Egypt & Neoliberalism

At Al Jazeera English, pseudonymous Egyptian writer’Abu Atris’ has a very interesting opinion column which seeks to analyze the Egyptian revolution as a revolt against neoliberalism. Atris makes the case that Egypt was among the most thoroughly neoliberal countries in the world and the failures of neoliberalism were evidenced by the intense inequality of wealth, driven by and symptomatic of high unemployment and the privatization of public services. Of course this isn’t a dissimilar argument from the one made by Matt Stoller at Naked Capitalism.

I don’t think the argument that Egypt was a revolt against neoliberalism undercuts the methods of that revolt as an economic uprising, driven by solidarity between unionized workers, the poor, and students. Rather, Atris’ neoliberalism argument explains the conditions which led to this incredible uprising.

Tell me if this description of events sounds familiar:

The only people for whom Egyptian neoliberalism worked “by the book” were the most vulnerable members of society, and their experience with neoliberalism was not a pretty picture. Organised labor was fiercely suppressed. The public education and the health care systems were gutted by a combination of neglect and privatization. Much of the population suffered stagnant or falling wages relative to inflation. Official unemployment was estimated at approximately 9.4% last year (and much higher for the youth who spearheaded the January 25th Revolution), and about 20% of the population is said to live below a poverty line defined as $2 per day per person.

For the wealthy, the rules were very different. Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite. Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid. Huge proportions of the profits made by companies that supplied basic construction materials like steel and cement came from government contracts, a proportion of which in turn were related to aid from foreign governments.

Most importantly, the very limited function for the state recommended by neoliberal doctrine in the abstract was turned on its head in reality. In Mubarak’s Egypt business and government were so tightly intertwined that it was often difficult for an outside observer to tease them apart. Since political connections were the surest route to astronomical profits, businessmen had powerful incentives to buy political office in the phony elections run by the ruling National Democratic Party. Whatever competition there was for seats in the Peoples’ Assembly and Consultative Council took place mainly within the NDP. Non-NDP representation in parliament by opposition parties was strictly a matter of the political calculations made for a given elections: let in a few independent candidates known to be affiliated with the Muslim Brotherhood in 2005 (and set off tremors of fear in Washington); dictate total NDP domination in 2010 (and clear the path for an expected new round of distributing public assets to “private” investors).

The descriptions of the suppression of labor, the privatization of services, public service austerity measures for non-elites, and rampant unemployment without a meaningful response from the government sound an awful lot like what we’re experiencing in the US.

Atris warns of post-revolution Egypt turning back towards neoliberal policies as a new government and new public society are formed. The dangers are real:

A neoliberal fix would, however, be a tragedy for the pro-democracy movement. The demands of the protesters were clear and largely political: remove the regime; end the emergency law; stop state torture; hold free and fair elections. But implicit in these demands from the beginning (and decisive by the end) was an expectation of greater social and economic justice. Social media may have helped organise the kernel of a movement that eventually overthrew Mubarak, but a large element of what got enough people into the streets to finally overwhelm the state security forces was economic grievances that are intrinsic to neoliberalism. These grievances cannot be reduced to grinding poverty, for revolutions are never carried out by the poorest of the poor. It was rather the erosion of a sense that some human spheres should be outside the logic of markets. Mubarak’s Egypt degraded schools and hospitals, and guaranteed grossly inadequate wages, particularly in the ever-expanding private sector. This was what turned hundreds of dedicated activists into millions of determined protestors.

What’s so powerful about this is that the analysis takes the clear economic causes for revolution in Egypt and connects them to still elemental, but broader, social justice guideposts. To put things a bit differently, if there’s a market that produces a system of values of cronyism, theft of wealth, destruction of government, and torture, the market is broken and needs to be replaced with a system that values people, values labor, and values civil society. The people of Egypt – driven primarily by unionized workers, students and the poor – forced out a dictatorial ruler who’d built a neoliberal system of government. What comes next will be up to these same people, but hopefully the common thread ends up being a rejection of neoliberalim and not merely a rejection of Mubarak.

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