Chapter 2: Alternatives to the Neo-Liberal Model

The Other Davos: Globalization of Resistances and Struggles
by Francois Houtart and Francois Polet

Chapter 2: Alternatives to the Neo-Liberal Model

Different social forces have long-since been engaged not only in a critique of the current model of society, but also in a re-definition of different models of society to the one which is imposed on us and whose sole vision is of a merchant society which is individualist and socially unjust and, above all, cynical. François Houtart (sociologist, director of the Tricontinental Centre and Executive Secretary of the World Forum for Alternatives) suggests that one should study these alternatives carefully. In order to do this he started out from the contributions of the Revue Alternatives Sud during its first three years of existence.

As a beginning, we should quote a pupil of Adam Smith, the Swiss Count Sigmond Sismondi, after he had visited England three times between 1818 and 1826. In 1826 he wrote on the subject of liberal economic theories: “These theories as they are practised have contributed to the growth of material wealth, but have diminished overall satisfaction for the individual; ... they tend to render the rich richer and the poor, poorer, more dependent and more miserable.”

If more than 170 years later we are still talking in the same way, both in the Third World and in our society, this is no doubt, to a certain extent because similar situations still exist, but more especially it can be put down to the fact that the same economic logic dominates the society. This is why the search for alternatives is certainly specific to the time in which we live, but retains a sense of continuity with the experiences of the past. In short, we must seek a new language and new techniques with the same objective.

1. Alternatives to capitalism

If neo-liberalism is only one phase of capitalist development, what we are talking about is alternatives to capitalism rather than simply making minor changes; it is alternatives to real capitalism not simply alternatives to liberal, neo-liberal or even neo-classical economic theories, nor it is alternatives to savage or civilised, American or Rhenan capitalism.

In any discussion of alternatives, the obvious first step is the notion of real socialism, which, after 1917, became the antithesis of capitalism. The defeat of real socialism must clearly be analysed from all angles. And in fact, we can learn a lesson from its defeat in terms of the strength of capitalism as a global system, which used all political and military means at its disposal to bring about the downfall of socialism. But there is also a lesson to be learnt about the character of an alternative construct which, quite clearly, defined valid social objectives and gained appreciable results, but which also succumbed to its own internal inflexibility and fell a victim to its own mistakes.

One of the reflections we can make on this subject concerns the transition to another form of production, i.e. another approach to the organisation of the production of goods and services. This is a long-term process. Capitalism has taken over four centuries to construct the material basis of its reproduction, in terms of creating a new way to organise labour, which goes hand in hand with technological development. Socialism had to walk with the legs of capitalism, without having its own material basis and this had many consequences among which is the need for a surfeit of ideology and symbols, the establishment of a crushing bureaucracy and leaving an easy way back to capitalist mentality.

Another point to be made concerns democracy, and was well expressed by Lula, the Brazilian head of the Labour Party (PT) at a meeting of the Forum de Sao Paulo in San Salvador in 1996: any alternative to capitalism should not only be a goal but must also be the means. A party, which is ahead of its time and espouses the truth, including philosophical truths, in theological language, as Marx would have said, can only end up by suffocating democracy. This is clearly not talking about a form of democracy reserved for those who can pay for it but one, which allows people and social groups to express their needs, their aspirations on various levels of real life.

Finally, we should be aware that the need to establish a power relationship to construct alternatives is also a lesson in contemporary history. We should not forget that it is the very existence of the eastern block, with all its ambiguities, which at least indirectly, incited Western societies to establish the post-war social pacts. These pacts were a defence strategy against the danger posed by the threat of a more aggressive socialism created by the working classes. And the defence strategy had positive results. The agreements were also the fruit of internal social struggles. Keynsianism was not born out of nothing. It came out of national liberation movements in the former colonial countries and of revolutionary movements in countries like those of Central America, which forced the West to seek compromise solutions between a national bourgeoisie and the popular classes.

The fall of the Berlin wall shook this power relationship and the restructuring of the means of accumulating capital, which was at the root of the crisis after the 1970s, bringing with it the subsequent neo-liberal solutions only served to profoundly change the relationship yet further. A new power relationship must therefore be established, to allow for a response to the dismantling of the systems of social protection and the weakening of social movements.

       A. How to approach the question of alternatives?

When the word alternatives is used in the plural it is not in an attempt to give an impression of a diluted mass of small initiatives. There is one system which must be replaced, but there are also various different levels of change and varying times at which changes need to be implemented, not to mention the very many different places in which the changes will take place and the individuals in each of those places who will be working together to achieve that goal. This is why we must provide a detailed analysis of the subject.

            Alternatives based on an analysis of social relations

What characterises neo-liberalism is the absence of consideration given to social relations. The market is presented as self-regulating for all social processes. The invisible hand produces a general balance on condition that the laws of the marketplace can continue to function freely (natural law of the economy). The policies of structural adjustment are aimed at freeing the economy and cover privatisation, the opening of the market, deregulation of labour, etc. All this is conceived in a social vacuum, with no consideration given to the relative weight of social groups. Under these circumstances we should not be surprised when the rich become richer and the poor become poorer, regarding this situation as if it happened by accident and can be rectified by taking various measures en route, when we should see that in reality it is the very logic of the system which is causing the situation.

In any search for alternatives it is imperative to analyse not only the existing social relations, that is the class structure, which is the direct result of the capitalist organisation of the economy, but also the pre-capitalist relationships between castes, different ethnic backgrounds, men and women. Without this analysis we can not understand why, for example, in many countries in the South, neo-liberal policies end up in caste conflicts (Africa, Chiapas) or in the feminisation of poverty in the informal sector. This type of analysis is a vital precursor to any attempt to measure the social and cultural effects of the extension of the capitalist system, especially in its contemporary neo-liberal phase, but it also permits us to draw up strategies and alliances for resistance.

There is an important phase of de-legitimisation in the neo-liberal system, which must arise simultaneously with the search for alternatives. This phase must be based on the no-functioning of the economy. In fact, in its current organisation, the economy is not fulfilling its essential function of ensuring the availability of goods and services necessary to all human beings for their existence. The economy does not identify with either science and the practice of accumulation or with competitive performance and less still with the exploitation of human beings. If, every five years, the United Nations announces that the number of poor in the world is rising, including in industrialised societies, this is not the result of bad luck but of the deficiencies of a system. Having noted this fact, which is essentially an economic one, one must move on to an analysis of the ethical aspect.

It is ethically unacceptable to allow the majority of human beings to continue living in materially, socially and culturally undignified conditions, while humanity has never known so many possibilities for resolving its problems. However, a critique, which is only based on ethical objections can become an obstacle to true alternatives. Firstly it runs the risk of resulting in the criticism of individuals rather than of the system. And this ends up in social inefficiency of the radical ethical critique. But there is one other point to consider. The critique can be useful for the capitalist system, because it affects visible abuses rather than an invisible logic, and thus contributes to the reproduction of the latter, since no system can indefinitely resist its own corruption. This was perfectly demonstrated in the case of real socialism. Every system needs instances of control, including moral control. And it was in this sense that Marx said that purely ethical criticism was bourgeois.

However, this type of critique is essential in order to achieve delegitimation but it only goes half way to a solution if it does not integrate an analysis of social relations and a critique of the economic function.

So we need to create a different logic, which was well expressed by K. Polanyi, the American economist of Hungarian origins, who wrote about the need to re-embed the economy in society. In fact, capitalism has rendered society an entity in and of itself, which has ended up by imposing its norms and its objectives on all of society, where everything has a commercial value and we are heading for a state of total market. We have privatised everything right up to social security, not to mention development co-operation and public services.

B. World capitalism

What needs to be replaced by these alternatives is a massive construct, which is increasingly concentrated and interconnected, and increasingly little controlled by the adjusted states. But the construct is vulnerable due to its own contradictions: the disproportionate size of financial capital faced with the activities of production and services; pressure on labour income and the resultant crisis of under-consumption; the class divide, the bases of which cross borders. This is the context in which the alternatives must be conceived.

2. Different levels of alternatives

There are many types of alternatives and we have to try to clear the terrain and make out the various different levels.

A. Utopia

We can dream of a perfectly balanced society, where the difference between individual initiative and solidarity are reduced to a simple state of tension, where human beings are judged because of what they are rather than the added-value they produce, where cultures are considered to be equally valid expressions of being and where scientific and technical progress is oriented towards the well-being of all rather than the enrichment of a few.

We must dream of this type of society be it called the Kingdom of God or a socialist society (or why not even both at the same time?), because even if it is not attainable in our topos (place), it does have the force of attraction, which mobilises the spirit and the heart and a dream of the necessary utopia. But unless this utopia starts out from a firm conviction that it is possible to construct another social logic and thus to approach the ideal, it remains a dream.

B. Some broad outlines

The search for alternatives passes through more general and realistic perspectives, while nevertheless being inspired by utopian ideals.

New poles of thought and action

After the deconstruction of socialism in the East and the triumph of neo-liberalism came profound disarray in alternative thinking. Some were seduced by the flight of liberalism, hoping that economic gains might result, such as by creating riches to be later re-distributed, or by the idea of the indivisibility of freedoms, market freedom being the forerunner of other freedoms to come.

A further result of this deconstruction was a development of post-modernism, in philosophy, human sciences and in particular in sociology. Starting out from a pertinent critique of modernism, scientism, totalitarianism in all its forms, this trend came to the point of refusing to analyse situations in terms of globablity or the system. Instead it moved towards an over-evaluation of the individual as the unique subject of current history at a time when capitalism had provided for itself the material and technical basis of a real world system. It should be added that there was a simultaneous weakening of the anti-systemic forces: unions, popular organisations, and revolutionary movements.

Little by little, new poles of thought and action saw the light. Many examples of this new trend can be seen, particularly in the field of thought, in many places in the five continents. There is a growth in the critical analysis of Marxist thought and practices. There is also a re-thinking of the political left. The Forum de Sao Paulo in Latin America is one example of this, passing from a critique of neo-liberalism and auto-criticism by the Latin American left to a progressive formulation of alternatives. This was the central theme of the meeting in Porto Alegre in 1997. In Asia, we saw the PP XXI (People’s Power for the 21st Century), which brought together social action groups and popular movements from all over Asia and went through a similar evolution.

All over the world we are witnessing social pressure being brought to bear demanding democracy, which is increasingly seen as a methodological requirement which goes far beyond the simple electoral process. This is one of the main thrusts of the teachings of the Zapatists in Mexico. We are also witnessing attempts to globalise resistance on the level of political thought. One example of this is the World Forum for Alternatives, which was created with its headquarters in Dakar. But there have also been new initiatives in action, such as the Europe-wide strikes seen at Renault, m solidarity with the closure of one if the headquarters in Vilvorde in Belgium.

Redefinition of globalisation

Rather than seeking globalisation directed by the needs of capitalist accumulation, we should be aiming for a synthesis of regional groupings working to the service of the people. This implicates groups such as the European Union, Mercosur in Latin America or ASEAN, all of which represent firstly an extension of the dimension of the market, but they can also give real, even shared, power to States to govern their own economy. This would provide States with an increased means of protection against transnational businesses and would place them in an improved negotiating position vis-à-vis other groups. It would also allow the poorer States in particular to develop negotiating power on an international scale. Finally, these types of groups would form the basis of the organisation of collective security.

Regulatory mechanisms and institutions would accompany this type of reorganisation on a world level, so as to ensure a balance in economic transactions, political co­operation and international security. Thus, The Bretton Woods organisations could exercise new functions whereby they would cease to be instruments of neo-liberalism. This new philosophy would bring about a polycentric world, whose philosophy would be opposed to current globalisation, dominated by transnational businesses and capitalism. This does not in any way imply autocracy and isolation but rather a disconnection from globalisation in its current form, so as to allow for the construction of a new form of globalisation on a different basis.

Regional response to the real needs of the people

On the basis of the regional groups referred to above, the next step would be to work on the basis of auto-centred development, that is development centred around the satisfaction of interdependent local needs rather than based on the current philosophy of everything for export. So these groupings would not just be stops on the path to capitalist globalisation, as is the case of ALENA, the free exchange zone between the United States, Canada and Mexico, but they would act as poles of development responding to the real needs of the local populations. In Africa, for example, this would allow for the promotion of sustainable agriculture supported by industrialisation.

All this presupposes, of course, the development of regional policies, inside each of the groupings, capable of taking the necessary economic and social measures to ensure stabilisation. In particular mechanisms would need to be set up to strengthen the position of the weakest countries or social groups.

Alternative Eco-development

The word ‘sustainable’ is used today as a quasi-magic term but in official literature, it is used outside the context of social relations. This was the price paid to ensure the continued existence of the concept in a world dominated by neo-liberalism. This is why we prefer to use the expression alternative Eco-development. This term implies the creation of new relationships of social production, responding simultaneously to the impasse created by the destruction of non-renewable natural resources, pollution and ecological deregulation.

New social, popular and democratic alliances

In order to create the power relationships capable of achieving these political goals, we need to establish new social alliances, alternatives to those that have existed until now. In industrialised countries, the time has come to work towards common strategies between the working class, the declining middle class, the intellectuals, immigrants and movements representing specific interests: ecologists, women, children’s rights, etc. In countries in the South, faced with the alliance between international capital, the comprador bourgeoisie and part of the middle class, the alternative consisted in using joint programmes and actions to bring together the different grass-roots groups such as workers, peasants, the informal sector, movements of the urban poor, co-operatives, minority ethnic groups, and also the vulnerable middle classes, students, etc. Some initiatives and experiences have already been undertaken in this field, and they prove that it is possible to achieve this goal even if nothing is ever permanent in this area.

Reorientation of international political powers

The move for the creation of regional entities clearly requires political redefinition. European experience shows that the lack of political definition within the regional powers is one of the major obstacles to their efficiency. There is no doubt that this will require a redefinition of the sovereignty of existing States. But at the same time it will give back to these States a much more real power vis-à-vis the transnational economic powers, which are destroying their sovereignty even more effectively than any regional grouping ever could.

In addition, the political reorganisation of the United Nations and its specialised organisations is essential. Some of these organisations have already been the object of retaliation by the more neo-liberal States. Take for example, the case of UNESCO, from which The United States, the UK and Singapore have withdrawn with accusations of undue favouritism towards the South. Similarly, the role of the ILO has been questioned by the United States Senate on the pretext that the fall of the socialist bloc renders it obsolete. It is true that the neo-liberal dogma of total deregulation of labour is hardly compatible with an organisation, which supports social pacts. The real goal we should be aiming for is the progressive creation of a world state, passing via a real confederation of states.

This is why the demand for a democratisation of the international organisations is an integral part of the alternatives. In particular, this implies the Security Council, which is so dominated by Western interests. As far as the Bretton Woods organisations, the World Bank, the IMF and the WTO, are concerned, they require total transformation, following a philosophy that meets the integral goals of the economy, i.e. the satisfaction of human needs rather than alignment with the satisfaction of capital accumulation.

Forms of democratic organisation on all levels

The very concept of democracy is being rethought and extended today. Democracy is all too often limited to the con­cepts of multi-party political leadership and the electoral pro­cess and is imposed in these terms within the neo-liberal dis­course (but not in its practices). However, it takes on another meaning in the context of new social movements and contemporary political reactions. On a political level, it is a question of deepening and widening the way in which public powers function democratically. This is particularly true on a super or inter-State level. Furthermore, State decentralisation, the importance given to municipal authorities and linked organisations (e.g. the panchayat in India or CACES in Haiti) are all steps forward provided that they are not conceived simply as forms of dismantling the State.

On an economic level, the various formulae for self-managing democracy are all valuable, particularly on the level of local initiatives or small and medium businesses. When it concerns large-scale production we need to seek other formulae, new forms of social links between the workers going beyond what has been a sort of joint management aimed above all at integrating them into the logic of capitalist accumulation.

On the question of democracy, it is worth adding two thoughts on the subject of terms often used these days and whose meaning or interpretation is profoundly altered through discourse and neo-liberal practices. Firstly there is the notion of civil society. This term is used by democratic institutions as well but often in the sense given to it by the dominant discourse. In reality, civil society is the place of social struggle and the notion is not solely identifiable to democratic organisations and social movements. Lobbies of transnational businesses to national or regional parliaments are also a part of civil society.

So terms must always be used judiciously. As a matter of fact, from a neo-liberal perspective, strengthening civil society can also mean destroying the State, on the pretext of privatisation to strengthen. If it is true that the concept is distinct from everything which relates to the public sector, it cannot be distinct from the reality of concrete social relations existing in a society and, thus, social struggle. So, the promotion of civil society is not a panacea to avoid conflict. On the contrary, it highlights the efforts of the weakest to organise a more just society and to overturn the existing power relations.

The second concept is that of NGOs (one issue of Alternatives Sud was dedicated to this topic in 1997). Within the framework of neo-liberalism, NGOs are considered to be organisations that are capable of finding solutions to social problems. But this positive definition is situated within the context of aid to support the struggle against poverty or as a response to needs not covered by society. As soon as NGOs move out of this perspective and support social or economic movements they are regarded with mistrust and the political and economic powers try to control them or to use them to their own ends.

There are two dangers for NGOs in this context. The first is that they might become, or be made into, palliatives to structural situations caused by the economic system, rather like the St.Vincent de Paul Conferences in the XVIII and XIXth Centuries: fine people but ineffective in the struggle to change social relations. The second danger is that often under the influence of established powers they might become weighed down in bureaucracy and end up becoming centres of power themselves, which are forced little by little to subscribe to the dominant logic in order to reproduce socially.

The role of culture in social emancipation

All large-scale social movements have produced their own cultural expressions, diffusing their movement and their values through poetry. Thus they become entrenched in local culture. This, in turn is renewed by social interaction. Social movements are expressed through poetry, music, painting, songs, theology and liturgy. A striking example of this can be seen in the Sandinista revolution in Nicaragua. But expressions of culture are only real if they grow in a democratic context. They cannot be imposed. This is the sign of popular authenticity.

     C. How to achieve the goal

Talking of utopia is necessary and even good. But it is even better to draw up some broad outlines of an alternative project, even if this always remains provisional. However, the big question mark remains — the method in which to get there and how to define the means.

The start of new perspectives

We should recognise that the debate in this area has only just begun and it is still distinctly secondary to the institutionalised practices of the past: the logic of reproduction of the institutions (political parties, unions, State forms); co-option of individuals or organisations from the popular sector into the dominant system (some unions, NGOs, agricultural co-operatives); corporatism of social groups which risk leading individual struggles without placing them in the context of the overall social objectives; pragmatism of the left which has come into positions of power and which is losing sight of the utopia or is too focussed solely on the interests of its own society. In short, history weighs us down with considerable force, but the importance of what is at stake forces us to take a different approach and, all over the world, we can see the emergence of new reflections, proposals and experiences.

Today, we are seeing the proposal of a series of concrete measures that generally cover the area of regulations and we will look at these later. However, none of these could succeed without a social movement pushing on the democratic and popular forces. Some see this as the only way of saving a regime rendered fragile by the destruction of its agents (notably financial), discredited by its own mistakes and endangered by social divides (internal and North-South). Others, on the other hand, find in it the means of constructing the steps towards fundamental transformation of the economic system and its political expressions. In other words, for some, it is a question of neo-Keynesianism and for others it is the point of departure for a non-capitalist alternative to neo-liberalism.

Concrete areas of regulation

The areas in which regulations are proposed are varied. They cover, naturally, the broad area we have covered above. We will specify these without going into any detail, each of them being the object for detailed analysis and debate, because, they can not only be interpreted totally differently, as we have already said, but also because experts disagree on the concrete mechanisms of their implementation. So in this document we will simply list the various regulations.

A.       Economic regulations

Obviously most of the major proposals fall under this category:

 -- regulation and taxation of international financial operations

 -- regional and international fiscality elimination of tax havens

 -- reduction of external debt for economically disadvantaged countries

 -- setting up of the regional base as a place of economic resistance

 -- transformation of the Bretton Woods institutions into regulatory bodies

 -- world sharing of technology

 -- creation of new paradigms of political economy and socialism of the market


B.       Ecological regulations

 -- efficient protection of non-renewable resources

           -- protection rules for biological resources

           -- strengthening of the programme of United Nations

              Agenda 21

C.       Social regulations

           -- labour legislation on a regional and an international level

 -- participatory power for social and popular organisations in economic, political and cultural, regional and international institutions


D.       Political regulations

 -- reconstruction of the power of the State to ensure the entirety of the regulations

 -- constitution of regional powers with regulatory powers reorganisation of international organisations: democratisation of the UN, creation of regulatory organs on this level

 -- world management of natural resources

 -- institution of a world parliament


E.        Cultural regulations

 -- creation of new cultural consumer models, respectful of the environment and of the equal sharing of world resources

 -- creation of new models of agricultural production which are non-destructive to the earth and phreatic layers

 -- conception of new models of industrial production placing technology at the service of labour rather than simply accumulation

 -- establishment of social code of ethics based on the analysis of local, regional and world social relations.


3. Global or partial social alliances

Nobody will believe that this type of objective on short or medium term can be achieved or even pursued without extreme social struggle. While certain sectors of the dominant economic world realise that the regulations are necessary to avoid the collapse of the system, most of them nevertheless try to support it and defend its integrity, identifying their interests with pure reproduction. This is why alliances must be created between social forces, whether they have long- or short-term perspectives depending on the concrete objectives in question. And it comes down to creating power relations to obtain precise objectives. One current example is the zapatist movement on Chiapas, which makes no claims for power but which demands an alliance of all social forces to democratise society.

This type of alliance should never lose sight of its ultimate objective or utopia at the risk of becoming a part of the by-products of revolution or being content with reformism. What appears to be happening is that multiple strategies are emerging out of the current trend and contemporary practices, taking into account the urgent need to find solutions given the dramatic situation in which hundreds of millions of people in the world find themselves and which risks ending up in collective suicide.


History is a dialectic process rather than a linear one. On an economic and social level it is the fruit of two contradictions affecting modes of production. The first contradiction is that of the physical limits set by the natural environment and the second is that of the limits of human exploitation. It is out of the synergy of these two points that social struggles emerge to construct another system of production and collective organisation of humanity. The current transition can already be seen in the questioning of social forms of an economy which every day has to struggle harder to reproduce itself or in the emergence of social struggles with repercussions which go beyond their place or origin and also in new forms of organisation. It is a long transition period, but it has begun.

The inheritance left by the past in the area of social analysis, the definition of collective objectives and the power of struggle should definitely not be abandoned. A critical study of this inheritance provides a constant source of new lessons, lessons which, today, place the emphasis on long term transition, on the multiplicity of strategies and on democracy as a means and not only as an objective. This could well mean a second breath for socialism.