Bastiat & Neoliberal Hegemonic Project: A Response To Dr Wijewardena

ABy Sumanasiri Liyanage -April 7, 2015

Sumanasiri Liyanage

Dr. W A Wijewardena’s article, Is Capitalism Immoral: Not at All Says Atlas Network’s Tom Palmer, turns me back to my pet subject, the history of social and economic thought. Some economics departments in Sri Lankan universities have already dropped this important subject while others are downgrading its significance in the course structure. Dr. Wijewardena was referring to a talk given by Tom G Palmer at the Sri Lanka Chapter of Bastiat Society. I must confess I have never heard of Tom G Palmer or the Sri Lanka Chapter of Bastiat Society. Nonetheless, it seems clear that the whole idea of this talk as well as Dr. Wijewardena’s article is to offer legitimacy to capitalism and its latest phase, neoliberalism, including the undefined economic policies and strategies of the present government. It is true that capitalism and neoliberalism are not synonyms. Capitalist mode of production (CMP) has gone through different phases in its history since the formation of capitalist world market in the early years of the 19^th century. If I refer to Ernest Mandel’s periodization, until the 1970s, it went through three phases, namely (1) the free market capitalism; (2) the phase of imperialism; and (3) the late capitalism. When the late capitalism based on Keynesian economic policies encountered a generalized crisis after in the mid and late 1970s, CMP had to restructure it by transforming socio-economic and political landscape in favor of capital. Its first experiment was conducted in Chile under Pinochet after killing democratically elected Salvador Allende and destroying the strong trade union movement in Chile preparing the ground for ‘Chicago Boys’ to introduce their policies. Although the operation was not that severe because of the socio-cultural and political setting, the basically the same approach was adopted later under Thatcher and Reagan in the UK and USA respectively. I define this new phase of CMP as neoliberalism. Its prescription for the Global South was forcefully presented in the form of so-called Washington Consensus. Of course, it does not imply that neoliberalism is a homogenous project. On the contrary, it took different forms in different countries. Hence, whatever Mahinda Rajapaksa government claimed, it had followed these basic principles of neoliberalism. West had detested MR regime not because of its economic policies but mainly because of its foreign policy.

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