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Beyond Competing Liberalisms: The WTO as Class Project

Robert Knox and Paavo Kotiaho Neoliberalism as theory of politics As he makes it clear in his introduction, Langs account of the neoliberal turn does not deny the importance of material forces in the development of the global trade policy or, as he puts it, the material conditions of possibility for the ideational transformations which his article seeks to flesh out. Indeed, as he explains several pages later, though his principal interest in this context lies in investigating the ideational conditions of the neoliberal revolution, he does not seek to contest the view that that the kind of intersubjective frameworks he seeks to describe are always made operational through the confluence of a certain set of material factors, be it the institutional environment in which trade professionals live and work or the strategic pursuit of commercial interests by states and other actors. That being said, it appears to us that Langs focus on the ideational aspects is not, for lack of a better word, simply a matter of convenience. He describes the ideational changes in the evolution of the GATT imaginary as processes operating at a deeper level that not only sustain and transform their own material conditions of possibility but also enable material changes more generally (Lang, 2011: 12). This is evident in his initial definition of neoliberalism as a turn away from an idea of politics as the creation, mobilization, and realization of the collective purposes of a political community, towards an idea of politics as the facilitation of individuals pursuit of their own private goals and purpose (Lang, 2011: 1). Of course, the very terms in which he goes on to explain the historical background behind the rise of neoliberalism suggest a consistent awareness of its material determination: The 1973 oil crisis and its attendant economic effects gave rise to concerns about the long-term affordability of the major programmes of social protection associated with welfare liberalism. The same social programmes were also criticized as encouraging dependence, discouraging responsibility, and imposing ... an unjustified burden on self-realisation. (Lang, 2011: 53) And yet, of course, not every mention of materialism yields the same kind of critical insight into the dialectics of historical processes. For all its undeniable sophistication and complexity, Langs concept of materialism seems somehow shallow and fundamentally technocratic. The vision of international legal history it encourages us to develop is one populated by planners and policy makers responding to a series of external events. There seems to be very little space left for the discussion of the underlying structural social processes, such as the transformations in the global division of labour and the massive transfers of wealth, property, and political power that were implemented as part of the neoliberal turn. In other words, there seems to be no space left for the question of class struggle and its impact on the international political processes. And that, in our view, is why in the end Langs argument, despite all its depth and power, comes across as notably less convincing than it otherwise could have been. In this brief note, we would like to supplement Langs account of international trade laws experience of the neoliberal turn by offering an alternative account grounded in a decidedly different sense of the causal relationship between the ideational and the material.

DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION It is not possible to go through the all ways in which neoliberalism was deeply intertwined with class antagonisms. But several should be noted. Neoliberal ideas were spread with the material and symbolic support of (certain sections) of the capitalist class. In some instances particularly in the US this was entirely conscious (Harvey, 2005: 1922). Yet in all cases, the state was heavily wedded to the interests of this class fraction. Secondly, the dismantling of the welfare state was not just a technical matter, it also opened up new vistas for the accumulation of capital and so has been extremely profitable for some capitalists (Dumnil & Lvy, 2011: 733). Finally, a central aspect of neoliberalism was the assault on the working class. All neoliberal transformations were accompanied by attacks on trade union rights, and the use of unemployment to undermine the bargaining power of workers. All of this gives credence to Harveys description of neoliberalism as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites (Harvey, 2005: 19). In a class-focused account, we would see neoliberalism not simply as a policy choice, or a theory of politics but rather a political project that was driven by a section of capital, in response to an economic crisis and designed to roll back the particular class compromise represented by embedded liberalism. As will be shown below, such an approach is not simply a materialist one counterposed to Langs ideational one; rather such a class perspective sheds light on a number of the ideational issues held dear by Lang himself. Evil Twins? Embedded Liberalism as a Class Project Langs account of embedded liberalism feels similarly technocratic. He argues that post-war planners wanted to avoid the problems of the interwar period (Lang, 2011: 190) and so aimed to temper free markets, hence avoiding the problems of unemployment and economic instability (Lang, 2011: 194). Again, whilst this is true, it is strongly arguable that other events to which Lang gives only brief consideration to the political revolutions of the first half of the twentieth century are vital to understanding the formation of embedded liberalism. That is to say, embedded liberalism too must be seen from a class perspective. It seems difficult to argue that the post-war planners were afraid of unemployment and instability simply on their own terms. In the period before the First World War, and during the interwar period, these factors had led to the growing strength of radical labour movements, culminating in a number of revolutionary situations. The end of the Second World War was a similar situation, with the added pressure of a successful and popular socialist bloc. Embedded liberalism represented an attempt to incorporate this labour movement into capitalist social relations. In this respect, it was a class project that aimed to preserve capitalist class power through the creation of a historic bloc and deal with the problems of underconsumption (and crisis) through Keynesian demand management. One should also note that neoliberalism also attempted to cement a historic bloc between its capitalist and working classes. One can see this in Thatchers attempt to create a home owning democracy (Harvey, 2005: 61), and in the function of debt to act as Privatised Keynesianism, which incorporated the working class into neoliberal capitalism by enabling a certain standard of living to be maintained via cheap credit (Crouch, 2009). Thus, the important point to recognise here, and one that has great significance for our understanding of the GATT regime, is that embedded liberalism has a very deep form of

DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION continuity with neoliberalism. Both represent class projects articulated out of capitalist social relations. This continuity undermines somewhat Langs claims for the radical contingency of the trade law regime. Whilst there may be a number of institutional arrangements on the table, the level of contingency remains constrained. At least in historical terms, the international trade regime has always remained wedded to the structures and attendant class projects of capitalism. Whose Technocracy? This continuity also operates in the various shifts in ideational and institutional factors that Lang identifies. Lang argues that the break between embedded liberalism and neoliberalism is captured by the shift from politics as the creation, mobilization, and realization of the collective purposes of a political community to one of the facilitation of individuals pursuit of their own private goals and purposes (Lang, 2011: 1). In the embedded liberal period this collective purpose was invoked to distinguish between trade distortions and legitimate regulation (Lang, 2011: 190239). Absent this it was necessary to turn to technical and scientific bodies of knowledge (Lang, 2011: 7, 247253). Whilst this point is well argued, it seems plausible to argue that again there is a much deeper level of continuity. The reason for this is simple. As Ellen Wood has argued, one of the key elements of capitalism is the separation of the economic from the political. In non-capitalist societies economic surplus is extracted through directly political means: i.e., the feudal peasant would work a farm, with the lord extracting a surplus directly through his customary position. As such, economic and political power cannot be said to be distinct. By contrast, under capitalism, direct producers create a surplus through purely economic means, they labour in exchange for a wage. It is only in such circumstances that one can imagine the economic as distinctive from the political (Wood, 2003: 1012). A corollary of this is that under capitalism social needs are not met directly through production, but rather production is carried out in order to maximise profit, which then indirectly satisfies social needs. Anti-capitalism, in whatever variant, has classically understood its mission as overcoming this separation between the political and economic, and absorbing the economic into democratic political control (Wood, 1999: 130140). This was the vision that animated the early forms of social democracy, with even its non-revolutionary variants arguing for a gradual transition to such a society (Hobsbawm, 2011: 910). Embedded liberalism never accepted this, viewing both collective forms of production and markets as tools. As such, the role of the state in embedded liberalism was not to directly realise the collective purposes of a political community but rather set the conditions i n which the activities of actors might realise these goals, precisely because it was committed to a system whereby the political and the economic remained separate. At this level, neoliberalism is not so different. Evidently, it accepts less of a role for direct state intervention. At the same time, however, it is not accurate to say that neoliberal theory argued that there was no collective interest. Those committed to neoliberalism shared similar stated goals to those committed to embedded liberalism in particular high economic growth and low unemployment (Harvey, 2005: 5354). The argument was simply that such collective goals could best be achieved through individual enterprise and deregulation. Hence the role of the state was to create the conditions that would promote this.

DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION Both liberalisms share a similar argument. The collective good is not directly realised through organising and directing production, but must be indirectly created through state action. The issue is simply the type and extent of state involvement. These indirect interventions are necessarily mediated through experts. This similarity is important when contrasting the role that technical knowledge played in neoliberalism and embedded liberalism. Certainly, the historical experience of embedded liberalism, and its regulation of public health, education and the economy was premised on the creation of a number of relatively unaccountable technical specialists. This is also evident in the case of the WTO. It seems difficult to draw a fundamental distinction between scientific/technical disciplines on the one hand, and the world of diplomacy and politics on the other, as Lang does. In both instances there are specialised, relatively elite institutions, operating with their own internal codes and practices that are highly inaccessible to those not trained in them.1 Indeed, Lang explicitly argues that the collective social purpose which diplomats were assigned required them to be insulated from both domestic and international political concerns (Lang, 2011: 16). On this basis, we might argue instead that both the turn to science and the old form of diplomacy share a similar logic, inasmuch as both are structured in such a way as to be radically opaque to forms of popular political mobilisation. The question is simply which type of experts rule. Blue Eyed Faith and the Logic of Transformismo Similar issues percolate through to Langs accounts of the specific forms of resistance to neoliberal economic globalization discussed in Chapter 3 (Lang, 2011: 61). Lang argues that by virtue of the rise of the global justice movement and the popularisation of a rights discourse contra trade liberalisation since the 1980s, international lawyers have acquired a great ability to contest world trade. Yet absent the question of class his account is problematic. According to Lang, despite the widespread appeal of the global justice movement, perhaps the most important geographical area has been the Latin American region (Lang, 2011: 86). Relying on Dezalay and Garth, Lang argues that it is in the Southern Latin Cone where for complex historical and institutional factors human rights were used as a counter to the economic expertise deployed in the neoliberal transformation of states (Lang, 2011: 8687). Amongst these factors are the close linkage between the human rights movement and the struggle against oppression, its linkage to the Catholic Church, and the legal institutionalisation of human rights, all leading to the emergence of human rights in the late 1990s as a language of critique of late twentieth-century economic liberalism (Lang, 2011: 87). Lang however, elides the way in which Dezalay and Garth show the role of human rights in facilitating the neoliberal project. Whilst the movement did ensure its popularity and vitality through its commitment to neutrality, impartiality, and independence (Dezalay & Garth, 2002: 6264), a corollary of this commitment was the total abandonment of the economy as a site of contestation. This was achieved through the promotion of technocrats, now
1

It may be the case that diplomacy is a more flexible form of argument than science, and so more responsive to political issues, but Lang shows convincingly in Chapter 10 that science was hardly an inflexible or neutral tool.

DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION supportive of human rights and democracy, as well as free markets who were re-baptised as technopols (Dezalay & Garth, 2002: 176). As Dominquez points out [o]nly when there was a democracy commitment to markets and government of the center-left could the rational investor be certain that market norms would prevail (Dezalay & Garth, 2002: 177). In this class-focused account then, the emergence of human rights is less as a challenge to neoliberalism, then as a development that both facilitated its rise and embedded its logic. What we can see here across the period of embedded liberalism to neoliberalism, and embracing many different legal regimes is the basic continuity of a class project designed to maintain capitalist social relations by incorporating and transforming resistance. This type of historical development was analysed by Gramsci under the rubric of transformiso, Gramsci sought to understand how formerly divided classes could be brought together in specific historical conjunctures. In the context of his own study of 19th century Italian politics Gramsci identified two steps in this movement. The first was a molecular stage whereby specific individuals of the democratic opposition were incorporated into the conservative moderate political class. In the second organic stage, whole swathes of the opposition follow these molecular instances of co-optation and have their agendas moved from transformation to conservation of the status quo (Gramsci, 1971: 58). Whither Politics? Whither Critique? The foregoing analysis casts doubt on Langs analytical strategy of dereification (Lang, 2011: 12). For Lang, previous debates have tended to ignore the contested character of the WTO. Indeed, since [d]escriptive claims are interventions into the internal contests within the regime (Lang, 2011: 12), by treating the WTO as neoliberal by default, progressives are contributing to the dominance of neoliberalism. The aim is to show activists that another trade regime is possible. Reification here is a kind of general intellectual problem whereby people cease to recognize the social world as the outcome of human endeavour and begin to see it as fixed and unchangeable (Marks, 2003: 21). This idea of reification as a general intellectual problem contradicts the author who did the most to popularise the term, Georg Lukcs. Lukcs argued that reification was not a timeless model of human relations but was built upon real capitalist foundations Luk cs, 1971: 95). He linked reification with commodity fetishism; arguing that the separation of the social and economic characteristic of capitalism means individuals are confronted with the product of their own action as if it was a structure entirely disconnected from them. Luk cs account suggests that reification is not just an intellectual phenomenon, but also a material process. In light of the class question outlined above, this leads to several questions. Even if the WTO was in theory radically contingent in terms of ideas, why have only certain ideas counted? Why is it that the legal projects of embedded liberalism and neoliberalism have been so amenable to the project of transformismo? Lang illustrates this well when he shows how substantive problems with the trade regimes outcomes are continually recast as issues of procedure. Lang treats this as an issue of framing, but this seems unable to explain the enduring character of this process. Here Luk cs position is useful. He explicitly argues that law by virtue of its form is one of the prime sites of reification Luk cs, 1971: 9598). The legal form as many critical scholars have argued is one that abstracts by its very nature. Thus, the propensity for the both the WTO and human rights regimes to co-opt resistance and articulate substantive demands through

DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION alienated expert politics is occasioned by the alienated legal form of these regimes (Knox, 2009: 429433). This form is rooted in capitalist social relations. A corollary of this account is that the goal of critical theory is not necessarily to show that anything is possible (Marks, 2009). Given the limited energy of progressive movements, it is sometimes important to show that the logic of a particular field may make it incredibly difficult to make headway there. Whilst one should not simply reduce ideas to material conditions; a materialist account is required to inform how and where ones intellectual energy should be spent. This also allows us to think about precisely what audience it is that Langs book is speaking to. Whilst it remains clear that Langs politics are firmly on the side of progressives, he explicitly positions the book as talking to international lawyers, and framing what they can do as international lawyers (Lang, 2011: 348). Yet, given the ways in which his own account seems to problematise mediating questions in this way, why has he chosen to do this? Might it not be better to frame his work as a legal account aimed at progressive constituencies in general? This is important. Lang is right when he argues against those looking for more regulatory autonomy since this: [R]adically underestimates the extent to which a states regulatory choices are already structured, constrained, and constituted by international economic forces and international economic law. (Lang, 2011: 344) But Lang seems to misunderstand the impetus behind calls for regulatory autonomy. They are not simply legal calls for national states to regulate their own space. Rather the issue is one of democratic control. This issue is playing out today all over Europe, where a discourse of popular sovereignty is being mobilised against undemocratic supranational institutions. If the above account is correct, nothing in Langs historical work suggests such democratic control is possible within the WTO. Any real attempt to deal with the substantive impacts of world trade will not go through the WTO but beyond it.

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DRAFT: DO NOT CITE WITHOUT AUTHORS PERMISSION Hobsbawm E (2011) How to Change the World: Tales of Marx and Marxism. Little, Brown. Knox R (2009) Marxism, International Law, and Political Strategy. Leiden Journal of International Law, 22(03), 413436. Lang A (2011) World trade law after neoliberalism: reimagining the global economic order . Oxford University Press,. Luk cs G (1971) History and Class Consciousness: Studies in Marxist Dialectics. Merlin Press. Marks S (2009) False Contingency. Current Legal Problems, 62(1), 121. Marks S (2003) The Riddle of All Constitutions: International Law, Democracy, and the Critique of Ideology. Oxford University Press. Wood EM (2003) Empire of Capital. Verso. Wood EM (1999) The Retreat from Class: A New True Socialism. Verso.