What kind of ‘liberals’ are these?

2 July 2018 10:24 am - 0     - {{hitsCtrl.values.hits}}


On June 19, Advocata Institute and Echelon Magazine’s Think series hosted Singaporean economist Razeen Sally at the Sri Lanka Foundation Institute to speak on ‘Capitalism in Asia and what it means for Sri Lanka’. 

The Avocado Collective attended and distributed leaflets challenging Sally-Advocata’s neoliberal worldview, much to the bemusement of event organisers. Our article below attempts to provide a more robust intervention.

Sally, Schumpeter trumpeter

Singapore Sally sallied forth with the ideas of Austrian political economist Joseph Schumpeter as a smokescreen for his geopolitical worldview, which we will outline later. 

Schumpeter, keenly aware of the crisis-ridden DNA of capitalism, popularised the term ‘creative destruction’ to explain how periods of growth destroy old industries while creating new ones. He argued that monopolies created during growth periods are necessary to stimulate innovation from below. Thus, new monopolies replace the old. 

While perhaps true for the period leading up to what Lenin and Schumpeter’s contemporary Rudolf Hilferding called ‘monopoly capitalism’, monopolies today actively inhibit innovation. For example, powerful lobbying by international fossil-fuel companies stunts sustainable energy innovation. Corporations also reinforce their monopolies by buying out smaller innovators. 

Most importantly, history shows that innovation is driven by publicly-funded research and development – at universities and even the military, as the example of the Internet demonstrates – not by private entrepreneurship. There is no private innovator not educated by public funds and no innovator innovates alone. Innovation is social, not individual.

Singapore Sally’s private appropriation of Schumpeter’s creative destruction argument is silent on the question of jobs. For workers, the key question is whether displaced labour will be given access to the necessary education, healthcare and social safety nets to ensure transition to new jobs – if they are indeed created.
Will private capital provide this? Does it want to?

China, US and pursuit of stability

Singapore Sally’s talk eventually coalesced into a chilling geopolitical worldview: ‘Clash of Civilizations’ redux, stoking neoliberal anxiety over China’s economic rise. Here we attempt to debunk a few of his claims:

1. Pax Americana, i.e. the US imperial ambitions after World War II, provided “Asia with a stable security environment because of the US leadership”.

We wonder what CIA manuals Sally reads to proclaim that the US is “the balancing power of Asia”. The strategy of the US militarism in Asia has not been to promote stability but to pursue the US economic interests and to oppose states experimenting with alternative economic systems.

Early US interventions in Asia grabbed the Philippines (from Spain), South Korea (from Japan), Vietnam (from France) and Indonesia (from the Dutch). Each of those sparked independence movements, which were crushed by the US, resulting in millions of civilian deaths and millions more in other Asian countries (from Iraq to Cambodia). Is this Singapore Sally’s idea of stability?

Rather than stabilising Asia to enable economic self-determination, the US has directly destabilised independent Asian states. For example, the CIA provided intelligence to Indonesian death squads massacring a million people, installing a dictatorship. The CIA also armed and trained the Taliban in Pakistan to overthrow a secular progressive government in Afghanistan.

The US bases, nuclear hardware and hundreds of thousands of soldiers are found across Asia: in Thailand, the Philippines, South Korea, Taiwan, Japan and more. This inhibits regional integration (like the peaceful reunification of Korea) and heightens military tensions (in attempting to encircle China).


Far from an innovative liberal analysis for developing capitalism in Asia, Singapore Sally serves up an ‘achcharu’ of conventional US propaganda based on a world order that exists only in the fevered hallucinations of the Cold War-era conservatives

2. “America must rediscover its rightful role as leader of the world.”

Neoliberalism – Sally’s preferred poison – argues against hierarchical political rule, calling for healthy competition in a “free market of ideas”. Isn’t it contradictory then for Sally to “advocata” a unipolar world with a single global “leader” (or hegemon), whose track record includes dozens of assassinations, coups, bombings and outright invasions of sovereign countries?

Even accepting the questionable need for a stabilising superpower, there is little evidence suggesting the suitability of the US for this role, given its historical intolerance of competing economic systems and blatant disregard for international law – including human rights.

The current US political climate proves that expansion of empire has come at the cost of its collapsing republic. After decades of US-led globalisation, migrating production caused vast unemployment and declining wages in the US hinterland that helped bring Trump to power – who is now opposing the TPP, NAFTA, FTAA and other free trade accords in favour of ‘America First’. 

In the long term, the US global leadership has fattened the wallets of tax-evading corporations while impoverishing people in the US – and Singapore Sally must think us foolish to believe the same US is going to be nice to our people.

3. Sally doubts “China’s ability to lead Asia as successfully as America with stability and growth” and says Sri Lanka should stick with its “civilisational friends in the US, UK and India”.

What a “civilisational friend” is only Singapore Sally knows! Is he implying that China is not a (5,000-year-old!) civilisation and an older friend of ours than the West?
We must not buy into the zero-sum game pitting China against the US “leadership”. Sally’s view of Chinese foreign policy reveals not scholarship but classic ‘Yellow Peril’ racism. His desire to uphold a particular political-economic system leads to a distortion of Communist Party of China (CPC) decisions.

Sally assumes the CPC liberalised its consumer market to appease a growing middle class but kept land and finance nationalised in order to maintain authoritarian rule. Firstly, he neglects the role of the CPC’s control over land and finance in shielding China from the 2008 recession. Secondly, he neglects how an open Chinese consumer market helped stabilise the post-recession global economy by providing the US and European producers with new markets to sell their products.

Like every country, China is driven by self-interest (we should be too)! At a minimum, Chinese foreign policy displays a desire for international stability and diplomacy. Sally fears that Sri Lanka will become a Chinese vassal state but Chinese credit – unlike the US, IMF and World Bank – comes without conditions. This means that economic decision-making is retained by sovereign states and their citizens.

Capitalism in Asia and what it means for the US

Far from an innovative liberal analysis for developing capitalism in Asia, Singapore Sally serves up an ‘achcharu’ of conventional US propaganda based on a world order that exists only in the fevered hallucinations of the Cold War-era conservatives. 

In whose benefit are the economic policies being prescribed by Razeen Sally and his sponsors at Advocata, Echelon and the Institute of Policy Studies? The Sri Lankan worker crippled by inflation, debt and rising costs of living or the speculative multinational? Are these policies designed to enable Sri Lanka’s economic rise or are they merely an attempt at stalling the decline of the US Empire? 

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