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12/27/2021

Debunking neoliberalism’s attack on the nation-state

Debunking neoliberalism’s attack on the nation-state

The World Association of Political Economy (WAPE) has organized in cooperation with the Shanghai International Studies University (SISU) its 15th annual forum on December 18 and 19 in Shanghai, People’s Republic of China. The forum was titled this year “Rethinking economic analysis: Perspective of political economy”. Sessions were organized both online and in presence.

More than 300 hundred speakers from 40 countries attended the forum, including researchers from China, Cuba, Russia, Brazil, the U.S., India, Canada, France, Germany, Japan, Greece and Turkey. The forum took place as a meeting of who’s who of global Marxist political economy.

In the forum, several participants from Turkey also made presentation, which were followed closely and with great interest as the country is currently witnessing a currency crisis. Among the Forum’s Turkish participants were also United World International experts.

As the Turkish economy is being closely followed worldwide, UWI will present in the coming days the speeches held by Turkish participants on the WAPE forum.

Today we present the speech of UWI expert Prof. Dr. Semih Koray in the WAPE forum.


Politics are based on economics. Economic targets that are objectively achievable can be reached only if a social force is both sufficiently able and willing to strive toward that goal. Thus, political economy deals not only with the relations underlying the workings of an economy, but also concerns itself with the creation and guidance of social forces by political means. The relations governing the transformation of an economic system reflect the objective aspect of the problem, while the social force needed to implement that transformation represents the subjective. Political economy tries to solve the problem of how to combine the objective and subjective factors in social and economic progress.

Throughout history, the state has undoubtedly been the central social and political organization in shaping the economy. Human civilization started with the establishment of the state. During the development period of a social system, the state is able to unleash the productive and social potential of the society, while in periods of stagnation and decline, the state is reduced to a sheer apparatus of the ruling classes, which blocks economic and social progress. In our era, the leading powers of the imperialist system have become something like the mafia, having been turned into an apparatus of hegemony based on military power, and comprise the biggest obstacle to human welfare. The nation-states of the oppressed and developing world, on the other hand, are on the side of humanity: the degree to which this is true depends upon the ability of the nation-state to mobilize in concordance with its own interests.

Neoliberalism and the state: privatization and commoditization

It is a well-known fact that markets have been able to adequately develop public welfare. The solution that neoliberalism found was to abolish public welfare entirely. Waves of privatizations spread across the whole world starting in the 80s and reaching its peak in the 90s. This not only deprived the working class of the benefits of public welfare, but it also deprived the nation-states of the developing world of important means of regulating the economy by participation as well as reorienting it using public enterprises whenever needed. Privatization was part of the imperialist strategy to destroy national markets in order to subject them to the world-wide market under the domination of the US.

Privatization was accompanied by the expansion of commoditization to an unprecedented extent in human history, covering every aspect of life including knowledge, education and health. The target was not just to deprive people of enjoying public benefits, but more importantly, to destroy the notion of the public entirely, to leave mankind as isolated individuals. The ideological consequence was to destroy the nation, nation-state, and national borders; in short, anything that could possibly bind individuals to a collective meaning.

The ideological offensive of neoliberalism was planned during the Seventies following the defeat of the US in Vietnam. The program was launched during the Eighties and reached its peak in the Nineties following the collapse of the Soviet Union. The central target of this ideological offensive was the liquidation of the nation-state entirely outside the imperialist system. The offensive aimed to orient the energy of society itself against its own state, making it too weak to resist. This aim could be achieved only if the individual could be deprived of all the values and means that connect him or her to the collective. All the social fault lines based on religious, ethnic and cultural differences were manipulated in order to set them into motion against the nation-state under the pretense of defending individual, ethnic and cultural rights and freedoms. Rights and freedoms have been valuable throughout history to the extent they served to strengthen society as a whole. The essence of these notions was emptied by neoliberalism- they were turned into fancy packing materials in order to make them serve the interests of the imperial center.

The neoliberal agenda of “downsizing the state” involves limiting the functions of the nation-state via privatization and commoditization, depriving the nation-state of its main tools to follow its own strategy for economic and social development, and turning civic society into an antagonistic opponent of the nation-state in the world outside the imperialist system. This neoliberal offensive was, of course, backed by the military power of the US, which had remained as the unique superpower in the world after the collapse of the Soviet Union. The illusion that it was the US who would shape the future of the world, however, did not last long.

The first Gulf War was meant to illustrate to the whole world that the threats of the US should be taken seriously. As it became apparent that the rise of a new world from Eurasia might develop more rapidly and more extensively than was initially estimated, the new millennium started with a sequence of military aggression by the US against Afghanistan and Iraq, followed by attacks on Syria and Libya. The outcome was the US continuing to never win a single open war in the post WW2 period. Moreover, this process triggered the deepest global financial crisis of the imperialist system, which is now declining rapidly in face of the rise of Asia. Finally, the way America retreated from Afghanistan made the world begin to see the US as their least trustworthy ally.

The way the imperialist system dealt with the nation-state after the collapse of the Soviet Union made it possible for oppressed and developing nations to discover the value and function of the nation-state when it comes to independence and the development of social and economic welfare. Nations began to feel that their very existence was threatened by the imperialist system. This, combined with the rise of Asia, gave countries around the world an impetus to strengthen the nation-state.

The era of national democratic revolutions and opening up to socialism

Given the present level of productive forces, our world is going through a second wave of “democratic revolutions”, which is different from the first wave in three fundamental aspects. Firstly, the main obstacle that the democratic revolution needs to overcome in this second wave is the imperialist system rather than the feudal system. Secondly, the gains of the democratic revolution cannot become permanent, as they must develop into the world opening up to socialism. Although the national bourgeoisie is part of the nation, which forms the fundamental social force of revolution, it has historically lost its chance of leading the revolution. It is the working class who has to emancipate the whole of humanity in order to emancipate itself. Thirdly, spontaneity has come to an end in economic and social development. History has reached a stage in which permanent gains can only be achieved under the guidance of science.

Concerning the relationship of the imperialist system and the developing world, the motto “let do and let pass”, ascribed to Adam Smith, has been reversed, and all is prohibited. Within the imperialist system itself, the above motto is not valid either any more, as doing (i.e., production) has been replaced by collecting tribute by sheer force. The center of production has thus shifted from the West to the East led by China. Within the capitalist system, financial circulation is not subject to the needs of production any more. Finance poisons rather than feeds production by dominating production so as to maximize its own tributes without caring about the negative impact upon the allocation of resources.

Today, market efficiency can only be revived by a nation state, which is not directed by the spontaneous workings of the capitalistic markets, but instead utilizes markets under its own control in a planned way, so as to enhance social and economic welfare. The main task is to design an economy that will unleash the potential of a nation at a maximal level. All classes and sectors of the nation should benefit from the increase in social welfare with a bias toward the poorer sections of society in order to strengthen national unity, which is indispensable for sustaining economic and social development.

A novel approach to freedom, democracy and the guidance of science

The present level of productive forces does not allow one to entirely ignore individual interest as a driving force in unleashing one’s creative potential. Thus, a common problem that the entire Developing World faces today is finding economic and social mechanisms that will align individual interests with the interest of the collective in a satisfactory way. Such problems cannot be dealt with successfully in the absence of a state, which is endowed with efficient means of implementation of appropriate policies.

Freedom is the ability to act. Thus, individual rights and freedoms should be arranged in such a way that will allow individuals to unleash their creative potential and thereby contribute voluntarily to the collective’s capacity to act. An individual experience in which this approach is internalized will also contribute to strengthening the human essence of individuals, which is an indispensable factor in building up a new society towards a classless social system.

Neither national democratic, nor socialist productive relations come into being within the bosom of the capitalist system in a spontaneous way. They have to be designed, planned and implemented. This problem cannot be solved without the guidance of science.

Targets set under scientific guidance are far more likely to be achievable and appropriate. Reaching that target, however, also requires the mobilization of the people in order to build up the social power needed to overcome difficulties. The nation-state is thus faced with the task of ensuring that scientific development strategies are taken up by the people. Economic development will be sustainable only if it is accompanied by social development. The fulfillment of this task requires that the nation-state take measures to continually raise the level of people’s welfare in order to encourage them to more actively participate in the implementation of development strategies; this implies a continual cultural revolution.

To accomplish this, the world needs a new democracy different from the democracies in the imperial center, which commonly treat people as passive recipients. This new democracy will combine the guidance of science with the mobilization of the people.

Developed capitalist countries are quite monolithic, while developing countries in contrast exhibit a very broad spectrum of characteristics, reflecting different stages in the nation-building process as well as different historical and cultural backgrounds. Thus, each country must craft a social and economic development strategy consistent with its own characteristics. On the other hand, they also face common problems, which makes closer interaction between oppressed nations a promising perspective.

Semih Koray
Semih Koray received his Ph. D. in Mathematics from Boğaziçi University in 1980. He has several articles published in journals such as Social Choice and Welfare, Review of Economic Design, Journal of Economic Theory, Econometrica and Semigroup Forum. Koray acted as the coordinating editor-in-chief and an associate editor of Review of Economic Design, as the President and Secretary General of the Association of Southern European Economic Theorists, as the Chair of the Turkish Mathematical Olympiad Committee, as a member of the International Mathematical Olympiad Advisory Board, and as the President of the Foundation for Economic Design. Koray’s research interests focus on economic and social design, game theory and social choice theory. Koray is currently the Deputy President of the Patriotic Party – Turkey in charge of the International Relations Bureau. He also has several articles on political and social issues published in the monthly periodicals Teori and Bilim ve Ütopya, along with writing in a weekly column on Eurasian Alternative in the daily newspaper Aydınlık.

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