Neoliberalism and Democracy

The following article was published in the December 2020 issue of the International Review of Contemporary Law, the journal of the IADL.

by António José Avelãs Nunes

ABSTRACT: This essay seeks to frame the problem of globalisation by characterising it as a neoliberal policy and rejecting the thesis that it is an inevitable consequence of scientific and technological development.

It analyses the significance of the period from the Keynesian consensus to the so-called Washington Consensus, which “codifies” the dogmas that fueled the monetarist counter-revolution and informs neoliberal policies on a global scale.

The essay considers neoliberalism incompatible with democracy. It is rather the dictatorship of big financial capital, overlapped with productive capital that drives capitalism as a whole. It reserves to itself the enormous gains in productivity resulting from the scientific and technological development in the last decades. This was a time marked by the globalisation of the labor market, which has sharply tilted the balance of forces in favor of big financial capital.

It designates and characterises the capitalism of systemic crime, describes the new Leviathan that is being built, and explains the threat of the emergence of new forms of fascism, which are much more violent than the violent market fascism (Samuelson) which seeks to pass as friendly fascism (Bertram Gross).

As Eric Hobsbawm, stated “our world is at risk of explosion and implosion. It has to change (…), and the future cannot be a continuation of the past.”


  1. – We are told that we live in a globalised world and that there is no point in challenging the dictates of globalisation, because it is an inescapable phenomenon of our existence, a necessary and inevitable consequence of scientific and technological development. [1]

This is a dangerous ideological discourse which conceals reality because it refuses to analyze it critically.

The world has known other eras with similar conditions to those of today, wherein the mastery of scientific and technological knowledge enabled imperial powers.

The first wave of worldwide integration and globalisation is linked to the oceanic voyages carried out by the Portuguese and Spanish explorers, from the 15th century onward. They were made possible by the evolution of knowledge and techniques in the fields of shipbuilding, astronomy, cartography, the regimen of wind and tides, and the arts of war.

This first wave of worldwide integration and globalisation, which extended the boundaries of the transit of people, the commerce of goods and allowed the Iberian peoples to dominate the world (which they divided among themselves, in 1494, through the Treaty of Tordesillas), was marked by colonisation, the oppression of colonised peoples and the slave trade. It would be absurd to argue that the aforementioned developments were the inevitable consequence of the evolution of science and technology that gave “new worlds to the world” and demonstrated that the Earth is round.

A second wave of globalisation occurred in the last quarter of the 19th century, as a result of the second industrial revolution. It was characterised by a series of scientific and technological inventions that made the world smaller. They enhanced energy sources, particularly in transportation and communications.

This second wave of globalisation led to the resurgence of colonialism, the race for colonies and the systematic exploitation of colonised territories which were subordinated to the economic and political interests of the metropolises. As dominated economies, they were integrated into the networks of the unified world market. They were subjected to the logic of capital accumulation on a world scale, which definitively consolidated capitalism as a world system and opened the path to the New Imperialism.

The race to the colonies was embodied in the notable Berlin Conference (1884/1885), which began the process of dividing the colonised territories among the great capitalist powers. That development constitutes one of the most significant events in contemporary history. First, it generated conflicts between the capitalist powers; ultimately, the two major world conflicts of the 20th century originated from inter-imperialist conflicts in the struggle for “living space.” Second, it created the situation of dependency and “underdevelopment,” which condemned the dominated territories, even though they became formally independent on the political level.

This second wave of globalisation confirmed the original brand of capitalism as a “civilization of inequalities”: it was this that led to the disparity between the so-called developed countries and the so-called underdeveloped countries. No informed person, however, would argue that the race for the colonies, the emergence of imperialism and the development of inter-imperialist conflicts were the automatic, inescapable consequence of scientific and technological development.


  1. – The colonised peoples were the victims of these two waves of globalisation and worldwide integration. They suffered from hindered development, as a result of the ascendance of the capitalist powers and their “society of abundance.” The third wave of globalisation (beginning in the mid-1970s) continued the exploitation of the so-called “underdeveloped countries,” reducing other countries, worldwide, to the status of colonies.

Thus, to paraphrase Amartya Sen, globalisation is a world in which “the sun never sets on the Coca-Cola empire.” But it is worth digging a little deeper to understand this phenomenon.

Globalisation is a complex phenomenon, which presents itself in multiple aspects. They include a philosophical, ideological and cultural order. But it is in the field of economics in which we find the key to understanding the strategic characteristic of this phenomenon. Its ultimate goal is to create a system of globalized trade, free from physical or legal barriers, in which all types of goods circulate freely. These include raw materials, semi-products and finished agricultural and industrial goods and services, as well as “financial products,” capital and technology. But this freedom no longer applies to workers. Indeed, the great imperial powers attempt to barricade themselves in their armed fortresses, in order to avoid a new “invasion of the barbarians.”

An essential characteristic of neoliberal globalisation is the hegemony of financial capital over productive capital. The process of financial globalisation assumes, in this context, fundamental importance. Generally, it results in the creation of a single capital market on a worldwide scale, within which the principle of the free movement of capital governs. It allows large transnational conglomerates to invest their capital and borrow money anywhere in the world, at any time of the day or night.

  1. – The dominant discourse seeks to convey the idea that globalisation is a spontaneous and inevitable process, an automatic consequence of scientific and technological development, namely, the transformations in transport systems and information and communication technologies. These allow control from the “centre” – a productive structure spread over several regions of the world. Information can be obtained and actions taken in real-time, anywhere on the planet, from any point on the planet.

Neoliberal globalisation is truly a policy of globalisation. in the service of a political project. It is conceived and carried out consciously and systematically by all who wield political power. And it is supported, as never before in history, by the powerful arsenal of the devices that produce and spread the dominant ideology: the totalitarianism of single thought based on the dogmas of neoliberalism.

The scientific and technological revolution cannot be confused with globalisation, nor can globalisation be seen as the inevitable result of that revolution. In the early days of the industrial revolution, workers saw machines as their “enemy” and so they destroyed and sabotaged them. They soon realised, however, that their class enemy was not the machine, but rather another social class. It is clear today that the source of our ills is not the progress of science and technological innovation. In fact, the development of science and technology is the vehicle of human liberation.

The critique of neoliberal globalisation cannot, therefore, be confused with the defense of a return to a “lost paradise” that denies science and progress. The problem with contemporary globalisation is not, therefore, the scientific development that facilitates some of the instruments of “neoliberal globalising politics.” Rather, it is the neoliberalism that fuels it, the structure of the powers upon which it rests and the interests it serves. Those are increasingly the interests of the small elite who control the financial-speculator capital.

As neoliberal globalisation is a political project, its opponents, committed to avoiding a new era of barbarism, must establish an alternative political project. It must be based on trust in humanity and its abilities, inspired by humanistic values and committed to objectives that “the markets” neither recognise nor are able to pursue. This is a project that rejects the imposition of a deterministic and inevitable logic, with no possible alternative, to the policies of neoliberal globalisation.

  1. – From 1967 forward, there has been a series of crises in capitalist economies. The first sign of the structural crisis of capitalism was the unilateral rupture of the Bretton Woods Agreement by the USA (1971), which ended the conversion of the dollar into gold, delivering the market to speculators and controlling the exchange rates.

The so-called oil crises followed (1973-1975 and 1978-1980). They ended the fallacy of capitalism without crises that some deemed to be a “conquest” of the Keynesian Revolution. With the emergence of stagflation, they exposed the limits of the Keynesian State and Keynesian policies, paving the way for the triumph of the monetarist counter-revolution. This began the kingdom of the market-god and capitalism assumed its undisguised nature as a civilization of inequalities.

In the wake of F.A. Hayek, it is proclaimed that “civilization is the result of spontaneous growth and not of a will” and that only the “spontaneous order” embodied in the market can ensure a free society. It identifies public policies as the road to serfdom, especially those that aim to correct injustices. According to Milton Friedman, “men of good intentions and goodwill who wish to reform society (…) and achieve major social transformations” are condemned as internal enemies. This phenomenon is based on the expansion of the state’s sphere of responsibility and the broadening of its scope.

The fight against the internal enemy has always been the driving force and the “legitimising” reason for totalitarianism. Neoliberal ideology doesn’t mean just a radical opposition to the underlying philosophy and concrete practice of economic and social democracy that has achieved the stature of constitutionality in a significant number of countries. It also includes projects of a totalitarian nature that cannot be detached from certain currents of political philosophy. They decry the “excessive burden of government,” that is, the welfare state of Keynesian economics. They accuse it of having led to the “ungovernability of democracies” and the “excess of democracy” which has provoked a “crisis of democracy.” It has fueled the war against the “oppressive monopolies of work” (Gottfried Haberler) by those who proclaim that “unions are becoming incompatible with the free economy market.”

Neoliberal ideology has elevated freedom of choice (one of Milton Friedman’s “glories”) to the category of the mother of all freedoms, a sine qua non of human dignity. But Friedman adds that anyone who is against freedom of choice is against true democracy (F. A. Fonseca). Recall that in defense of the veritable truth, the Holy Inquisition was created, which forced Galileo to deny his truth. In addition, the Inquisition bonfires were constructed, in which Giordano Bruno was burned to death because he refused to capitulate to what Galileo eventually accepted.

  1. – Regarding the monetarist counter-revolution, some speak of the substitution of politics by the market or even of the death of politics. This is a correct judgment. It would also be accurate to say that it is another way of conducting politics because, as the state, the market is a political institution.

In fact, far from being “a given invariant of human nature” the market is a recent “invention.” It only emerged under certain historical conditions, when companies replaced families as units of production par excellence. It appeared when the means of production ceased to operate for the satisfaction of the needs of people (of families), and instead led to a monetary, homogeneous, quantifiable and measurable gain, that is, profits for the capitalist class.

The market, like the state, is therefore a social construct. It is a historical creation of humanity, which emerged in certain economic, social, political and ideological circumstances. It coincided with the advent of capitalism as an autonomous mode of production. Since the early days of capitalism, the market has functioned as a political institution designed to regulate and maintain certain structures of power that guarantee the prevalence of the interests of certain social groups over the interests of other social groups, resulting in a civilization of inequalities.

In a seminal book on this subject, Professor Natalino Irti (FD/Univ. Rome) demonstrates that the market is “the ‘visible hand’ of the law” and “an artificial organism, built by a political decision of the state.” He argues that “market, politics and law are not isolable [entities].” And FD/USP Professor Eros Grau points out that market regulation is, since the early days of capitalism, the essential function of bourgeois law acting as an instrument of “domination of civil society by the market.” He concludes that the regulation of the market by the state (by positive law) turns the market into “a sign that connotes a political project, a principle of social organisation.” That is to say, “market and state do not only coexist, but they are also interdependent, building and reforming themselves in the process of their interaction.” They are both institutions of social power and political power.

Thus, the defense of the market, as opposed to the active presence of the state in the economy and the subordination of economic and financial power to democratic political power, does not represent just a technical point of view regarding a technical problem.

The defense of the market means the defense of the liberal conception of the state. It is understood as a phenomenon separate from the economy and civil society. It considers the non-intervention of the state in the economy to be a corollary of the alleged nature of the state as purely political.

And it also means defending a model of society in the style of Hayek, who thinks the expression social justice should be abolished from the language of economists. This is justified by the claim that it is not “an innocent expression of goodwill towards the less fortunate, (…) having become a dishonest suggestion that one must agree with the requirements of some specific interests that do not offer any authentic reason for them.”

This conception devalues the lesson of the physiocrats, John Locke and Adam Smith, and deliberately ignores the “understanding” of the class nature of the state (in Marxist terms). It reveals itself incapable of comprehending that the so-called non-intervention of the state in the economy is just. – There are different types of “intervention.” One of the ways the capitalist state intervenes in the economy is to fulfil its essential mission of guaranteeing the general conditions indispensable for the operation of the capitalist mode of production and for the maintenance of the social structures that make it viable.

In that vein, the defense of the market conveys a conception of the social order that is considered desirable and enshrines an attitude of defense of the social order that entrusts everything to the market. Thus the critique of the market and its supposed natural character (by Keynesians, radicals or Marxists) means the recognition of the need to introduce changes in the established social order. This is designed to perpetuate capitalism or even replace the capitalist economic-social order (in which the market is one essential pillar) with another social order that surpasses capitalism.

  1. – One of the fundamental precepts of neoliberal ideology is the attempt to reduce the state to a kind of minimum state, with the aim of hiding the fundamental role of the capitalist statein the definition and execution of the policies of neoliberal globalisation.

Economic liberalism worked given the historical conditions of the 18th and 19th centuries, which are considerably different from the current conditions. The liberal “solution” of imposing on workers the burden of “paying for the crisis’ (mass unemployment and low and decreasing wages, until it would pay to hire more workers) only functioned because capitalism was then, without disguise, “a system in that those who could not work could not eat either” (Samuelson/Nordhaus). And those who had nothing to eat died, as it was “natural” and “fair,” according to the natural laws of the market…

But the world has changed. The scientific and technological revolution, as well as the capitalist concentration, have transformed capitalist structures and brought enormous gains in productivity. Workers reinforced their class consciousness and gained strength in unions and at the political level. Universal suffrage prevented governments from continuing to ignore with impunity the sacrifices (and the sacrificed) occasioned by the cyclical crises of the capitalist economy, regardless of their duration and intensity.

As workers gained the right to universal suffrage and most civil and political rights, the laissez-faire attitude of the privileged culminated in the Great Depression of 1929-1933. Capitalism itself was in danger of imminent collapse.

In the 1950s, Raúl Prebisch (the Argentine who was the first president of ECLAC) understood that, in the context of Latin America, liberalism (structural adjustment imposed by the IMF on countries in financial difficulty – the famous Dr. Jacobson’s pills) could only be put into practice manu militari, by force of arms.

Now, when the almost exclusive protagonists are the large transnational conglomerates, it makes no sense to interpret globalisation as a return to the times of “competitive capitalism,” now projected on a world scale. And it is also evident that the neoliberalism of today cannot be confused with the return to laisser-faire and free markets, which are said to dispense with the “intervention” of the state in the economy. István Mészáros (The 21st Century, cit., 33) is correct when he argues that the national state remains “the comprehensive command structure of the established order” and “the ultimate arbiter of comprehensive socio-economic and political decision-making, as well as the real guarantor of the risks assumed by all transnational economic enterprises.”

From another perspective, the national state remains the matrix of freedom and citizenship and continues to provide the only space in which workers can, within the framework of the democratic rule of law, organize and struggle in defense of their rights and the transformation of the world.

One of these days the national state may announce that the news of its death has been somewhat exaggerated…

  1. – It is unmistakable that the neoliberal political project of today is not a libertarian project, which dispenses with the state. In the class societies in which we live, capitalism presupposes the existence of the capitalist state. But neoliberalism, as an ideology, aims to reverse the correlation of forces between capital and labor in favor of big financial capital. It requires a strong class state, capable of pursuing ambitious goals.

Neoliberalism is not a foreign element to capitalism. Neoliberalism is the rediscovery of capitalism itself. It is the unmasking capitalist state.

Neoliberalism is pure, unadulturated capitalism, operating as if it will last forever. It does not think it must bear the “price” of social commitments (the welfare state). And it allows all liberties to capital, even those that kill the freedoms of the workers who live by the fruits of their labor.

Neoliberalism is the dictatorship of the bourgeoisie, without concessions. More specifically, it is the dictatorship of big financial capital.

This dictatorship has imposed the violence of neoliberal policies which have fallen onto workers. It aims to transfer productivity gains to capital, in an attempt to counter the downward trend in the average rate of profit. This violence has included: (1) the imposition of tax systems that enrich the rich (the holders of income from capital) at the expense of the poor (the holders of income from work); (2) the deregulation of industrial relations; (3) the “war” against unions; (4) the “confiscation” of workers’ economic, social and cultural rights (which many constitutions enshrine as fundamental workers’ rights); (5) the evisceration of collective bargaining (which proved to be, as the ILO has shown, an instrument of income redistribution in favor of workers, more effective than Keynesian-inspired redistribution policies); and (6) the dismantling of the welfare state.

  1. – The neoliberal globalisation policy has taken a giant step with the acceleration of the so-called financial innovation process, namely the development of markets for derivative financial products. These are virtual products whose free creation was authorised by the legislation that deregulated the financial system, multiplying fictitious capital and fueling speculation. This facilitated the appropriation, by financial capital, of a significant part of the wealth created by the real economy and shaped casino capitalism as capitalism of systemic crime.

It is estimated that futures markets mobilize financial resources equivalent to eight times the annual world GDP, controlling the markets for commodities such as food (corn, wheat, rice and soybeans), minerals, oil and other energy sources, manipulating the respective prices at their discretion. The power this represents is what gives meaning to the truism that such “products” are true “weapons of mass destruction” (Warren Buffet).

But these weapons did not appear spontaneously. They were invented and produced, consciously and systematically, by the financial system, with the backing of the capitalist state and with the support of all the violence it is capable of marshalling. The “revolution” in telecommunications and information technology made life easier for big financial speculative capital which can play 24 hours a day in a worldwide “casino.” But it is incorrect to assert that casino capitalism and  neoliberal globalisation are the  inevitable consequences of scientific and technological development.

It was a strong state that created the conditions which led to the refusal to honor the commitments of the times of the Keynesian social state, destroying the pillars of the Keynesian Consensus and replaced by the so-called Washington Consensus. It was the institutions of political power (national states and international organisations dominated by financial capital and their states) that built, brick by brick, the empire of neoliberal capitalism. Inspired by the dogmas “codified” in the Washington Consensus, they included: (1) total freedom of trade (without customs barriers or other obstacles to the free movement of goods and services); (2) absolute freedom of movement of capital on a global scale (the “mother” of all freedoms of capital); (3) deregulation of all markets (especially financial markets) to benefit “organised money” led by professional and institutional speculators; (4) freedom to create derivative financial products; (5) imposition of the dogma of central bank independence, which has translated into a kind of  “privatisation” of national states, wholly dependent on “markets” (such as families or businesses) for their own financing (of public policies); and (6) privatisation of the public business sector, including public services (even water!) and strategic companies that support national sovereignty.

Ultimately, national states are the drivers of neoliberal globalisation. They are parties to the World Trade Organization’s free-tradism. (which has always been the ideology and policy of dominant powers and interests) and they are responsible for the policies of neoliberal globalisation, which paved the way for the capitalism of systemic crime.

  1. – The emergence of a real world labor force market is perhaps “the main social consequence of globalization.” We are undoubtedly facing a new element in the characterisation of global capitalism, which did not exist in 1916, when Lenin published the seminal treatise on Imperialism. And it is an element that has acted contrary to the interests and rights of workers.

The enormous increase in the reserve army of labor for the benefit of large corporations in powerful countries worldwide has facilitated the implementation of the neoliberal program inscribed in the Washington Consensus.

“Imagine, for a moment,” writes Joseph Stiglitz (The Price… 127), “how the world would be like if there was free mobility of the labor force, but no mobility of capital.” He answered, “Countries would compete to attract workers. They would promise good schools and a good environment, as well as high taxes on capital.”

But the globalised world in which we live does not present itself in this way. It is governed instead by the principle of absolute freedom of movement of capital, in a single capital market on a universal scale. In these conditions, “globalisation, as it has been defended, often seems to replace the old dictatorships of national elites with new dictatorships of international finance.” This is because, stresses Stiglitz (El Malestar…, 308-313), the “asymmetric globalisation” resulting from neoliberal policies serves the interests of large corporations that derive their incomes from “the political machine,”.. They get states “to define the rules of globalisation in order to increase their bargaining power with workers.”

These are the rules in force in the so-called Western democracies, driven by big financial capital. The elections themselves are transformed into an “electoral business,” replacing the democratic principle of “one person, one vote” with the plutocratic principle of “one dollar, one vote.”  As Joseph Stiglitz, maintains, it is politics that “determines the rules of the economic game” because “markets are shaped by politics” and “the rules of the political game are shaped by the top 1%.”

Societies like these cannot be considered democracies. Indeed, as Paul Krugman noted at the end of 2011, “the extreme concentration of income is incompatible with real democracy.”  It is characterised by the “asymmetry between power and legitimacy. Great power and little legitimacy on the side of capital and states, small power and high legitimacy on the side of those who protest,” according to Ulrich Beck (ob. cit., 20/21 and 110). There is no democracy when the holders of political power lack democratic legitimacy (“capital and states”) and when the people lack power. Democracy is nothing but the power of the people.

These are, as Federico Mayor Zaragoza observes, the consequences of neoliberal policies pursued by all those who, at a certain historical moment, agree to carry out a real “market coup” by agreeing “to replace democratic principles with the laws of the market.” (, Dec / 2012)

  1. – Important theoretical studies confirm that neoliberal globalisation requires a strong state. Based on the experience of Thatcherism, Andrew Gamble concluded, in a book published in 1994, that “the New Right believes that to save the free society and the free economy it is necessary to restore the authority of the state. (…) The key doctrine of the New Right and the political project it inspired is the free economy and the strong state,” capable of “restoring authority at all levels of society” and fighting both external enemies and internal enemies.

In a more recent book, Wolfgang Streeck recalls “it has already been demonstrated several times that neoliberalism needs a strong state that is able to curb social and, in particular, union demands to interfere in the free play of market forces.”

The German sociologist critically analyses the ongoing process of emptying democracy, which he characterises as “an immunisation of the market to democratic corrections.” Streeck begins by stressing that this process can be carried out “through the abolition of democracy according to the Chilean model of the 1970s” [an option that he believes is not currently available], or “through a neoliberal re-education of citizens” [promoted by what he designates as “capitalist public relations”].

He then details the paths being taken to achieve “the elimination of the tension between capitalism and democracy, as well as the consecration of a lasting primacy of the market over politics.” They include “reforms of the political-economic institutions, through the transition to an economic policy based on a set of rules, for independent central banks and for a fiscal policy immune to electoral results; through the transfer of political-economic decisions to regulatory authorities and groups of ‘experts’, as well as curbs on indebtedness enshrined in the constitutions, to which states and their policies must be legally bound for decades, if not forever.”

The realisation of the lasting primacy of the market over politics has other requirements as well. The states of advanced capitalism must be restructured in such a way as to permanently instill confidence in the owners and managers of capital, ensuring, in a credible manner, through institutionally established political programs, that they will not intervene in the “economy.” If they do intervene, they will only do so to impose and defend market justice in the form of an adequate return on investment in capitals. For this, concludes the author, it is necessary to neutralize democracy, that is, the social democracy of democratic capitalism of the post-war period, as well as to carry forward and complete the liberalisation in the sense of Hayekian liberalisation, namely an immunisation of capitalism against interventions of mass democracy.

There is only conclusion to be drawn: “Neoliberalism is not compatible with a democratic state, if we understand democracy as a regime that intervenes, on behalf of its citizens and through public authorities, in the distribution of economic goods resulting from the functioning of the market.

  1. – In the European context, these reflections help us to understand what is at stake when the “dominant” voices speak of structural reforms, golden rules, central bank independence, state reform, healthy finances, the necessary reform of the welfare state, the irreplaceable role of independent regulatory agencies, the benefits of social consultation, the flexibility of the labor market and the need to “free” political action from the control of the Constitutional Court.

They reinforce the concerns of many writers who have warned that the structural treaties of the EU have set in motion a “political power that is no longer separated from economic power and, above all, from financial power” (Étienne Balibar). This is a political power that “corrodes any democratic credibility” of the European integration process (J. Habermas), transforming it into a “political and economic catastrophe” (W. Streeck).

With the “argument” that the peoples of the South are incapable of self-government, a new Leviathan is being built, to moderate those who live above their means, to govern the present and guarantee the future. This is a new Leviathan that reduces politics to the mere mechanical application of equal rules for all (ignoring that the EU is made up of countries with completely different situations and histories). These rules are, for this very reason, the negation of politics (and of freedom of decision that it presupposes, with corresponding responsibility), the denial of citizenship and the death of democracy. It is a new Leviathan that is, without pretense, the dictatorship of big financial capital, which has been cruelly impoverishing, humiliating and colonising the peoples of the South.

Ultimately, Streeck’s reflections compel the conclusion that these “soft” solutions (although muscular, even violent) will only be continued if “the Chilean model of the 1970s” is not available to big financial capital. If conditions permit (or compel, due to the impossibility of deepening the exploitation of workers through the aforementioned “reformist” methods of “postwar democratic capitalism”), the capitalist state can dress up and arm itself again as a fascist state. It will be maskless and carry far more serious dangers than those inherent in both market fascism (of which Paul Samuelson warned in 1980 at a conference in Mexico) and friendly fascism (the title of a book published in 1981 by Bertram Gross, who collaborated with the Franklin D. Roosevelt administration during the New Deal).

  1. – Since the mid-1970s, the system closed ranks in an attempt to offset the downward trend in the average rate of profit and prevent and overcome increasingly frequent and more difficult crises. Even when GDP begins to grow, high unemployment rates remain and the new jobs that are created offer lower wages than those that prevailed before the crisis. The structural factors that trigger crises (which translate into generalised decline in the purchasing power of the great majority of the population) made the presence of a class state increasingly stronger and more committed to financial capital, to “organised money.”

In 1994/1995, the crisis that caused the severe devaluation of the Mexican peso nearly sank the US financial system, and with it, the great casino of world capitalism. Serving rulers realised that they might be living the story of the sorcerer’s apprentice. Panicked, they proclaimed, through the voice of French President Jacques Chirac (October/1995), that speculators are “the AIDS of the world economy” and protested that “the world is in the hands of these guys,” as Michel Camdessus, then Managing Director of the IMF, wrote unceremoniously.

Despite the alarm of the creators at the behaviour of their own creations, nothing was done to end to this libertarian vertigo, not even under the pretext of saving the world economy from the kind of “AIDS” that is undermining its resistance.  And this was all done in the name of the freedoms of capital and in honor of the market god.

Even in light of the evident risk of a pandemic, the guardians of the free market continue to defend the same actors and spare no effort to safeguard their private sanctuaries. These include all kinds of off-shores, so-called tax havens or bank havens, which are also (and increasingly) primarily judicial havens (lawless spaces, without taxes, without police, without courts). They are mafia states or bandit states, whose business is to sell sovereignty. This is a business that mobilizes more than ¼ of the world’s GDP, to which the cream of financial capital on a global scale and the structures of political power at its service are committed. It is a business of laundering dirty money, through tax evasion and fraud. It profits from trafficking in arms, drugs, people and human organs. It reaps benefits from vast organised criminality, whose profits corrupt political leaders and parties. And it relies on international financial terrorism (which, under the pretext of  warfare, supports the arms and security policies that are enemies of freedom and the wars that constitute crimes against humanity).

In the context of the fight against global crime and global terrorism announced after the attacks on the twin towers of New York (11/09/2001), journalist Francisco Sarsfield Cabral wrote (Público, 06/10/2001), “It will be in the determination to end off-shores that we will have real proof of the political will to fight terrorism and its allies. There, more than by military actions, it will be seen whether the anti-terrorist campaign is really serious.”

But the “war on terrorism” was not serious, as Cabral himself acknowledged in 2008 (Público, 22.9.2008): “The fight against off-shores was defeated by the interests of those who profit from them.” And those who profit from them are organised criminals, especially the ones committing crimes developed and/or shielded by the international financial system. This is accomplished with the exercise of political power at various levels, protected by the “arsenals” that constitute the capitalist state apparatus, the “godfather” of the “godparents” of systemic crime and their “men” in finance and in politics.

  1. – No cogent argument can justify tax havens. But they are located in Europe itself (the City of London, Netherlands, Luxembourg, Switzerland, Monaco, Cyprus, Malta, as well as several territories of the Netherlands and the UK) and are present in other “civilised” locations, including Singapore, Hong Kong, the US State of Delaware, etc.

An investigation of the Wachovia bank (the fourth largest in the US), conducted after a complaint from one of its former employees, concluded that, in just four years, Wachovia brought US $376 billion into the United States and laundered it. The investigation revealed that a high percentage of money laundering from cocaine traffic passes through the “respectable” City of London.

In mid-July 2012, newspapers reported that HSBC (an English bank considered the third largest in the world) was accused in the US of laundering billions of dollars from Colombian and Mexican drug cartels and engaging in other illegal practices.

Also in the USA, the Swiss bank UBS and the German Deutsche Bank were found to be illegally manipulating the Libor and Euribor rates and deliberately selling toxic products. And the oldest of Swiss banks (Wegelin & Co) has been accused of helping US citizens hide more than $1.2 billion from the tax authorities.

These banks should be nationalised, without the right to any compensation. And those responsible for such practices should be prevented from returning to banking, taken to court and assessed a penalty commensurate with the seriousness of their crimes. But financial capital “laws” dictated another, more “realistic” solution. Those banks paid fines and the U.S. Department of Justice agreed not to prosecute them. The official justification was fear that prosecution could jeopardise the stability of some of the largest banks in the world and ultimately destabilise the global financial system. That is, according to the literature, the normal treatment in cases like these. This is the profile of systemic crime capitalism.

In 2012, two professors from the University of the Andes (Bogotá) investigated the circuits of cocaine trafficking and the participation of the big banks in this criminal business. They found that the cocaine producing countries are left with only 2.6% of the trafficking profits, with the remaining 97.4% going to large dealers and big banks in wealthy consumer countries (mainly the UK and the USA).

However, warn these researchers, the system “aims at the repression of the small distributor, never trying to reach the big dealers of drugs or the financial systems that support them” because “it is a real taboo to pursue the big banks.”

  1. – Many other recent accounts confirm the close link between political power and some of the most powerful banks in the world, and their commitment to practices that constitute true systemic crime. They have, at least since 2005, manipulated, for their own benefit, the financial markets, through the falsification of the Libor rate. That is the reference rate used to determine the interest rates of contracts for financial products that assess a value corresponding to approximately ten times the value of world GDP.

These huge banks provide false data to the regulatory authorities. They use privileged information regarding the variation of the reference rate to their own advantage. This true crime cartel fraudulently earned many millions of dollars virtually overnight by betting against the “financial products” they themselves sold to their clients.

In 2012, the European Commission went public with these allegations. One of the Commissioners spoke of “scandalous behaviour on the part of the banks” and one of the vice-presidents of the Commission did not hesitate to describe “criminal activities in the banking sector.” Despite this, the Commission merely announced the EU’s intention to adopt legislation that unequivocally prohibits this type of action and now considers it to be criminal activity subject to criminal sanctions. One naively wonders: why were not the “criminal activities” to which the vice-president of the European Commission referred already subject to criminal sanctions? This is a scandal on top of the scandal of those “criminal activities.”

In 2013, newspapers reported that the European Commission decided to impose fines on some of the banks guilty of manipulating and falsifying the Libor and Euribor reference rates. One of the Commissioners said he was “shocked by the collusion between banks that should be competing” and two others spoke of banksters in this “organised money” elite.

This is a shameless admission that contemporary capitalism is the capitalism of systemic crime. Big finance capital is based on criminal practices. And for those who believe in the virtues of the market, manipulation of the markets must be considered a serious crime, a crime against the market, a crime against capitalism. Those faithful to the market-god will certainly consider it a crime against their own divinity. But instead of punishing criminals who commit such crimes, the political elite make deals with them. They do not take the criminals to court, so as not to destabilise the global financial system, which thrives on systemic crime. And this practice will continue,, to the benefit of the capitalist state (and of all instances of political power in the service of capitalism) since the fines paid are a miniscule part of the profits that flow from criminal activities.

The unsuspecting The Economist (15/12/2012) is right that big banks are not only too big to fail, they are also too big to jai Prisons were not built for the elite, but rather for the miserable, for people of color, for immigrants, for those not adapted to “Western civilization.” They were not created for the lords of the world, the ‘godparents’ of systemic crime, the veritable “owners” of prisons. The capitalist state, its law and its courts exist to guarantee this phenomenon.

Roosevelt is often credited with saying that allowing financial capital (the “organised money”) to dominate politics is more dangerous than entrusting the government of the world to “organised crime.” Whoever the author of this theory, however, it confirms the current reality. Through the sacred freedom of movement of capital and the free creation of derivative financial products, organised money has been committing all kinds of crimes against humanity, crimes that affect the lives and dignity of millions of people.

This is the portrait of  systemic criminal capitalism. This is the unfettered dictatorship of big financial capital. It is an intolerable situation – the complicity between the state and “organised money” (organised crime).

  1. – In view of the crisis beginning in 2007-2008, many believed that another New Deal was imminent and the time had come to bury neoliberalism, already discredited on the theoretical level, once and for all. For some time, many politicians, economists and “commentators” tired of saying that neoliberalism was dead, that the world could not continue in the same vein as in recent decades, that “a global refoundation of capitalism” was necessary, and that “the ideology of the dictatorship of markets” died with the crisis (Sarkozy, O Globo, October 16 and 24, 2008).

That state of affairs, however, was short-lived. Big financial capital quickly imposed the naiive “argument” on shift officials that there was no alternative to capitalism and neoliberalism. Joshcka Fisher (former leader of The Greens and former Minister of Foreign Affairs of a German government led by the SPD), thus summarises the position of those who have given up the fight: “no one can do politics against the markets.” (Apud U. Beck, ob. cit., 58).

Capitalism, however, is not the end of history. Joseph Stiglitz (Diário Económico, 15/6/2009) correctly noted that “this substitute for capitalism, in which losses are socialised and profits are privatised, is doomed to failure.”

The policies that do not go against the markets, the neoliberal policies of regenerative and salvation austerity, imposed urbi et orbe by the centres that rule the world, are policies “without democratic legitimacy” that “sin against the dignity of the people.” This was acknowledged by Jean-Claude Juncker, president of the European Commission, who publicly stated (February 2015), “We have sinned against the dignity of the people”! But these policies, whether sinful or not, constitute legalized crime, unacceptable in a democracy, because no democracy can accept policies that violate the dignity of the people. How then can we classify crimes that threaten the dignity of the people? Are we not facing real crimes against humanity?

How can we admit that there is no alternative to the capitalism of systemic crime?

  1. – We live in a time of great contradictions and great despair. Life experience teaches us that humans are their own worst enemy. But the productivity advances from the scientific and technological revolution that has characterised the last 200 years give us reason to believe we can build a world of cooperation and solidarity, a world capable of satisfactorily meeting the basic needs of all  of its inhabitants. So this is also a time of hope.

Despite the “global dictatorship” that characterises this era of unilateral thinking, we must take advantage of the gaps opening in the fortress of globalised capitalism. “Those who protest against globalization,” The Economist noted in 2000, “are right when they say that the most pressing moral, political and economic issue of our time is third-world poverty. And they are right that the tide of globalisation, powerful as the engines driving it may be, can be turned back. The fact that both these things are true is what makes the protesters – and, crucially, the strand of popular opinion that sympathises with them – so terribly dangerous.”

In a moment of clarity, one of the beacons of neoliberalism admitted what we already knew: the engines of neoliberal globalisation can be stopped or even reversed. The inevitability of neoliberal globalisation is a myth; the thesis that there is no alternative is false.

Furthermore, in view of the contradictions inherent in neoliberal globalisation itself, many believe that globalisation, hailed by the defenders of the system as the solution to their problems, “triggers forces that highlight not only the uncontrollability of the system by any rational process, but also, and at the same time, its own inability to fulfil the control functions that are defined as its condition of existence and legitimacy.” (I. Mészáros, The Twenty-First Century, 105)

As Eric Hobsbawm (The Age of Extremes) wrote, “the future cannot be a continuation of the past, and there are signs, both externally and internally, that we have reached a point of historic crisis. (…) Our world is at risk of explosion and implosion. It has to change.”

Globalised capitalism has gained strength. Capitalism’s defensive strongholds are increasingly difficult to conquer. But this economic and social system only survives by the worsening exploitation of workers.  The capitalist system aims to circumvent the effects of the downward trend in the average rate of profit and provide big financial capital with the parasitic and criminal incomes on which it feeds. Its contradictions and weaknesses are subject to the effects so well exemplified by the old Portuguese maxim, the bigger the ship, the bigger the storm.

The discussion about the demise of the welfare state – exacerbated by the current crisis of fear – is perhaps a sign that, like the sorcerer’s apprentice, capitalism may die immolated by the fire it is setting. Or, as Karl Marx noted, capitalism contains within itself the seeds of its own destruction. Mark Blyth observes that the welfare state is “a form of asset insurance for the wealthy.” However, he says, “those with the most assets are skipping on the insurance payments.” Indeed, perhaps they are playing with fire.

This capitalism of systemic crime is unsustainable. The tasks of those who seek to meet the challenge of transforming the world are urgent. As citizens, we are all responsible. We must engage in both  theoretical work (which helps us understand reality in order to more effectively interact with it), and  ideological struggle (which helps us to fight established interests and ready-made ideas and is, today more than ever, an essential factor of both political and social struggles). Jurists and academics thus have a great responsibility.

The scientific and technological development propelled by the bourgeois revolutions provided a meteoric increase in the productive capacity and productivity of human labor, creating more favourable conditions for social progress. This development of the productive forces (with the individual as creator, depositary and user of knowledge) must lead to new social relations of production, a new way of organising collective life, so that we can achieve happiness for everyone.

But necessary changes do not happen simply by believing a better world is possible; voluntarism and good intentions have never been the “engine of history.” Real change will take place as a result of the laws of development of human societies. Social movements can, however, accelerate the trajectory of history, even making their own history, if they are committed to the struggle for real social change. They must dream that it is possible. And if the dream rules life (as the poem by António Gedeão sung by Manuel Freire says), utopia helps to pave the way (as Eduardo Galeano teaches). Dreaming is necessary. Even in difficult times, especially in difficult times, as the Brazilian poet, composer and singer Chico Buarque told us. Even living under dictatorship, he dreamed and sang his “impossible dream” because he believed in it: “To fight, when it is easy to give in / (…) Deny, when the rule is to sell / (…) And the world will see a flower / sprout from the impossible ground.”

António José Avelãs Nunes: Jubilated Full Professor at the University of Coimbra Faculty of Law (FDUC), Portugal (Director, 1996-2000); Director of the Boletim de Ciências Económicas (Economic Sciences Bulletin) (1995-2012). Vice-Rector of the University of Coimbra (2003-2009).

Doctor Honoris Causa from the Federal Universities of Paraná, Alagoas and Paraíba, Brazil.

Sigillo D’ Oro from Università Degli Studi di Foggia, Italy.

Doctor Honoris Causa from the Universidad de Valladolid, Spain.

Correspondent Member of Academia Brasileira de Letras Jurídicas (Brazilian Academy of Legal Writings).

Vice-President of the Instituto de Direito Comparado Luso-Brasileiro (Portuguese-Brazilian Institute of Comparative Law), Rio de Janeiro, Brazil.

Member of the first five governments subsequent to the Carnation Revolution in 1974.

Author of several books, published both in Portugal and abroad (Mexico, Brazil and Spain). Member of the Scientific Council of several Brazilian and Portuguese magazines. Vast collaboration and contributions in several magazines in Portugal, Angola, Brazil and Spain.


Avelãs Nunes, António José – A Crise do Capitalismo Capitalismo, Neoliberalismo, Globalização (The Crisis of Capitalism – Capitalism, Neoliberalism, Globalisation) Lisbon, Editora Página a Página, 6th edition, 2013;

O estado capitalista e as suas máscaras (The capitalist state and its masks), Lisbon, Edições Avante, 3rd edition, 2013;

Os trabalhadores e a crise do capitalismo (Workers and the crisis of capitalism), Lisbon, Página a Página, 2015;

QUO VADIS, EUROPA?, São Paulo, Editora Contracorrente, 2016;

O keynesianismo e a contra-revolução monetarista (Keynesianism and the monetarist counter-revolution), reprinting of the 1st edition (1991), Lisbon, Página a Página, 2016 (with Author’s Preface).

O neoliberalismo não é compatível com a democracia, (Neoliberalism is not compatible with democracy), Rio de Janeiro, Editora Lumen Juris and Faculdade Guanambi Editora, 2016.

Balibar, Étienne – “Um novo impulso, mas para que Europa?” (“A new impulse – but for which Europe?”), in Le Monde Diplomatique (PT edition), March 2014.

Beck, Ulrich – A Europa Alemã – De Maquiavel a “Merkievel”: Estratégias de Poder na Crise do Euro (From Machiavelli to Merkievel”: Power Strategies in the Euro Crisis), pt translation, Lisbon, Edições 70, 2013.

Blyth, Mark, Austeridade – A História de uma Ideia Perigosa (Austerity – The History of a Dangerous Idea), pt translation, Lisbon, Quetzal, 2013.

Fonseca, Fernando Adão da – “Estado Garantia: o Estado Social do Século XXI” (“Guarantee State: the Welfare State of the 21st Century”), in Nova Cidadania, No 31, Jan-March 2007, 24-29.

Friedman, Milton and Rose – Free to choose, pt translation (Liberdade para Escolher), Europa-America, Lisbon, (1st American ed., 1979).

Gamble, Andrew, The Free Economy and The Strong State – The Politics of Thatcherism (2nd edition), London, Macmillan, 1994.

Haberler, Gottfried – “Inflación y Desarrollo Económico” (“Inflation and Economic Development”), in Revista de Economia y Estadistica, 1958, No. 3, 81-83;

– “Politica de salarios, empleo y estabilidad monetaria(“Policy on salaries, unemployment and monetary stability”), in Información Comercial Española, August-September 1969, 165-173.

Habermas, Jürgen – Um Ensaio sobre a Constituição da Europa (On Europe’s Constitution – An Essay), Lisbon, Edições 70, 2012.

Hayek, Friedrich A. – Studies in Philosophy, Politics and Economics (lst ed., 1967), Routledge and Kegan Paul, London, 1978.

Hobsbawm, Eric – A Era dos Extremos. Breve História do Século XX: 1914-1991 (The Age of Extremes – Brief History of the 20th Century: 1914-1991), Lisbon, Editorial Presença, 1998.

Irti, Natalino – L’Ordine Giuridico del Mercato, Bari, Laterza, 1998.

Krugman, Paul – “When austerity fails”, The New York Times, 25.5.2011 (published in Portugal by Jornal i);

Acabem com esta Crise já!, Lisbon, Editorial Presença, 2012.

Mészàros, István – O Século XXI – Civilização ou Barbárie? (Socialism Or Barbarism: Alternative To Capital’s Social Order: From The American Century To The Crossroads), Brazilian Portuguese translation, Boitempo Editorial, São Paulo, 2006.

Samuelson, Paul and Nordhaus, William – Economia, 12th and 14th editions, McGraw – Hill, Lisbon, 1988 and 1993.

SEN, Amartya – Desenvolvimento como liberdade (Development as freedom), Brazilian Portuguese translation, Companhia das Letras, São Paulo, 2000.

Stiglitz, Joseph E. – Globalization and its Discontents (2002), Spanish translation, El Malestar en la Globalización, Madrid, Santillana Ediciones Generales, 2002;

O Preço da Desigualdade (The Price of Inequality), Portuguese translation, Lisbon, Bertrand, 2013.

Streeck, Wolfgang – Tempo Comprado – A Crise Adiada do Capitalismo Democrático (Buying Time: The Delayed Crisis of Democratic Capitalism), Portuguese translation, Lisbon, Conjuntura Actual Editora, 2013.

[1] This text served as a support to the Closing Conference of the International Conference on the 50th Anniversary of the UN Covenants on Human Rights, organised by the International Association of Democratic Lawyers and the Portuguese Association of Democratic Jurists, which took place at the Faculty of Law of the University of Lisbon, between 10 and 12 November 2016.

I offer it, with friendship and consideration, to my friend José Pinheiro Lopes de Almeida.

All articles published in the International Review of Contemporary Law reflect only the position of their author and not the position of the journal, nor of the International Association of Democratic Lawyers.


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