples of the Third World built for themselves in their attempts to transcend the conditions of peripheral integration into the world economy were dismantled with reckless rapidity. National industries—once symbols of progress and national pride—were liquidated and parted out to multinational corporations to close balance of payment gaps. Societies heaved from the strain of social dislocation caused by massive unemployment and price hikes. As recent events in Greece have demonstrated, this process is not subject to a democratic check, even in a parliamentary democracy.

Narrowing the Choices

But, neoliberal economic restructuring was not only an economic process; rather, it systematically redefined politics itself. Ignoring the history of the history of the societies which built up non-market institutions, the neoliberals replaced the products of genuine social processes with a very narrow set of prescriptions; trade and financial liberalization, balanced state budgets, undistorted prices, reduction of state intervention in general, including the collection of rents, and the promotion of policies conducive to foreign investment. During the process of neoliberal restructuring, whole social structures were written off and liquidated, as if deviating from the natural state of the market could only be the result of a temporary insanity, ignoring the social forces that swept the state-led model into existence. Ideologically, deviations from the narrow neoliberal understanding of the market were characterized as dangerous and radical. To facilitate this shift, whole economic histories needed to be rewritten; the preeminence of the United States and Great Britain were posited as a triumph of laissez-faire economics over lazy French interventionism, rather than a bloody hundreds-year long process of redesigning the world by force of arms at the expense of entire civilizations. The Soviet Union was descending into oblivion, and the neoliberals were triumphant that they could put an end, not just to history, but to politics itself. As opposition to the international capitalist order became a less and less viable basis for an ideology of social transformation, an already disoriented anti-imperialism, which at its apex “self-consciously” placed itself “within the tradition of the European Enlightenment” all but disappeared from the Third World. By systematically circumscribing the scope of political possibilities and stripping governments of their abilities to protect workers and develop industry, the neoliberal pivot created a mass of people who are both materially deprived and socially vulnerable and at the same time lack the discursive tools needed to understand and comprehend their positions. Thus, we are left only what Tariq Ali, in his latest work, dubs “the extreme center,” an incontestable set of assumptions which severely hamper the ability of the state to deal with the problems inherent in peripheral economies.

In the Middle East and North Africa, the death of politics and the triumph of neoliberal center left a vacuum which culturalist ideologies, primarily Islamism, rushed to fill. Islamism is nothing more than an inverted Eurocentrism, and is incapable of dealing with the economic and political problems presented by international capitalism. These problems were once the territory of some form of socialism which understood the profound failure and disarray of the Arab world after World War I as the result of European colonialism and the way in which the Ottoman Empire was integrated into the world market in a peripheral way. The solutions were thought to be political and economic; the creation of strong states to steward the development of industry and the tools through which to confront imperialism. When that collapsed, the region wide-pivot towards neoliberalism was rapid and hard. “The outbreak of financial crisis in the 1980s gave international financial institutions the opportunity to effect change in the direction of unfettered free market economy.Sudan in 1979/1980,Morocco in 1983, Tunisia and Egypt in 1987,and Jordan in 1989 all turned to the IMF and World Bank for financial and technical assistance. Algeria,Yemen,and Lebanon followed suit during the 1990s.”[3]

Whereas the neoliberal restructuring of Latin America is held up as the prototypical failure of this strategy, the “lost decade” in the Arab world was characterized by worse economic growth performance than in Latin America. The non-oil Arab states achieved almost zero growth, compared to the meager one percent or so for Latin America. The Middle East also emerged as the second largest indebted region after Latin America.[7] Arab governments were compelled by the need to secure aid and favor with the West to transform their governments from “social states” to “regulatory states.” While the state capitalist phase succumbed to its own internal contradictions, it at least produced coherent systems with positive visions, as opposed to the nihilism of the neoliberal program, in which the masses are not seen as the backbone of society to be elevated through productive and socially coherent employment, but as cannon fodder to be marched into free trade industrial zones, perpetual casualties in the never ending war to attract international capital.

Clash of Extremists

In this context, the parallels between what happened to politics in the United States and what has happened in the Middle East as result of the ascension of neoliberalism to hegemonic dominance are easy to see. The discourse which was once the venue through which real social conflicts were carried out is now hollowed out, leaving only the culturalist husks, perversions of actual political and economic grievances. Whereas this can take the form of identity politics, xenophobia, or “the culture wars” at the center, in the periphery, where economic problems are more acute, social structures are in a position of perpetual collapse, and states struggle for legitimacy in the face of political humiliation and economic stagnation, this process is exponentially more extreme.

The Islamists rose to power through elections in Egypt and Tunisia, but their program failed spectacularly and with speed. What came to replace them were ancien regime figures, who also lacked true political ideology; they have no substance outside of the constitutive other. Just as Mohammed Morsi had no program to reverse Egypt’s economic stagnation, Abdel Fatah al Sisi’s campaign consisted of nothing more than being the anti-Mohammed Morsi. He articulated no plan for getting Egypt out of the economic disaster it currently faces. In other words they were both the perfect neoliberals; empty vessels galvanizing the whipped up masses behind false understandings of their own history and the scope of choices available, the epitome of those “machine men with machine minds and machine hearts” which Charlie Chaplin’s character in the 1940 film, The Great Dictator implores the world to reject. Al Sisi led the resurgence of the neoliberal technocrat, repackaged as the anti-Islamist crusader. Riding a wave of anti-Islamism, he has continued the neoliberal restructuring of Egypt at a pace that even Mubarak could not muster. A similar dialectic process occurred in Tunisia, albeit without the extremes of political repression and bloodshed. After winning the most number of seats in the 2011 elections, The Islamic Renaissance party has lost to the newly formed “Call for Tunisia” party, in the latest parliamentary elections.  Call for Tunisia is led by ex-Ben Ali regime apparatchik Mohamed Beji Caid Essebsi, and essentially campaigned on the same un-Islamist platform as al Sisi.

This is the Arab world we find ourselves in today: a world in which the fiery articulation of deeply political and economic grievances rooted in a history of humiliation and stagnation which manifested itself in the Arab Spring, has been wholly extinguished by the binary of inverted Eurocentrism and farcical Bonapartism, which reinforce each other at every turn. The great tragedy, of course, is that neither program actually addresses the political and economic problems of the region caused by the demise of the state capitalism and neoliberal economic restructuring. It is only in this perverse world, stripped of the discursive space necessary to articulate any opposition to neoliberal ideology, that the Islamic State menace can exist, that King Abdullah of Jordan, whose kingdom could not exist without British imperialism and American largesse can don a flight suit and pose as some kind of strongman in the face of the Islamic State, or that a Gulf Cooperation Council jet flown by a female pilot can exist as a bulwark against Islamic extremism. It is only within this context that al Sisi can pose in the shadow of Nasser while cooperating fully in the crushing of Gaza and gutting of Egyptian social protections, where al Assad can successfully market himself as the civilized man in a battle with brutes from 1000AD while killing tens of thousands Syrians.

[1] Chang, Ha-Joon. “‘The Market, the State and Institutions in Economic Development’.” Rethinking Development Economics. London: Anthem, 2003. N. pag. Print.

[2] Sayyid, S.A Fundamental Fear: Eurocentrism and the Emergence of Islamism. London: Zed, 1997. Print.

[3]Globalization, International Finance, and Political Islam in the Arab World Author(s): Hamed El-Said and Jane Harrigan

Source: Middle East Journal, Vol. 60, No. 3 (Summer, 2006), pp. 444-466 Published by: Middle East Institute

Stable URL: . Accessed: 29/09/2014 12:55

[4] ibid.

[5] Heydarian, Richard J. How Capitalism Failed The Arab World. London: Zed, 2014. Print., 64


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