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

Mike Lombardo via @moreMiLo
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“I was almost brainwashed by him”: How male YouTubers get away with preying on young fans

A multitude of YouTube stars have been accused of taking advantage of young fans, but little is being done to tackle the problem.

In June, a 24-year-old YouTuber named Austin Jones was charged with two counts of producing images of child abuse. Court documents allege that the internet personality – who has more than half a million subscribers to his YouTube channel – solicited explicit videos from two of his young female fans. According to the criminal complaint, Jones asked one of the teenage girls – known only as Victim B – to dance for him, and said: “Bounce again and smile at the camera while you bounce. And while you bounce, say ‘I’m only 14’ 3 times throughout the video.” Jones has been released on bail and is awaiting trial. Jones’ attorney Gerardo Solon Gutierrez points out that the singer is “innocent until proven guilty”.

A few weeks later, a YouTuber known as Durte Dom was accused of filming a 15-year-old girl from behind while she danced at a party, without her consent. “He filmed my ass dancing,” the girl wrote anonymously on Twitter. Dom responded to the allegations via the social network, writing: “the party was 18+, the girl snuck in. don't fool yourself.” He says he will now “start having people sign release forms” before he films them.

These allegations are not isolated. In 2014, a Tumblr user called Olga accused the YouTuber Tom Milsom of coercing her into sexual activities when she was 15 and he was 21. Milsom did not comment publicly on the accusations and was never charged. Only a month earlier, a YouTube musician, Mike Lombardo, was jailed for five years on child pornography charges after soliciting explicit photographs and videos from 11 of his underage fans. 

These events set off a series of other allegations. Vlogger Alex Day admitted to having “manipulative relationships with women” after 14 women and teenage girls accused him of manipulation and abuse. One anonymous 15-year-old wrote on Tumblr that Day had sex with her knowing she was underage and “didn’t listen to me when I asked to stop”. Day denied any sexual relations with underage girls, and none of his alleged victims pressed charges. Another YouTuber, Ed Blann, admitted in a now-deleted Tumblr post that he “manipulated” an of-age fan into sex even after he was “repeatedly told to stop”. Like Day, Blann never faced any charges, but, also like Day, he apologised for his actions.  

 In September 2014, a 19-year-old woman accused the YouTube prankster Sam Pepper of raping her, and another woman filed a police report accusing him of rape. Pepper denied the accusations, was never arrested and charges were never filed. He did, however, apologise for YouTube pranks that included pinching women’s behinds while wearing a fake hand.

A Tumblr post set up to track emotional and sexual abuse in the YouTube community to date features allegations against 43 YouTubers.

***

Social media revolutionised the concept of celebrity – and celebrity-fan interactions. YouTubers are both incredibly adored and incredibly accessible. Products they design sell out overnight and their live events fill arenas. At the same time, fans are often just a few clicks away from engaging in private, one-on-one conversations with their heroes.

“I feel like I was kind of blinded to the whole situation, like I was almost brainwashed by him,” says Ashley LaPrade, a 16-year-old who claims that when she was 15, Austin Jones coerced her into creating sexualised videos on the messaging app Kik. She posted screenshots of their conversations on social media after the news of Jones’s arrest broke.

“It was kind of casual at first and he asked me to model his merchandise for him... so I did. I took a couple pictures and I’m a gymnast so I was trying to like impress him and I did like splits and stuff,” she says. She alleges that Jones asked her to film herself from behind while bending down or dancing. “I didn't want to upset him and make him not like me,” she says.

LaPrade explains that as a young 15-year-old fan she “looked up” to Jones and was initially excited by his interest in her. After she began to feel uncomfortable with his requests, they stopped talking, but she continued to listen to his music and go to his concerts. She says that she only realised the severity of his actions after his arrest.

Many young fans like Ashley are initially unable to comprehend that anything wrong – legally or morally – has happened to them. Neesey Pathan is a 20-year-old student and YouTuber who claims she was sexually harassed by Sam Pepper when she was 15. In 2014, she posted a YouTube video of her allegations, showing screenshots of alleged conversations with Pepper in which he asks her to “do a naked a dance” and show him her cleavage.

“As a young naïve 15-year old girl, I just wanted to keep talking to him because I was a huge fan,” Neesey tells me. “When he started to get inappropriate with me, at the time that made me feel uncomfortable but I didn’t understand how serious that was, because of how young I was.

“I wanted him to stop being inappropriate with me but I didn't want him to stop speaking to me.”

***

Since the concept of celebrity was invented, nefarious individuals have used their fame to manipulate and take sexual advantage of young fans. In the 1970s, Lori Mattix was a “baby groupie” to musicians – alleging in a Thrillist article that she lost her virginity to David Bowie aged just 14. When the guitarist Ted Nugent couldn’t legally marry 17-year-old Pele Massa, he became her guardian instead. Anna Garcia met Prince aged 15 and began a relationship with him aged 17. “I guess it’s kind of a dream to a young girl of 17,” she said in the Nineties. “You can be influenced very easily and stuff like that because he’s 12-13 years older than me.”

It now seems as though a slew of YouTubers have taken advantage of this imbalanced fan-creator relationship, and have deliberately exploited the naivety of their young fans. Ashley and Neesey both claim they were emotionally manipulated.

“I think I put him on this pedestal, which put him in a position to very easily manipulate me and get what he wanted,” says Neesey. “I was just so excited to get to speak to someone who I had looked up to for a long time.”

Ashley claims that when she wouldn’t film increasingly explicit videos for Jones, he treated her coldly. “He went on about how he was in a bad mood now and he didn’t want to talk any more,” she says. “If I did something wrong to him, like if I didn’t blow a kiss or something, then he would make me redo [the video].”

In 2015, Jones was first accused of asking his underage fans to film themselves twerking. In a video entitled “Setting The Record Straight”, he admitted to asking for the twerking videos and said he became suicidal after this news became public. “I’m a pretty insecure person... I began researching different suicide methods. I started planning my suicide. It’s something I was very, very serious about,” he says in the video. 

“A lot of times when we were talking he was talking about how he was going to therapy so I kind of felt bad for him and that’s why I didn't really say anything [to the authorities],” says Ashley.

The American National Domestic Violence Hotline outlines on its website that threatening suicide can be a form of emotional abuse. “If your partner regularly threatens suicide, particularly whenever you’re not doing something he or she wants you to do, or when you’re trying to leave the relationship... this is a form of emotional abuse.”

According to Neesey’s screenshots, Pepper flippantly mentioned he was “suicidal” when she refused to show him her breasts. In Olga’s blogpost about Tom Milsom, she alleges: “he’d like sob and cut himself in front of me he threatened weird suicidal shit a lot”.

“Obviously, if someone is saying to you that they're suicidal, you want to help them, because obviously they don't mean it but as a young person you think they do,” explains Neesey. “And you don't want to be held responsible for them hurting themselves and you maybe care about this person because you’ve been watching them for so long. So you’re manipulated into carrying on contact with them because if you don’t, what will happen...” 

***

To date, Lombardo is the only YouTuber who has ever been jailed for sexually abusing his fans. There are a multitude of reasons for this. Some victims are too afraid to press charges, fearing backlash from a YouTuber’s fandom. Many victims are unable to see the severity of their abuse until they are older. More still are manipulated into silence. Parents can’t comprehend YouTube stardom, and fail to understand what is happening in their children’s lives. Some victims simply don’t know which authorities to turn to.

“I'm kind of steaming about this whole issue,” says Michelle LaPrade, Ashley’s mother. “I can’t even look at a picture of the guy. It makes me want to punch him.”

At the time, Ashley never told her mother about Jones’s behaviour, but Michelle overheard conversations about it between her daughter and her friends. “I feel like a bad mother. I never even really investigated it. Because I know girls and their drama and you know, [they] overreact sometimes.”

After Jones’s arrest, Michelle wanted to report his interactions with Ashley to the authorities, but she found her local police department unhelpful. “I don't know who to turn to,” she says.

Many more victims are unaware that a crime has even occurred. “When I was 15 I didn't see how problematic it was,” says Neesey. “I knew it was a bit strange, and I did feel uncomfortable, but I didn't realise that he was actually sort of committing a crime in terms of asking a minor, as an adult, to do these things...

“It wouldn't even have crossed my mind to go to the police.”

While the UK has the large-scale Operation Yewtree into sexual abuse by celebrities, there is no equivalent for YouTube. Despite the multitude of allegations spanning half a decade, there is no single helpline or dedicated investigation into YouTube abuse. When questioned on this, a Home Office spokesperson said:

“We cannot allow social media platforms to be looked upon as a safe space for predators to target our children and share indecent images. It is vital that communication service providers have easily identifiable reporting systems for people to flag inappropriate or illegal content – and that they are clear about what is and isn’t allowed on their sites.”

A YouTube spokesperson said: “We have clear policies against harassment and we enforce these policies by removing both flagged content and comments that break our rules as well as terminating the accounts of repeat offenders.”

Sam Pepper is still on YouTube, where his channel has over two million subscribers. Alex Day returned to YouTube in December 2015, and now has over 80,000 subscribers. Austin Jones’s YouTube channel remains live, though he is not allowed to use social media before his trial.

***

“I feel like it is really hard to be taken seriously,” says Ashley. On social media, people are prone to victim-blaming Ashley and other alleged victims, saying that they should have stopped replying to the YouTubers harassing them. “Yeah, we did send stuff back but it was... we were being pressured into it and we didn't want to upset him or anything like that,” Ashley says. Her mother tells me she is glad Ashley “took the high ground” in not sending overtly sexual videos to Jones.

Unsure which authorities to speak to, many victims turn to social media to discuss their abuse. Accusations play out on Tumblr, Twitter and YouTube itself. Ashley tweeted screenshots of her interactions with Jones, while Neesey created two videos about her conversations with Pepper. Although this is an effective, and unprecedented, way for victims to get their voices heard, many online are distrustful of complaints that didn’t go through the authorities. Many more leave misogynistic and hateful comments.

“People will just be absolutely horrible to you and call you demeaning things... I got called a flirt, I got told it was all my fault because I continued speaking to him...” says Neesey, of the reaction to her videos. “I think that's a lot of the reason why people sometimes don’t come forward, because they don't want to go through all that stress again. They’ve already dealt with the situation; why would they want to deal with the stress of people being horrible to them about it?”

Some commenters criticise Neesey and other victims who have made YouTube videos and claim they were doing so for attention. “No one in their right mind would do it for attention because the attention you get is negative,” Neesey says. “I honestly don’t believe that someone would sit down and accuse someone of doing something if they didn’t mean it. So I really think it should be taken seriously.”

Whether it makes sense to those outside of the community or not, many victims' first recourse is social media, not the police or authorities. The accusations about Durte Dom – the YouTuber who allegedly filmed a 15-year-old dancing – were publicised by another YouTuber, Elijah Daniel, on his Twitter page.

Damon Fizzy is a YouTuber who called out Austin Jones after the initial accusations in 2015, and continues to do so on Twitter now. Although he agreed to speak with me, he was unable to find time to do so over a series of weeks.

For many YouTubers and their victims, social media is more important that the traditional media. Perhaps this makes sense – when the Mail Online covered the arrest of Lombardo, the YouTuber who solicited child abuse images from 11 underage fans, they added inverted commas around the word “star” in their headline. If the media and the authorities can’t take YouTube seriously, how seriously will they take accusations of YouTuber abuse?

***

In the past, YouTubers have often been good at self-policing. Hank and John Green are American brothers who run the YouTube channel Vlogbrothers, which has over three million subscribers. They own a record label, DFTBA, and run the annual YouTube convention VidCon. Lombardo and Day were DFTBA artists, and were dropped from the label after the accusations emerged. The Green brothers also banned Pepper from VidCon.

After the storm of accusations in 2014, an enormous number of popular YouTubers made videos in response. Hank Green explained consent to his audience, while the comedy YouTuber TomSka created a guide to YouTube gatherings. The popular YouTube duo Jack and Dean even made a music video about consent. The community came together to exile those who weren’t being punished in other ways. The subscriber numbers on the accused’s channels dropped dramatically.

Yet within a few months, many disgraced YouTubers can return to the platform to harness a new generation of fans, many of whom might not be aware of the accusations.

“YouTube still allows them to create content and make money off it, and that to me is just communicating that the behaviour is just not that bad. It’s sort of equivalent to a slap on the wrist and it doesn't convey the extremity of the situation of what they’ve done,” says Neesey. “I think they should be completely ostracised from the community, and have their status stripped from them, and I think YouTube should support that. Because they’re criminals.”

On Twitter, YouTuber Damon Fizzy claims he received backlash from Jones’s fans when trying to speak out years ago. “It’s crazy the backlash I received versus now. I was literally treated worse than the person who uses his underage fans for sexual gain,” he wrote.

And it’s true that YouTubers’ leagues of adoring fans can make it difficult to speak out about abuse. It is hard for many adults to understand how consuming being a young fan can be, particularly when manipulation is involved. When I ask both Ashley and Neesey what they would say to young female fans who start talking to YouTubers, they both say this is fine. Neesey warns that when a youngster becomes uncomfortable, they should end communication, but both she and Ashley feel that safe, normal fan-creator interaction is fine, indeed desirable.  

Sapphire Putt is a 20-year-old who claims a YouTuber coerced her into filming videos of herself dancing when she was 16. When I ask if she thinks it would be OK for the YouTuber to return to YouTube, she says she would be “cautious” but “wouldn’t throw the possibility of maybe giving him a chance again”.

“If he actually shows that he’s learned, you know, I would give it a chance and if he would mess it up again then that’s it, you know.”

When I ask Ashley what she would say to people who remain fans of Austin Jones she says: “I’d say that I probably understand... but they also need to understand that what he’s doing isn’t right and no one should be treated the way he is treating people.”

***

The NSPCC is currently calling for an independent regulator to scrutinise internet companies and fine them if they fail to keep children safe.

“We want the government to draw up a list of minimum standards that internet companies must observe to protect children, and children should be automatically offered safer accounts that protect them from grooming and harmful content,” an NSPCC spokesperson says.

“We know from our Childline service that online sexual exploitation is increasing so it’s vital that more is done to protect young people from abusers who use social media to target and manipulate them.”

For now, Ashley is simply glad things didn’t go further. “It's scary not knowing what could've happened, knowing that I was brainwashed like to believe it was OK, and I'm just happy he's not able to message other girls at this point,” she says.

Neesey hopes that schools will get better at teaching consent. “As a young person, I knew I felt a bit uncomfortable but I just thought that I was being dramatic... so I think people need to be educated, for sure.”  She says education needs to be improved not just in schools, but in the media.

“Unfortunately, people are sort of used to it now, after quite a few YouTubers, so it’s sort of like, ‘Oh another one.' People aren’t talking about it as much – not that it’s old news, but it’s not as shocking. People aren’t giving it as much attention as it needs.”

The NSPCC advises that if a child is worried about an online situation they should talk to a trusted adult or contact Childline on 0800 1111. Parents can find out more about talking to their child about staying safe online by searching Share Aware or visiting www.nspcc.org.uk

Amelia Tait is a technology and digital culture writer at the New Statesman.