Neoliberalism and Modernity

Far more than an empty epithet, as those on the right maintain, neoliberalism is also more than a set of economic policies. Neoliberals not only maintain that there is no alternative to the market, but that such a position is apolitical. Any attempt to posit an alternative brings the subjectivity of politics into the clean, technical and objective realm of economic questions, producing distortions. When put into practice through the policies of powerful states and international financial institutions, neoliberalism’s central claim – that a very specific conception of the boundary between the market and state is not only superior to all others, but actually beyond political contestation – necessarily circumscribes political possibilities.

This claim is both a product of the economic and political conditions in which neoliberalism ascended to hegemonic status in the late 1970s, and an ideological feature that has helped maintain that hegemony since the international economic order established after World War II and its ideological underpinnings, characterized by Keynesianism in the West and its socialist challenger – began unraveling in the wake of a series of economic and political crises.

This unraveling had significance far beyond the fate of specific economic theories or political projects. The crises of the 1970s facilitated a general disillusionment. Long-held assumptions about the nature and possibilities of modernity itself were brought into question, as “the ideology of the modern lost its nerve, its self-confidence, its interventionist logic and expansive spirit, and became dégonflé and insipid.”

As the American Marxist philosopher Marshal Berman put it, “The great economic boom that had gone on beyond all expectations, for a quarter of century after the Second World War, was coming to a close…. Horizons for expansion and growth abruptly shrank…”

Postmodern subjectivism emerged from the ashes of the “grand narratives” that were central to project of modernity. The idea of an objective understanding of politics or economics, even in aspiration, became passé, rubbished by intellectuals, most vehemently by those that would become the postmodern left. Emphasis shifted from the object and the empirical to the subject and to discourse. Much of the left discarded the class analysis that was once the core of its project, as yet another grand narrative to be critiqued. Identity politics, with its atomized conception of oppression, has its origin in this reaction against modernity.

As the international economic landscape shifted, it became less favorable to Keynesianism and Soviet socialism, and these alternatives to liberalism became less and less viable. Economic questions were relegated to the “technical expertise” of right-wing economists and removed from the sphere of political contestation.

In the Third World, the economic crises of the 1970s also undermined the long-held belief that industrialization and economic modernization could be achieved through controlling the state. After all, the Soviet Union, champion of this of model, was reeling and beginning its disintegration. The idea that the Third World could “catch up” to the former colonial masters through industrialization was no longer viable. Structural adjustment programs, made up of sharp cuts to social spending and the public sector, were pushed onto Third World states by international financial institutions.

“Exit from History”

In the Arab world, this disillusionment preceded the collapse of Bretton Woods. A surprise attack initiated by Israel completely decimated the Arab armies in 1967 and severely undermined the discourse of pan-Arab nationalism, which was at the height of its power in the late 1960s. The “New Men” who came to power in the early 1950s sought to erase the Arab world they inherited and build it anew, embracing scientific progress, republicanism, and socialism. They posited themselves as the vanguards of modernity, defined against the backwardness that had lost everything in the first half of the century, 1967 had them exposed as failures.

Faisal Darraj, in the forward to a reprint of Sadik Al-Azm’s seminal interrogation of the state of the Arab world after the war, 1967: Self Criticism After the Defeat, quotes Egyptian economist Dr. Fawzy Mansour, who captured the long-term effect of the defeat perfectly as “the exit of Arabs from history.”

This condition is not relegated to the past. As Nadya Sbaiti, co-founder of Jadiliyyah put it,

the legacies of 1967 envelop us and permeate everyday life in Lebanon. Daily we elbow our way through their viscosity, wondering why movement and breath and vision are limited. We take comfort in the invisibility of these legacies, convince ourselves that we have escaped, even as we have spent fifty years wiping the gelatinous tendrils from our very selves.”

Hesham Sallam, co-editor of the same outlet agrees:

somehow in the year 2017, the [1967 war]… for Egypt is not merely a legacy of the past or a distant memory that reemerges as its anniversary nears. While regime forces initially coined the term naksa (setback) to minimize the defeat, in everyday practice and use it has come to mean a broad-ranging defeat. Today, the naksa in Egypt epitomizes a lived reality, one in which defeat is experienced daily. It also captures the state of fear that many Egyptians confront as they contemplate imminent threats that could affect their daily lives. In the Egypt of Abdel-Fattah Al-Sisi, every day is 1967.

The Economy of Defeatism

Politically and military defeated, the Egyptian regime pivoted hard to the right in terms of economic policy after Nasser died in 1970. Anwar Sadat’s infitah, or economic opening, paved the way for other Arab governments to follow suit. In Latin America, the 1980s became known as the “lost decade,” but the Arab states actually experienced worse economic performance than Latin America did during the 1980s.

Throughout this period, Arab regimes from Morocco to Jordan implemented economic reforms that constituted neoliberal restructuring, including the reduction of subsidies on food and other consumer goods, reduction of government expenditures in general and reduced public investment, which caused workers and peasant families to bear the brunt of austerity. International lending to Arab states also increased dramatically during the 1970s and remained very high well into the 1980s. In response to austerity, food riots exploded in Egypt in 1977, Morocco in 1981, Tunisia in 1983, and Jordan in 1989, and Algeria experienced the near toppling of the government in the late 1980s, which led to civil war in the 1990s. “Sudan in 1979/1980, Morocco in 1983, Tunisia and Egypt in 1987, and Jordan in 1989 all turned to the IMF and World Bank for financial and technical assistance. Algeria, Yemen, and Lebanon followed suit during the 1990s.”

While the state-led model put into practice by the Arab nationalist regimes ultimately succumbed to its own economic contradictions, it at least produced coherent systems with a clear set of social goals. In that sense, statism in the Arab world was a modern endeavor par excellence, guided by the assumption that, through policy, the power of the state could be harnessed to erase the backwardness of the past and build society anew. The grand narrative of the Arab nationalists – that through the revolutions of the young military officers, the Arab masses could transcend the defeat and division of the first half of the 20th century – was dealt a fatal blow in just six days, the narrative that came to replace it put the task of reversing the defeats of the past, now even deeper into another plane.

Islamism as Critique

Placing Islamism into this context is essential to understanding its contemporary popular appeal. The region-wide pivot away from statism and the abandonment of confrontation with Israel stripped the Arab nationalist regimes of their legitimating tenants: socialism and anti-imperialism. The “social contract” that Arab regimes built themselves around disintegrated. The gains of the modern era were reversed through austerity that evolved into full-blown neoliberal economic restructuring.

This was fertile ground for the articulation of the Islamist discourse, which posited the political and economic crises in the Arab world in culturalist terms. Islamists understood the failure of Arab nationalism not as a result of the limits of authoritarian state-capitalist development, but the failure of a foreign conception of modernity, itself in crisis globally.

The discourse of development itself is vulnerable to these culturalist critiques. It is, of course, a Eurocentric discourse that makes it impossible to contemplate a future in which the rest of the world does not resemble Europe socially and economically; the process of development was understood as “the diffusion of the superior model” – the European model, to the rest of the world.

For Islamists, the conception of modernity posited by Arab nationalist regimes was nothing more than an attempt to reshape Arab society in the image of Europe, at the expense of all that was authentically Islamic. The 1967 period and the decline of the Arab nationalist project was explained in simple and devastatingly appealing terms by the Islamists; “The Arabs renounced their faith in God, and God renounced them,” in the words of Islamic Studies scholar Salah al-Din al Munajjid.

As the ailing Arab nationalist regimes abandoned their social commitments in favor of austerity and debt repayments, and embraced deeply unpopular alliances with the United States, Islamism served as a powerful and all-encompassing critique of the status quo.

Stripped of their raison d’être, the regimes had no response to this ideological challenge. Increasingly unpopular and authoritarian, their discourses were reduced to little more than a negation of Islamism. The United States and its newly oil-rich allies in the Gulf poured in military and political support for these regimes in order to secure a favorable and durable regional order. At the same time, the credibility of the left had been decimated by the defeat of 1967 and the decline of the Soviet Union.

By 2011, after decades of dropping trade barriers, lowering wages and privatizing industries, Arab governments had reduced the social protections necessary for their populations of to cope with the increases in unemployment and commodity prices and the stagnation in wages that were characteristic of the global recession. The gutting of state industry and the opening of trade policy paid dividends for those who were well connected to the state bourgeoisie that had developed during the state-capitalist period in many countries. But these changes left the mass of people more vulnerable to international economic crises and reeling from a deepening sense of social inequality, which increased significantly from 1985 to 2009, and very high youth unemployment.

The political opening that uprisings carved out gave Islamist parties the chance to turn their popular support into political power after years of exclusion. In Egypt and Tunisia, electoral victories by Islamists, and poor showings by the battered or coopted left set the stage for the resurgence of the old regimes. The Islamists’ brief stints in power demonstrated the hollowness of that program and gave the remnants of the old regimes the opportunity to stage a massive and crushing comeback. The battle between the old regime and the Islamic State, where it was able to take hold, epitomized the wider crisis in the Arab world today. From Morocco to Syria, the Islamists and regimes  reinforce each other at every turn.

The Left, the Right, and the Counter Revolution

As the revolution developed into a battle between the old regimes and the Islamists, comparisons to the Algerian Civil War are more and more fitting. As Jean Pierre Filiu argues in his 2015 book, From Deep State to Islamic State: The Arab Counter-Revolution and its Jihadi Legacy, the Algerian experience had a deep impact on the region:

This is how this ‘Arab counter-revolution’ was conceived: not as a paradoxical sequel, but as a study of the repressive dynamics designed to crush any hope of democratic change, through the association of any revolutionary experience with the worst collective nightmare.

Filiu argues that Arab regimes developed a symbiotic relationship with Islamists in the 1980s and 1990s, as they leveraged the threat of Islamism to get political and military support from Western powers, while using the specter of Islamism to dismiss any calls for political openings from their own populations.

This is most clearly at play in Egypt and Syria, where El-Sisi and Assad have come to define themselves against Islamism. As Flilu explains, “Assad’s regime needed the jihadi threat both to exist and to be controlled, since ‘key component of its [the regime’s] survival stems from the comparison he [Assad] nurtures abroad with a worse threat than himself.” To that end, Assad has even released known jihadists from prison “to quickly radicalize the opposition, discrediting it in the process.” The strategy, which many Assad supporters on the Western left and the far right have bought into, is a reproduction of the discourse of the War on Terror, that the only way to contain the threat of Islamism, which is understood as an inherent  feature of Arab society, is through authoritarianism and military force.

The Left and Islamism in Egypt and Tunisia

Even in Tunisia and Egypt, left-wing parties and politicians have folded to this type of thinking.

Egypt may have a rich tradition of grass-roots socialist politics, but it was Hamdeen Sabahi, who narrowly missed the runoff round of the 2012 presidential elections, who was the only major political figure of the left to emerge in the post-revolution landscape. Running on a campaign platform informed by the legacy of Gamal Abdel Nasser, Sabahi maintained that the solution to Egypt’s woes was neither the Islamism of Mohammed Morsi, nor the return to the status quo ante, represented by his other opponent, Ahmed Shafik, but, a refocused economic policy geared toward generating employment at home and reducing inequality.

Mohamed Morsi’s victory and the discontent that boiled over under his brief rule, led Sabahi to throw his lot in with the Supreme Council of the Armed Forces and support the 2013 coup d’état that eventually put El-Sisi into power. Sabahi expended all of his political capital, which was substantial at the time, on supporting the discourse of the old regime; that secular authoritarianism is the only way to counter the threat posed by Islamism. Sabahi has since declared opposition to El-Sisi’s authoritarianism and vicious austerity, but it’s difficult to imagine his political recovery.

In Tunisia, the trajectory of Ennehda, the major Islamist party, and the remnants of the old regime also highlight their respective inability to deal with the problems that sparked the revolution. Ennehda achieved a legislative election victory in 2012, but its government was racked by instability, which culminated in the assassination of two prominent leftists in 2013. Amidst the ensuing crisis, mass protests pressured Ennehda to step down, a decision that likely saved Tunisia from going down the Egyptian route. Mohamed Beji Caid Essebsi, an old regime figure in his late 80s, hastily formed the Nidda Tounes party in opposition to Ennehda and won the next round of legislative elections and the presidency. His party was “founded precisely in opposition to the Islamist party” capitalizing on the rising unpopularity of Ennehda, fear over Islamist violence, and the ouster of Mohammed Morsi.

Like El-Sisi in Egypt, the platform of Essebsi and his party is nothing more than the negation of Islamism. On economic questions, there is little to differentiate Essebsi from Ben Ali or even from Ennehda itself. Nidda Tunis’ lack of program is further demonstrated by the recent decision of Essebsi to name his son as the next party leader.

Unable to form a majority government without Ennehda, Nidda Tounes invited their former rivals into a coalition government, much to the shock and dismay of their respective voter bases. Meanwhile, the Tunisian left has been warming to Assad. The General Union of Tunisian Workers (UGTT), which is the main union in the country, sent a delegation to meet with the Assad regime last week and encouraged the resumption of diplomatic ties, which were cut in 2012.

The unstable coalition deal may have saved the political process in Tunisia, but it exposes another of the central tragedies of the Arab revolution so far; underneath the battle of discourses and questions of identity, Islamists and their old regime adversaries largely agree on economic issues. While politics in Tunisia and Egypt remain subsumed by the same ideological binary that has dominated the Arab world since the 1970s, both countries have signed fresh structural adjustment agreements with the International Monetary Fund.

The setbacks faced by the Arab revolution demonstrate that neither Islamism nor a return to secular authoritarianism – whether it purports to be anti-imperialist or not – is equipped to address the political and economic problems the Arab world is facing. The Arab left needs to be more than the negation of Islamism, it needs to offer an alternative to the economic and political models that have impoverished the Arab world, it needs to chart a path out of the impasse.