The high cost of neoliberalism

Financial liberalisation undermines democracy, handing power to a “virtual senate” that acts on beha

In the contemporary world of state-capitalist nations, loss of sovereignty can lead to a diminution of democracy, and a decline in the ability of states to conduct social and economic policy on their own terms. History shows that, more often than not, loss of sovereignty leads to liberalisation imposed in the interests of the powerful. In recent years, the regime thus imposed has been called "neoliberalism". It is not a very good term, as the social-economic regime in question is not new; nor is it liberal, at least as the concept was understood by classical liberals. The very design of neoliberal principles is a direct attack on democracy.

The central doctrine of neoliberalism is financial liberalisation, which took off in the early 1970s. Some of its effects are well known. With the increase in speculative capital flows, countries were forced to set aside much larger reserves to protect their currencies from attack. It is striking that countries which maintained capital controls - among them India and China - avoided the worst of the Asian financial crisis of 1997-98.

In the United States, meanwhile, the share of the financial sector in corporate profit rose from just a few per cent in the 1960s to over 30 per cent in 2004. Concentration also increased sharply, thanks largely to the deregulatory zeal of the Clinton administration. By 2009, the share of banking industry assets held by the 20 largest institutions stood at 70 per cent.

Among the consequences of financialisation is the creation of what an analysis by the investment bank Citigroup calls "plutonomy". The bank's analysts describe a world that is dividing into two blocs: the plutonomy and the rest. The US, UK and Canada are the key plutonomies: economies in which growth is powered by - and largely consumed by - the wealthy few. In plutonomies, these rich consumers take a disproportionately large slice of the national pie. Two-thirds of the world's economic growth is driven by consumption, primarily in the pluto­nomies, which monopolise profits as well.

The virtual senate

Citigroup's "plutonomy stock basket" has far outperformed the world index of developed markets since 1985, when the Reagan-Thatcher programmes for enriching the very wealthy were taking off. This is a substantial extension of the "80-20 rule" that is taught in business schools: 20 per cent of your customers provide 80 per cent of the profits, and you may be better off without the other 80 per cent. Corporations recognised years ago that modern information technology allows them to identify profitable customers to whom they can provide grand treatment, while deliberately offering skimpy services to the rest, creating a form of "consumer apartheid".

Financial liberalisation also creates what some international economists have called a "virtual senate" of investors and lenders, who "conduct moment-by-moment referendums" on government policies. If the virtual senate determines that those policies are irrational - meaning that they are designed to benefit people, not profit - then it can exercise its "veto power" by capital flight, attacks on currency and other means. Take one recent example: after Hugo Chávez was elected president of Venezuela, capital flight escalated to the point where assets held abroad by wealthy Venezuelans equalled a fifth of the country's GDP. With capital flow liberalised, governments face a "dual constituency": voters and the virtual senate. And even in the richest countries, the private constituency tends to prevail.

The Bretton Woods system put in place at the end of the Second World War was designed on the understanding that capital controls and regulated currencies would create a space for government action responding to public will - for some measure of democracy, that is. Keynes considered the most important achievement of Bretton Woods to be the establishment of the right of governments to restrict capital movement. In dramatic contrast, in the neoliberal phase that followed, the US treasury department came to regard free capital mobility as a "fundamental right", unlike such alleged rights as those guaranteed by the United Nations Universal Declaration of 1948: to health, education, decent employment and security - entitlements that the Reagan and Bush administrations dismissed as "preposterous", "letters to Santa Claus", mere "myths".

In earlier years, the public had not been much of a problem. In his definitive history of the international monetary system, the economist Barry Eichengreen observes that, in the 19th century, governments had not yet been "politicised by universal male suffrage and the rise of trade unionism and parliamentary labour parties". This meant that the severe costs imposed by the virtual senate of lenders and investors could be transferred to the general population.

But with the radicalisation of the general public during the Great Depression and the anti-fascist war that followed, this luxury was no longer available to private power and wealth. Hence, in the Bretton Woods system, Eichengreen writes, "limits on capital mobility sub­stituted for limits on democracy as a source of insulation from market pressures". It is only necessary to add the obvious corollary: with the dismantling of that system from the 1970s on, functioning democracy was restricted.

Real choices

In Latin America, specialists and polling organisations have, for some time, observed that the extension of formal democracy was accompanied by an increasing disillusionment about democracy and a lack of faith in democratic institutions. A persuasive explanation for these disturbing tendencies was given by the Argentinian political scientist Atilio Boron, who pointed out that the new wave of democratisation in Latin America coincided with neoliberal economic "reforms", which undermine effective democracy. The phenomenon extends worldwide, although it appears that the tendency may have reversed in recent years, with departures from neoliberal orthodoxy.

The annual polls on Latin American opinion by the Chilean polling agency Latinobaró­metro, and their reception in the west, are interesting in this respect. Few elements of the reigning western orthodoxy are upheld with more fervour than the view that Chávez is a tyrant dedicated to the destruction of democracy. The polls are therefore a serious annoyance that have to be overcome by the usual device: suppression.

The November 2007 poll had the same irritating results as in the preceding few years: Venezuela ranked second behind Uruguay in satisfaction with democracy and third in satisfaction with leaders. It ranked first in the assessment of the current and future economic situation, equality and justice, and education standards. True, it ranked only 11th in favouring a market economy but, even with this flaw, overall it ranked highest in Latin America on matters of democracy, justice and optimism, far above the US favourites Colombia, Peru, Mexico and Chile.

The Latin America analyst Mark Turner has written of an "almost total English-speaking blackout about the results of this important snapshot of [Latin American] views and opinions". He also found the usual exception: there were reports of the finding that Chávez is about as unpopular as Bush in Latin America, a fact that will come as little surprise to those who are familiar with the bitterly hostile coverage to which the Venezuelan president is subjected in the media, not least (and this is an odd feature of this putative dictatorship) in his country.

In the US, faith in institutions has been declining steadily. It is interesting to compare recent presidential elections in the richest country in the world and the poorest country in South America, Bolivia. In the 2004 US presidential election, voters had a choice between two men born to wealth and privilege, who attended the same elite university, joined the same secret society where privileged young men are trained to take their place in the ruling class, and were able to run in the election because they were supported by pretty much the same conglomerations of private power. Their announced programmes were similar, consistent with the needs of their primary constituency: wealth and privilege.

By contrast, in the December 2005 election in Bolivia, voters were familiar with the issues: control of resources, cultural rights for the indigenous majority, problems of justice in a complex multi-ethnic society and many others. They eventually chose Evo Morales, someone from their own ranks, and not a representative of narrow sectors of privilege. There was real participation, extending over years of intense struggle and organisation.

Election day was not just a brief interlude for pushing a lever and then retreating to passivity and private concerns, but one phase in ongoing participation in the workings of the society. The comparison, and it is not the only one, raises some questions about where democracy promotion is most needed.

Latin America has real choices, for the first time in its history. The usual modalities of imperial control - violence and economic strangulation - are much more limited than before. There are lively and vibrant popular organisations providing the essential basis for meaningful democracy. Latin American and other former colonies have enormous internal problems and there are sure to be many setbacks, but there are promising developments as well. It is in these parts of the world that today's democratic wave finds its basis and its home. That is why the World Social Forum has met in Porto Alegre, Mumbai, Caracas, Nairobi, not in northern cities, though by now the global forum has spawned many regional and local offshoots, doing valuable work geared to problems of significance in their own regions.

The former colonies, in Latin America in particular, have a better chance than ever before to overcome centuries of subjugation, violence and foreign intervention, which they have so far survived as dependencies with islands of luxury in a sea of misery. These are exciting prospects for Latin America, and if the hopes can be realised, even partially, the results cannot fail to have a large-scale global impact as well.

Extracted from "Hopes and Prospects" by Noam Chomsky (Hamish Hamilton, £18.99)
© Noam Chomsky 2010 penguin.co.uk

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Seasons change, Gilmores stay the same

Gilmore Girls is fundamentally about two things: inheritance and community. The four seasons are crucial in exploring those themes.

If you’re out on the road, feeling lonely and so cold / All you have to do is call my name / And I’ll be there. The Gilmore Girls theme, a special version of Carole King’s “Where You Lead” featuring extra vocals from her daughter, plays each episode over images of autumnal New England foliage, and always reminded me of another song on Tapestry, “You’ve Got a Friend”. Winter, spring, summer or fall / All you have to do is call / And I’ll be there.

“Winter”, “Spring”, “Summer” and “Fall” are the episodes that make up Gilmore Girls: A Year in the Life, Netflix’s revival of the Noughties TV series. Fans won’t be at all surprised to see Netflix lean on the four seasons to organise the new show, a fundamental principle of the original series. This integral structure remains even as they dispense with other structures of the previous seven seasons, instead of the original 22-episode year, there are just four episodes used to narrate the Gilmores’ 2016, and each one has ballooned from 45 minutes to 90. And that familiar opening? Gone.

MISS PATTY: And flutter, flutter, flutter, flutter, flutter… and leaves! Where are my leaves? I got pumpkins, I got Pilgrims, I got no leaves.

Until 2016, every episode of Gilmore Girls included the same opening credits, with shots of red and gold leaves, a Connecticut town in the throes of autumn. So, those leafy fall shots would appear at least once an episode, even though the show’s picture-perfect town, Stars Hollow, would spend each series transitioning in and out of each of the four seasons. Of course, Stars Hollow is not a real place under the influence of real changes in the weather: it’s filmed on the perpetually sunny Warner Brothers lot in Los Angeles. And New England is so inextricably associated with autumn splendour, Stars Hollow so relentlessly idyllic, you might have expected the makes of Gilmore Girls to suspend Stars Hollow in a perennial fall, with Rory and Lorelai clutching hot coffees as they tread autumn leaves underfoot all year round. (It might make thematic sense, too: Gilmore Girls’ narrative of a precocious 16-year-old, brimming with brains and potential, slowly failing to achieve her own impossible goals fits both with the season’s connotations of academic beginnings and promise, and with its longer-standing cultural affiliation with maturity, pensive reflection and wistfulness.)

DARREN: Stars Hollow is charming. The last time we drove through there, there was a pumpkin patch.
LORELAI: Sounds like us.
DARREN: In March.
LORELAI: Oh, that would be the year the pumpkins arrived late.

The idea of Stars Hollow in perpetual autumn even comes up in a few episodes. Pumpkins arrive in March, autumnal events continue until the very end of November. Fall decorations are seemingly mandatory for local businesses.  But while every Gilmore Girls viewer can immediately conjure an image of Stars Hollow in fall, so too will they have an equally memorable selection of images of the town in winter, spring, and summer. No season goes unmarked. In fact, in the hyperreal utopia of Stars Hollow, seasons are exaggerated and picturesque: an overabundance of harvest vegetables, fluffy snow, budding blossoms, or falling leaves.

LORELAI: Grass is just not this green — not outside of Pleasantville, it isn’t.
CHRISTOPHER: So, what exactly are you saying?
LORELAI: I’m suggesting they brought in sod.
CHRISTOPHER: You suspect sod.
LORELAI: Yes, or spray paint. Maybe they spray-painted the grass when they spray-painted these trees, ‘cause, I mean, there’s autumnal foliage and then there’s autumnal foliage. It’s over the top, people.

But the seasonal obsession is more than just a way to emphasise the perfection of Stars Hollow. It’s an organising principle for the show’s structure, action and themes.

***

When Kelly Bishop (the actor who plays the most senior Gilmore girl, Emily) received the script for Gilmore Girls, she was stunned by the sheer weight of it. “I kept flicking it over, and looking at the thickness of it,” she told EW. “It was too thick to be a sitcom.” Gilmore Girls, consisting of hour-long episodes that make little sense out of order, but with its emphasis on witty dialogue over dramatic plotlines, hovers in a strange space between sitcom and drama.

Sitcoms are, by definition, situational — they often rely on characters thrown together in a confined space, be it the family living room, friends flatsharing or colleagues in a shitty office space. Comedy is often drawn from the familiarity of the specific surroundings: as a result, fans of The Simpsons or Friends or The Office could accurately draw floor-plans of the shows’ unchanging sets. So, too, could you draw a map of Stars Hollow, if you’ve seen enough episodes (trust me, I’ve done it). The action of a sitcom is often suspended in time and space: episodes end back where they began, the next opening as though nothing of note has happened since. Dramas, though, tend to thrive on progression of both character and plot; casts moving inexorably forward through time and space.

LORELAI: God, the town looks beautiful.
LUKE: Same as always.
LORELAI: No, it’s always different this time of year. It’s magical.
LUKE: If you say so, sure. Oh look, there’s the magical plumbing supply store where I bought a magical float for my toilet last week.
LORELAI: You disappoint me.
LUKE: Oh look. There’s the magical Luke’s Diner, right underneath the apartment that Jess magically lit by leaving every stinkin’ light on.

So, for Gilmore Girls to straddle both these genres, Stars Hollow must hold most of the show’s action and the majority of its ensemble cast, while still allowing the passing year to make its mark on the town. The seasons allow this. Much of this work is done in the background, as the set design changes from episode to episode, but characters are also constantly remarking on the changes in the town with each passing month, as Lorelai does when snow envelops the square.

The result is not just a keen sense of place, but of a place moving through time.

***

TAYLOR: Every other store in town has fall decorations.
LUKE: Hoorah for the mob mentality.
TAYLOR: We’re talking a few streamers and a paper turkey. How’s it gonna hurt to have a paper turkey?
LUKE: No turkey, no squash, no pumpkins. Nothing colored orange.
TAYLOR: OK, you don’t like orange. That’s fine. Autumn has many varied hues to toy with. This is the Autumn Festival. Your shop is right across the street from the Horn of Plenty! You’re smack dab in the middle of everything. You have to decorate.
LUKE: I don’t have to do anything but serve food.
TAYLOR: We’re talking about the spirit of fall!
LUKE: You know where you can stick the spirit of fall?

Gilmore Girls, with its principle cast of family members, and its sprawling ensemble cast of Stars Hollow residents, is fundamentally about two things: inheritance and community. The four seasons similarly become an important device for exploring those themes.

Small rural communities have long organised themselves around the seasons. Stars Hollow is no different — except in the ridiculous extent of its embrace of all things seasonal. Each season of Gilmore Girls is organised around the constant onslaught of annual festivals: the End of Summer Madness Festival that, well, ends summer, the Teen Hayride, the 24-Hour Dance Marathon the Autumn Festival complete with Cornucopia Can Drive and Horn of Plenty, November’s Old Muddy River Bridge Knitathon, the commemorations of the Battle of Stars Hollow, the Winter Carnival, the Snowman-Building Contest, the Christmas Procession, January’s Founders’ Firelight Festival, the Bid-on-a-Basket festival, Groundhog Day, St Patrick’s Day, the Purim festival, a whole host of springtime weddings and engagement parties, the springtime Movie Night in the Square, the annual Easter Egg Hunt, the Hay Bale Maze at the Spring Fling Festival, and the Festival of Living Pictures are just selection of the events honoured in Stars Hollow.

LORELAI: Oh, hey! Turn out the lights.
LUKE: For what? It’s not the real procession, it’s just the rehearsal.
LORELAI: So, it’s pretty.
LUKE: And why do they need to rehearse it? It’s the same thing every year.
LORELAI: Come on Luke, please. It’s hard to imagine living somewhere else isn’t it?

These aren’t just background quirks, lending us an increased sense of familiarity with the town as we’re told over and over that these events unfold in the same, strange way every single year. They’re linchpins which hold key plot events in place. Both Jess and Dean tell Rory they love her, with less than positive consequences, during the supposedly romantic Founder’s Firelight Festivals. Rory’s romantic relationship with Jess speeds up when he bids on her basket at the Bid-on-a-Basket festival, which is also where Sookie and Jackson become engaged. Her relationship with Dean ends (the second time) in spectacular fashion at the Dance Marathon. Luke begins his romantic relationship with Lorelai when dancing with her amidst springtime decorations in the town square at Liz and TJ’s wedding. The list goes on.

The result is that the lives of our main characters, the lives of the smaller Stars Hollow characters, and small-town seasonal events are all inextricably linked to the same calendar. Particularly in the early seasons, every significant relationship, for both Rory and Lorelai, becomes rooted in the community of Stars Hollow. Public acts of citizenship and private expressions of love overlap. To live in Stars Hollow is to live every aspect of your life communally, communing with others, and with nature itself.

LORELAI: Do you know that the best things in my life have happened when it snowed?
RORY: Why, yes, I do.
LORELAI: My best birthday.
RORY: Your first kiss.
LORELAI: Your first steps. They all happened when it snowed.

***

The seasonal structure of the show also brings with it a sense of inevitability, as, in the midst of these reliable annual ceremonies, Gilmore Girls explores ideas of inheritance across the generations. In the grand houses of Emily and Richard’s world (and Lorelai, Christopher and Logan’s youths) inheritance both metaphorical and literal is an encouraged part of family life: but it feels forced and uncomfortable, restricting individuality in favour of decorum and reputation. In Stars Hollow, inheritance functions in a different, but no less crucial, way: more subtle and natural, as constant and eternal as the circles of life. For children who grow up with their parents in Stars Hollow, inheritance seems predestined, even if it didn’t seem so to the characters it affects.  

Many characters are surprised by what they inherit from their parents: Luke never expected to care so much for his father’s old hardware store, Lane is shocked to discover that after years of aching to break out of her mother’s conservative ideals, she’s not comfortable with having sex before marriage. Jess never thought he would pick up a book on intimacy from his uncle Luke, let alone read it sincerely, nor to learn so much valuable advice from him about communication in relationships.

LUKE: You do not want to grow up to be like your mom.
RORY: Sorry, too late.

Of course, that sense of inescapable legacies is taken to extremes in Rory and Lorelai’s relationship: in the very first episode, Lorelai exclaims to her daughter, “After all, you’re me!” While Rory at 16  is, in some ways, a vision of everything Lorelai at 16 was not (responsible, excited by her education, chaste, keeping a constant, serious eye on her future), as the series unfolds, that changes, as Rory becomes more impulsive, reckless and romantic. Viewers are relentlessly confronted by parallels between Rory and Lorelai’s romantic choices: Christopher is to Lorelai as Logan is to Rory, Luke is to Lorelai as Jess is to Rory. Seasons change, Gilmores stay the same.

LORELAI: He kind of looks like Christopher.
LUKE: The grocery kid?
LORELAI: Yeah. He looks like Christopher.
LUKE: And Christopher is Rory’s dad?
LORELAI: The hair, the build, something about the eyes. He reminds me of Christopher.
LUKE: Well that’s not too surprising.
LORELAI: You’re going to quote Freud to me? ’Cause I’ll push you in front of a moving car. This talk was going so well.
LUKE: You and Rory are a lot alike. It’s not surprising you would have similar tastes in men.

It is an inexorable, unavoidable logic, then, that sees Gilmore Girls: A Year in the Life, a show with more interest in the unfolding seasons and the passage of time than ever, that sees Rory finally become her mother. The show’s much-anticipated final four words (“Mom,” “Yeah?” “I’m pregnant”) see Rory at 32, the same age as her mother when the series began, in a similar position to her mother at 16: single, pregnant, unfocused in her career. Some found it frustratingly obvious and pessimistic, others found it optimistic and apt. I’d sum it up in the same way Lorelai comments on her repeating circumstances with her own mother: with a grimly ironic toast “to the circle of life”.

But however you feel about the ending, Gilmore Girls has pulled off one impressive feat. As Lorelai and Rory sit together in the bandstand, and the show cuts to black, it doesn’t feel like the show has ended at all. The fictional landscape of Stars Hollow has a life that extends beyond the screen, as inevitable as the seasons themselves.

Anna Leszkiewicz is a pop culture writer at the New Statesman.