Principles of Neoliberalism
How can we understand neoliberal policy as a form of primitive accumulation?
Neoliberal policy is a model in economics and social studies which shifts the control of all economic factor of production in the public sector to the private sector. There is fundamentalism and privatization (Brady et al., 2014). It is taken from the neoclassical economics’ principles. It states that the government must have tax reforms in favour of increased tax base (Spolander et al., 2014). Also, it should reduce subsidies and other expenditures. The aim is to bring down the deficit. The government should have open trade and minimize the protectionism. Neoliberalism also specifies the need of fixed exchange rate abolishment, allow the private businesses and properties and back the deregulation (Sugarman, 2015). It can be summed as privatization, free trade, deregulation, fiscal austerity and highly reduced government spending.
Neoliberal policy can often be linked with ‘laissez-faire economics’ (Orlowski, 2016). Laissez-faire economics emphasizes that business and economics are at their best under no influence of the government (Storper, 2016). Economists regard it as the guiding principle of the free market economy or capitalism. It is a scenario where the private party transactions are secluded from the government interference. Neoliberalism competes against the state intervention (Amable, 2011). There is minimum government interference.
Neoliberalism believes that sustained economic growth is essential and a means in the achievement of sustained economic growth. It lays a commitment to the trade freedom and capital freedom and stresses on the minimal state intervention.
Primitive accumulation is a process where the direct producers or the masses of peasants are forced to transform as wage labourers (Roberts, 2017). Meanwhile, the monetary wealth and other production means are transformed into capital. This process was succeeded by the capitalist production mode. The primitive accumulation foundation was established by the money relations, commodity growth, productive forces development and development of extensive and adequate national markets.
Neoliberal policy can be seen as a form of primitive accumulation. The primitive accumulation focusses on the transfer of public ownership to the private hands. It promotes privatization. The same can be seen in the case of primitive accumulation where the poor labourers are forced to transfer their lands to the large private owners. The aim is to achieve efficiency through efficient allocation of resources. The small peasants are unable to produce efficiently because of low capital inputs and their associated high costs. The small level of output produced is unable to cover their costs.
Link between Neoliberalism and Laissez-Faire Economics
These peasants are often under the pressure to take loans from different sources. These in rural areas are often the large landlords as the banks are either far-off from the village or require collateral and paper work that the peasants are unable to provide. Large landlords provide them loans for production at high rate of interest. Agriculture is a highly risky venture. It depends heavily on rain and weather conditions. The peasant borrows for the irrigation facilities, fertilizer and other inputs in the process of production. The peasants is not only able to pay back the principal amount, but is also incapable to pay the monthly interest most of the times. The peasant has to take further loans to pay back the previous one. This is a vicious cycle in most of the backward sections of an economy.
This cycle continues and the peasant is indebted to provide the landlord with not only his/her land but also the labour services. They work on their land for negligible or very low wages. Most of the labourers provide their labour services till the time of their death. The contracts often result in the vicious cycle. The peasant, his relatives and his future generations are liable to provide their services to the landlords.
The outcome of this step to bring efficiency in production and allocation of resources is often not favourable. The weaker sections have to suffer throughout their lives. The peasants are often worse-off than before. They suffer hunger and are deprived of basic rights. They are exploited for their services and forced to work for longer durations than permissible by the law. The private owners charge high prices for their produce while incurring low costs due to cheap labour.
Money relations and commodity expansion in the feudal society were able to intensify the economic differentiation. The small-scale manufacturers had to shut down. With the boom in the manufacturing sector, the demand for labour rose sharply. The peasants were forced to join the labour market along with the small-scale manufacturers. There was mass dispossession of the direct producers and demolition of the agrarian feudal relations by the starting of the 19th century Marxian political economy (Moyo et al., 2013). This eventually led to the evaporation the peasantry class.
The outcome of this was establishment of large-scale land properties from the small-scale ownership by the peasants. There was an organization of large capitalist farms. The small lands of the peasants are transferred to the large land owners. The peasants were forced to change their customary existence means and were often denied the facilities of shelter. The end result was the forthcoming of beggars and vagabonds masses who were initially paupers. The dismantled regulatory instruments and welfare states have exposed the violent and predatory phase of developed countries where the social security measure and labour rights are curtailed (Bhattacharya & Seda-Irizarry, 2014).
Impacts of Neoliberalism on Peasants
The capitalist system makes an assumption of labour separation from all the properties. This will supposedly lead to the labour realization. Capitalism transfers the land from small peasants to the large landowners. They were dispossessed of their lands. The peasants are supposed to work as land labourers and provide high profits and surpluses to the feudal landlords (Genc, 2011). They are denied property rights. The private owners, instead of the governing body, rule the markets with the aim to earn high profits.
Primitive accumulation was preceded by accumulation in capitalism. It could be associated with the more primitive parts of the world. Primitive accumulation was central to the early phase of capitalism. There was social division of labour, development of industries from the classical political economy perspective and society’s division into independent firms. Laws were designed to undetermined the peasants’ resistance against the wage labour demands and were accompanied by the peasants’ rights dispossession.
The crucial force in the capitalist development was the primitive accumulation. It played a continuous role in the process of capitalist development. Primitive accumulation is crucial in the social labour division. On the other hand, primitive accumulation theory can be used to analyse the capital accumulation at large. Many classical economists promoted primitive accumulation as vital in fostering capitalist development. The small-scale producers were an obstruction in the process of capital advancement (Perelman, 2000).
There were many real life incidences of primitive accumulations in the neo-liberal policy. In case of Lao, labour was indigenous to the people who lost their lands during the land transfers. They were legally separated from their lands where they produced output. Labour on the other hand is inseparable from the labour. This results in the increased bargaining power of the labour in terms of their physical labour than their lands. Some of them resented the change while the others were unaware of the exploitation. There was a forced shift in the semi-subsistence livelihoods of the labour to wage-level dominated economy. There was resettlement, land enclosures or eradication of swidden agriculture. Primitive accumulation framework provides a vision beyond dispossession aspects and enclosure of land (Baird, 2011).
In case of India, neo-liberal growth land requirements were unable to accomplish under the electoral democracy by the second half of 2000s. India has the second largest population and there is scope for private investment in the land for the economy’s growth and development. Under the Nehru period, the state was able to transfer the lands from the poor peasants to the big private owners. Dispossession was done for the sake of capturing and manufacturing. It was concluded that the land values are a poor substitute for the comprehensive growth in the neo-liberal regime. Peasantry is considered a hurdle in the growth of the economy in India and the farmers are themselves responsible for their downfall. These are the struggles that the Indian economy faces (Levien, 2017).
Concept of Primitive Accumulation
The case of Botswana is another consideration for the dispossession. There were conflicts regarding the water access in the Central Kalahari Game Reserve. There was violation of human rights by denying them the access to water. The people were dispossessed and there were social reproduction, subsistence and livelihood implications. There was social injustice prevailing in the area (Morinville & Rodina, 2013).
There was another incidence of land dispossession of Narragansett Indians residing in the present-day Rhode Island. The Narragansett tribe was dispossessed of their own lands. There were three main mechanisms responsible in the given scenario. Firstly, there were acts of violence which depleted the tribal population and led to grouping of the remaining ones in a particular region in the present day South country. Also, the king Philip’s War created dependence among. The tribe’s survival depended on the borrowings from the colonists. Autonomy and indigenous sovereignty were removed with the invasion of settlers. The second mechanism was the debt. It was responsible for transforming tribal people to slaves. They were also compelled to sell-off their lands for the settlement of accounts. The then prevailing surroundings of market relations and private property required them to sell their lands and trade their labour for their survival. The third and final mechanism responsible was the state governance. It dispossessed the tribe of their inherited lands. They were declared as the residents or citizens by the state. This was done with the objective to confiscate their rights associated with the tribe. Their authority and protection was at stake. The state proclaimed that the tribe has been eliminated due to their contacts with the general people and hence, confiscated their properties. There was act of coercion in the dispossession through violence and contracts. It was easy for them to lose the land because of the laws. The contract and conquest were not treated differently back then. The major plausible reason was the capitalistic expansion. It separated people from their lands (Murphy, 2018).
There was another case of water rights and global neoliberalism. It happened in the Indian sub-continent. The water was considered as an instrument of for capital accumulation while the state was unable to manage it. There was accumulation of dispossession in India in terms of interrelation between privatization and commodification. The case can be used to examine the local liberalism in the context of rural India. There was local struggle and accumulation processes across levels for water of Arvari. It raised the issue of water rights across nations. The people of the county are responsible for the state policy rejection regarding the privatization. There exists a divergence between the state action and the citizens’ interests. The state plays a vital role in the shaping and transposing neoliberal globalization at the local and state level. Water is constantly being exposed to market imperatives and converted into a capital accumulation means. There is a need for decentralization at local stems. This does not imply their security or freedom as it is often subjected to hierarchy of power (Subramanian, 2014).
The Role of Primitive Accumulation in Capitalist Development
It can be concluded that the neoliberal policy was a form of primitive accumulation. There were cases, as discussed above, which show the relation between the two. In all the above mentioned cases, people were dispossessed of their properties and forced to trade them for their labour factor services. There is transfer of properties from the small peasants to the large private owners. There is privatisation of resources and increased demand for labour services. The peasants, who earned both profits and wages earlier, were later compelled to trade them off for low wages. The masses are often exploited under both neoliberal and primitive accumulation. There is decreased welfare for the small land owners while the large ones enjoy high profits, low costs and cheap labour services. Public sector or state intervention is essential for the welfare of all and protection of their basic rights.
References
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