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Skepticism and Pseudoscience > Who Rules America > Neoliberal Brainwashing
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Even though I agreed with him, I warned that whenever someone tried to raise the issue, he or she was accused of fomenting class
warfare. “There’s class warfare, all right, "Mr. Buffett said, “but it’s my class, the rich class, that’s making war,
and we’re winning."
Make no mistake, the neo-Liberal fuckers are just as bad as the Stalinists May '68 and its Afterlives [Review] Neoliberal ideology acted as a smokescreen that enabled the financially powerful to rewrite the rules and place themselves beyond the law. |
See also Neoliberalism: a primer
Neoliberalism as an ideology was discredited in 2008. Yet the philosophy of the free market and the strong state has an uncanny capacity to survive, and even thrive, ,uch like secular religion. Understanding neoliberalism’s longevity and its latest permutation requires a more detailed understanding of its origins and development. Looks like neolineral will surove event the current COVID-19 pandemic. Neoliberalism has re-shaped our personal, social, and political lives for more than 40 years and continues to do so.
This page organizes the best articles known to the author on and about neoliberalism. Like Marxism befor it, neoliberal mangles the langiuage, It redefince several common word such as "freedom" *and in very insidious way) and stresses several previously known concepts creating Neoliberal NewSpeak:
That Greece needs to adjust there is no doubt. The question, however, is not how much adjustment Greece needs to make. It is, rather, what kind of adjustment. If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax rate increases, it is clear we have done more of that than any other country in peacetime. (Varoufakis 2015)
It also constructs a elaborate set of myths, like any organized religion. And much like Troskism it relies ont he power of the state Economic Transitions to Neoliberalism in Middle-Income Countries - Policy Dilemmas, Crises, Mass Resistance:
Neoliberalism is based on the systematic use of state power to impose, under the veil of ‘non-intervention’, a hegemonic project of recomposition of capitalist rule in most areas of social life. The tensions and displacements embedded within global neoliberalism are nowhere more evident than in the middle-income countries. At the domestic level, the neoliberal transitions have transformed significantly the material basis of social reproduction in these countries. These transformations include, but they are not limited to, shifts in economic and social policy. They also encompass the structure of property, the modality of insertion of the country into the international economy, and the domestic forms of exploitation and social domination. The political counterpart of these processes is the limitation of the domestic political sphere through the insulation of ‘markets’ and investors from social accountability and the imposition of a stronger imperative of labour control, allegedly in order to secure international competitiveness.
Among the authors who tried to analyze neoliberalism as a social system Guardian columnist George Monbiot really stands out. If you have time to read only one article on this topic I would recommend his 2016 article
It is article like this that make it clear why Mr Monbiot is almost a legend amongst the long time Guardian readers. It is irrelevant if one agrees with him or not: This is real journalism of high caliber.
"... The book was The Constitution of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone. ..."
"... But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap. ..."
"... He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands. ..."
"... The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality. ..."
"... So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot for externalities that overwhelm the logic of an unfettered so-called free market. ..."
"... J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know) write a volume on his belief in progressive taxation. ..."
"... The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another large assist from Nixon and the Powell Memo. ..."
"... What's changed is the distribution of the gains in GDP growth -- that is in no small part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted the economy towards financial services, which has the tendency of increasing inequality. ..."
"... Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. ..."
"... "Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several functions and it actually had the effect of increasing spending. ..."
"... When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market. ..."
"... As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism, no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education, vaccines, antibiotics, and massive availability of energy has nothing to do with those things. ..."
"... I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really afford to service the loans. ..."
The most recent brilliant introduction to neoliberalism belongs to Ganesh Sitaraman who is one of the first researchers who understood that neoliberalism is actually ideology of colonialism applied to the people within the given nations ("internal colonialism"). It is a draped in elements of Trotskyism which makes it far more difficult to decipher. He also predicted Floydgate riots as the inevitable result of neoliberal emphasis on identity politics as the major tool of splitting the population into warring tribal groups, the typical colonial tactic of divide and conquer. In his article The Collapse of Neoliberalism he stated
"... In study after study, political scientists have shown that the U.S. government is highly responsive to the policy preferences of the wealthiest people, corporations, and trade associations -- and that it is largely unresponsive to the views of ordinary people. The wealthiest people, corporations, and their interest groups participate more in politics, spend more on politics, and lobby governments more. Leading political scientists have declared that the U.S. is no longer best characterized as a democracy or a republic but as an oligarchy -- a government of the rich, by the rich, and for the rich. ..."
"... Neoliberalism's war on "society," by pushing toward the privatization and marketization of everything, indirectly facilitates a retreat into tribalism. ..."
"... neoliberalism's radical individualism has increasingly raised two interlocking problems. First, when taken to an extreme, social fracturing into identity groups can be used to divide people and prevent the creation of a shared civic identity. ..."
"... Demagogues rely on this fracturing to inflame racial, nationalist, and religious antagonism, which only further fuels the divisions within society. ..."
"... neoliberals on right and left sometimes use identity as a shield to protect neoliberal policies. As one commentator has argued, "Without the bedrock of class politics, identity politics has become an agenda of inclusionary neoliberalism in which individuals can be accommodated but addressing structural inequalities cannot." What this means is that some neoliberals hold high the banner of inclusiveness on gender and race and thus claim to be progressive reformers, but they then turn a blind eye to systemic changes in politics and the economy. ..."
"... They thought globalization was inevitable and that ever-expanding trade liberalization was desirable even if the political system never corrected for trade's winners and losers. They were wrong. These aren't minor mistakes. ..."
"... In spite of these failures, most policymakers did not have a new ideology or different worldview through which to comprehend the problems of this time. So, by and large, the collective response was not to abandon neoliberalism. After the Great Crash of 2008, neoliberals chafed at attempts to push forward aggressive Keynesian spending programs to spark demand. President Barack Obama's advisers shrank the size of the post-crash stimulus package for fear it would seem too large to the neoliberal consensus of the era -- and on top of that, they compromised on its content. ..."
"... Although neoliberalism had little to offer, in the absence of a new ideological framework, it hung over the Obama presidency -- but now in a new form. Many on the center-left adopted what we might call the "technocratic ideology," a rebranded version of the policy minimalism of the 1990s that replaced minimalism's tactical and pragmatic foundations with scientific ones. The term itself is somewhat oxymoronic, as technocrats seem like the opposite of ideologues. ..."
"... The technocratic ideology preserves the status quo with a variety of tactics. We might call the first the "complexity canard." ..."
"... The most frequent uses of this tactic are in sectors that economists have come to dominate -- international trade, antitrust, and financial regulation, for example. The result of this mind-set is that bold, structural reforms are pushed aside and highly technical changes adopted instead. Financial regulation provides a particularly good case, given the 2008 crash and the Great Recession. When it came time to establish a new regulatory regime for the financial sector, there wasn't a massive restructuring, despite the biggest crash in 70 years. ..."
"... Instead, for the most part, the Dodd-Frank Act was classically technocratic. It kept the sector basically the same, with a few tweaks here and there. There was no attempt to restructure the financial sector completely. ..."
"... The Volcker Rule, for example, sought to ban banks from proprietary trading. But instead of doing that through a simple, clean breakup rule (like the one enacted under the old Glass-Steagall regime), the Volcker Rule was subject to a multitude of exceptions and carve-outs -- measures that federal regulators were then required to explain and implement with hundreds of pages of technical regulations ..."
"... Dodd-Frank also illustrates a second tenet of the technocratic ideology: The failures of technocracy can be solved by more technocracy. ..."
Professor Wendy Brown analyzed neoliberal from the angle of "neoliberal rationality. " -- a set of implicit beliefs (worldvioew) about the society. The best of articles on the topic (written before she wrote her first book on the subject: Undoing the Demos Neoliberalism's Stealth Revolution ) Brown provided a powerful argumentation that neoliberalism create closed cult-style system -- the secular religion which creates its own worldview -- "neoliberal rationality" escape from which like from high demand cult is very difficult.
Papal Laudato si is a powerful condemnation of Neoliberalism from the Catholic Church top cleric.
Another important contributor who contributed to our understanding of neoliberalism as the system based on lies and deception as well as Clinton sellout of Democratic Party to the Wall Street, which eventually led to backlash and the election of Trump in 2016 is Chris Hedges. Especially his article The Bankruptcy of the American Left
The issue of lies and deception was also addressed by Philip Mirowski. see Neoliberal v Neoclassical economics - what's the difference - Renegade Inc
Neoliberalism is associated with laissez-faire economic liberalism and was pioneered by economist Milton Friedman & Friedrich Hayeck, but as the economic historian, Philip Mirowski points out, this is a deliberate deception to trick people into thinking it is concerned about market equilibrium.
Joseph Stiglitz wrote several intersting articles on neoliberal globalization and why it eventually failed, but they never stoke me as anything close to revelations of the level of Monbiot, or Sitaraman. Still he was one of the early critics of neoliberalism and made valuable contributions to the topic.
The role of financial oligarchy in staging neoliberal coup d'état (Neoliberalism is a form of Trotskyism -- "Trotskyism for the rich" and as such inherited/adapted large part of Trotskyite ideology and its methods) is also a very interesting and important topic. It waits iwts researches. I summarized some known points in Neoliberalism as Trotskyism for the rich
Financial oligarchy, which is the "ruling class" under neoliberalism in Marxist terms, enforces on the population the "totalitarism in velvet gloves" which is called "Inverted Totalitarism." It was brilliantly analyzed by late Sheldon Wolin (his first article on the topic was published in 2003, Sheldon Wolin. "Inverted Totalitarianism". The Nation magazine, May 19, 2003. The book Democracy Incorporated Managed Democracy and the Specter of Inverted Totalitarianism followed)
As in foreign policy Neoliberalism is a flavor of Imperialism which can be called Financial imperialism, it is intrinsically connected with the neo-colonial wars for the expansion of the Neoliberal Empire. Inread of military occulations it enforced "debt-slavery" via IMF and World Bank. But the USA as the most warring of the neoliberal nations is not shy of open military intervention against non-nuclear powers, where it feels that it will not suffer any retaliation. The so not give a dime for the opinion of world community, operating that the most powerful prestor, outside of international law. It is not accident that both major political parties int he USA now are "war parties." This issue was analyzed at some depth by Scott Ritter,
Actually, the USA was an imperial state for the most of its short history (see American imperialism - Wikipedia )
American imperialism describes policies aimed at extending the political, economic, and cultural influence of the United States over areas beyond its boundaries. Depending on the commentator, it may include military conquest, gunboat diplomacy, unequal treaties, subsidization of preferred factions, economic penetration through private companies followed by intervention when those interests are threatened, or regime change.
The policy of imperialism is usually considered to have begun in the late 19th century. The government of the US has never referred to its territories as an empire, but some commentators refer to it as such, including Max Boot, Arthur Schlesinger, and Niall Ferguson.[6]
The United States has also been accused of neocolonialism, sometimes defined as a modern form of hegemony that uses economic rather than military power, and sometimes used as a synonym for contemporary imperialism.
Neoliberalism proved to be pretty resilient, but the cracks in neoliberal facade became more and more visible even with naked eye. It survived 2008 financial crash which decimated neoliberal ideology of "free markets." COVID-19 epidemic raises the question of collapse of neoliberalism as the result of the collapse of neoliberal globalization, the process which started with election of Trump and Brexit.
Still Trump administration started to dismantle one of the major tenets of classic neoliberal -- neoliberal globalization and initiated trade war with China. At the same tinme internally Trump behaved like a classic neoliberal. This new flavor of neoliberal can be called "National neoliberalism".
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Apr 10, 2019 | www.theguardian.com
Thousands of people march through London to protest against underfunding and privatisation of the NHS. Photograph: Wiktor Szymanowicz/Barcroft Images M y life was saved last year by the Churchill Hospital in Oxford, through a skilful procedure to remove a cancer from my body . Now I will need another operation, to remove my jaw from the floor. I've just learned what was happening at the hospital while I was being treated. On the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff had objected to a decision by the National Health Service to privatise the hospital's cancer scanning . They complained that the scanners the private company was offering were less sensitive than the hospital's own machines. Privatisation, they said, would put patients at risk. In response, as the Guardian revealed last week , NHS England threatened to sue the hospital for libel if its staff continued to criticise the decision.
The dominant system of political thought in this country, which produced both the creeping privatisation of public health services and this astonishing attempt to stifle free speech, promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more oppressive than the system it replaced.
Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom but demands conformity and silence.
Much of the theory behind these transformations arises from the work of Ludwig von Mises. In his book Bureaucracy , published in 1944, he argued that there could be no accommodation between capitalism and socialism. The creation of the National Health Service in the UK, the New Deal in the US and other experiments in social democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and Nazi Germany.
He recognised that some state bureaucracy was inevitable; there were certain functions that could not be discharged without it. But unless the role of the state is minimised – confined to defence, security, taxation, customs and not much else – workers would be reduced to cogs "in a vast bureaucratic machine", deprived of initiative and free will.
By contrast, those who labour within an "unhampered capitalist system" are "free men", whose liberty is guaranteed by "an economic democracy in which every penny gives a right to vote". He forgot to add that some people, in his capitalist utopia, have more votes than others. And those votes become a source of power.
His ideas, alongside the writings of Friedrich Hayek , Milton Friedman and other neoliberal thinkers, have been applied in this country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony Blair. All of those have attempted to privatise or marketise public services in the name of freedom and efficiency, but they keep hitting the same snag: democracy. People want essential services to remain public, and they are right to do so.
If you hand public services to private companies, either you create a private monopoly, which can use its dominance to extract wealth and shape the system to serve its own needs – or you introduce competition, creating an incoherent, fragmented service characterised by the institutional failure you can see every day on our railways. We're not idiots, even if we are treated as such. We know what the profit motive does to public services.
So successive governments decided that if they could not privatise our core services outright, they would subject them to "market discipline". Von Mises repeatedly warned against this approach. "No reform could transform a public office into a sort of private enterprise," he cautioned. The value of public administration "cannot be expressed in terms of money". "Government efficiency and industrial efficiency are entirely different things."
"Intellectual work cannot be measured and valued by mechanical devices." "You cannot 'measure' a doctor according to the time he employs in examining one case." They ignored his warnings.
Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control.
Public-service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself.
Its perversities afflict all public services. Schools teach to the test , depriving children of a rounded and useful education. Hospitals manipulate waiting times, shuffling patients from one list to another. Police forces ignore some crimes, reclassify others, and persuade suspects to admit to extra offences to improve their statistics . Universities urge their researchers to write quick and superficial papers , instead of deep monographs, to maximise their scores under the research excellence framework.
As a result, public services become highly inefficient for an obvious reason: the destruction of staff morale. Skilled people, including surgeons whose training costs hundreds of thousands of pounds, resign or retire early because of the stress and misery the system causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania claims to address.
New extremes in the surveillance and control of workers are not, of course, confined to the public sector. Amazon has patented a wristband that can track workers' movements and detect the slightest deviation from protocol. Technologies are used to monitor peoples' keystrokes, language, moods and tone of voice. Some companies have begun to experiment with the micro-chipping of their staff . As the philosopher Byung-Chul Han points out , neoliberal work practices, epitomised by the gig economy, that reclassifies workers as independent contractors, internalise exploitation. "Everyone is a self-exploiting worker in their own enterprise."
The freedom we were promised turns out to be freedom for capital , gained at the expense of human liberty. The system neoliberalism has created is a bureaucracy that tends towards absolutism, produced in the public services by managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency measures, and in the private sector by subjection to faceless technologies that can brook no argument or complaint.
Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated drones. But the system his disciples have created is heading the same way.
George Monbiot is a Guardian columnist
The other point to be made is that the return of fundamentalist nationalism is arguably a radicalized form of neoliberalism. If 'free markets' of enterprising individuals have been tested to destruction, then capitalism is unable to articulate an ideology with which to legitimise itself.glisson , 12 Apr 2019 00:10Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian orientations, previously effaced beneath discourses of egalitarian free-enterprise, become overt.
The market is no longer an enabler of private enterprise, but something more like a medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs collectivise into a 'people' serving a market which has become synonymous with nationhood.
A corporate state emerges, free of the regulatory fetters of democracy. The final restriction on the market - democracy itself - is removed. There then is no separate market and state, just a totalitarian market state.
This is the best piece of writing on neoliberalism I have ever seen. Look, 'what is in general good and probably most importantly what is in the future good'. Why are we collectively not viewing everything that way? Surely those thoughts should drive us all?economicalternative -> Pinkie123 , 11 Apr 2019 21:33Pinkie123: So good to read your understandings of neoliberalism. The political project is the imposition of the all seeing all knowing 'market' on all aspects of human life. This version of the market is an 'information processor'. Speaking of the different idea of the laissez-faire version of market/non market areas and the function of the night watchman state are you aware there are different neoliberalisms? The EU for example runs on the version called 'ordoliberalism'. I understand that this still sees some areas of society as separate from 'the market'?economicalternative -> ADamnSmith2016 , 11 Apr 2019 21:01ADamnSmith: Philip Mirowski has discussed this 'under the radar' aspect of neoliberalism. How to impose 'the market' on human affairs - best not to be to explicit about what you are doing. Only recently has some knowledge about the actual neoliberal project been appearing. Most people think of neoliberalism as 'making the rich richer' - just a ramped up version of capitalism. That's how the left has thought of it and they have been ineffective in stopping its implementation.economicalternative , 11 Apr 2019 20:42Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on us all.Pinkie123 , 11 Apr 2019 13:27
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'. Neoliberals believe - unlike classical liberals with their view of people as rational individuals acting in their own self-interest - people are inherently 'unreliable', stupid. Only entrepreneurs - those close to the market - can know 'the truth' about anything. To succeed we all need to take our cues in life from what the market tells us. Neoliberalism is not about a 'small state'. The state is repurposed to impose the 'all knowing' market on everyone and everything. That is neoliberalism's political project. It is ultimately not about 'economics'.The left have been entirely wrong to believe that neoliberalism is a mobilisation of anarchic, 'free' markets. It never was so. Only a few more acute thinkers on the left (Jacques Ranciere, Foucault, Deleuze and, more recently, Mark Fisher, Wendy Brown, Will Davies and David Graeber) have understood neoliberalism to be a techno-economic order of control, requiring a state apparatus to enforce wholly artificial directives. Also, the work of recent critics of data markets such as Shoshana Zuboff has shown capitalism to be evolving into a totalitarian system of control through cybernetic data aggregation.manolito22 -> MrJoe , 11 Apr 2019 08:14
Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so we'll make sure the police will turn up if someone breaks into your house; but otherwise we'll hang back and let you do what you want'. Hayek is perfectly clear that a strong state is required to force people to act according to market logic. If left to their own devices, they might collectivise, think up dangerous utopian ideologies, and the next thing you know there would be socialism. This the paradox of neoliberalism as an intellectual critique of government: a socialist state can only be prohibited with an equally strong state. That is, neoliberals are not opposed to a state as such, but to a specifically centrally-planned state based on principles of social justice - a state which, to Hayek's mind, could only end in t totalitarianism. Because concepts of social justice are expressed in language, neoliberals are suspicious of linguistic concepts, regarding them as politically dangerous. Their preference has always been for numbers. Hence, market bureaucracy aims for the quantification of all values - translating the entirety of social reality into metrics, data, objectively measurable price signals. Numbers are safe. The laws of numbers never change. Numbers do not lead to revolutions. Hence, all the audit, performance review and tick-boxing that has been enforced into public institutions serves to render them forever subservient to numerical (market) logic. However, because social institutions are not measurable, attempts to make them so become increasingly mystical and absurd. Administrators manage data that has no relation to reality. Quantitatively unmeasurable things - like happiness or success - are measured, with absurd results.It should be understood (and I speak above all as a critic of neoliberalism) that neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of understanding the world that has an emotional hold over people. For any ideology to universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were Jewish fugitives of Nazism, living through the worst horrors of twentieth-century totalitarianism. There are passages of Hayek's that describe a world operating according to the rules of a benign abstract system that make it sound rather lovely. To understand neoliberalism, we must see that it has an appeal.
However, there is no perfect order of price signals. People do not simply act according to economic self-interest. Therefore, neoliberalism is a utopian political project like any other, requiring the brute power of the state to enforce ideological tenets. With tragic irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes that Hayek railed against.
Nationalised rail in the UK was under-funded and 'set up to fail' in its latter phase to make privatisation seem like an attractive prospect. I have travelled by train under both nationalisation and privatisation and the latter has been an unmitigated disaster in my experience. Under privatisation, public services are run for the benefit of shareholders and CEO's, rather than customers and citizens and under the opaque shroud of undemocratic 'commercial confidentiality'.Galluses , 11 Apr 2019 07:26What has been very noticeable about the development of bureaucracy in the public and private spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are designed now to place responsibility and culpability on the workers delivering the services - Teachers, Nurses, social workers, etc. While those making the policies, passing the laws, overseeing the regulations- viz. the people 'at the top', now no longer take the rap when something goes wrong- they may be the Captain of their particular ship, but the responsibility now rests with the man sweeping the decks. Instead they are covered by tying up in knots those teachers etc. having to fill in endless check lists and reports, which have as much use as clicking 'yes' one has understood those long legal terms provided by software companies.... yet are legally binding. So how the hell do we get out of this mess? By us as individuals uniting through unions or whatever and saying NO. No to your dumb educational directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.fairshares -> rjb04tony , 11 Apr 2019 07:17'The left wing dialogue about neoliberalism used to be that it was the Wild West and that anything goes. Now apparently it's a machine of mass control.'It is the Wild West and anything goes for the corporate entities, and a machine of control of the masses. Hence the wish of neoliberals to remove legislation that protects workers and consumers.
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Apr 09, 2020 | www.counterpunch.org
"The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear."
– Antonio Gramsci
The Pandemic & Public Health Crisis
On January 20th, 2020, the first confirmed case of COVID-19 infection took place in the United States. Since then, over 240,000 Americans have tested positive for the COVID-19 virus, with over 6,000 dying as a result of the pandemic. The New York Times suggests that the actual numbers are likely 6-10 times higher than is being currently reported.
According to studies from the Center for Disease Control and Prevention (CDC), people with underlying health conditions such as diabetes, obesity, high cholesterol, high blood pressure, heart disease, and those who smoke, are at high-risk of severe illness or death if they contract the virus. Unfortunately, that's a lot of Americans.
Several days ago, Dr. Anthony Fauci estimated that anywhere between 100,000-240,000 Americans will die from COVID-19 by the end of August, and that's if "we do everything perfectly," as the good doctor put it. Since no one actually believes that the United States will conduct the response in a "perfect" manner, we can assume those numbers are low.
For the sake of discussion, let's assume they're correct. For some perspective, 116,708 Americans died in World War I (1914-1918). Roughly 416,800 Americans died in World War II (1941-1945). Over 40,000 Americans died in the Korean War (1950-1953). And 70,000 Americans died in the Vietnam War (1965-1975).
Perhaps we throw around large numbers too often, or maybe there's simply no way to humanize 240,000 lives -- regardless, we cannot allow the U.S. government to normalize gross numbers of fatalities, especially as a result of a completely preventable pandemic. Remember, this isn't a 'Natural Disaster' -- this is a 'Man Made Disaster,' and it should be treated as such. Yes, Trump is responsible, but he's not the only one. In fact, individuals aren't the problem. The entire Neoliberal Capitalist project is to blame.
Americans aren't unhealthy because they've made bad choices as individuals. Americans are disproportionately unhealthy (when compared to both industrialized and industrializing nations) and susceptible to the worst effects of COVID-19 because Neoliberal Capitalist policies have created a social, political, economic, and ecological context in which this pandemic can thrive and impose maximum destruction.
Deindustrialization, privatization, and deregulation, has driven down the cost of labor, creating millions of working-poor Americans who live on credit and swim in mounds of debt, while attempting to navigate a social landscape of food deserts, fast food chains, sugar-rich foods, and low-wage service sector work. This context creates a population of addicted, depressed, and desperate workers whose sole pleasure at the end of a long shift is a can of Coke and bag of potato chips.
People don't purposely make themselves obese and unhealthy. When people are put in desperate situations, they make impulsive decisions. That's how people behave in a context of scarcity and oppression. Unfortunately, this is exactly the social context in which COVID-19 could cause extreme and permanent damage.
The Political Crisis
The political context in the U.S. is equally disturbing. Since the 1970s, politicians have drifted further and further into the realm of absurdity and utter corruption. Gone are the days of enlightened debates. Enter the age of Trump, Tweets, and trolling.
As empires decline, so does the quality of their leaders. The U.S. might wish to run away from reality, but Uncle Sam can't run away from history. History has finally caught up with the U.S. Indeed, Donald Trump is the result of forty-plus years of hyper-individuality, 'greed is good' culture, superficial materialism, and a politics based not on substance or principles, but looks, marketability, and adherence to Neoliberal fundamentalist ideologies.
One of the few principled politicians in Washington D.C., Bernie Sanders, was raked over the coals by the corporate press for simply attempting to give Americans a basic social safety-net. That, for the Neoliberals, was too much. CNN and MSNBC unleashed the pundit hounds. The New York Times and Washington Post ran round-the-clock editorials about the "dangers" of Sanders' policies, his supposed "unelectability," and "radical" following, degrading the tens of millions of poor and working class people who largely see Bernie's campaign as their last electoral hope.
Now, Joe Biden is the frontrunner. As a result, virtually everyone I know and work with has checked out of the electoral scene. Most of my friends have already come to the conclusion that Trump will win again in 2020. Hell, his numbers continue to rise even in the midst of the deadliest pandemic in over a 100 years, a pandemic he could've prevented. Frustrating, but not surprising.
Most Americans have checked out of politics. It's not that they don't care. They just don't believe that participating will make a difference. Who could blame them, really? I'm 35 years old. The U.S. government hasn't implemented one major program that's benefitted me since the day I was born. Obamacare? Get real. Every major political institution in this country has rapidly deteriorated over the course of my life.
When I was 16, Bush II, with the help of his brother, stole the White House from Al Gore. No one really did anything about it, even Al Gore. That was 20 years ago. Since then, we've experienced 9/11, the Afghanistan War, the Iraq War, two terms of GWB, the 2008 Recession, Obama's bullshit 'Hope & Change,' which really meant 'More Of The Same,' the Tea Party, nationwide union busting efforts, the explosion of charter schools, Citizens United, corporate consolidation, financial deregulation, increasingly militarized policing, exploding prison populations, privatization of public goods and services, and elections that no one trusts because paper ballots are gone and billionaires own the electoral process. And yes, in 2016, the election of Donald Trump, the perfect ending to a 40 year nightmare.
Let's remember why Trump won in the first place. Trump defeated Hillary Clinton because Democrats stayed home. Bottom line. Democrats stayed home because they were betrayed by Obama, disgusted by Clinton, and upset about the entire 2016 primary process. As many others have pointed out, Trump is a symptom, not the disease. Here, we should be very clear: yes, Trump poses unique challenges and threats, but he is not the primary source of our collective problems. Our collective problems are structural, not individual, in nature.
Right now, the entire electoral-parliamentary process of representative democracy should be in question. Quite obviously, this particular mode of democratic participation has reached its limits. People are flat-out sick and tired of voting for politicians who answer to corporations. People are tired of the Democrat vs. Republican electoral carnival. Who could blame them? I'm tired of it. You're tired of it. We're all tired of it.
This is the toxic legacy of Reaganism, a bankrupt ideology that has destroyed the American political system, civic society, and popular culture. As a result, both major political parties have drifted so far to the right that people can barely tell the difference between the two. The Democratic Party is a walking corpse. And the Republican Party is full-blown batshit crazy. The Green Party doesn't really stand a chance, but I give them credit for trying to develop an alternative, however flawed it may be. After all, the Greens, not the Dems, came up with the 'Green New Deal.'
Large NGOs are moribund and, in many ways, counterproductive, even on their best days. Right now, the left contains no structural articulation of its politics beyond various regional organizations and radical local unions. In reality, most of 'the left' as we know it primarily exists in online forums and alternative media projects. The political situation is dire, no doubt.
The only way out of this mess is through deep organizing at the workplace and within communities. Tactically, this will take the form of massive strikes, street protests, targeted direct actions, and militant non-violent resistance. But people also need a vision and a strategy, and structures and institutions to carry out that vision and strategy. Right now, both are in short order. However, like all moments of immense historical crises, this context provides an opportunity to introduce radical alternatives, and hopefully, change course. If leftwing groups can't use this moment to radicalize and politicize people, shame on us.
The Crisis of Capitalism
Prior to the COVID-19 pandemic, despite what you might've heard on corporate news outlets, Global Capitalism was on the ropes. Liberal economists such as Paul Krugman and Dean Baker, but also leftwing economists such as Jack Rasmus, Doug Henwood, and Richard Wolff, among others, have been sounding the alarm bells for some time now. The pandemic ended up being the match that lit a combustible array of socio-economic ingredients, including wide-spread underemployment, entire legions of workers who've dropped out of the labor pool, millions living in poverty, millions more on the verge of poverty, stagnating wages, hundreds of thousands of Americans sleeping on the streets, tens of millions lacking health coverage, and the majority of Americans drowning in ever-growing debt.
The COVID-19 pandemic has laid bare the hollowness and brutality of Global Capitalism. The most vulnerable will endure the brunt of this pandemic. They already have. Those who were barely surviving before this crisis will be lucky to survive the crisis. And so it goes.
The multitude of injustices and structural inequalities that existed before the pandemic will be exacerbated during a global health crisis and economic depression. The brutal legacies of colonization, imperialism, and neo-imperialism put the most vulnerable at risk and expose a system that's incapable of providing even the most basic necessities to those most in need. In fact, quite the opposite, as Wall Street receives trillions of dollars for wrecking the global economy, ordinary Americans will have to wait weeks for their measly $1,200 stimulus checks.
Unlike 2008, the free marketeers are nowhere to be found. During the Great Financial Recession, the market fundamentalists wanted the whole system to collapse. The financial press blamed the recession on overpaid auto workers and poor families, especially poor black families, who the corporate pundits insisted "bought homes they couldn't afford." That was the dominant narrative in 2008. The calls for austerity were swift and loud. This time around, not so much.
Today, millions of Americans identify as socialists, and Bernie Sanders' policies, flawed and inadequate as they may be, are supported by the majority of Democrats, many Independents, and even some Republicans. It's true that Bernie's policies aren't 'socialist' in the traditional sense, but they're socialistic in nature, and provide a welcome alternative to Neoliberal barbarism. Thanks to Occupy Wall Street and radical unions, today's context is much different. Americans are much further to the left than they were twelve years ago.
Ralph Nader has long described the U.S. economic system as "socialism for the rich, and rugged individualism for the rest of us." This is true. As Christian Parenti points out in a recent article in Jacobin , the financialization of the U.S. economy is already largely socialized, using public funds to prop-up private institutions, but with little to no social benefit for poor and working class people. Today, the COVID-19 pandemic shows us that the state is more important than ever before. Indeed, the Federal Government is the only entity powerful enough to reign-in capital. Ironically, as Parenti notes, only socialist policies can revive 21st Century Capitalism.
The state is also the only entity capable of dealing with a pandemic: providing healthcare supplies, financial resources, dealing with supply chain and logistical challenges, directing private sector production, etc. Here, we are witnessing in real-time the fundamental limits of private power and market fundamentalism within the context of a global healthcare crisis. Now is not the time to coddle capitalism -- now is the time to castrate capitalism. Unless the left has a strategy to bypass the state and provide the many services the state provides by alternative means, our approach to the ensuing economic depression must include an analysis of state power, how it relates to capital, and how leftwing organizations and movements relate to both.
Historian Alfred McCoy, in his recent book, In the Shadows of the American Century , notes that China will overtake the U.S. as the largest economy in the world by 2030, perhaps sooner (Trump & COVID-19 have helped). Then again, China faces its own internal dilemmas, including an increasingly affluent workforce that's very much interested in liberal democratic norms, and a growing number of repressed workers who are fighting back against China's unique brand of 'Authoritarian Capitalism.' Some of the same contradictions and questions can be applied to India, the world's 5th largest economy, authoritarian-religious nationalism, and hundreds of millions of precarious workers provide a potentially explosive political context.
Without question, capitalism will survive COVID-19. The unfolding COVID-19 pandemic and economic crises will alter the future of capitalism. The real question is: how can workers and ordinary people nudge things in a preferred direction, a path that leads to more collectivism and cooperation? How can we exploit the contradictions within the system? How can we ruthlessly expose the inherent limitations and internal contradictions of capital accumulation?
Most importantly, we must not exit this crisis with a more authoritarian version of capitalism. Giving the banks and multinational corporations more power is a death knell for the human species and much of the planet. Time is running out. The economic shocks will continue in frequency and severity. Now is the time for alternatives.
The Crisis of Militarism & Empire
Since 9/11, the U.S. has bombed seven nations: Afghanistan, Iraq, Pakistan, Libya, Syria, Somalia, and Yemen. U.S. troops remain in Iraq, Afghanistan, Syria, and Libya, with special forces operations taking place in Pakistan and Somalia. The ongoing war in Afghanistan is the longest war in U.S. history. And the U.S. continues to economically, logistically, politically, and militarily support the systematic repression and genocide of the Palestinian people vis a vi the brutal Israeli regime.
According to military historian, Nick Turse, U.S. forces conduct, on average, three combat or intelligence missions per day on the continent of Africa. Of course, Uncle Sam's growing footprint in Africa has gone virtually unreported in the corporate press. In October, 2017, when 9 U.S. troops were killed in the 'Tongo Tongo Ambush' in Niger, most Americans had no idea that U.S. troops were even stationed in Niger, let alone conducting combat missions. While it's true that U.S. Empire is in decline, it's also true that empires throughout history lash out during their final days, leaving a path of destruction in their wake.
As a result, the human cost of the post-9/11 'War on Terror' has been immense. Iraq: 300,000-1,000,000 dead. Syria: 400,000-600,000 dead. Afghanistan: 120,000 dead. Libya: 30,000 dead. Pakistan: 50,000 dead. Somalia: (unknown). Yemen: 100,000 dead. On the U.S. side, over 7,000 troops have lost their lives in Iraq, Afghanistan, Syria, and Pakistan, with more than double that number of private contractors dying in U.S.-led conflicts.
The Great Oil Wars of the early 21st Century have also caused the greatest refugee crisis since World War II, with more than 100,000 Syrian refugees fleeing their war-torn country, and over 3 million Iraqis internally displaced. Tens of thousands have fled Libya. The same is true in Pakistan. Millions abroad live in abject poverty and suffer preventable diseases as a result of Uncle Sam's military adventures.
Veterans of course, also suffer from Uncle Sam's hubris, with over 10,000 having committed suicide since 9/11. On a personal note, I've lost more of the marines from my platoon than died during our unit's three combat deployments to Iraq.
Dr. Martin Luther King Jr. once said: "The bombs in Vietnam explode at home -- they destroy the dream and possibility for a decent America." The same is true today, as the United States spends what the next 15 nations spend combined on its military empire ($750 billion a year), a monstrosity and sign of deep societal decay. According to Brown University, the wars in Iraq and Afghanistan have cost U.S. taxpayers $5.9 trillion. With that money, the U.S. government could've paid off every Americans' credit card, student loan, and auto loan debt, and still had money left over.
As the U.S. spends trillions of dollars on weapons of war, hospitals run out of surgical masks and ventilators. A ventilator costs anywhere from $10,000 to $50,000 -- a tomahawk missile costs $1.4 million.
Like every empire, the U.S. has drained its domestic resources to maintain its imperial hegemony, but that influence is waning with time. As the republic crumbles under the weight of its own internal contradictions, U.S. allies are distancing themselves, while Uncle Sam's foes are becoming increasingly empowered with each blunder and catastrophe that's unfolded since 9/11. As Chomsky points out, the U.S. has been in decline since World War II, the peak of Uncle Sam's imperial prowess.
Already, Trump is using the COVID-19 pandemic as an excuse to ramp-up tensions with both Venezuela and Iran, two countries the U.S. has been politically, militarily, and economically terrorizing for decades. During the pandemic, U.S.-imposed sanctions in Iran have caused a disproportionate number of deaths due to lack of proper health equipment and medicine.
Fortunately, several European countries have broken the sanctions and delivered medical goods to the Iranian government. Also, as we speak, Trump has directed the U.S. Navy to move several U.S. Navy ships in close proximity to Venezuelan waters under the pretext of "curbing drug smuggling" -- no doubt a top priority during the worst pandemic since 1918.
History shows us that every empire eventually confronts the same choice: maintain military forces and watch the republic crumble from within, or de-escalate conflicts, demilitarize, and maintain some semblance of a functioning state. The Roman Empire chose the former. The British Empire chose the latter. The coming decade will determine which path Uncle Sam chooses. If the last 20 years are a window into the future, God help us all.
If we hope to survive the next pandemic, the U.S. government must redirect the resources it's currently spending on weapons of war, and instead invest in public healthcare infrastructure (hospitals, equipment, resources, nurses, personnel, EMTs), public education (medical schools, tuition free), housing (free and available to all), and research and development.
If we hope to survive the coming decades, the U.S. government must redirect its vast resources to mitigating climate change and ecological devastation.
The Climate & Ecological Crisis
The world has ten years to make radical changes to the global economy and its relation to fossil fuel production and consumption or the planet will be uninhabitable by the end of the century. Climate Change isn't the issue , it's the overarching context in which we now exist. Everything we do or don't do over the next ten years will determine whether or not future generations will inhabit a living planet, or a barren wasteland.
There is simply no way to downplay the urgency of our collective challenge. As author David Wallace-Wells' notes in his latest book, The Uninhabitable Earth: Life After Warming , "we could potentially avoid 150 million excess premature deaths by the end of century from air pollution (the equivalent of 25 Holocausts or twice the number of deaths from World War II) if we could limit average global warming to 1.5 degrees Celsius." Right now, we're on track to hit 1.5 degrees Celsius by as early as 2030.
In the future, numbers will matter. The 100,000-240,000 Americans projected to die from COVID-19 will soon turn into numbers like 1,000,000-5,000,000. What we accept today, we'll be expected to accept tomorrow.
In some ways, we've already accepted mass death, but our relationship to the living world is so warped that these numbers don't seem to shake us. Species extinction rates are 100-1,000 times faster than they were, on average, during the evolutionary time-scale of planet Earth. More than 100 go extinct every single day.
Oceans have been destroyed by toxic materials, dumping, shipping, and large-scale industrial fishing. Coral reefs are dying. Warming temperatures mean less phytoplankton, which means less oxygen, which means more carbon dioxide. Some studies suggest that most of the large fish in the world's oceans will be gone by 2050. Deforestation continues at breakneck speeds, ravaging ecosystems and leaving nothing behind. Ice caps melt. Prairies destroyed for suburban developments. Mountains leveled for minerals. Lakes drained for bottled water. Rivers polluted for industry. Life murdered for profit.
The level of ecological disruption and destruction industrial society has unleashed on the living world is unparalleled. And time is running out.
The IPCC (Intergovernmental Panel on Climate Change) report, Global Warming of 1.5 degree Celsius , outlines our reality: if we wish to hold the line to 1.5 degrees, we have to cut emissions by about 45% from 2010 levels by 2030. Then, we have to reach net-zero around 2050. That's to avoid the 250 million deaths Wallace-Wells mentioned. So far, none of that is happening. In fact, we're moving in the opposite direction as global emissions rise each year.
If we continue at current rates of emission, global temperature could rise by 7 degrees Celsius, and the number of human deaths from pollution could rise to 1-3 billion by 2100. That's not including deaths due to habitat loss, crop failure, lack of fresh water, lack of medical care, lack of housing, rising sea levels, lack of employment, addiction, suicide, unbearable temperatures, failing governments, collapsing economies, and everything that comes with those cascading crises: tribal war, banditry, barbarism, and eventually, genocide.
The Totality of Our Crisis
Without question, the stakes couldn't be higher. In many ways, the COVID-19 pandemic and ensuing economic depression is a dress rehearsal for the future. From here on out, each crisis will be more pronounced and severe than the last. The new normal is cascading and multilayered crises all playing out at the same time. How we collectively respond to this crisis will determine how we respond to the impending large-scale crises of the future, not the least of which being Climate Change. So far, we're failing miserably.
If the United States can't handle a small-scale pandemic and virus that's moderately deadly, though admittedly quite disruptive, how can we expect the government to cope with tens of millions of climate refugees fleeing their homes in the coming decades, while seeking housing, employment, and safety in cities and counties already strapped for resources?
If capitalists already are taking advantage of this pandemic, netting trillions of dollars from the Federal Reserve and U.S. Treasury, while simultaneously jacking up the price of medical equipment and charging poor victims exorbitant amounts of money for health insurance, needed medicine, and hospital treatment, how can we expect them to behave in the context of rapid ecological collapse?
If the state is incapable of providing even menial assistance to poor and working class Americans during the worst pandemic in over 100 years, how can we expect the state to behave in the context of cascading and multilayered crises unfolding at a rapid pace over a short period of time, crises that will undoubtedly require massive state intervention in the economy?
Unfortunately, we know the answers to these questions, but only if most poor and working class people remain unorganized or unwilling to fight back.
Let's remember, all of this takes place within a context of many unnamed crises, many of which weren't mentioned in this essay. Some of those include gun culture/NRA (weapons sales are at all-time highs since the pandemic started), police militarism, the prison-industrial complex (already being used to manufacture surgical masks, while prisoners remain trapped in COVID-19 incubators), patriarchy (domestic violence calls have skyrocketed during the pandemic), homelessness (500,000 Americans can't 'stay at home'), systemic racism (already, statistics show that black people are disproportionately impacted by and suffering the worst effects of COVID-19), housing (Americans already spend a insane amounts of their income toward rent/mortgage payments -- those problems have only accelerated during the pandemic), childcare (cash-strapped families and single parents choosing between safety and work), and the list goes on, and on.
Every single aspect of our society is under extreme stress. Even the most passive populations can only take so much. Human beings can only take so much. The living world can only take so much. Eventually, things will explode.
The question is: how? Will poor and working class Americans turn that despair and cynicism into a righteous anger and rage? And if so, who will that anger and rage be directed toward? Each other? Or the powerful elites?
The current social context in the U.S. and across the globe is ripe for radical political change, but that change doesn't necessarily have to be progressive in nature. It could also be reactionary and fueled by religious extremism, xenophobia, racism, and tribalism. That's up to us. Join the debate on Facebook More articles by: Vincent Emanuele
Vincent Emanuele writes for teleSUR English and lives in Michigan City, Indiana. He can be reached at [email protected]
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Sep 29, 2014 | www.theguardian.com
An economic system that rewards psychopathic personality traits has changed our ethics and our personalities
'We are forever told that we are freer to choose the course of our lives than ever before, but the freedom to choose outside the success narrative is limited.'
We tend to perceive our identities as stable and largely separate from outside forces. But over decades of research and therapeutic practice, I have become convinced that economic change is having a profound effect not only on our values but also on our personalities. Thirty years of neoliberalism, free-market forces and privatisation have taken their toll, as relentless pressure to achieve has become normative. If you're reading this sceptically, I put this simple statement to you: meritocratic neoliberalism favours certain personality traits and penalises others.
There are certain ideal characteristics needed to make a career today. The first is articulateness, the aim being to win over as many people as possible. Contact can be superficial, but since this applies to most human interaction nowadays, this won't really be noticed.
It's important to be able to talk up your own capacities as much as you can – you know a lot of people, you've got plenty of experience under your belt and you recently completed a major project. Later, people will find out that this was mostly hot air, but the fact that they were initially fooled is down to another personality trait: you can lie convincingly and feel little guilt. That's why you never take responsibility for your own behaviour.
On top of all this, you are flexible and impulsive, always on the lookout for new stimuli and challenges. In practice, this leads to risky behaviour, but never mind, it won't be you who has to pick up the pieces. The source of inspiration for this list? The psychopathy checklist by Robert Hare , the best-known specialist on psychopathy today.
This description is, of course, a caricature taken to extremes. Nevertheless, the financial crisis illustrated at a macro-social level (for example, in the conflicts between eurozone countries) what a neoliberal meritocracy does to people. Solidarity becomes an expensive luxury and makes way for temporary alliances, the main preoccupation always being to extract more profit from the situation than your competition. Social ties with colleagues weaken, as does emotional commitment to the enterprise or organisation.
Bullying used to be confined to schools; now it is a common feature of the workplace. This is a typical symptom of the impotent venting their frustration on the weak – in psychology it's known as displaced aggression. There is a buried sense of fear, ranging from performance anxiety to a broader social fear of the threatening other.
Constant evaluations at work cause a decline in autonomy and a growing dependence on external, often shifting, norms. This results in what the sociologist Richard Sennett has aptly described as the "infantilisation of the workers". Adults display childish outbursts of temper and are jealous about trivialities ("She got a new office chair and I didn't"), tell white lies, resort to deceit, delight in the downfall of others and cherish petty feelings of revenge. This is the consequence of a system that prevents people from thinking independently and that fails to treat employees as adults.
More important, though, is the serious damage to people's self-respect. Self-respect largely depends on the recognition that we receive from the other, as thinkers from Hegel to Lacan have shown. Sennett comes to a similar conclusion when he sees the main question for employees these days as being "Who needs me?" For a growing group of people, the answer is: no one.
Our society constantly proclaims that anyone can make it if they just try hard enough, all the while reinforcing privilege and putting increasing pressure on its overstretched and exhausted citizens. An increasing number of people fail, feeling humiliated, guilty and ashamed. We are forever told that we are freer to choose the course of our lives than ever before, but the freedom to choose outside the success narrative is limited. Furthermore, those who fail are deemed to be losers or scroungers, taking advantage of our social security system.
A neoliberal meritocracy would have us believe that success depends on individual effort and talents, meaning responsibility lies entirely with the individual and authorities should give people as much freedom as possible to achieve this goal. For those who believe in the fairytale of unrestricted choice, self-government and self-management are the pre-eminent political messages, especially if they appear to promise freedom. Along with the idea of the perfectible individual, the freedom we perceive ourselves as having in the west is the greatest untruth of this day and age.
The sociologist Zygmunt Bauman neatly summarised the paradox of our era as: "Never have we been so free. Never have we felt so powerless." We are indeed freer than before, in the sense that we can criticise religion, take advantage of the new laissez-faire attitude to sex and support any political movement we like. We can do all these things because they no longer have any significance – freedom of this kind is prompted by indifference. Yet, on the other hand, our daily lives have become a constant battle against a bureaucracy that would make Kafka weak at the knees. There are regulations about everything, from the salt content of bread to urban poultry-keeping.
Our presumed freedom is tied to one central condition: we must be successful – that is, "make" something of ourselves. You don't need to look far for examples. A highly skilled individual who puts parenting before their career comes in for criticism. A person with a good job who turns down a promotion to invest more time in other things is seen as crazy – unless those other things ensure success. A young woman who wants to become a primary school teacher is told by her parents that she should start off by getting a master's degree in economics – a primary school teacher, whatever can she be thinking of?
There are constant laments about the so-called loss of norms and values in our culture. Yet our norms and values make up an integral and essential part of our identity. So they cannot be lost, only changed. And that is precisely what has happened: a changed economy reflects changed ethics and brings about changed identity. The current economic system is bringing out the worst in us.
Psychology Work & careers Economics Economic policySee also
- Sick of this market-driven world? You should be George Monbiot George Monbiot: The self-serving con of neoliberalism is that it has eroded the human values the market was supposed to emancipate 5 Aug 2014 1,877
- Neoliberalism has spawned a financial elite who hold governments to ransom Deborah Orr 8 Jun 2013 400
- Who's in control – nation states or global corporations? Gary Younge 2 Jun 2014 767
- Who can control the post-superpower capitalist world order? Slavoj Žižek 6 May 2014 454
- If you think we're done with neoliberalism, think again George Monbiot 14 Jan 2013 797
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Apr 16, 2016 | www.theguardian.com
Financial meltdown, environmental disaster and even the rise of Donald Trump – neoliberalism has played its part in them all. Why has the left failed to come up with an alternative? @GeorgeMonbiot
Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you'll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness , the collapse of ecosystems, the rise of Donald Trump . But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?
Inequality is recast as virtuous. The market ensures that everyone gets what they deserve.
So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin's theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.
Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.
Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
Never mind structural unemployment: if you don't have a job it's because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you're feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it's your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.
See also Neoliberalism has brought out the worst in us by Paul Verhaeghe, Sep 24, 2014
Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it's unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe . We are all neoliberals now.
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The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt's New Deal and the gradual development of Britain's welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.
In The Road to Serfdom , published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises's book Bureaucracy , The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.
With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as "a kind of neoliberal international": a transatlantic network of academics, businessmen, journalists and activists. The movement's rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute , the Heritage Foundation , the Cato Institute , the Institute of Economic Affairs , the Centre for Policy Studies and the Adam Smith Institute . They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.
As it evolved, neoliberalism became more strident. Hayek's view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.
Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal . But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.
At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes 's economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.
But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, "when the time came that you had to change ... there was an alternative ready there to be picked up". With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter's administration in the US and Jim Callaghan's government in Britain.
It may seem strange that a doctrine promising choice should have been promoted with the slogan 'there is no alternative'
After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, "it is hard to think of another utopia to have been as fully realised."
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It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan "there is no alternative". But, as Hayek remarked on a visit to Pinochet's Chile – one of the first nations in which the programme was comprehensively applied – "my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism". The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.
Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers , endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.
Facebook Twitter Pinterest Naomi Klein documented that neoliberals advocated the use of crises to impose unpopular policies while people were distracted. Photograph: Anya Chibis/The GuardianAs Naomi Klein documents in The Shock Doctrine , neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet's coup, the Iraq war and Hurricane Katrina, which Friedman described as "an opportunity to radically reform the educational system" in New Orleans .
Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating " investor-state dispute settlement ": offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes , protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.
Neoliberalism was not conceived as a self-serving racket, but it rapidly became one
Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.
Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.
The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel .
In Mexico, Carlos Slim was granted control of almost all phone services and soon became the world's richest man. Photograph: Henry Romero/ReutersThose who own and run the UK's privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world's richest man.
Financialisation, as Andrew Sayer notes in Why We Can't Afford the Rich , has had a similar impact. "Like rent," he argues, "interest is ... unearned income that accrues without any effort". As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.
Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.
Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land , Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.
The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.
Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.
Chris Hedges remarks that "fascist movements build their base not from the politically active but the politically inactive, the 'losers' who feel, often correctly, they have no voice or role to play in the political establishment". When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation . To the admirers of Trump, for example, facts and arguments appear irrelevant.
Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to "cajoling, threatening and ultimately coercing people to obey them".
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Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.
The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch , two of the richest men in the world, founded the institute that set up the Tea Party movement . We find that Charles Koch, in establishing one of his thinktanks, noted that "in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised".
The nouveau riche were once disparaged by those who had inherited their money. Today, the relationship has been reversed
The words used by neoliberalism often conceal more than they elucidate. "The market" sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What "the market wants" tends to mean what corporations and their bosses want. "Investment", as Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities "camouflages the sources of wealth", leading us to confuse wealth extraction with wealth creation.
A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entre preneurs. They claim to have earned their unearned income.
These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism: the franchise model which ensures that workers do not know for whom they toil ; the companies registered through a network of offshore secrecy regimes so complex that even the police cannot discover the beneficial owners ; the tax arrangements that bamboozle governments; the financial products no one understands.
The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively . But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom , Bureaucracy or Friedman's classic work, Capitalism and Freedom .
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For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.
Neoliberalism, Locke and the Green party | Letters Read more
Neoliberalism's triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was ... nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.
Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.
What the history of both Keynesianism and neoliberalism show is that it's not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.
George Monbiot's How Did We Get into This Mess? is published this month by Verso. To order a copy for £12.99 (RRP £16.99) ) go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99.
Topics Economics
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Feb 05, 2018 | www.truthdig.com
There will be no economic or political justice for the poor, people of color, women or workers within the framework of global, corporate capitalism. Corporate capitalism, which uses identity politics , multiculturalism and racial justice to masquerade as politics, will never halt the rising social inequality, unchecked militarism, evisceration of civil liberties and omnipotence of the organs of security and surveillance. Corporate capitalism cannot be reformed, despite its continually rebranding itself. The longer the self-identified left and liberal class seek to work within a system that the political philosopher Sheldon Wolin calls " inverted totalitarianism ," the more the noose will be tightened around our necks. If we do not rise up to bring government and financial systems under public control -- which includes nationalizing banks, the fossil fuel industry and the arms industry -- we will continue to be victims.
Corporate capitalism is supranational . It owes no loyalty to any nation-state. It uses the projection of military power by the United States to protect and advance its economic interests but at the same time cannibalizes the U.S., dismantling its democratic institutions, allowing its infrastructure to decay and deindustrializing its factory centers to ship manufacturing abroad to regions where workers are treated as serfs.
Resistance to this global cabal of corporate oligarchs must also be supranational. It must build alliances with workers around the globe. It must defy the liberal institutions, including the Democratic Party, which betray workers. It is this betrayal that has given rise to fascist and protofascist movements in Europe and other countries. Donald Trump would never have been elected but for this betrayal. We will build a global movement powerful enough to bring down corporate capitalism or witness the rise of a new, supranational totalitarianism.
The left, seduced by the culture wars and identity politics, largely ignores the primacy of capitalism and the class struggle. As long as unregulated capitalism reigns supreme, all social, economic, cultural and political change will be cosmetic. Capitalism, at its core, is about the commodification of human beings and the natural world for exploitation and profit. To increase profit, it constantly seeks to reduce the cost of labor and demolish the regulations and laws that protect the common good. But as capitalism ravages the social fabric, it damages, like any parasite, the host that allows it to exist. It unleashes dark, uncontrollable yearnings among an enraged population that threaten capitalism itself.
"This is a crisis of global dimensions," David North , the national chairman of the Socialist Equality Party in the United States, told me when we spoke in New York. "It is a crisis that dominates every element of American politics. The response that we're seeing, the astonishing changes in the state of the government, in the decay of political life, the astonishingly low level of political and intellectual discourse, is in a certain sense an expression of the bewilderment of the ruling elite to what it's going through."
"We can expect a monumental explosion of class struggle in the United States," he said. "I think this country is a social powder keg. There is an anger that exists over working conditions and social inequality. However [much] they may be confused on many questions, workers in this country have a deep belief in democratic rights. We totally reject the narrative that the working class is racist. I think this has been the narrative pushed by the pseudo-left, middle-class groups who are drunk on identity politics, which have a vested interest in constantly distracting people from the essential class differences that exist in the society. Dividing everyone up on the basis of race, gender, sexual preference fails to address the major problem."
North argues, correctly, that capitalism by its nature lurches from crisis to crisis. This makes our current predicament similar to past crises.
"All the unanswered questions of the 20th century -- the basic problem of the nation-state system, the reactionary character of private ownership with the means of production, corporate power, all of these issues which led to the first and Second world wars -- are with us again, and add to that fascism," he said.
"We live in a global economy, highly interconnected," North went on. "A globalized process of production, financial system. The ruling class has an international policy. They organize themselves on an international scale. The labor movement has remained organized on a national basis. It has been completely incapable of answering this [ruling-class policy]. Therefore, it falls behind various national protectionist programs. The trade unions support Trump."
The sociologist Charles Derber , whom I also spoke with in New York, agrees.
"We don't really have a left because we don't have conversations about capitalism," Derber said. "How many times can you turn on a mainstream news like CNN and expect to hear the word 'capitalism' discussed? Bernie [Sanders] did one thing. He called himself a democratic socialist , which was a bit transformational simply in terms of rhetoric. He's saying there's something other than capitalism that we ought to be talking about."
"As the [capitalist] system universalizes and becomes more and more intersectional, we need intersectional resistance," Derber said. "At the end of the 1960s, when I was getting my own political education, the universalizing dimensions of the left, which was growing in the '60s, fell apart. The women began to feel their issues were not being addressed. They were treated badly by white males, student leaders. Blacks, Panthers, began to feel the whites could not speak for race issues. They developed separate organizations. The upshot was the left lost its universalizing character. It no longer dealt with the intersection of all these issues within the context of a militarized, capitalist, hegemonic American empire. It treated politics as siloed group identity problems. Women had glass ceilings. Same with blacks. Same with gays."
The loss of this intersectionality was deadly. Instead of focusing on the plight of all of the oppressed, oppressed groups began to seek representation for their own members within capitalist structures.
"Let's take a modern version of this," Derber said. " Sheryl Sandberg , the COO of Facebook, she did a third-wave feminism thing. She said 'lean in.' It captures this identity politics that has become toxic on the left. What does 'lean in' mean? It means women should lean in and go as far as they can in the corporation. They should become, as she has, a major, wealthy executive of a leading corporation. When feminism was turned into that kind of leaning in, it created an identity politics that legitimizes the very system that needs to be critiqued. The early feminists were overtly socialists. As was [Martin Luther] King. But all that got erased."
"The left became a kind of grab bag of discrete, siloed identity movements," Derber said. "This is very connected to moral purity. You're concerned about your advancement within the existing system. You're competing against others within the existing system. Everyone else has privilege. You're just concerned about getting your fair share."
"People in movements are products of the system they're fighting," he continued. "We're all raised in a capitalistic, individualistic, egoistic culture, so it's not surprising. And it has to be consciously recognized and struggled against. Everybody in movements has been brought up in systems they're repulsed by. This has created a structural transformation of the left. The left offers no broad critique of the political economy of capitalism. It's largely an identity-politics party. It focuses on reforms for blacks and women and so forth. But it doesn't offer a contextual analysis within capitalism."
Derber, like North, argues that the left's myopic, siloed politics paved the way for right-wing, nativist, protofascist movements around the globe as well as the ascendancy of Trump.
"When you bring politics down to simply about helping your group get a piece of the pie, you lose that systemic analysis," he said. "You're fragmented. You don't have natural connections or solidarity with other groups. You don't see the larger systemic context. By saying I want, as a gay person, to fight in the military, in a funny way you're legitimating the American empire. If you were living in Nazi Germany, would you say I want the right of a gay person to fight in combat with the Nazi soldiers?"
"I don't want to say we should eliminate all identity politics," he said. "But any identity politics has to be done within the framework of understanding the larger political economy. That's been stripped away and erased. Even on the left, you cannot find a deep conversation about capitalism and militarized capitalism. It's just been erased. That's why Trump came in. He unified a kind of very powerful right-wing identity politics built around nationalism, militarism and the exceptionalism of the American empire."
"Identity politics is to a large degree a right-wing discourse," Derber said. "It focuses on tribalism tied in modern times to nationalism, which is always militaristic. When you break the left into these siloed identity politics, which are not contextualized, you easily get into this dogmatic fundamentalism. The identity politics of the left reproduces the worse sociopathic features of the system as a whole. It's scary."
"How much of the left," he asked, "is reproducing what we are seeing in the society that we're fighting?"
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Sep 08, 2017 | www.faireconomy.org
Many of us have come across the term "neoliberal," or "neoliberalism" before, but for all its use, few have ever taken the chance to actually explain what it is. An inadequate popular definition has allowed the term to be abused and misrepresented in a variety of ways. Despite these misrepresentations, however, "neoliberalism" is a concept that is very useful for understanding the world we live in today.
In simple terms, neoliberalism is a broad ideology that became popular in political, economic, and governmental circles in the 1970's and reached its peak in global popularity in the 1980's. Neoliberalism describes the political paradigm we are in right now, the political conditions of modern society . As the name suggests, it calls for a revitalization of the classical liberal view of economic policy. It's important to understand that "classical liberal" here refers to an older understanding of the word liberal than the one it has in modern America- it is referencing the liberalism of the Enlightenment era, represented by thinkers like Adam Smith and John Locke, not modern social liberalism as embodied by Barack Obama and much of the rest of the Democratic Party. In concrete policy terms, neoliberalism means free trade, low taxes, deregulation, privatization, and balanced budgets.
"Stagflation" & Schools of Economic ThoughtNeoliberalism emerged as a reaction to welfare state politics and Keynesian economics that had become popular in the West following the end of World War II.
What is Keynesian Economics? Two major schools of economic thought are Classical Economics and Keynesian Economics. Adam Smith's (1723-1790) theory of Classical Economics asserts that the market is a rapidly-adjusting, self-correcting entity. John Maynard Keynes (1883-1946) believed that Classical Economics was flawed. If classical economics were true, Keyes asserted, waves of massive unemployment wouldn't exist, as the market would quickly self-adjust for the downturn. Keynes theorized that during an economic downturn, consumer demand tended to drop, causing employers to lay off employees, which would then decrease overall consumer demand, and the cycle would continue. Keynes concluded that in periods of economic downturn, government could manipulate demand by hiring, directly or through policy, unemployed workers and break the cycle.
Following a long period of significant prosperity, the 1970's brought with it a phenomenon known as "stagflation" - simultaneous stagnation (where worker wages are kept flat) and inflation (where the cost of living rises). Keynesians, who had been the dominant group in American economics at the time, believed it was impossible for stagflation to exist for any extended period of time.
As the Keynesians tried to make sense of economic realities of the day, a new wave of economists began to create other schools of thought. Milton Friedman (known as "the Chicago School" or "monetarists") made the case not only for a different approach to monetary policy in order to solve stagflation, but also for the idea that many forms of governmental involvement in the economy are in fact harmful. Others, like James Buchanan pioneered a field known as "public choice theory," which made the case to the economics profession that government bureaucrats acted in personal self-interest, not in the public interest, and thus that policy prescriptions should be much more cautious in calling for governmental solutions to economic issues.
Activist BusinessAt the same time as the intellectual environment began to shift toward the political right in economics, the business community also began to be more aggressive in asserting their interests in politics. This development was prompted in part by soon-to-be Supreme Court Justice Lewis F. Powell, Jr. writing a memo to the U.S. Chamber of Commerce in 1971, arguing that "the American economic system is under attack" from progressive critics of big business and that the business community should fight back. A number of conservative and libertarian think tanks and advocacy organizations were created and expanded during this period in order to make the intellectual case for "freer" capitalism, including the Heritage Foundation (1973), the Cato Institute (1974), and the American Enterprise Institute (founded in 1938 but becoming influential during the 1970′s).
A Radical MessageCombine a turn against government in the field of economics and a growing assertion of political power by businesses, and throw in increased public skepticism of government after Vietnam and Watergate, and you have a recipe for fundamental political change. Between the economic disarray, the public distrust, and both intellectual and financial support for an alternative to post-war welfare statism, a new ideology became dominant in the political sphere. This ideology was encapsulated by the presidency of Ronald Reagan, who summed it up perfectly with his famous quote: "in this current crisis, government is not the solution to the problem; government is the problem."
Such a claim may sound like standard conservative fare today, but both Reagan and his message were quite radical at the time, even among Republicans. At the time of his election, Reagan was seen by some ( including Gerald Ford ) as simply too far right to win. The last (elected) Republican president before him, Nixon, created the Environmental Protection Agency (EPA), the Occupational Health and Safety Administration (OSHA), and a number of other progressive programs. He also called for healthcare reform that could arguably be called stronger than Obamacare, and an expansion of welfare , the latter of which was the inspiration for the Earned Income Tax Credit, passed shortly after he left office. Pieces of Nixon's economic agenda were noticeably left-wing, so much so that one journalist at the time noted that he left the Democrats having to resort to "me-tooism."
Nixon took such positions because he needed to respond to political pressures from the left, the same pressures that had pushed LBJ on civil rights legislation and the war on poverty. In the late 1970's, as the activism and radicalism of the 1960's began to die out, those pressures began to be outweighed by increasing pressure from businesses in the direction of neoliberalism. This started under Jimmy Carter, who oversaw the cautious deregulation of airlines in 1978 and the trucking industry in 1980. However, it was Reagan who truly delivered the neoliberal agenda in America and institutionalized it into government.
Importantly, this era also saw the start of the growth in the importance of campaign donations. Republicans had not only a strong base of think tanks to provide them with a network of intellectual support, they also had far more money from the corporate interests they were serving. Congressional Republicans beat their Democratic counterparts in campaign expenditures in every election year from 1976 to 1992.
Traditionally, Democrats had relied on unions as a critical source of both campaign donations and organizational support. With union strength declining (a trend the Reagan administration encouraged through policy), the Democrats were being totally outgunned. According to Jacob S. Hacker and Paul Pierson's book "Winner-Take-All Politics":
The Third Way" From the late 1970s to the late 1980s, corporate PACS [political action committees] increased their expenditures in congressional races nearly five fold. Labor spending only rose about half as fast... By 1980, unions accounted for less than a quarter of all PAC donations -- down from half six years earlier."
Even with the emergence of conservative "Reagan Democrats" during the 1980's, the game had changed for the Democratic Party. Recognizing this, a number of Democrats (including Bill Clinton) joined together in a group called the Democratic Leadership Council with the goal of dragging the party to the right and boosting campaign contributions. They succeeded. When Clinton eventually won the presidency, he cemented neoliberalism as the law of the land by making it clear that the Democrats would not challenge the new fundamental doctrine of limited government involvement in many parts of the economy, and as a result made the Democrats politically competitive again. (Both the previously mentioned "Winner-Take-All Politics" and Thomas Ferguson and Joel Roger's "Right Turn" go more into detail on this issue, and on neoliberalism more generally).
Instead of challenging the entirety of Reagan's assertion of government-as-problem, Clinton espoused a "third way" ideology: in his second inauguration, he said that "Government is not the problem, and Government is not the solution. We -- the American people -- we are the solution." Though the Clinton White House at times backed left-liberal policies like mild tax hikes on the wealthy, the Children's Health Insurance Program, and the Family Medical Leave Act, it also continued the neoliberal march of rolling back progressive achievements through the deregulation of Wall Street (the Gramm-Leach-Bliley Act of 1999, the Commodity Futures Modernization Act of 2000, etc.), conservative welfare reform in 1996, NAFTA, and the gutting of public housing .
A One-Party SystemClinton himself was aware of the way that American politics was moving to the right, and he was sometimes frustrated with it. Allegedly, he once entered a meeting in the Oval Office complaining : "Where are all the Democrats? I hope you're all aware we're all Eisenhower Republicans. We're Eisenhower Republicans here, and we are fighting the Reagan Republicans. We stand for lower deficits and free trade and the bond market. Isn't that great?"
Despite this, however, Clinton and most of the rest of the Democratic Party accepted their role doing nothing more than, to borrow a phrase from political philosopher Roberto Unger, "to put a softer face on the agenda of their conservative opponents." They seek to make marginal improvements for poor, working class, and middle class voters here and there, but never seek to fundamentally shake up the political-economic system in any way. As one critic put it in 1990, even before Clinton's election, the Democratic Party is "...history's second-most enthusiastic capitalist party. They do not interfere with capitalist momentum, but wait for excesses and the inevitable popular reaction." This is why many left-wing critics will refer to some Democrats as neoliberals even when they don't literally advocate for free market capitalism.
Neoliberalism within the Democratic Party looks less like a proposal to privatize or abolish Social Security as much as it does a commitment to benefit-cutting "entitlement reform." It can be seen both in language (the constant discussion of education as an "investment" in "skills" necessary for "improving the workforce," instead of a guaranteed right for all citizens) and in policy (proposing tax cuts for the middle class instead of social spending even when taxes are at some of their lowest rates in decades ; compromis[ing] in advance on major policy proposals like the 2009 stimulus; advocating piecemeal technocratic reforms to healthcare and finance instead of deeper, fundamental reform; etc.).
With their opponents on the defensive and partially compliant with their agenda, the Republicans continued to push further right under the leadership of Newt Gingrich and his "Contract with America." The Democrats started to dig their heels in and push back a little for the first time during the later part of the George W. Bush administration as his (and the wars') approval ratings sank, and they now seem to have more or less stabilized. An increasingly loud progressive coalition of activists and advocates continues to push for ideas like single-payer healthcare, often dismissed as radical despite both being an international norm and the explicit goal of many mainstream Democratic politicians before neoliberalism's rise. The Democratic party establishment, on the contrary, is largely fine holding on to ideological territory that is, in certain areas, to the right of where it was several decades ago.
With the establishment of both major political parties accepting neoliberal ideology, it became default wisdom among economic, political, and media elites. Because the most powerful class of America accepted it as fact, it was instilled into the American consciousness as "common sense" that can't be seriously challenged. Ideas in direct opposition to neoliberalism were largely marginalized, and as a result, much of our modern debate now takes place within its bounds. Today, though, this marginalization is rapidly disappearing.
Today, we are witnessing the collapse of neoliberalism's "common sense" status. Republican elites took neoliberalism being one of their root organizing principles for granted while running campaigns using dog-whistle racism, never realizing that they were attracting a base of voters who hated immigrants a lot more than they hated regulation. The Republicans have drifted so far to the right that unabashed nationalists like Trump can now take the lead of the party, even as he espouses racist xenophobia-inspired protectionism that are in conflict with the neoliberal ideals of the party's business wing.
Even during their neoliberalization, the Democrats always had a left-wing occupied by social democrats. Today they largely occupy the Congressional Progressive Caucus. They were empowered by both opposition to the Iraq War late in the Bush era and the subsequent economic crash that occurred as a result of neoliberal deregulation of the finance sector. Obama ran as a semi-progressive but governed as a standard Democrat, leaving progressive disappointment and frustration to rise to the surface again once a primary was held to determine who would be the Democratic candidate after Obama: thus, the Bernie phenomenon.
Globalism & NeoliberalismIt seems as though the extinction of neoliberalism is embedded in the formula of neoliberalism itself. Neoliberalism and accompanying globalization have resulted in inequality and poverty for significant portions of the population, leaving many people economically impoverished and politically alienated. This prompts an inevitable political reaction, angry and populist in nature. The center-left (ex. Hillary Clinton) and center-right (ex. Jeb Bush) sing the praises of neoliberal globalization, while the left (ex. Bernie Sanders) vigorously attacks the "neoliberal" part of it, and the far-right (ex. Donald Trump) vigorously attack the "globalization" part of it. Today, progressives dislike neoliberalism, but also believe that the far-right's disdain for all forms of globalization is a distraction and misidentification of the root issue, using foreigners and people of color as scapegoats. The problem is not globalization, but globalization implemented in such a way so as to benefit the wealthy and powerful.
Neoliberalism is a powerful ideology and way of looking at the world. The neoliberal views most government involvement in the economy as harmful, and seeks to leave social problems to be solved by private enterprise and markets whenever possible. This is an idea that, over the last several decades, has become widely accepted to varying degrees by people across the political spectrum, and as such has been embedded into modern government and public policy.
A number of other industrialized countries have undergone neoliberalization on roughly the same time frame as the US, and are now experiencing similar backlashes: the U.K., neoliberalized under Margaret Thatcher and others, now has UKIP on its right and Jeremy Corbyn and social democratic Scottish nationalists on its left. France has witnessed the rise of not only the National Front on its far-right, but also the rise of populist socialists like Jean-Luc Mélenchon. Germany has the AfD and Pegida on its right and Die Linke on its left. New Zealand has New Zealand First. Sweden has the Sweden Democrats. Spain has Podemos. Additionally, backlash against "Washington Consensus" neoliberalism in Latin America contributed to a revitalization of left-populism in many countries. Though there are some nations that have experienced some form of neoliberalism without such political effects, a definite connection between neoliberalism and the emergence of anti-neoliberal populism certainly seems to exist.
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Feb 03, 2017 | www.theguardian.com
It's not just a populist backlash – many economists who once swore by free trade have changed their minds, too. How had they got it so wrong?
Share on Facebook Share on Twitter Share via Email T he annual January gathering of the World Economic Forum in Davos is usually a placid affair: a place for well-heeled participants to exchange notes on global business opportunities, or powder conditions on the local ski slopes, while cradling champagne and canapes. This January, the ultra-rich and the sparkling wine returned, but by all reports the mood was one of anxiety, defensiveness and self-reproach.
The future of economic globalisation, for which the Davos men and women see themselves as caretakers, had been shaken by a series of political earthquakes. "Globalisation" can mean many things, but what lay in particular doubt was the long-advanced project of increasing free trade in goods across borders. The previous summer, Britain had voted to leave the largest trading bloc in the world. In November, the unexpected victory of Donald Trump , who vowed to withdraw from major trade deals, appeared to jeopardise the trading relationships of the world's richest country. Forthcoming elections in France and Germany suddenly seemed to bear the possibility of anti-globalisation parties garnering better results than ever before. The barbarians weren't at the gates to the ski-lifts yet – but they weren't very far.
In a panel titled Governing Globalisation , the economist Dambisa Moyo , otherwise a well-known supporter of free trade, forthrightly asked the audience to accept that "there have been significant losses" from globalisation. "It is not clear to me that we are going to be able to remedy them under the current infrastructure," she added. Christine Lagarde, the head of the International Monetary Fund, called for a policy hitherto foreign to the World Economic Forum : "more redistribution". After years of hedging or discounting the malign effects of free trade, it was time to face facts: globalisation caused job losses and depressed wages, and the usual Davos proposals – such as instructing affected populations to accept the new reality – weren't going to work. Unless something changed, the political consequences were likely to get worse.
The backlash to globalisation has helped fuel the extraordinary political shifts of the past 18 months. During the close race to become the Democratic party candidate, senator Bernie Sanders relentlessly attacked Hillary Clinton on her support for free trade . On the campaign trail, Donald Trump openly proposed tilting the terms of trade in favour of American industry. "Americanism, not globalism, shall be our creed," he bellowed at the Republican national convention last July. The vote for Brexit was strongest in the regions of the UK devastated by the flight of manufacturing. At Davos in January, British prime minister Theresa May, the leader of the party of capital and inherited wealth, improbably picked up the theme, warning that, for many, "talk of greater globalisation means their jobs being outsourced and wages undercut." Meanwhile, the European far right has been warning against free movement of people as well as goods. Following her qualifying victory in the first round of France's presidential election, Marine Le Pen warned darkly that "the main thing at stake in this election is the rampant globalisation that is endangering our civilisation."
It was only a few decades ago that globalisation was held by many, even by some critics, to be an inevitable, unstoppable force. "Rejecting globalisation," the American journalist George Packer has written, "was like rejecting the sunrise." Globalisation could take place in services, capital and ideas, making it a notoriously imprecise term; but what it meant most often was making it cheaper to trade across borders – something that seemed to many at the time to be an unquestionable good. In practice, this often meant that industry would move from rich countries, where labour was expensive, to poor countries, where labour was cheaper. People in the rich countries would either have to accept lower wages to compete, or lose their jobs. But no matter what, the goods they formerly produced would now be imported, and be even cheaper. And the unemployed could get new, higher-skilled jobs (if they got the requisite training). Mainstream economists and politicians upheld the consensus about the merits of globalisation, with little concern that there might be political consequences.
Back then, economists could calmly chalk up anti-globalisation sentiment to a marginal group of delusional protesters, or disgruntled stragglers still toiling uselessly in "sunset industries". These days, as sizable constituencies have voted in country after country for anti-free-trade policies, or candidates that promise to limit them, the old self-assurance is gone. Millions have rejected, with uncertain results, the punishing logic that globalisation could not be stopped. The backlash has swelled a wave of soul-searching among economists, one that had already begun to roll ashore with the financial crisis. How did they fail to foresee the repercussions?
I n the heyday of the globalisation consensus, few economists questioned its merits in public. But in 1997, the Harvard economist Dani Rodrik published a slim book that created a stir. Appearing just as the US was about to enter a historic economic boom, Rodrik's book, Has Globalization Gone Too Far?, sounded an unusual note of alarm.
Rodrik pointed to a series of dramatic recent events that challenged the idea that growing free trade would be peacefully accepted. In 1995, France had adopted a programme of fiscal austerity in order to prepare for entry into the eurozone; trade unions responded with the largest wave of strikes since 1968. In 1996, only five years after the end of the Soviet Union – with Russia's once-protected markets having been forcibly opened, leading to a sudden decline in living standards – a communist won 40% of the vote in Russia's presidential elections. That same year, two years after the passing of the North American Free Trade Agreement (Nafta), one of the most ambitious multinational deals ever accomplished, a white nationalist running on an "America first" programme of economic protectionism did surprisingly well in the presidential primaries of the Republican party.
What was the pathology of which all of these disturbing events were symptoms? For Rodrik, it was "the process that has come to be called 'globalisation'". Since the 1980s, and especially following the collapse of the Soviet Union, lowering barriers to international trade had become the axiom of countries everywhere. Tariffs had to be slashed and regulations spiked. Trade unions, which kept wages high and made it harder to fire people, had to be crushed. Governments vied with each other to make their country more hospitable – more "competitive" – for businesses. That meant making labour cheaper and regulations looser, often in countries that had once tried their hand at socialism, or had spent years protecting "homegrown" industries with tariffs.
Facebook Twitter Pinterest Anti-globalisation protesters in Seattle, 1999. Photograph: Eric Draper/APThese moves were generally applauded by economists. After all, their profession had long embraced the principle of comparative advantage – simply put, the idea countries will trade with each other in order to gain what each lacks, thereby benefiting both. In theory, then, the globalisation of trade in goods and services would benefit consumers in rich countries by giving them access to inexpensive goods produced by cheaper labour in poorer countries, and this demand, in turn, would help grow the economies of those poorer countries.
But the social cost, in Rodrik's dissenting view, was high – and consistently underestimated by economists. He noted that since the 1970s, lower-skilled European and American workers had endured a major fall in the real value of their wages, which dropped by more than 20%. Workers were suffering more spells of unemployment, more volatility in the hours they were expected to work.
While many economists attributed much of the insecurity to technological change – sophisticated new machines displacing low-skilled workers – Rodrik suggested that the process of globalisation should shoulder more of the blame. It was, in particular, the competition between workers in developing and developed countries that helped drive down wages and job security for workers in developed countries. Over and over, they would be held hostage to the possibility that their business would up and leave, in order to find cheap labour in other parts of the world; they had to accept restraints on their salaries – or else. Opinion polls registered their strong levels of anxiety and insecurity, and the political effects were becoming more visible. Rodrik foresaw that the cost of greater "economic integration" would be greater "social disintegration". The inevitable result would be a huge political backlash.
As Rodrik would later recall, other economists tended to dismiss his arguments – or fear them. Paul Krugman , who would win the Nobel prize in 2008 for his earlier work in trade theory and economic geography, privately warned Rodrik that his work would give "ammunition to the barbarians".
It was a tacit acknowledgment that pro-globalisation economists, journalists and politicians had come under growing pressure from a new movement on the left, who were raising concerns very similar to Rodrik's. Over the course of the 1990s, an unwieldy international coalition had begun to contest the notion that globalisation was good. Called "anti-globalisation" by the media, and the "alter-globalisation" or "global justice" movement by its participants, it tried to draw attention to the devastating effect that free trade policies were having, especially in the developing world, where globalisation was supposed to be having its most beneficial effect. This was a time when figures such as the New York Times columnist Thomas Friedman had given the topic a glitzy prominence by documenting his time among what he gratingly called "globalutionaries" : chatting amiably with the CEO of Monsanto one day, gawking at lingerie manufacturers in Sri Lanka the next. Activists were intent on showing a much darker picture, revealing how the record of globalisation consisted mostly of farmers pushed off their land and the rampant proliferation of sweatshops. They also implicated the highest world bodies in their critique: the G7, World Bank and IMF. In 1999, the movement reached a high point when a unique coalition of trade unions and environmentalists managed to shut down the meeting of the World Trade Organization in Seattle.
In a state of panic, economists responded with a flood of columns and books that defended the necessity of a more open global market economy, in tones ranging from grandiose to sarcastic. In January 2000, Krugman used his first piece as a New York Times columnist to denounce the "trashing" of the WTO, calling it "a sad irony that the cause that has finally awakened the long-dormant American left is that of – yes! – denying opportunity to third-world workers".
Where Krugman was derisive, others were solemn, putting the contemporary fight against the "anti-globalisation" left in a continuum of struggles for liberty. "Liberals, social democrats and moderate conservatives are on the same side in the great battles against religious fanatics, obscurantists, extreme environmentalists, fascists, Marxists and, of course, contemporary anti-globalisers," wrote the Financial Times columnist and former World Bank economist Martin Wolf in his book Why Globalization Works. Language like this lent the fight for globalisation the air of an epochal struggle. More common was the rhetoric of figures such as Friedman, who in his book The World is Flat mocked the "pampered American college kids" who, "wearing their branded clothing, began to get interested in sweatshops as a way of expiating their guilt".
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Arguments against the global justice movement rested on the idea that the ultimate benefits of a more open and integrated economy would outweigh the downsides. "Freer trade is associated with higher growth and higher growth is associated with reduced poverty," wrote the Columbia University economist Jagdish Bhagwati in his book In Defense of Globalization. "Hence, growth reduces poverty." No matter how troubling some of the local effects, the implication went, globalisation promised a greater good.
The fact that proponents of globalisation now felt compelled to spend much of their time defending it indicates how much visibility the global justice movement had achieved by the early 2000s. Still, over time, the movement lost ground, as a policy consensus settled in favour of globalisation. The proponents of globalisation were determined never to let another gathering be interrupted. They stopped meeting in major cities, and security everywhere was tightened. By the time of the invasion of Iraq, the world's attention had turned from free trade to George Bush and the "war on terror," leaving the globalisation consensus intact.
Above all, there was a widespread perception that globalisation was working as it was supposed to. The local adverse effects that activists pointed to – sweatshop labour, starving farmers – were increasingly obscured by the staggering GDP numbers and fantastical images of gleaming skylines coming out of China. With some lonely exceptions – such as Rodrik and the former World Bank chief and Columbia University professor Joseph Stiglitz – the pursuit of freer trade became a consensus position for economists, commentators and the vast majority of mainstream politicians, to the point where the benefits of free trade seemed to command blind adherence. In a 2006 TV interview, Thomas Friedman was asked whether there was any free trade deal he would not support. He replied that there wasn't, admitting, "I wrote a column supporting the Cafta, the Caribbean Free Trade initiative. I didn't even know what was in it. I just knew two words: free trade."
I n the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.
A few months before the financial crisis hit, Krugman was already confessing to a "guilty conscience". In the 1990s, he had been very influential in arguing that global trade with poor countries had only a small effect on workers' wages in rich countries. By 2008, he was having doubts: the data seemed to suggest that the effect was much larger than he had suspected.
In the years that followed, the crash, the crisis of the eurozone and the worldwide drop in the price of oil and other commodities combined to put a huge dent in global trade. Since 2012, the IMF reported in its World Economic Outlook for October 2016 , trade was growing at 3% a year – less than half the average of the previous three decades. That month, Martin Wolf argued in a column that globalisation had "lost dynamism", due to a slackening of the world economy, the "exhaustion" of new markets to exploit and a rise in protectionist policies around the world. In an interview earlier this year, Wolf suggested to me that, though he remained convinced globalisation had not been the decisive factor in rising inequality, he had nonetheless not fully foreseen when he was writing Why Globalization Works how "radical the implications" of worsening inequality "might be for the US, and therefore the world". Among these implications appears to be a rising distrust of the establishment that is blamed for the inequality. "We have a very big political problem in many of our countries," he said. "The elites – the policymaking business and financial elites – are increasingly disliked . You need to make policy which brings people to think again that their societies are run in a decent and civilised way."
Facebook Twitter Pinterest Illustration by Nathalie LeesThat distrust of the establishment has had highly visible political consequences: Farage, Trump, and Le Pen on the right; but also in new parties on the left, such as Spain's Podemos, and curious populist hybrids, such as Italy's Five Star Movement . As in 1997, but to an even greater degree, the volatile political scene reflects public anxiety over "the process that has come to be called 'globalisation'". If the critics of globalisation could be dismissed before because of their lack of economics training, or ignored because they were in distant countries, or kept out of sight by a wall of police, their sudden political ascendancy in the rich countries of the west cannot be so easily discounted today.
Over the past year, the opinion pages of prestigious newspapers have been filled with belated, rueful comments from the high priests of globalisation – the men who appeared to have defeated the anti-globalisers two decades earlier. Perhaps the most surprising such transformation has been that of Larry Summers. Possessed of a panoply of elite titles – former chief economist of the World Bank, former Treasury secretary, president emeritus of Harvard, former economic adviser to President Barack Obama – Summers was renowned in the 1990s and 2000s for being a blustery proponent of globalisation. For Summers, it seemed, market logic was so inexorable that its dictates prevailed over every social concern. In an infamous World Bank memo from 1991 , he held that the cheapest way to dispose of toxic waste in rich countries was to dump it in poor countries, since it was financially cheaper for them to manage it. "The laws of economics, it's often forgotten, are like the laws of engineering," he said in a speech that year at a World Bank-IMF meeting in Bangkok. "There's only one set of laws and they work everywhere. One of the things I've learned in my short time at the World Bank is that whenever anybody says, 'But economics works differently here,' they're about to say something dumb."
Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages. More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing, and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says, an era of slow growth is here to stay.
In Summers's recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a "responsible nationalism". Now he argues that politicians must recognise that "the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good".
O ne curious thing about the pro-globalisation consensus of the 1990s and 2000s, and its collapse in recent years, is how closely the cycle resembles a previous era. Pursuing free trade has always produced displacement and inequality – and political chaos, populism and retrenchment to go with it. Every time the social consequences of free trade are overlooked, political backlash follows. But free trade is only one of many forms that economic integration can take. History seems to suggest, however, that it might be the most destabilising one.
Nearly all economists and scholars of globalisation like to point to the fact that the economy was rather globalised by the early 20th century. As European countries colonised Asia and sub-Saharan Africa, they turned their colonies into suppliers of raw materials for European manufacturers, as well as markets for European goods. Meanwhile, the economies of the colonisers were also becoming free-trade zones for each other. "The opening years of the 20th century were the closest thing the world had ever seen to a free world market for goods, capital and labour," writes the Harvard professor of government Jeffry Frieden in his standard account, Global Capitalism: Its Fall and Rise in the 20th Century. "It would be a hundred years before the world returned to that level of globalisation."
In addition to military force, what underpinned this convenient arrangement for imperial nations was the gold standard. Under this system, each national currency had an established gold value: the British pound sterling was backed by 113 grains of pure gold; the US dollar by 23.22 grains, and so on. This entailed that exchange rates were also fixed: a British pound was always equal to 4.87 dollars. The stability of exchange rates meant that the cost of doing business across borders was predictable. Just like the eurozone today, you could count on the value of the currency staying the same, so long as the storehouse of gold remained more or less the same.
When there were gold shortages – as there were in the 1870s – the system stopped working. To protect the sanctity of the standard under conditions of stress, central bankers across the Europe and the US tightened access to credit and deflated prices. This left financiers in a decent position, but crushed farmers and the rural poor, for whom falling prices meant starvation. Then as now, economists and mainstream politicians largely overlooked the darker side of the economic picture.
In the US, this fuelled one of the world's first self-described "populist" revolts, leading to the nomination of William Jennings Bryan as the Democratic party candidate in 1896. At his nominating convention, he gave a famous speech lambasting gold backers: "You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold." Then as now, financial elites and their supporters in the press were horrified. "There has been an upheaval of the political crust," the Times of London reported, "and strange creatures have come forth."
Businessmen were so distressed by Bryan that they backed the Republican candidate, William McKinley, who won partly by outspending Bryan five to one. Meanwhile, gold was bolstered by the discovery of new reserves in colonial South Africa. But the gold standard could not survive the first world war and the Great Depression. By the 1930s, unionisation had spread to more industries and there was a growing worldwide socialist movement. Protecting gold would mean mass unemployment and social unrest. Britain went off the gold standard in 1931, while Franklin Roosevelt took the US off it in 1933; France and several other countries would follow in 1936.
The prioritisation of finance and trade over the welfare of people had come momentarily to an end. But this wasn't the end of the global economic system.
T he trade system that followed was global, too, with high levels of trade – but it took place on terms that often allowed developing countries to protect their industries. Because, from the perspective of free traders, protectionism is always seen as bad, the success of this postwar system has been largely under-recognised.
Over the course of the 1930s and 40s, liberals – John Maynard Keynes among them – who had previously regarded departures from free trade as "an imbecility and an outrage" began to lose their religion. "The decadent international but individualistic capitalism, in the hands of which we found ourselves after the war, is not a success," Keynes found himself writing in 1933 . "It is not intelligent, it is not beautiful, it is not just, it is not virtuous – and it doesn't deliver the goods. In short, we dislike it, and we are beginning to despise it." He claimed sympathies "with those who would minimise, rather than with those who would maximise, economic entanglement among nations," and argued that goods "be homespun whenever it is reasonably and conveniently possible".
The international systems that chastened figures such as Keynes helped produce in the next few years – especially the Bretton Woods agreement and the General Agreement on Tariffs and Trade (Gatt) – set the terms under which the new wave of globalisation would take place.
The key to the system's viability, in Rodrik's view, was its flexibility – something absent from contemporary globalisation, with its one-size-fits-all model of capitalism. Bretton Woods stabilised exchange rates by pegging the dollar loosely to gold, and other currencies to the dollar. Gatt consisted of rules governing free trade – negotiated by participating countries in a series of multinational "rounds" – that left many areas of the world economy, such as agriculture, untouched or unaddressed. "Gatt's purpose was never to maximise free trade," Rodrik writes. "It was to achieve the maximum amount of trade compatible with different nations doing their own thing. In that respect, the institution proved spectacularly successful."
Facebook Twitter Pinterest Construction workers in Beijing, China. Photograph: Ng Han Guan/APPartly because Gatt was not always dogmatic about free trade, it allowed most countries to figure out their own economic objectives, within a somewhat international ambit. When nations contravened the agreement's terms on specific areas of national interest, they found that it "contained loopholes wide enough for an elephant to pass", in Rodrik's words. If a nation wanted to protect its steel industry, for example, it could claim "injury" under the rules of Gatt and raise tariffs to discourage steel imports: "an abomination from the standpoint of free trade". These were useful for countries that were recovering from the war and needed to build up their own industries via tariffs – duties imposed on particular imports. Meanwhile, from 1948 to 1990, world trade grew at an annual average of nearly 7% – faster than the post-communist years, which we think of as the high point of globalisation. "If there was a golden era of globalisation," Rodrik has written, "this was it."
Gatt, however, failed to cover many of the countries in the developing world. These countries eventually created their own system, the United Nations conference on trade and development (UNCTAD). Under this rubric, many countries – especially in Latin America, the Middle East, Africa and Asia – adopted a policy of protecting homegrown industries by replacing imports with domestically produced goods. It worked poorly in some places – India and Argentina, for example, where the trade barriers were too high, resulting in factories that cost more to set up than the value of the goods they produced – but remarkably well in others, such as east Asia, much of Latin America and parts of sub-Saharan Africa, where homegrown industries did spring up. Though many later economists and commentators would dismiss the achievements of this model, it theoretically fit Larry Summers's recent rubric on globalisation: "the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good."
The critical turning point – away from this system of trade balanced against national protections – came in the 1980s. Flagging growth and high inflation in the west, along with growing competition from Japan, opened the way for a political transformation. The elections of Margaret Thatcher and Ronald Reagan were seminal, putting free-market radicals in charge of two of the world's five biggest economies and ushering in an era of "hyperglobalisation". In the new political climate, economies with large public sectors and strong governments within the global capitalist system were no longer seen as aids to the system's functioning, but impediments to it.
Not only did these ideologies take hold in the US and the UK; they seized international institutions as well. Gatt renamed itself as the World Trade Organization (WTO), and the new rules the body negotiated began to cut more deeply into national policies. Its international trade rules sometimes undermined national legislation. The WTO's appellate court intervened relentlessly in member nations' tax, environmental and regulatory policies, including those of the United States: the US's fuel emissions standards were judged to discriminate against imported gasoline, and its ban on imported shrimp caught without turtle-excluding devices was overturned. If national health and safety regulations were stricter than WTO rules necessitated, they could only remain in place if they were shown to have "scientific justification".
The purest version of hyperglobalisation was tried out in Latin America in the 1980s. Known as the "Washington consensus", this model usually involved loans from the IMF that were contingent on those countries lowering trade barriers and privatising many of their nationally held industries. Well into the 1990s, economists were proclaiming the indisputable benefits of openness. In an influential 1995 paper, Jeffrey Sachs and Andrew Warner wrote: "We find no cases to support the frequent worry that a country might open and yet fail to grow."
But the Washington consensus was bad for business: most countries did worse than before. Growth faltered, and citizens across Latin America revolted against attempted privatisations of water and gas. In Argentina, which followed the Washington consensus to the letter, a grave crisis resulted in 2002 , precipitating an economic collapse and massive street protests that forced out the government that had pursued privatising reforms. Argentina's revolt presaged a left-populist upsurge across the continent: from 1999 to 2007, leftwing leaders and parties took power in Brazil, Venezuela, Bolivia and Ecuador, all of them campaigning against the Washington consensus on globalisation. These revolts were a preview of the backlash of today.
R odrik – perhaps the contemporary economist whose views have been most amply vindicated by recent events – was himself a beneficiary of protectionism in Turkey. His father's ballpoint pen company was sheltered under tariffs, and achieved enough success to allow Rodrik to attend Harvard in the 1970s as an undergraduate. This personal understanding of the mixed nature of economic success may be one of the reasons why his work runs against the broad consensus of mainstream economics writing on globalisation.
"I never felt that my ideas were out of the mainstream," Rodrik told me recently. Instead, it was that the mainstream had lost touch with the diversity of opinions and methods that already existed within economics. "The economics profession is strange in that the more you move away from the seminar room to the public domain, the more the nuances get lost, especially on issues of trade." He lamented the fact that while, in the classroom, the models of trade discuss losers and winners, and, as a result, the necessity of policies of redistribution, in practice, an "arrogance and hubris" had led many economists to ignore these implications. "Rather than speaking truth to power, so to speak, many economists became cheerleaders for globalisation."
In his 2011 book The Globalization Paradox , Rodrik concluded that "we cannot simultaneously pursue democracy, national determination, and economic globalisation." The results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push back, for better or for worse, against the campaigns and institutions that promised more globalisation. "I'm not at all surprised by the backlash," Rodrik told me. "Really, nobody should have been surprised."
But what, in any case, would "more globalisation" look like? For the same economists and writers who have started to rethink their commitments to greater integration, it doesn't mean quite what it did in the early 2000s. It's not only the discourse that's changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good times may be running out.
Facebook Twitter Pinterest Illustration by Nathalie LeesStatistics from Global Inequality , a 2016 book by the development economist Branko Milanović, indicate that in relative terms the greatest benefits of globalisation have accrued to a rising "emerging middle class", based preponderantly in China. But the cons are there, too: in absolute terms, the largest gains have gone to what is commonly called "the 1%" – half of whom are based in the US. Economist Richard Baldwin has shown in his recent book, The Great Convergence, that nearly all of the gains from globalisation have been concentrated in six countries.
Barring some political catastrophe, in which rightwing populism continued to gain, and in which globalisation would be the least of our problems – Wolf admitted that he was "not at all sure" that this could be ruled out – globalisation was always going to slow; in fact, it already has. One reason, says Wolf, was that "a very, very large proportion of the gains from globalisation – by no means all – have been exploited. We have a more open world economy to trade than we've ever had before." Citing The Great Convergence, Wolf noted that supply chains have already expanded, and that future developments, such as automation and the use of robots, looked to undermine the promise of a growing industrial workforce. Today, the political priorities were less about trade and more about the challenge of retraining workers , as technology renders old jobs obsolete and transforms the world of work.
Rodrik, too, believes that globalisation, whether reduced or increased, is unlikely to produce the kind of economic effects it once did. For him, this slowdown has something to do with what he calls "premature deindustrialisation". In the past, the simplest model of globalisation suggested that rich countries would gradually become "service economies", while emerging economies picked up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected to have more industrial potential are going through the stages of automation more quickly than previously developed countries did, and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.
For both Rodrik and Wolf, the political reaction to globalisation bore possibilities of deep uncertainty. "I really have found it very difficult to decide whether what we're living through is a blip, or a fundamental and profound transformation of the world – at least as significant as the one that brought about the first world war and the Russian revolution," Wolf told me. He cited his agreement with economists such as Summers that shifting away from the earlier emphasis on globalisation had now become a political priority; that to pursue still greater liberalisation was like showing "a red rag to a bull" in terms of what it might do to the already compromised political stability of the western world.
Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill Clinton passed Nafta, but failed to expand safety nets. "The issue is that the people are rightly not trusting the centrists who are now promising compensation," Rodrik said. "One reason that Hillary Clinton didn't get any traction with those people is that she didn't have any credibility."
Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues for global growth, and that much of the damage done by globalisation – economic and political – is irreversible. "There is a sense that we're at a turning point," he said. "There's a lot more thinking about what can be done. There's a renewed emphasis on compensation – which, you know, I think has come rather late."
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Nov 14, 2017 | www.theguardian.com
Neoliberalism and its usual prescriptions – always more markets, always less government – are in fact a perversion of mainstream economics.
As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over cultural norms, and private entrepreneurship over collective action. It has been used to describe a wide range of phenomena – from Augusto Pinochet to Margaret Thatcher and Ronald Reagan, from the Clinton Democrats and the UK's New Labour to the economic opening in China and the reform of the welfare state in Sweden.
The term is used as a catchall for anything that smacks of deregulation, liberalisation, privatisation or fiscal austerity. Today it is routinely reviled as a shorthand for the ideas and practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash.
We live in the age of neoliberalism, apparently. But who are neoliberalism's adherents and disseminators – the neoliberals themselves? Oddly, you have to go back a long time to find anyone explicitly embracing neoliberalism. In 1982, Charles Peters, the longtime editor of the political magazine Washington Monthly, published an essay titled A Neo-Liberal's Manifesto . It makes for interesting reading 35 years later, since the neoliberalism it describes bears little resemblance to today's target of derision. The politicians Peters names as exemplifying the movement are not the likes of Thatcher and Reagan, but rather liberals – in the US sense of the word – who have become disillusioned with unions and big government and dropped their prejudices against markets and the military.
The use of the term "neoliberal" exploded in the 1990s, when it became closely associated with two developments, neither of which Peters's article had mentioned. One of these was financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle . The second was economic globalisation, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialisation and globalisation have become the most overt manifestations of neoliberalism in today's world.
That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that centre-left politicians – Democrats in the US, socialists and social democrats in Europe – enthusiastically adopted some of the central creeds of Thatcherism and Reaganism, such as deregulation, privatisation, financial liberalisation and individual enterprise? Much of our contemporary policy discussion remains infused with principles supposedly grounded in the concept of homo economicus , the perfectly rational human being, found in many economic theories, who always pursues his own self-interest.
But the looseness of the term neoliberalism also means that criticism of it often misses the mark. There is nothing wrong with markets, private entrepreneurship or incentives – when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas.
The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions. A proper understanding of the economics that lie behind neoliberalism would allow us to identify – and to reject – ideology when it masquerades as economic science. Most importantly, it would help us to develop the institutional imagination we badly need to redesign capitalism for the 21st century.
N eoliberalism is typically understood as being based on key tenets of mainstream economic science. To see those tenets without the ideology, consider this thought experiment. A well-known and highly regarded economist lands in a country he has never visited and knows nothing about. He is brought to a meeting with the country's leading policymakers. "Our country is in trouble," they tell him. "The economy is stagnant, investment is low, and there is no growth in sight." They turn to him expectantly: "Please tell us what we should do to make our economy grow."
The economist pleads ignorance and explains that he knows too little about the country to make any recommendations. He would need to study the history of the economy, to analyse the statistics, and to travel around the country before he could say anything.
Facebook Twitter Pinterest Tony Blair and Bill Clinton: centre-left politicians who enthusiastically adopted some of the central creeds of Thatcherism and Reaganism. Photograph: ReutersBut his hosts are insistent. "We understand your reticence, and we wish you had the time for all that," they tell him. "But isn't economics a science, and aren't you one of its most distinguished practitioners? Even though you do not know much about our economy, surely there are some general theories and prescriptions you can share with us to guide our economic policies and reforms."
The economist is now in a bind. He does not want to emulate those economic gurus he has long criticised for peddling their favourite policy advice. But he feels challenged by the question. Are there universal truths in economics? Can he say anything valid or useful?
So he begins. The efficiency with which an economy's resources are allocated is a critical determinant of the economy's performance, he says. Efficiency, in turn, requires aligning the incentives of households and businesses with social costs and benefits. The incentives faced by entrepreneurs, investors and producers are particularly important when it comes to economic growth. Growth needs a system of property rights and contract enforcement that will ensure those who invest can retain the returns on their investments. And the economy must be open to ideas and innovations from the rest of the world.
But economies can be derailed by macroeconomic instability, he goes on. Governments must therefore pursue a sound monetary policy , which means restricting the growth of liquidity to the increase in nominal money demand at reasonable inflation. They must ensure fiscal sustainability, so that the increase in public debt does not outpace national income. And they must carry out prudential regulation of banks and other financial institutions to prevent the financial system from taking excessive risk.
Now he is warming to his task. Economics is not just about efficiency and growth, he adds. Economic principles also carry over to equity and social policy. Economics has little to say about how much redistribution a society should seek. But it does tell us that the tax base should be as broad as possible, and that social programmes should be designed in a way that does not encourage workers to drop out of the labour market.
By the time the economist stops, it appears as if he has laid out a fully fledged neoliberal agenda. A critic in the audience will have heard all the code words: efficiency, incentives, property rights, sound money, fiscal prudence. And yet the universal principles that the economist describes are in fact quite open-ended. They presume a capitalist economy – one in which investment decisions are made by private individuals and firms – but not much beyond that. They allow for – indeed, they require – a surprising variety of institutional arrangements.
So has the economist just delivered a neoliberal screed? We would be mistaken to think so, and our mistake would consist of associating each abstract term – incentives, property rights, sound money – with a particular institutional counterpart. And therein lies the central conceit, and the fatal flaw, of neoliberalism: the belief that first-order economic principles map on to a unique set of policies, approximated by a Thatcher/Reagan-style agenda.
Consider property rights. They matter insofar as they allocate returns on investments. An optimal system would distribute property rights to those who would make the best use of an asset, and afford protection against those most likely to expropriate the returns. Property rights are good when they protect innovators from free riders, but they are bad when they protect them from competition. Depending on the context, a legal regime that provides the appropriate incentives can look quite different from the standard US-style regime of private property rights.
This may seem like a semantic point with little practical import; but China's phenomenal economic success is largely due to its orthodoxy-defying institutional tinkering. China turned to markets, but did not copy western practices in property rights. Its reforms produced market-based incentives through a series of unusual institutional arrangements that were better adapted to the local context. Rather than move directly from state to private ownership, for example, which would have been stymied by the weakness of the prevailing legal structures, the country relied on mixed forms of ownership that provided more effective property rights for entrepreneurs in practice. Township and Village Enterprises (TVEs), which spearheaded Chinese economic growth during the 1980s, were collectives owned and controlled by local governments. Even though TVEs were publicly owned, entrepreneurs received the protection they needed against expropriation. Local governments had a direct stake in the profits of the firms, and hence did not want to kill the goose that lays the golden eggs.
China relied on a range of such innovations, each delivering the economist's higher-order economic principles in unfamiliar institutional arrangements. For instance, it shielded its large state sector from global competition, establishing special economic zones where foreign firms could operate with different rules than in the rest of the economy. In view of such departures from orthodox blueprints, describing China's economic reforms as neoliberal – as critics are inclined to do – distorts more than it reveals. If we are to call this neoliberalism, we must surely look more kindly on the ideas behind the most dramatic poverty reduction in history.
One might protest that China's institutional innovations were purely transitional. Perhaps it will have to converge on western-style institutions to sustain its economic progress. But this common line of thinking overlooks the diversity of capitalist arrangements that still prevails among advanced economies, despite the considerable homogenisation of our policy discourse.
What, after all, are western institutions? The size of the public sector in OECD countries varies, from a third of the economy in Korea to nearly 60% in Finland. In Iceland, 86% of workers are members of a trade union; the comparable number in Switzerland is just 16%. In the US, firms can fire workers almost at will; French labour laws have historically required employers to jump through many hoops first. Stock markets have grown to a total value of nearly one-and-a-half times GDP in the US; in Germany, they are only a third as large, equivalent to just 50% of GDP.
Facebook Twitter Pinterest 'China turned to markets, but did not copy western practices ... ' Photograph: AFP/GettyThe idea that any one of these models of taxation, labour relations or financial organisation is inherently superior to the others is belied by the varying economic fortunes that each of these economies have experienced over recent decades. The US has gone through successive periods of angst in which its economic institutions were judged inferior to those in Germany, Japan, China, and now possibly Germany again. Certainly, comparable levels of wealth and productivity can be produced under very different models of capitalism. We might even go a step further: today's prevailing models probably come nowhere near exhausting the range of what might be possible, and desirable, in the future.
The visiting economist in our thought experiment knows all this, and recognises that the principles he has enunciated need to be filled in with institutional detail before they become operational. Property rights? Yes, but how? Sound money? Of course, but how? It would perhaps be easier to criticise his list of principles for being vacuous than to denounce it as a neoliberal screed.
Still, these principles are not entirely content-free. China, and indeed all countries that managed to develop rapidly, demonstrate the utility of those principles once they are properly adapted to local context. Conversely, too many economies have been driven to ruin courtesy of political leaders who chose to violate them. We need look no further than Latin American populists or eastern European communist regimes to appreciate the practical significance of sound money, fiscal sustainability and private incentives.
O f course, economics goes beyond a list of abstract, largely common-sense principles. Much of the work of economists consists of developing stylised models of how economies work and then confronting those models with evidence. Economists tend to think of what they do as progressively refining their understanding of the world: their models are supposed to get better and better as they are tested and revised over time. But progress in economics happens differently.
Economists study a social reality that is unlike the physical universe. It is completely manmade, highly malleable and operates according to different rules across time and space. Economics advances not by settling on the right model or theory to answer such questions, but by improving our understanding of the diversity of causal relationships. Neoliberalism and its customary remedies – always more markets, always less government – are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.
Does an increase in the minimum wage depress employment? Yes, if the labour market is really competitive and employers have no control over the wage they must pay to attract workers; but not necessarily otherwise. Does trade liberalisation increase economic growth? Yes, if it increases the profitability of industries where the bulk of investment and innovation takes place; but not otherwise. Does more government spending increase employment? Yes, if there is slack in the economy and wages do not rise; but not otherwise. Does monopoly harm innovation? Yes and no, depending on a whole host of market circumstances.
Facebook Twitter Pinterest 'Today [neoliberalism] is routinely reviled as a shorthand for the ideas that have produced growing economic inequality and precipitated our current populist backlash' Trump signing an order to take the US out of the TPP trade pact. Photograph: AFP/GettyIn economics, new models rarely supplant older models. The basic competitive-markets model dating back to Adam Smith has been modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric information, irrational behaviour and many other real-world features. But the older models remain as useful as ever. Understanding how real markets operate necessitates using different lenses at different times.
Perhaps maps offer the best analogy. Just like economic models, maps are highly stylised representations of reality . They are useful precisely because they abstract from many real-world details that would get in the way. But abstraction also implies that we need a different map depending on the nature of our journey. If we are travelling by bike, we need a map of bike trails. If we are to go on foot, we need a map of footpaths. If a new subway is constructed, we will need a subway map – but we wouldn't throw out the older maps.
Economists tend to be very good at making maps, but not good enough at choosing the one most suited to the task at hand. When confronted with policy questions of the type our visiting economist faces, too many of them resort to "benchmark" models that favour the laissez-faire approach. Kneejerk solutions and hubris replace the richness and humility of the discussion in the seminar room. John Maynard Keynes once defined economics as the "science of thinking in terms of models, joined to the art of choosing models which are relevant". Economists typically have trouble with the "art" part.
This, too, can be illustrated with a parable. A journalist calls an economics professor for his view on whether free trade is a good idea. The professor responds enthusiastically in the affirmative. The journalist then goes undercover as a student in the professor's advanced graduate seminar on international trade. He poses the same question: is free trade good? This time the professor is stymied. "What do you mean by 'good'?" he responds. "And good for whom?" The professor then launches into an extensive exegesis that will ultimately culminate in a heavily hedged statement: "So if the long list of conditions I have just described are satisfied, and assuming we can tax the beneficiaries to compensate the losers, freer trade has the potential to increase everyone's wellbeing." If he is in an expansive mood, the professor might add that the effect of free trade on an economy's longterm growth rate is not clear either, and would depend on an altogether different set of requirements.
This professor is rather different from the one the journalist encountered previously. On the record, he exudes self-confidence, not reticence, about the appropriate policy. There is one and only one model, at least as far as the public conversation is concerned, and there is a single correct answer, regardless of context. Strangely, the professor deems the knowledge that he imparts to his advanced students to be inappropriate (or dangerous) for the general public. Why?
The roots of such behaviour lie deep in the culture of the economics profession. But one important motive is the zeal to display the profession's crown jewels – market efficiency, the invisible hand, comparative advantage – in untarnished form, and to shield them from attack by self-interested barbarians, namely the protectionists . Unfortunately, these economists typically ignore the barbarians on the other side of the issue – financiers and multinational corporations whose motives are no purer and who are all too ready to hijack these ideas for their own benefit.
As a result, economists' contributions to public debate are often biased in one direction, in favour of more trade, more finance and less government. That is why economists have developed a reputation as cheerleaders for neoliberalism, even if mainstream economics is very far from a paean to laissez-faire. The economists who let their enthusiasm for free markets run wild are in fact not being true to their own discipline.
H ow then should we think about globalisation in order to liberate it from the grip of neoliberal practices? We must begin by understanding the positive potential of global markets. Access to world markets in goods, technologies and capital has played an important role in virtually all of the economic miracles of our time. China is the most recent and powerful reminder of this historical truth, but it is not the only case. Before China, similar miracles were performed by South Korea, Taiwan, Japan and a few non-Asian countries such as Mauritius . All of these countries embraced globalisation rather than turn their backs on it, and they benefited handsomely.
Defenders of the existing economic order will quickly point to these examples when globalisation comes into question. What they will fail to say is that almost all of these countries joined the world economy by violating neoliberal strictures. South Korea and Taiwan, for instance, heavily subsidised their exporters, the former through the financial system and the latter through tax incentives. All of them eventually removed most of their import restrictions, long after economic growth had taken off.
But none, with the sole exception of Chile in the 1980s under Pinochet, followed the neoliberal recommendation of a rapid opening-up to imports. Chile's neoliberal experiment eventually produced the worst economic crisis in all of Latin America. While the details differ across countries, in all cases governments played an active role in restructuring the economy and buffering it against a volatile external environment. Industrial policies, restrictions on capital flows and currency controls – all prohibited in the neoliberal playbook – were rampant.
Facebook Twitter Pinterest Protest against Nafta in Mexico City in 2008: since the reforms of the mid-90s, the country's economy has underperformed. Photograph: EPABy contrast, countries that stuck closest to the neoliberal model of globalisation were sorely disappointed. Mexico provides a particularly sad example. Following a series of macroeconomic crises in the mid-1990s, Mexico embraced macroeconomic orthodoxy, extensively liberalised its economy, freed up the financial system, sharply reduced import restrictions and signed the North American Free Trade Agreement (Nafta). These policies did produce macroeconomic stability and a significant rise in foreign trade and internal investment. But where it counts – in overall productivity and economic growth – the experiment failed . Since undertaking the reforms, overall productivity in Mexico has stagnated, and the economy has underperformed even by the undemanding standards of Latin America.
These outcomes are not a surprise from the perspective of sound economics. They are yet another manifestation of the need for economic policies to be attuned to the failures to which markets are prone, and to be tailored to the specific circumstances of each country. No single blueprint fits all.
A s Peters's 1982 manifesto attests, the meaning of neoliberalism has changed considerably over time as the label has acquired harder-line connotations with respect to deregulation, financialisation and globalisation. But there is one thread that connects all versions of neoliberalism, and that is the emphasis on economic growth . Peters wrote in 1982 that the emphasis was warranted because growth is essential to all our social and political ends – community, democracy, prosperity. Entrepreneurship, private investment and removing obstacles that stand in the way (such as excessive regulation) were all instruments for achieving economic growth. If a similar neoliberal manifesto were penned today, it would no doubt make the same point.
Critics often point out that this emphasis on economics debases and sacrifices other important values such as equality, social inclusion, democratic deliberation and justice. Those political and social objectives obviously matter enormously, and in some contexts they matter the most. They cannot always, or even often, be achieved by means of technocratic economic policies; politics must play a central role.
Still, neoliberals are not wrong when they argue that our most cherished ideals are more likely to be attained when our economy is vibrant, strong and growing. Where they are wrong is in believing that there is a unique and universal recipe for improving economic performance, to which they have access. The fatal flaw of neoliberalism is that it does not even get the economics right. It must be rejected on its own terms for the simple reason that it is bad economics.
A version of this article first appeared in Boston Review
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Dec 23, 2019 | newrepublic.com
Welcome to the Decade From Hell , our look back at an arbitrary 10-year period that began with a great outpouring of hope and ended in a cavalcade of despair.The long-dominant ideology brought us forever wars, the Great Recession, and extreme inequality. Good riddance.With the 2008 financial crash and the Great Recession, the ideology of neoliberalism lost its force. The approach to politics, global trade, and social philosophy that defined an era led not to never-ending prosperity but utter disaster. "Laissez-faire is finished," declared French President Nicolas Sarkozy. Federal Reserve Chairman Alan Greenspan admitted in testimony before Congress that his ideology was flawed. In an extraordinary statement, Australian Prime Minister Kevin Rudd declared that the crash "called into question the prevailing neoliberal economic orthodoxy of the past 30 years -- the orthodoxy that has underpinned the national and global regulatory frameworks that have so spectacularly failed to prevent the economic mayhem which has been visited upon us."
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May 30, 2019 | www.theguardian.com
Bill Clinton and Tony Blair represented neoliberalism with a human face but remained beholden to an expired ideology. Photograph: Mark Lennihan/AP W hat kind of economic system is most conducive to human wellbeing? That question has come to define the current era, because, after 40 years of neoliberalism in the United States and other advanced economies, we know what doesn't work.The neoliberal experiment – lower taxes on the rich, deregulation of labour and product markets, financialisation, and globalisation – has been a spectacular failure. Growth is lower than it was in the quarter-century after the second world war, and most of it has accrued to the very top of the income scale. After decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried.
Vying to succeed it are at least three major political alternatives: far-right nationalism, centre-left reformism and the progressive left (with the centre-right representing the neoliberal failure). And yet, with the exception of the progressive left, these alternatives remain beholden to some form of the ideology that has (or should have) expired.
The centre-left, for example, represents neoliberalism with a human face. Its goal is to bring the policies of former US president Bill Clinton and former British prime minister Tony Blair into the 21st century, making only slight revisions to the prevailing modes of financialisation and globalisation.
Meanwhile, the nationalist right disowns globalisation, blaming migrants and foreigners for all of today's problems. Yet as Donald Trump's presidency has shown, it is no less committed – at least in its American variant – to tax cuts for the rich, deregulation and shrinking or eliminating social programmes.
By contrast, the third camp advocates what I call progressive capitalism , which prescribes a radically different economic agenda, based on four priorities. The first is to restore the balance between markets, the state and civil society. Slow economic growth, rising inequality, financial instability and environmental degradation are problems born of the market, and thus cannot and will not be overcome by the market on its own. Governments have a duty to limit and shape markets through environmental, health, occupational safety and other types of regulation. It is also the government's job to do what the market cannot or will not do, such as actively investing in basic research, technology, education and the health of its constituents.
The second priority is to recognise that the "wealth of nations" is the result of scientific inquiry – learning about the world around us – and social organisation that allows large groups of people to work together for the common good. Markets still have a crucial role to play in facilitating social cooperation, but they serve this purpose only if they are governed by the rule of law and subject to democratic checks. Otherwise, individuals can get rich by exploiting others, extracting wealth through rent-seeking rather than creating wealth through genuine ingenuity. Many of today's wealthy took the exploitation route to get where they are. They have been well served by Trump's policies, which have encouraged rent-seeking while destroying the underlying sources of wealth creation. Progressive capitalism seeks to do precisely the opposite.
There is no magic bullet that can reverse the damage done by decades of neoliberalism
This brings us to the third priority: addressing the growing problem of concentrated market power . By exploiting information advantages, buying up potential competitors and creating entry barriers, dominant firms are able to engage in large-scale rent-seeking to the detriment of everyone else. The rise in corporate market power, combined with the decline in workers' bargaining power, goes a long way toward explaining why inequality is so high and growth so tepid. Unless government takes a more active role than neoliberalism prescribes, these problems will likely become much worse, owing to advances in robotisation and artificial intelligence.
The fourth key item on the progressive agenda is to sever the link between economic power and political influence. Economic power and political influence are mutually reinforcing and self-perpetuating, especially where, as in the US, wealthy individuals and corporations may spend without limit in elections. As the US moves ever closer to a fundamentally undemocratic system of "one dollar, one vote", the system of checks and balances so necessary for democracy likely cannot hold: nothing will be able to constrain the power of the wealthy. This is not just a moral and political problem: economies with less inequality actually perform better . Progressive-capitalist reforms thus have to begin by curtailing the influence of money in politics and reducing wealth inequality.
There is no magic bullet that can reverse the damage done by decades of neoliberalism. But a comprehensive agenda along the lines sketched above absolutely can. Much will depend on whether reformers are as resolute in combating problems like excessive market power and inequality as the private sector is in creating them.
A comprehensive agenda must focus on education, research and the other true sources of wealth. It must protect the environment and fight climate change with the same vigilance as the Green New Dealers in the US and Extinction Rebellion in the United Kingdom. And it must provide public programmes to ensure that no citizen is denied the basic requisites of a decent life. These include economic security, access to work and a living wage, health care and adequate housing, a secure retirement, and a quality education for one's children.
This agenda is eminently affordable; in fact, we cannot afford not to enact it. The alternatives offered by nationalists and neoliberals would guarantee more stagnation, inequality, environmental degradation and political acrimony, potentially leading to outcomes we do not even want to imagine.
Progressive capitalism is not an oxymoron. Rather, it is the most viable and vibrant alternative to an ideology that has clearly failed. As such, it represents the best chance we have of escaping our current economic and political malaise.
Joseph E Stiglitz is a Nobel laureate in economics, university professor at Columbia University and chief economist at the Roosevelt Institute. Project Syndicate
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May 24, 2015 | 5w2.vatican.va
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6. My predecessor Benedict XVI likewise proposed "eliminating the structural causes of the dysfunctions of the world economy and correcting models of growth which have proved incapable of ensuring respect for the environment".[10] He observed that the world cannot be analyzed by isolating only one of its aspects, since "the book of nature is one and indivisible", and includes the environment, life, sexuality, the family, social relations, and so forth. It follows that "the deterioration of nature is closely connected to the culture which shapes human coexistence".[11] Pope Benedict asked us to recognize that the natural environment has been gravely damaged by our irresponsible behaviour. The social environment has also suffered damage. Both are ultimately due to the same evil: the notion that there are no indisputable truths to guide our lives, and hence human freedom is limitless. We have forgotten that "man is not only a freedom which he creates for himself. Man does not create himself. He is spirit and will, but also nature".[12] With paternal concern, Benedict urged us to realize that creation is harmed "where we ourselves have the final word, where everything is simply our property and we use it for ourselves alone. The misuse of creation begins when we no longer recognize any higher instance than ourselves, when we see nothing else but ourselves".[13]
United by the same concern
7. These statements of the Popes echo the reflections of numerous scientists, philosophers, theologians and civic groups, all of which have enriched the Church's thinking on these questions. Outside the Catholic Church, other Churches and Christian communities – and other religions as well – have expressed deep concern and offered valuable reflections on issues which all of us find disturbing. To give just one striking example, I would mention the statements made by the beloved Ecumenical Patriarch Bartholomew, with whom we share the hope of full ecclesial communion.
8. Patriarch Bartholomew has spoken in particular of the need for each of us to repent of the ways we have harmed the planet, for "inasmuch as we all generate small ecological damage", we are called to acknowledge "our contribution, smaller or greater, to the disfigurement and destruction of creation".[14] He has repeatedly stated this firmly and persuasively, challenging us to acknowledge our sins against creation: "For human beings to destroy the biological diversity of God's creation; for human beings to degrade the integrity of the earth by causing changes in its climate, by stripping the earth of its natural forests or destroying its wetlands; for human beings to contaminate the earth's waters, its land, its air, and its life – these are sins".[15] For "to commit a crime against the natural world is a sin against ourselves and a sin against God".[16]
9. At the same time, Bartholomew has drawn attention to the ethical and spiritual roots of environmental problems, which require that we look for solutions not only in technology but in a change of humanity; otherwise we would be dealing merely with symptoms. He asks us to replace consumption with sacrifice, greed with generosity, wastefulness with a spirit of sharing, an asceticism which "entails learning to give, and not simply to give up. It is a way of loving, of moving gradually away from what I want to what God's world needs. It is liberation from fear, greed and compulsion".[17] As Christians, we are also called "to accept the world as a sacrament of communion, as a way of sharing with God and our neighbours on a global scale. It is our humble conviction that the divine and the human meet in the slightest detail in the seamless garment of God's creation, in the last speck of dust of our planet".[18]
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I. TECHNOLOGY: CREATIVITY AND POWER... ... ...
105. There is a tendency to believe that every increase in power means "an increase of 'progress' itself", an advance in "security, usefulness, welfare and vigour; an assimilation of new values into the stream of culture",[83] as if reality, goodness and truth automatically flow from technological and economic power as such. The fact is that "contemporary man has not been trained to use power well",[84] because our immense technological development has not been accompanied by a development in human responsibility, values and conscience. Each age tends to have only a meagre awareness of its own limitations. It is possible that we do not grasp the gravity of the challenges now before us. "The risk is growing day by day that man will not use his power as he should"; in effect, "power is never considered in terms of the responsibility of choice which is inherent in freedom" since its "only norms are taken from alleged necessity, from either utility or security".[85] But human beings are not completely autonomous. Our freedom fades when it is handed over to the blind forces of the unconscious, of immediate needs, of self-interest, and of violence. In this sense, we stand naked and exposed in the face of our ever-increasing power, lacking the wherewithal to control it. We have certain superficial mechanisms, but we cannot claim to have a sound ethics, a culture and spirituality genuinely capable of setting limits and teaching clear-minded self-restraint.
II. THE GLOBALIZATION OF THE TECHNOCRATIC PARADIGM
106. The basic problem goes even deeper: it is the way that humanity has taken up technology and its development according to an undifferentiated and one-dimensional paradigm. This paradigm exalts the concept of a subject who, using logical and rational procedures, progressively approaches and gains control over an external object. This subject makes every effort to establish the scientific and experimental method, which in itself is already a technique of possession, mastery and transformation. It is as if the subject were to find itself in the presence of something formless, completely open to manipulation. Men and women have constantly intervened in nature, but for a long time this meant being in tune with and respecting the possibilities offered by the things themselves. It was a matter of receiving what nature itself allowed, as if from its own hand. Now, by contrast, we are the ones to lay our hands on things, attempting to extract everything possible from them while frequently ignoring or forgetting the reality in front of us. Human beings and material objects no longer extend a friendly hand to one another; the relationship has become confrontational. This has made it easy to accept the idea of infinite or unlimited growth, which proves so attractive to economists, financiers and experts in technology. It is based on the lie that there is an infinite supply of the earth's goods, and this leads to the planet being squeezed dry beyond every limit. It is the false notion that "an infinite quantity of energy and resources are available, that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily absorbed".[86]
107. It can be said that many problems of today's world stem from the tendency, at times unconscious, to make the method and aims of science and technology an epistemological paradigm which shapes the lives of individuals and the workings of society. The effects of imposing this model on reality as a whole, human and social, are seen in the deterioration of the environment, but this is just one sign of a reductionism which affects every aspect of human and social life. We have to accept that technological products are not neutral, for they create a framework which ends up conditioning lifestyles and shaping social possibilities along the lines dictated by the interests of certain powerful groups. Decisions which may seem purely instrumental are in reality decisions about the kind of society we want to build.
108. The idea of promoting a different cultural paradigm and employing technology as a mere instrument is nowadays inconceivable. The technological paradigm has become so dominant that it would be difficult to do without its resources and even more difficult to utilize them without being dominated by their internal logic. It has become countercultural to choose a lifestyle whose goals are even partly independent of technology, of its costs and its power to globalize and make us all the same. Technology tends to absorb everything into its ironclad logic, and those who are surrounded with technology "know full well that it moves forward in the final analysis neither for profit nor for the well-being of the human race", that "in the most radical sense of the term power is its motive – a lordship over all".[87] As a result, "man seizes hold of the naked elements of both nature and human nature".[88] Our capacity to make decisions, a more genuine freedom and the space for each one's alternative creativity are diminished.
109. The technocratic paradigm also tends to dominate economic and political life. The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated, and we are learning all too slowly the lessons of environmental deterioration. Some circles maintain that current economics and technology will solve all environmental problems, and argue, in popular and non-technical terms, that the problems of global hunger and poverty will be resolved simply by market growth. They are less concerned with certain economic theories which today scarcely anybody dares defend, than with their actual operation in the functioning of the economy. They may not affirm such theories with words, but nonetheless support them with their deeds by showing no interest in more balanced levels of production, a better distribution of wealth, concern for the environment and the rights of future generations. Their behaviour shows that for them maximizing profits is enough. Yet by itself the market cannot guarantee integral human development and social inclusion.[89] At the same time, we have "a sort of 'superdevelopment' of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation",[90] while we are all too slow in developing economic institutions and social initiatives which can give the poor regular access to basic resources. We fail to see the deepest roots of our present failures, which have to do with the direction, goals, meaning and social implications of technological and economic growth.
110. The specialization which belongs to technology makes it difficult to see the larger picture. The fragmentation of knowledge proves helpful for concrete applications, and yet it often leads to a loss of appreciation for the whole, for the relationships between things, and for the broader horizon, which then becomes irrelevant. This very fact makes it hard to find adequate ways of solving the more complex problems of today's world, particularly those regarding the environment and the poor; these problems cannot be dealt with from a single perspective or from a single set of interests. A science which would offer solutions to the great issues would necessarily have to take into account the data generated by other fields of knowledge, including philosophy and social ethics; but this is a difficult habit to acquire today. Nor are there genuine ethical horizons to which one can appeal. Life gradually becomes a surrender to situations conditioned by technology, itself viewed as the principal key to the meaning of existence. In the concrete situation confronting us, there are a number of symptoms which point to what is wrong, such as environmental degradation, anxiety, a loss of the purpose of life and of community living. Once more we see that "realities are more important than ideas".[91]
111. Ecological culture cannot be reduced to a series of urgent and partial responses to the immediate problems of pollution, environmental decay and the depletion of natural resources. There needs to be a distinctive way of looking at things, a way of thinking, policies, an educational programme, a lifestyle and a spirituality which together generate resistance to the assault of the technocratic paradigm. Otherwise, even the best ecological initiatives can find themselves caught up in the same globalized logic. To seek only a technical remedy to each environmental problem which comes up is to separate what is in reality interconnected and to mask the true and deepest problems of the global system.
112. Yet we can once more broaden our vision. We have the freedom needed to limit and direct technology; we can put it at the service of another type of progress, one which is healthier, more human, more social, more integral. Liberation from the dominant technocratic paradigm does in fact happen sometimes, for example, when cooperatives of small producers adopt less polluting means of production, and opt for a non-consumerist model of life, recreation and community. Or when technology is directed primarily to resolving people's concrete problems, truly helping them live with more dignity and less suffering. Or indeed when the desire to create and contemplate beauty manages to overcome reductionism through a kind of salvation which occurs in beauty and in those who behold it. An authentic humanity, calling for a new synthesis, seems to dwell in the midst of our technological culture, almost unnoticed, like a mist seeping gently beneath a closed door. Will the promise last, in spite of everything, with all that is authentic rising up in stubborn resistance?
113. There is also the fact that people no longer seem to believe in a happy future; they no longer have blind trust in a better tomorrow based on the present state of the world and our technical abilities. There is a growing awareness that scientific and technological progress cannot be equated with the progress of humanity and history, a growing sense that the way to a better future lies elsewhere. This is not to reject the possibilities which technology continues to offer us. But humanity has changed profoundly, and the accumulation of constant novelties exalts a superficiality which pulls us in one direction. It becomes difficult to pause and recover depth in life. If architecture reflects the spirit of an age, our megastructures and drab apartment blocks express the spirit of globalized technology, where a constant flood of new products coexists with a tedious monotony. Let us refuse to resign ourselves to this, and continue to wonder about the purpose and meaning of everything. Otherwise we would simply legitimate the present situation and need new forms of escapism to help us endure the emptiness.
114. All of this shows the urgent need for us to move forward in a bold cultural revolution. Science and technology are not neutral; from the beginning to the end of a process, various intentions and possibilities are in play and can take on distinct shapes. Nobody is suggesting a return to the Stone Age, but we do need to slow down and look at reality in a different way, to appropriate the positive and sustainable progress which has been made, but also to recover the values and the great goals swept away by our unrestrained delusions of grandeur.
III. THE CRISIS AND EFFECTS OF MODERN ANTHROPOCENTRISM
115. Modern anthropocentrism has paradoxically ended up prizing technical thought over reality, since "the technological mind sees nature as an insensate order, as a cold body of facts, as a mere 'given', as an object of utility, as raw material to be hammered into useful shape; it views the cosmos similarly as a mere 'space' into which objects can be thrown with complete indifference".[92] The intrinsic dignity of the world is thus compromised. When human beings fail to find their true place in this world, they misunderstand themselves and end up acting against themselves: "Not only has God given the earth to man, who must use it with respect for the original good purpose for which it was given, but, man too is God's gift to man. He must therefore respect the natural and moral structure with which he has been endowed".[93]
116. Modernity has been marked by an excessive anthropocentrism which today, under another guise, continues to stand in the way of shared understanding and of any effort to strengthen social bonds. The time has come to pay renewed attention to reality and the limits it imposes; this in turn is the condition for a more sound and fruitful development of individuals and society. An inadequate presentation of Christian anthropology gave rise to a wrong understanding of the relationship between human beings and the world. Often, what was handed on was a Promethean vision of mastery over the world, which gave the impression that the protection of nature was something that only the faint-hearted cared about. Instead, our "dominion" over the universe should be understood more properly in the sense of responsible stewardship.[94]
117. Neglecting to monitor the harm done to nature and the environmental impact of our decisions is only the most striking sign of a disregard for the message contained in the structures of nature itself. When we fail to acknowledge as part of reality the worth of a poor person, a human embryo, a person with disabilities – to offer just a few examples – it becomes difficult to hear the cry of nature itself; everything is connected. Once the human being declares independence from reality and behaves with absolute dominion, the very foundations of our life begin to crumble, for "instead of carrying out his role as a cooperator with God in the work of creation, man sets himself up in place of God and thus ends up provoking a rebellion on the part of nature".[95]
118. This situation has led to a constant schizophrenia, wherein a technocracy which sees no intrinsic value in lesser beings coexists with the other extreme, which sees no special value in human beings. But one cannot prescind from humanity. There can be no renewal of our relationship with nature without a renewal of humanity itself. There can be no ecology without an adequate anthropology. When the human person is considered as simply one being among others, the product of chance or physical determinism, then "our overall sense of responsibility wanes".[96] A misguided anthropocentrism need not necessarily yield to "biocentrism", for that would entail adding yet another imbalance, failing to solve present problems and adding new ones. Human beings cannot be expected to feel responsibility for the world unless, at the same time, their unique capacities of knowledge, will, freedom and responsibility are recognized and valued.
119. Nor must the critique of a misguided anthropocentrism underestimate the importance of interpersonal relations. If the present ecological crisis is one small sign of the ethical, cultural and spiritual crisis of modernity, we cannot presume to heal our relationship with nature and the environment without healing all fundamental human relationships. Christian thought sees human beings as possessing a particular dignity above other creatures; it thus inculcates esteem for each person and respect for others. Our openness to others, each of whom is a "thou" capable of knowing, loving and entering into dialogue, remains the source of our nobility as human persons. A correct relationship with the created world demands that we not weaken this social dimension of openness to others, much less the transcendent dimension of our openness to the "Thou" of God. Our relationship with the environment can never be isolated from our relationship with others and with God. Otherwise, it would be nothing more than romantic individualism dressed up in ecological garb, locking us into a stifling immanence.
120. Since everything is interrelated, concern for the protection of nature is also incompatible with the justification of abortion. How can we genuinely teach the importance of concern for other vulnerable beings, however troublesome or inconvenient they may be, if we fail to protect a human embryo, even when its presence is uncomfortable and creates difficulties? "If personal and social sensitivity towards the acceptance of the new life is lost, then other forms of acceptance that are valuable for society also wither away".[97]
121. We need to develop a new synthesis capable of overcoming the false arguments of recent centuries. Christianity, in fidelity to its own identity and the rich deposit of truth which it has received from Jesus Christ, continues to reflect on these issues in fruitful dialogue with changing historical situations. In doing so, it reveals its eternal newness.[98]
Practical relativism
122. A misguided anthropocentrism leads to a misguided lifestyle. In the Apostolic Exhortation Evangelii Gaudium, I noted that the practical relativism typical of our age is "even more dangerous than doctrinal relativism".[99] When human beings place themselves at the centre, they give absolute priority to immediate convenience and all else becomes relative. Hence we should not be surprised to find, in conjunction with the omnipresent technocratic paradigm and the cult of unlimited human power, the rise of a relativism which sees everything as irrelevant unless it serves one's own immediate interests. There is a logic in all this whereby different attitudes can feed on one another, leading to environmental degradation and social decay.
123. The culture of relativism is the same disorder which drives one person to take advantage of another, to treat others as mere objects, imposing forced labour on them or enslaving them to pay their debts. The same kind of thinking leads to the sexual exploitation of children and abandonment of the elderly who no longer serve our interests. It is also the mindset of those who say: Let us allow the invisible forces of the market to regulate the economy, and consider their impact on society and nature as collateral damage. In the absence of objective truths or sound principles other than the satisfaction of our own desires and immediate needs, what limits can be placed on human trafficking, organized crime, the drug trade, commerce in blood diamonds and the fur of endangered species? Is it not the same relativistic logic which justifies buying the organs of the poor for resale or use in experimentation, or eliminating children because they are not what their parents wanted? This same "use and throw away" logic generates so much waste, because of the disordered desire to consume more than what is really necessary. We should not think that political efforts or the force of law will be sufficient to prevent actions which affect the environment because, when the culture itself is corrupt and objective truth and universally valid principles are no longer upheld, then laws can only be seen as arbitrary impositions or obstacles to be avoided.
The need to protect employment
124. Any approach to an integral ecology, which by definition does not exclude human beings, needs to take account of the value of labour, as Saint John Paul II wisely noted in his Encyclical Laborem Exercens. According to the biblical account of creation, God placed man and woman in the garden he had created (cf. Gen 2:15) not only to preserve it ("keep") but also to make it fruitful ("till"). Labourers and craftsmen thus "maintain the fabric of the world" (Sir 38:34). Developing the created world in a prudent way is the best way of caring for it, as this means that we ourselves become the instrument used by God to bring out the potential which he himself inscribed in things: "The Lord created medicines out of the earth, and a sensible man will not despise them" (Sir 38:4).
125. If we reflect on the proper relationship between human beings and the world around us, we see the need for a correct understanding of work; if we talk about the relationship between human beings and things, the question arises as to the meaning and purpose of all human activity. This has to do not only with manual or agricultural labour but with any activity involving a modification of existing reality, from producing a social report to the design of a technological development. Underlying every form of work is a concept of the relationship which we can and must have with what is other than ourselves. Together with the awe-filled contemplation of creation which we find in Saint Francis of Assisi, the Christian spiritual tradition has also developed a rich and balanced understanding of the meaning of work, as, for example, in the life of Blessed Charles de Foucauld and his followers.
126. We can also look to the great tradition of monasticism. Originally, it was a kind of flight from the world, an escape from the decadence of the cities. The monks sought the desert, convinced that it was the best place for encountering the presence of God. Later, Saint Benedict of Norcia proposed that his monks live in community, combining prayer and spiritual reading with manual labour (ora et labora). Seeing manual labour as spiritually meaningful proved revolutionary. Personal growth and sanctification came to be sought in the interplay of recollection and work. This way of experiencing work makes us more protective and respectful of the environment; it imbues our relationship to the world with a healthy sobriety.
127. We are convinced that "man is the source, the focus and the aim of all economic and social life".[100] Nonetheless, once our human capacity for contemplation and reverence is impaired, it becomes easy for the meaning of work to be misunderstood.[101] We need to remember that men and women have "the capacity to improve their lot, to further their moral growth and to develop their spiritual endowments".[102] Work should be the setting for this rich personal growth, where many aspects of life enter into play: creativity, planning for the future, developing our talents, living out our values, relating to others, giving glory to God. It follows that, in the reality of today's global society, it is essential that "we continue to prioritize the goal of access to steady employment for everyone",[103] no matter the limited interests of business and dubious economic reasoning.
128. We were created with a vocation to work. The goal should not be that technological progress increasingly replace human work, for this would be detrimental to humanity. Work is a necessity, part of the meaning of life on this earth, a path to growth, human development and personal fulfilment. Helping the poor financially must always be a provisional solution in the face of pressing needs. The broader objective should always be to allow them a dignified life through work. Yet the orientation of the economy has favoured a kind of technological progress in which the costs of production are reduced by laying off workers and replacing them with machines. This is yet another way in which we can end up working against ourselves. The loss of jobs also has a negative impact on the economy "through the progressive erosion of social capital: the network of relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence".[104] In other words, "human costs always include economic costs, and economic dysfunctions always involve human costs".[105] To stop investing in people, in order to gain greater short-term financial gain, is bad business for society.
129. In order to continue providing employment, it is imperative to promote an economy which favours productive diversity and business creativity. For example, there is a great variety of small-scale food production systems which feed the greater part of the world's peoples, using a modest amount of land and producing less waste, be it in small agricultural parcels, in orchards and gardens, hunting and wild harvesting or local fishing. Economies of scale, especially in the agricultural sector, end up forcing smallholders to sell their land or to abandon their traditional crops. Their attempts to move to other, more diversified, means of production prove fruitless because of the difficulty of linkage with regional and global markets, or because the infrastructure for sales and transport is geared to larger businesses. Civil authorities have the right and duty to adopt clear and firm measures in support of small producers and differentiated production. To ensure economic freedom from which all can effectively benefit, restraints occasionally have to be imposed on those possessing greater resources and financial power. To claim economic freedom while real conditions bar many people from actual access to it, and while possibilities for employment continue to shrink, is to practise a doublespeak which brings politics into disrepute. Business is a noble vocation, directed to producing wealth and improving our world. It can be a fruitful source of prosperity for the areas in which it operates, especially if it sees the creation of jobs as an essential part of its service to the common good.
New biological technologies
130. In the philosophical and theological vision of the human being and of creation which I have presented, it is clear that the human person, endowed with reason and knowledge, is not an external factor to be excluded. While human intervention on plants and animals is permissible when it pertains to the necessities of human life, the Catechism of the Catholic Church teaches that experimentation on animals is morally acceptable only "if it remains within reasonable limits [and] contributes to caring for or saving human lives".[106] The Catechism firmly states that human power has limits and that "it is contrary to human dignity to cause animals to suffer or die needlessly".[107] All such use and experimentation "requires a religious respect for the integrity of creation".[108]
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Oct 08, 2017 | www.amazon.com
Quote from the book is courtesy of Amazon preview of the book Neoliberalism (Key Ideas in Media & Cultural Studies)
Generally speaking, neoliberalism is a set of social, cultural, and political-economic forces that puts competition at the center of social life. According to neoliberalism, government's charge is not the care and security of citizens, but rather the promotion of market competition. In the neoliberal imagination, public social infrastructures (such as social security, unemployment benefits, public education) are believed to squash entrepreneurialism and individualism and breed dependency and bureaucracy.
Competition, on the other hand, is heralded to ensure efficiency and incite creativity. Spurred by competition, individuals, organizations, companies, and even the government itself, will seek to optimize and innovate, creating a truly free social world where the best people and ideas come out on top. Put a little differently, neoliberalism aims to create a market-based society, where there are only competing private enterprises.
Since the late 1970s, neoliberal ideas have increasingly guided the policies and practices of governments and other social institutions, and as a result, we have come to live in competition with ourselves, others, and our social world.
...In a neoliberal society, the capitalist market is no longer imagined as a distinct arena where goods are valued and exchanged; rather, the market is, or ideally should be, the basis for all human activities.
...We are necessarily interdependent beings, vulnerable and connected to one another, as our lives are supported and made possible by a number of infrastructures (e.g., schools, roads and bridges, communication) that bring us into relation with one another.
We need each other. We need social cooperation and a commitment to a common, collective good if we are all going to make it in this world.
Neoliberalism and its diffusion of competition throughout society make the infrastructures that undergird our lives profoundly unstable, while simultaneously diminishing our senses of interdependence and social connection. As we will see, living in competition paradoxically undercuts what enables our lives -- that is, our social connections and infrastructures -- while telling us to assume more and more responsibility through self-enclosed individualism, thereby squashing our capacities for coming together, trusting and caring for each other, and organizing for social change.
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In a culture composed ot anxious, sell-enclosed individuals, where market competition defines all of social life, we need now, more than ever, to see the social constructedness of our identities, worlds, and everyday lives. For neoliberalism's culture of living in competition is so entrenched that only a cultural studies perspective can produce the forms of knowledge we need to imagine and build new worlds. Indeed, a cultural studies perspective understands that possibilities of resistance and transformation are everywhere. As Grossberg puts it,
power is never able to totalize itself. There are always fissures and fault lines that may become the active sites of change. Power never quite accomplishes everything it might like to everywhere, and there is always the possibility of changing the structures and organization of power.7
See, here's the thing; there's a gigantic paradox at the heart of neoliberal culture. On one hand, as we will see, neoliberalism presents itself as a totalizing situation where resistance and transformation seem impossible, as living in competition has come to define all aspects of our lives. On the other hand, though, neoliberalism's power over our lives is incredibly tenuous; for, as mentioned earlier, I am convinced that most of us are yearning for a vastly different world, one that is built upon and nurtures our interdependencies and shared vulnerabilities, not self-enclosed individualism and living in competition.
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1 should note that, within academia, neoliberalism is a controversial term. Scholars continue to debate its usefulness. On one hand, for some, neoliberalism is a buzzword, a catchphrase; it is a term that is so often repeated and invoked that it has lost its meaning. According to these critiques, neoliberalism is presented as a scary monster that is everywhere and nowhere all at once. It has come to figure as shorthand for everything that is evil in our world, and as a result, it ends up teaching us very little about what specifically is wrong, how exactly we got here, and what actually can be done to change course. Thus, many scholars advocate not using the term at all. On the other hand, other scholars prefer not to use the term because they argue that it is misleading. For them, neoliberalism is simply an advanced form of liberal capitalism. There's nothing really new or neo here, so why overstate and confuse things with the prefix?
However, despite these critiques, I hang onto the term neoliberalism. My wager in doing so is that writing this book as a critical study of neoliberal culture gives us a way to map our current conjuncture. It allows us to hold together the "specific ensemble of social, cultural, and economic forces" at work in our world and, thus, to locate our lives in interrelation with those of others. Indeed, I have found during my work with students over the years that studying neoliberalism enables us to see our interconnectedness and the new ways of living that sensing our interconnectedness opens up. We all suffer when we're forced to live in competition as self-enclosed individuals. Studying the neoliberal conjuncture allows us to clearly identify the roots of our suffering, and to tr ace our connections with others who are also suffering, although often in variegated ways. In other words, when w'e map our conjuncture, we can see how our different lives are lived on common ground, which is a crucial step to creating a world beyond competition.
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A NEW HEGEMON
CHAPTER OVERVIEW
At this point, you might have a sense of what neoliberalism is, but you're probably still fuzzy on the details. This chapter starts to clear things up by charting the making of our neoliberal conjuncture. By tracing the history and development of neoliberalism, we will leant how competition came to be the driving force in our everyday lives. Specifically, we will examine the rise of neoliberal hegemony in four phases.
Table 1.1 Four Phases of Neoliberalism
- Phase I 1920-1950 Theoretical innovation
- Phase II 1950-1980 Organizing, institution building, and knowledge production
- Phase III 1980-2000 Crisis management and policy implementation
- Phase IV 2000 -- Present Crisis ordinariness and precarity
As we will see, neoliberalism is far from natur and necessary; rather, it represents a clear political project that was organized, struggled for, and won.
A NEW HEGEMONY
We begin our investigation with a historical account of the rise of neoliberal hegemony. Hegemony is a concept developed by Italian Marxist Antonio Gramsci. Gramsci was keen to account for the definitive role that culture played in legitimizing and sustaining capitalism and its exploitation of the working classes. In our own context of extreme economic inequality, Gramsci's question is still pressing: How and why do ordinary working folks come to accept a system where wealth is produced by their collective labors and energies but appropriated individually by only a few at the top? The theory of hegemony suggests that the answer to this question is not simply a matter of direct exploitation and control by the capitalist class. Rather, hegemony posits that power is maintained through ongoing, ever-shifting cultural processes of winning the consent of the governed, that is, ordinary people like you and me.
In other words, if we want to really understand why and how phenomena like inequality and exploitation exist, we have to attend to the particular, contingent, and often contradictory ways in which culture gets mobilized to forward the interests and power of the ruling classes. According to Gramsci, there was not one ruling class, but rather a historical bloc, "a moving equilibrium" of class interests and values. Hegemony names a cultural struggle for moral, social, economic, and political leadership; in this struggle, a field -- or assemblage -- of practices, discourses, values, and beliefs come to be dominant. While this field is powerful and firmly entrenched, it is also open to contestation. In other words, hegemonic power is always on the move; it has to keep winning our consent to survive, and sometimes it fails to do so.
Through the lens of hegemony, we can think about the rise of neoliberalism as an ongoing political project -- and class struggle -- to shift society's political equilibrium and create a new dominant field. Specifically, we are going to trace the shift from liberal to neoliberal hegemony. This shift is represented in the two images below.
Previous versions of liberal hegemony imagined society to be divided into distinct public and private spheres. The public sphere was the purview of the state, and its role was to ensure the formal rights and freedoms of citizens through the rule of law. The private sphere included the economy and the domestic sphere of home and family.
For the most part, liberal hegemony was animated by a commitment to limited government, as the goal was to allow for as much freedom in trade, associations, and civil society as possible, while preserving social order and individual rights. Politics took shape largely around the line between public and private; more precisely, it was a struggle over where and how to draw the line. In other words, within the field of liberal hegemony, politics was a question of how to define the uses and limits of the state and its public function in a capitalist society. Of course, political parties often disagreed passionately about where and how to draw that line. As we'll see below, many advocated for laissez-faire capitalism, while others argued for a greater public role in ensuring the health, happiness, and rights of citizens. What's crucial though is that everyone agreed that there was a line to be drawn, and that there was a public function for the state.
As Figure 1.1 shows, neoliberal hegemony works to erase this line between public and private and to create an entire society -- in fact, an entire world -- based on private, market competition. In this way, neoliberalism represents a radical reinvention of liberalism and thus of the horizons of hegemonic struggle. Crucially, within neoliberalism, the state's function does not go away; rather, it is deconstructed and reconstructed tow ard the new' end of expanding private markets.
Consequently, contemporary politics take shape around questions of how best to promote competition. For the most part, politics on both the left and right have been subsumed by neoliberal hegemony. For example, while neoliberalism made its debut in Western politics with the right-wing administrations of Ronald Reagan and Margaret Thatcher, leaders associated with the left have worked to further neoliberal hegemony in stunning ways. As we will explore in more depth below and in die coming chapters, both U.S. presidents Bill Clinton and Barack Obama have governed to create a privatized, market society. In other words, there is both a left and a right hegemonic horizon of neoliberalism. Thus, moving beyond neoliberalism will ultimately require a whole new field of politics.
It is important to see that the gradual shift from liberal to neoliberal hegemony was not inevitable or natural, nor was it easy. Rather, what we now r call neoliberalism is the effect of a sustained hegemonic struggle over the course of the twentieth and twentyfirst centuries to construct and maintain a new political equilibrium. Simply put, neoliberalism was, and continues to be, struggled over, fought for, and w'on.
In Masters of the Universe: Hayek, Friedman, and the Birth of Neoliheral Politics, Daniel Stedman Jones charts the history of the neoliberal project in three phases. The first phase saw the development of neoliberal ideas and philosophies in Europe during the years between World War I and World War II, as a relatively small group of economists (including most notably those from Austria, Germany, and France), wrestling with the rise of fascism, communism, and socialism, sought to envision a new liberal society that would protect individual liberties and free markets. The second phase w as a period of institution building, knowledge production, and organizing that enabled neoliberalism to cultivate a powerful base in culture and politics, especially in the U.S. and United Kingdom. During this phase, neoliberalism developed into a "thought collective" and full-fledged political movement. In the third phase, neoliberal ideas migrated from the margins to the center of political life as they came to shape global trade and development suggested by the theory of hegemony, none of these phases were neat and clean; each was shot through with struggle and contingency.
1 am adding a fourth phase, which is the focus of this book. Here neoliberalism is not only a set of economic policies and political discourses, but also a deeply entrenched sensibility of w ho we are and can become and of what is possible to do, both individually and collectively. It is what Raymond Williams called "a structure of feeling." Thanks to a convergence of different social, economic, and cultural forces, which we will explore throughout the following chapters, competition has become fully embedded in our lifeworlds: it is our culture, our conjuncture, the air we breathe. More specifically, this fourth phase is characterized by widespread precarity, where crisis becomes ordinary, a constant feature of everyday life. As we will learn in coming chapters, we are prompted to confront the precarity neoliberalism brings to our lives with more neoliberalism, that is, with living in competition and self-enclosed individualism.
PHASE I: THEORETICAL INNOVATION
The Crisis of Liberalism and the Birth of the Social Welfare State
Neoliberalism emerged out of the crisis of liberalism that ultimately came to a head in the early twentieth century. It is crucial to understand that liberal hegemony was never a coherent, unified phenomenon. Rather, it developed around a central political antagonism. On one side were those who championed individual liberty (especially private property rights and free markets) above all else. They argued against government intervention in private life, especially in the market. On the other side, social reformers believed that government should be pursued for the common good and not just for individual liberties. In the decades leading up to the Great Depression, it became clear that the individual-liberty side, which had long been dominant, was inadequate for managing huge transformations in capitalism that were underway. These transformations included industrialization, urbanization, and internationalization, as well as the rise of large-scale corporate firms that squeezed smaller market actors. Huge gaps formed between the political-economic elite, the middle classes, and the poor. Simply put, liberalism was in crisis.
During this time of social, cultural, and economic upheaval, those espousing the common good gained political ground. Specifically, the misery and devastation of the Great Depression solidified the gains for social reformers, opening a new era where a new, common-good liberalism began to prevail. In the United States, President Franklin
Roosevelt's administration passed a comprehensive set of social policies designed to protect individuals from the unpredictable and often brutal operations of capitalism. These included the following:
- Reforming banking: The Glass-Steagall Act of 1933 set up regulatory agencies to provide oversight to the stock markets and financial sector, while enforcing the separation of commercial banking and speculative investment. Simply put, banks couldn't gamble with your savings and future.
- Strengthening labor: In 1935, the National Recovery Administration and the National Labor Relations Act were passed to recognize labor unions and the rights of workers to organize. At the same time, the administration spurred employment through the Public Works Administration, the Civil Works Administration, and the Works Progress Administration, while guaranteeing workers a dignified retirement with the Social Security Act of 1935.
- Promoting housing: A range of programs, policies, and agencies were established, including the Federal Housing Administration and the U.S. Housing Authority, to encourage homeownership and provide housing to the poor and homeless. 1
Taken together, these policies marked the birth of the so-called social welfare state, albeit one that was limited in scope and often highly exclusionary in practice. For example, a universal health care program was never realized. Many social groups, including African-Americans, migrant farm workers, and women, were prohibited by law from receiving federal benefits such as social security or unemployment. 3 Additionally, institutional racism plagued (as it still does) housing and banking institutions.
The Walter Lippmann Colloquium and the Birth of Neoliberalism
It is helpful to trace the emergence of our neoliberal conjuncture back to this moment where the common good was starting to win the day via the establishment of a limited and exclusionary social welfare state. For, despite the fact that these social welfare policies effectively "saved" capitalism from destroying itself, the individual-liberty side was deeply troubled. They feared that a new and established the Mont Pelerin Society (MPS) in 1947 to continue the work of dreaming up a new individual-liberty liberalism.
At this point, neoliberalism was still swimming upstream, as the postwar era ushered in a new' conjuncture that David Harvey calls embedded liberalism.
Embedded liberalism was premised on a "class compromise" between the interests of workers and those of capitalists. In the name of peace, general prosperity, and global capitalism, a hegemonic consensus emerged "that the state should focus on full employment, economic growth, and the welfare of its citizens, and that state power should be freely deployed, alongside of or, if necessary, intervening in or even substituting for market processes to achieve these ends." 4
A central piece of the embedded liberal compromise was the Bretton Woods Accord, which attempted to stabilize the global economy by re-fixing currency rates to the gold standard. The idea was that national economies shouldn't be threatened by currency speculation in the financial markets. All this meant that an infrastructure emerged to protect citizens' economic and social security. To ensure the common good, capitalism must be embedded within "a web of social and political constraints." 5
Neoliberalism developed largely as a coordinated political response to the hegemony of embedded liberalism. As Harvey explains, it was a project "to disembed capital from these constraints." 6 Indeed, the struggle for neoliberal hegemony waged a robust and successful class war on the "compromise" of embedded liberalism by developing, promoting, and implementing a new version of individual-liberty liberalism.
The Neoliberal Thought Collective
As the system of embedded liberalism was taking root and establishing its dominance in national and international affairs, neoliberals were working on the ground: creating think tanks, forging political alliances, and infiltrating universities. During this second phase, neoliberalism emerged as a "thought collective": a "multilevel, multiphase, multi-sector approach to the building of political capacity to incubate, critique, and promulgate ideas." 7
The Neoliberal Thought Collective, as Philip Mirowski coined it, was a vertically integrated network of organizations and people focused on radically shifting the [concensus. ]
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Oct 01, 2017 | www.jacobinmag.com
To understand how a body of thought became an era of capitalism requires more than intellectual history.
"What is going to come after neoliberalism?" It was the question on many radicals' lips, present writer included, after the financial crisis hit in 2008. Though few were so sanguine about our prospects as to repeat the suicidal optimism of previous radical movements ("After Hitler, Our Turn!"), the feeling of the day was that the era of unfettered marketization was coming to a close. A new period of what was loosely referred to as Keynesianism would be the inevitable result of a crisis caused by markets run amok.
Five years later, little has changed. What comes after neoliberalism? More neoliberalism, apparently. The prospects for a revived Left capable of confronting it appear grim.
Enter Philip Mirowski's Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown . Mirowski maintains that the true nature of neoliberalism has gone unrecognized by its would-be critics, allowing the doctrine to flourish even in conditions, such as a massive financial crisis, that would seem to be inimical to its survival. Leftists keep busy tilting at the windmill of deregulation as the giants of neoliberalism go on pillaging unmolested.
Mirowski identifies three basic aspects of neoliberalism that the Left has failed to understand: the movement's intellectual history, the way it has transformed everyday life, and what constitutes opposition to it. Until we come to terms with them, Mirowski suggests, right-wing movements such as the Tea Party (a prominent player in the book) will continue to reign triumphant.
The book begins with the war of ideas -- a conflict in which, Mirowski argues, the Left has been far too generous in taking neoliberals at their word, or at least their best-publicized word. We have, in effect, been suckered by kindly old Milton Friedman telling us how much better off we'd all be if the government simply left us "free to choose." But neoliberals have at times been forthright about their appreciation for the uses of state power. Markets, after all, do not simply create themselves. Joining a long line of thinkers, most famously Karl Polanyi, Mirowski insists that a key error of the Left has been its failure to see that markets are always embedded in other social institutions. Neoliberals, by contrast, grasp this point with both hands -- and therefore seek to reshape all of the institutions of society, including and especially the state, to promote markets. Neoliberal ascendancy has meant not the retreat of the state so much as its remaking.
If Mirowski is often acidic about the Left's failure to understand this point, he also recognizes that the neoliberals themselves have been canny about keeping the real nature of their project hidden through a variety of means. Neoliberal institutions tend to have what he calls a "Russian doll" structure, with the most central ones well hidden from public eyes. Mirowski coins an ironic expression, "the Neoliberal Thought Collective," for the innermost entities that formulate the movement's doctrine. The venerable Mont Pelerin Society is an NTC institution. Its ideas are frequently disseminated through venues which, formally at least, are unconnected to the center, such as academic economics departments. Thus, neoclassical economists spread the gospel of the free market while the grand project of remaking the state falls to others.
At the same time as neoliberal commonsense trickles down from above, Mirowski argues that it also wells up from below, reinforced by our daily patterns of life. Social networking sites like Facebook encourage people to view themselves as perpetual cultural entrepreneurs, striving to offer a newer and better version of themselves to the world. Sites like LinkedIn prod their users to present themselves as a fungible basket of skills, adjustable to the needs of any employer, without any essential characteristics beyond a requisite subservience. Classical liberalism always assumes the coherent individual self as its basic unit. Neoliberalism, by contrast, sees people as little more than variable bundles of human capital, with no permanent interests or even attributes that cannot be remade through the market. For Mirowski, the proliferation of these forms of everyday neoliberalism constitute a "major reason the neoliberals have emerged from the crisis triumphant."
Finally, Mirowski argues that the Left has too often been sucked in by neoliberalism's loyal opposition. Figures like Joseph Stiglitz or Paul Krugman, while critical of austerity and supportive of the welfare state, accept the fundamental neoclassical economic precepts at the heart of neoliberal policy. Mirowski argues that we must ditch this tradition in its entirety. Even attempts to render its assumptions more realistic -- as in the case of behavioral economics, for example, which takes account of the ways real people diverge from the hyperrationality of homo economicus -- provide little succor for those seeking to overturn the neoliberals.
For Mirowski, these three failures of the Left go a long way toward explaining how neoliberals have largely escaped blame for a crisis they created. The Left persistently goes after phantoms like deregulation or smaller government, which neoliberals easily parry by pointing out that the regulatory apparatus has never been bigger. At the same time, we ignore the deep roots of neoliberal ideology in everyday life, deceiving ourselves as to the scale of the task in front of us.
Whatever criticisms of Mirowski's analysis are in order, much of it is compelling, particularly in regard to the intellectual history of the NTC. Mirowski's insistence on the centrality of the state to the neoliberal project helps correct the unfortunate tendency of many leftists over the past decade to assent to neoliberal nostrums about the obsolescence of the state. Indeed, Mirowski goes further than many other critics who have challenged the supposed retreat of the state under neoliberalism.
Loïc Wacquant, for instance, has described the "centaur state" of neoliberalism, in which a humanist liberalism reigns for the upper classes, while the lower classes face the punitive state apparatus in all its bestiality. But Mirowski shows us that the world of the rich under neoliberalism in no way corresponds to the laissez-faire of classical liberalism. The state does not so much leave the rich alone as actively work to reshape the world in their interests, helping to create markets for the derivatives and securities that made (and then destroyed) so many of the fortunes of the recent past. The neoliberal state is an eminently interventionist one, and those mistaking it for the austere nightwatchman of libertarian utopianism have little hope of combating it.
It's here that we begin to see the strategic genius of neoliberal infrastructure, with its teams of college economics professors teaching the wondrous efficacy of supply and demand on the one hand, and the think tanks and policy shops engaged in the relentless pursuit of state power on the other. The Left too often sees inconsistency where in fact there is a division of labor.
Mirowski's concern to disabuse his readers of the notion that the wing of neoliberal doctrine disseminated by neoclassical economists could ever be reformed produces some of the best sections of the book. His portrait of an economics profession in haggard disarray in the aftermath of the crisis is both comic and tragic, as the amusement value of the buffoonery on display diminishes quickly when one realizes the prestige still accorded to these figures. Reading his comprehensive examination of the discipline's response to the crisis, one is reminded of Freud's famous broken kettle. The professional economists' account of their role in the crisis went something like (a) there was no bubble and (b) bubbles are impossible to predict but (c) we knew it was a bubble all along.
Incoherence notwithstanding, however, little in the discipline has changed in the wake of the crisis. Mirowski thinks that this is at least in part a result of the impotence of the loyal opposition -- those economists such as Joseph Stiglitz or Paul Krugman who attempt to oppose the more viciously neoliberal articulations of economic theory from within the camp of neoclassical economics. Though Krugman and Stiglitz have attacked concepts like the efficient markets hypothesis (which holds that prices in a competitive financial market reflect all relevant economic information), Mirowski argues that their attempt to do so while retaining the basic theoretical architecture of neoclassicism has rendered them doubly ineffective.
First, their adoption of the battery of assumptions that accompany most neoclassical theorizing -- about representative agents, treating information like any other commodity, and so on -- make it nearly impossible to conclusively rebut arguments like the efficient markets hypothesis. Instead, they end up tinkering with it, introducing a nuance here or a qualification there. This tinkering causes their arguments to be more or less ignored in neoclassical pedagogy, as economists more favorably inclined toward hard neoliberal arguments can easily ignore such revisions and hold that the basic thrust of the theory is still correct. Stiglitz's and Krugman's arguments, while receiving circulation through the popular press, utterly fail to transform the discipline.
Mirowski also heaps scorn on the suggestion, sometimes made in leftist circles, that the problem at the heart of neoclassical economics is its assumption of a hyperrational homo economicus , relentlessly comparing equilibrium states and maximizing utility. Though such a revision may be appealing to a certain radical romanticism, Mirowski shows that a good deal of work going on under the label of behavioral economics has performed just this revision, and has come up with results that don't differ substantively from those of the mainstream. The main problem with neoclassicism isn't its theory of the human agent but rather its the theory of the market -- which is precisely what behavioral economics isn't interested in contesting.
In all, Mirowski's indictment of the state of economic theory and its imbrication with the neoliberal project is devastating. Unfortunately, he proves much less successful in explaining why things have turned out as they have. The book ascribes tremendous power to the Neoliberal Thought Collective, which somehow manages to do everything from controlling the economics profession to reshaping the state to forging a new sense of the human self. The reader is left wondering how the NTC came to acquire such power. This leads to the book's central flaw: a lack of any theory of the structure of modern capitalism. Indeed, the NTC seems to operate in something of a vacuum, without ever confronting other institutions or groups, such as the state or popular movements, with interests and agendas of their own.
To be fair, Mirowski does offer an explanation for the failure of popular movements to challenge neoliberalism, largely through his account of "everyday" neoliberalism. At its strongest, the book identifies important strategic failures, such as Occupy's embrace of "a mimicry of media technologies as opposed to concerted political mobilization." However, Mirowski extends the argument well beyond a specific failure of the Occupy movement to propose a general thesis that developments like Facebook and reality TV have transmitted neoliberal ideology to people who have never read Friedman and Hayek. In claiming that this embodied or embedded ideology plays an important role in the failure of the Left, he places far more explanatory weight on the concept of everyday neoliberalism than it is capable of bearing.
At the simplest level, it's just not clear that everyday neoliberalism constitutes the kind of block to political action that Mirowski thinks it does. No doubt, many people reading this article right now simultaneously have another browser tab open to monster.com or LinkedIn, where they are striving to present themselves as a fungible basket of skills to any employer that will have them. In this economy, everyone has to hustle, and that means using all available means. That many of these same readers have probably also done things like organize against foreclosures should give pause to any blurring of the distinction between using various media technologies and embracing the ideology Mirowski sees embodied in them.
Indeed, the ubiquity of participation in such technologies by people who support, oppose, or are apathetic about neoliberalism points to a larger phenomenon on which Mirowski is silent: the labor market. Put bluntly, it is difficult to imagine anyone engaging in the painfully strained self-advertisement facilitated by LinkedIn in a labor market with, say, 2-percent unemployment. In such a market, in which employers were competing for comparatively scarce workers, there would be very little need for those workers to go through the self-abasing ritual of converting themselves into fungible baskets of skills. In our current situation, by contrast, where secure and remunerative employment is comparatively scarce, it is no surprise that people turn to whatever technologies are available to attempt to sell themselves. As Joan Robinson put it, the only thing worse than being exploited by capitalism is not being exploited by it.
In evaluating the role of everyday neoliberalism, it is also helpful to move, for the moment, beyond the perspective of the United States, where the NTC has clearly had great success, and adopt that of countries where resistance is significantly more developed, such as Venezuela or South Africa. Especially in the former, popular movements have been notably successful in combating neoliberal efforts to take over the state and reshape the economy, and have instead pushed the country in the opposite direction. Is it really plausible that a main reason for this difference is that everyday neoliberalism is more intense in the United States? I doubt it. For one thing, the strength of Venezuela's radical movements, in comparison with the US, clearly antedates the developments (social media, Here Comes Honey Boo Boo , and so on) that Mirowski discusses.
Moreover, it is just as plausible that the entrepreneurial culture he describes is even more extensive in the slums of the global South, where neoliberal devastation has forced many poor households to rely on at least one family member engaging in semi-legal arbitrage in goods salvaged from garbage or made at home. Surely such activities provide a firmer foundation for commercial subjectivity than having a 401(k). That resistance has grown in such circumstances suggests that looking to malignant subjectivities to explain popular passivity is an analytic dead-end.
If everyday neoliberalism doesn't explain the comparative weakness of the US left, what does? This is, of course, the key question, and I can do no more than gesture at an answer here. But I would suggest that the specific histories of the institutions of the American left, from the Communist Party to Students for a Democratic Society to labor unions, and the histories of the situations they confronted, provide us with a more solid foundation for understanding our current weakness than the hegemony of neoliberal culture does. Moreover, with a theory of capitalism that emphasizes the way the structure of the system makes it both necessary and very difficult for most people to organize to advance their interests, it becomes very easy to explain the persistence of a low level of popular mobilization against neoliberalism in the context of a weakened left.
If Mirowski's account doesn't give us a good basis for explaining why popular resistance has been so lacking in the US, it nonetheless suggests why he is so concerned with explaining the supposed dominance of neoliberal ideology among the general population. From the beginning, he raises the specter of right-wing resurgence, whether in the form of Scott Walker surviving the recall campaign in Wisconsin, the Tea Party mania of 2010, or the success of right-wing parties in Europe. However, much of this seems overstated, especially from a contemporary perspective. The Tea Party has, for all intents and purposes, disappeared from the front lines of American politics, and the Republican Party, while capable of enacting all kinds of sadistic policies on the state level, has remained in a state of disarray on the national level since the 2006 congressional elections.
More fundamentally, the argument that the voting public embraces neoliberalism doesn't square well with recent research by political scientists like Larry Bartels and Martin Gilens emphasizing the profound disconnect between the policy preferences of the poor and what transpires in Washington. What appears to be happening is less the general populace's incorporation into neoliberalism than their exclusion from any institutions that would allow them to change it. Importantly, this alternative explanation does not rely on the Left conceit that rebellion lurks perpetually just below the placid social surface, ready to explode into radical insurgency at any moment. It simply contends that the political passivity of neoliberalism's victims reflects a real diminution of their political options.
Mirowski's failure to address these larger institutional and structural dynamics vitiates much of the explanatory power of his book. On a purely descriptive level, the sections on the intellectual history of neoliberalism and the non-crisis of neoclassical economics illuminate many of the hidden corners of neoliberal ideology. However, if Mirowski is right to suggest that we need to understand neoliberalism better to be successful in fighting it -- and he surely is -- then much more is needed to explain neoliberal success and Left failure.
To understand how a body of thought became an era of capitalism requires more than intellectual history. It demands an account of how capitalism actually works in the period in question, and how the ideas of a small group of intellectuals came to be the policy preferences of the rich. Mirowski has given us an excellent foundation for understanding the doctrine, but it will remain for others to explain its actual development.
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Nov 16, 2017 | www.theguardian.com
The events that led to Donald Trump's election started in England in 1975. At a meeting a few months after Margaret Thatcher became leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of conservatism. She snapped open her handbag, pulled out a dog-eared book, and slammed it on the table . "This is what we believe," she said. A political revolution that would sweep the world had begun.
The book was The Constitution of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.
This, at any rate, is how it was originally conceived. But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap.
He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.
Democracy, by contrast, "is not an ultimate or absolute value". In fact, liberty depends on preventing the majority from exercising choice over the direction that politics and society might take.
He justifies this position by creating a heroic narrative of extreme wealth. He conflates the economic elite, spending their money in new ways, with philosophical and scientific pioneers. Just as the political philosopher should be free to think the unthinkable, so the very rich should be free to do the undoable, without constraint by public interest or public opinion.
The ultra rich are "scouts", "experimenting with new styles of living", who blaze the trails that the rest of society will follow. The progress of society depends on the liberty of these "independents" to gain as much money as they want and spend it how they wish. All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction made between earned and unearned income, and no limit to the rents they can charge.
Inherited wealth is more socially useful than earned wealth: "the idle rich", who don't have to work for their money, can devote themselves to influencing "fields of thought and opinion, of tastes and beliefs". Even when they seem to be spending money on nothing but "aimless display", they are in fact acting as society's vanguard.
Hayek softened his opposition to monopolies and hardened his opposition to trade unions. He lambasted progressive taxation and attempts by the state to raise the general welfare of citizens. He insisted that there is "an overwhelming case against a free health service for all" and dismissed the conservation of natural resources. It should come as no surprise to those who follow such matters that he was awarded the Nobel prize for economics .
By the time Thatcher slammed his book on the table, a lively network of thinktanks, lobbyists and academics promoting Hayek's doctrines had been established on both sides of the Atlantic, abundantly financed by some of the world's richest people and businesses , including DuPont, General Electric, the Coors brewing company, Charles Koch, Richard Mellon Scaife, Lawrence Fertig, the William Volker Fund and the Earhart Foundation. Using psychology and linguistics to brilliant effect, the thinkers these people sponsored found the words and arguments required to turn Hayek's anthem to the elite into a plausible political programme.
Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the right, but its colonisation of parties that once stood for everything Hayek detested.
Bill Clinton and Tony Blair did not possess a narrative of their own. Rather than develop a new political story, they thought it was sufficient to triangulate . In other words, they extracted a few elements of what their parties had once believed, mixed them with elements of what their opponents believed, and developed from this unlikely combination a "third way".
It was inevitable that the blazing, insurrectionary confidence of neoliberalism would exert a stronger gravitational pull than the dying star of social democracy. Hayek's triumph could be witnessed everywhere from Blair's expansion of the private finance initiative to Clinton's repeal of the Glass-Steagal Act , which had regulated the financial sector. For all his grace and touch, Barack Obama, who didn't possess a narrative either (except "hope"), was slowly reeled in by those who owned the means of persuasion.
As I warned in April, the result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people's lives; debate is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments are replaced by slogans, symbols and sensation. The man who sank Hillary Clinton's bid for the presidency was not Donald Trump. It was her husband.
The paradoxical result is that the backlash against neoliberalism's crushing of political choice has elevated just the kind of man that Hayek worshipped. Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation of Hayek's "independent"; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting to be filled by those who know what they want. The likely result is the demolition of our remaining decencies, beginning with the agreement to limit global warming .
Those who tell the stories run the world. Politics has failed through a lack of competing narratives. The key task now is to tell a new story of what it is to be a human in the 21st century. It must be as appealing to some who have voted for Trump and Ukip as it is to the supporters of Clinton, Bernie Sanders or Jeremy Corbyn.
A few of us have been working on this, and can discern what may be the beginning of a story. It's too early to say much yet, but at its core is the recognition that – as modern psychology and neuroscience make abundantly clear – human beings, by comparison with any other animals, are both remarkably social and remarkably unselfish . The atomisation and self-interested behaviour neoliberalism promotes run counter to much of what comprises human nature.
Hayek told us who we are, and he was wrong. Our first step is to reclaim our humanity.
justamug -> Skytree 16 Nov 2016 18:17
Thanks for the chuckle. On a more serious note - defining neoliberalism is not that easy since it is not a laid out philosophy like liberalism, or socialism, or communism or facism. Since 2008 the use of the word neoliberalism has increased in frequency and has come to mean different things to different people.
A common theme appears to be the negative effects of the market on the human condition.
Having read David Harvey's book, and Phillip Mirowski's book (both had a go at defining neoliberalism and tracing its history) it is clear that neoliberalism is not really coherent set of ideas.
ianfraser3 16 Nov 2016 17:54
EF Schumacher quoted "seek first the kingdom of God" in his epilogue of "Small Is Beautiful: a study of economics as if people mattered". This was written in the early 1970s before the neoliberal project bit in the USA and the UK. The book is laced with warnings about the effects of the imposition of neoliberalism on society, people and the planet. The predictions have largely come true. New politics and economics needed, by leaders who place at the heart of their approach the premise, and fact, that humans are "by comparison with any other animals, are both remarkably social and remarkably unselfish". It is about reclaiming our humanity from a project that treats people as just another commodity.
Filipio -> YouDidntBuildThat 16 Nov 2016 17:42Whoa there, slow down.
Your last post was questioning the reality of neoliberalism as a general policy direction that had become hegemonic across many governments (and most in the west) over recent decades. Now you seem to be agreeing that the notion does have salience, but that neoliberalism delivered positive rather than negative consequences.
Well, its an ill wind that blows nobody any good, huh?
Doubtless there were some positive outcomes for particular groups. But recall that the context for this thread is not whether, on balance, more people benefited from neoliberal policies than were harmed -- an argument that would be most powerful only in very utilitarian style frameworks of thought (most good for the many, or most harm for only the few). The thread is about the significance of the impacts of neoliberalism in the rise of Trump. And in specific relation to privatisation (just one dimension of neoliberalism) one key impact was downsizing (or 'rightsizing'; restructuring). There is a plethora of material, including sociological and psychological, on the harm caused by shrinking and restructured work-forces as a consequence of privatisation. Books have been written, even in the business management sector, about how poorly such 'change' was handled and the multiple deleterious outcomes experienced by employees.
And we're still only talking about one dimension of neoliberalism! Havn't even touched on deregulation yet (notably, labour market and financial sector).
The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality.
You want evidence? I'm not doing your research for you. The internet can be a great resource, or merely an echo chamber. The problem with so many of the alt-right (and this applies on the extreme left as well) is that they only look to confirm their views, not read widely. Open your eyes, and use your search engine of choice. There is plenty out there. Be open to having your preconceptions challenged.
RichardErskine -> LECKJ3000 16 Nov 2016 15:38
LECKJ3000 - I am not an economist, but surely the theoretical idealised mechanisms of the market are never realised in practice. US subsidizing their farmers, in EU too, etc. And for problems that are not only externalities but transnational ones, the idea that some Hayek mechanism will protect thr ozone layer or limit carbon emissions, without some regulation or tax.
Lord Stern called global warming the greatest market failure in history, but no market, however sophisticated, can deal with it without some price put on the effluent of product (the excessive CO2 we put into the atmosphere).
As with Montreal and subsequent agreements, there is a way to maintain a level playing field; to promote different substances for use as refrigerants; and to address the hole in ozone layer; without abandoning the market altogether. Simple is good, because it avoids over-engineering the interventions (and the unintended consequences you mention).
The same could/ should be true of global warming, but we have left it so late we cannot wait for the (inevitable) fall of fossil fuels and supremacy of renewables. We need a price on carbon, which is a graduated and fast rising tax essentially on its production and/or consumption, which has already started to happen ( http://www.worldbank.org/content/dam/Worldbank/document/SDN/background-note_carbon-tax.pdf ), albeit not deep / fast / extensive enough, or international in character, but that will come, if not before the impacts really bite then soon after.
So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot for externalities that overwhelm the logic of an unfettered so-called free market.
LionelKent -> greven 16 Nov 2016 14:59
And persistent. J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know) write a volume on his belief in progressive taxation.
RandomLibertarian -> JVRTRL 16 Nov 2016 09:19
Not bad points.
When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.
Do not forget that the USG, in WW2, took the deliberate step of allowing employers to provide health insurance as a tax-free benefit - which it still is, being free even from SS and Medicare taxes. In the post-war boom years this resulted in the development of a system with private rooms, almost on-demand access to specialists, and competitive pay for all involved (while the NHS, by contrast, increasingly drew on immigrant populations for nurses and below). Next, the large sums of money in the system and a generous court system empowered a vast malpractice industry. So to call our system in any way a consequence of a free market is a misnomer.
Entirely state controlled health care systems tend to be even more cost-effective.
Read Megan McArdle's work in this area. The US has had similar cost growth since the 1970s to the rest of the world. The problem was that it started from a higher base.
Part of the issue is that privatization tends to create feedback mechanism that increase the size of spending in programs. Even Eisenhower's noted "military industrial complex" is an illustration of what happens when privatization really takes hold.
When government becomes involved in business, business gets involved in government!
Todd Smekens 16 Nov 2016 08:40
Albert Einstein said, "capitalism is evil" in his famous dictum called, "Why Socialism" in 1949. He also called communism, "evil", so don't jump to conclusions, comrades. ;)
His reasoning was it distorts a human beings longing for the social aspect. I believe George references this in his statement about people being "unselfish". This is noted by both science and philosophy.
Einstein noted that historically, the conqueror would establish the new order, and since 1949, Western Imperialism has continued on with the predatory phase of acquiring and implementing democracy/capitalism. This needs to end. As we've learned rapidly, capitalism isn't sustainable. We are literally overheating the earth which sustains us. Very unwise.
Einstein wrote, "Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting, strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual can achieve an inner equilibrium and can contribute to the well-being of society."
Personally, I'm glad George and others are working on a new economic and social construct for us "human beings". It's time we leave the predatory phase of "us versus them", and construct a new society which works for the good of our now, global society.
zavaell -> LECKJ3000 16 Nov 2016 06:28
The problem is that both you and Monbiot fail to mention that your "the spontaneous order of the market" does not recognize externalities and climate change is outside Hayek's thinking - he never wrote about sustainability or the limits on resources, let alone the consequences of burning fossil fuels. There is no beauty in what he wrote - it was a cold, mechanical model that assumed certain human behaviour but not others. Look at today's money-makers - they are nearly all climate change deniers and we have to have government to reign them in.
aLERNO 16 Nov 2016 04:52
Good, short and concise article. But the FIRST NEOLIBERAL MILESTONE WAS THE 1973 COUP D'ETAT IN CHILE, which not surprisingly also deposed the first democratically-elected socialist government.
accipiter15 16 Nov 2016 02:34
A great article and explanation of the influence of Hayek on Thatcher. Unfortunately this country is still suffering the consequences of her tenure and Osborne was also a proponent of her policies and look where we are as a consequence. The referendum gave the people the opportunity to vent their anger and if we had PR I suspect we would have a greater turn-out and nearly always have some sort of coalition where nothing gets done that is too hurtful to the population. As for Trump, again his election is an expression of anger and desperation. However, the American voting system is as unfair as our own - again this has probably been the cause of the low turn-out. Why should people vote when they do not get fair representation - it is a waste of time and not democratic. I doubt that Trump is Keynsian I suspect he doesn't have an economic theory at all. I just hope that the current economic thinking prevailing currently in this country, which is still overshadowed by Thatcher and the free market, with no controls over the city casino soon collapses and we can start from a fairer and more inclusive base!
JVRTRL -> Keypointist 16 Nov 2016 02:15
The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another large assist from Nixon and the Powell Memo.
Bill Clinton didn't do it by himself. The GOP did it with him hand-in-hand, with the only resistance coming from a minority within the Democratic party.
Trump's victory was due to many factors. A large part of it was Hillary Clinton's campaign and the candidate. Part of it was the effectiveness of the GOP massive resistance strategy during the Obama years, wherein they pursued a course of obstruction in an effort to slow the rate of the economic recovery (e.g. as evidence of the bad faith, they are resurrecting a $1 trillion infrastructure bill that Obama originally proposed in 2012, and now that they have full control, all the talk about "deficits" goes out the window).
Obama and the Democratic party also bear responsibility for not recognizing the full scope of the financial collapse in 2008-2009, passing a stimulus package that was about $1 trillion short of spending needed to accelerate the recovery by the 2010 mid-terms, combined with a weak financial regulation law (which the GOP is going to destroy), an overly complicated health care law -- classic technocratic, neoliberal incremental policy -- and the failure of the Obama administration to hold Wall Street accountable for criminal misconduct relating to the financial crisis. Obama's decision to push unpopular trade agreements didn't help either. As part of the post-mortem, the decision to continuing pushing the TPP may have cost Clinton in the rust belt states that went for Trump. The agreement was unpopular, and her shift on the policy didn't come across as credible. People noticed as well that Obama was trying to pass the measure through the lame-duck session of Congress post-election. With Trump's election, the TPP is done too.
JVRTRL daltonknox67 16 Nov 2016 02:00
There is no iron law that says a country has to run large trade deficits. The existence of large trade deficits is usually a result of policy choices.
Growth also hasn't gone into the tank. What's changed is the distribution of the gains in GDP growth -- that is in no small part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted the economy towards financial services, which has the tendency of increasing inequality.
The idea too that people will be "poorer" than in the 1920s and 1930s is just plain ignorant. It has no basis in any of the data. Wages in the bottom quartile have actually decreased slightly since the 1970s in real terms, but those wages in the 1970s were still exponentially higher than wages in the 1920s in real terms.
Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. The 2008 bailouts were a clear illustration of this reality. People in industries rigged rules to benefit themselves. They misallocated resources. Then they went to representatives and taxpayers and asked for a large no-strings attached handout that was effectively worth trillions of dollars (e.g. hundreds of billions through TARP, trillions more through other programs). As these players become wealthier, they have an easier time buying politicians to rig rules further to their advantage.
JVRTRL -> RandomLibertarian 16 Nov 2016 01:44
"The tyranny of the 51 per cent is the oldest and most solid argument against a pure democracy."
"Tyranny of the majority" is always a little bizarre, given that the dynamics of majority rule are unlike the governmental structures of an actual tyranny. Even in the context of the U.S. we had minority rule due to voting restrictions for well over a century that was effectively a tyranny for anyone who was denied the ability to participation in the elections process. Pure majorities can go out of control, especially in a country with massive wealth disparities and with weak civic institutions.
On the other hand, this is part of the reason to construct a system of checks and balances. It's also part of the argument for representative democracy.
"Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several functions and it actually had the effect of increasing spending.
When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.
Entirely state controlled health care systems tend to be even more cost-effective. Part of the issue is that privatization tends to create feedback mechanism that increase the size of spending in programs. Even Eisenhower's noted "military industrial complex" is an illustration of what happens when privatization really takes hold.
daltonknox67 15 Nov 2016 21:46
After WWII most of the industrialised world had been bombed or fought over with destruction of infrastructure and manufacturing. The US alone was undamaged. It enjoyed a manufacturing boom that lasted until the 70's when competition from Germany and Japan, and later Taiwan, Korea and China finally brought it to an end.
As a result Americans born after 1950 will be poorer than the generation born in the 20's and 30's.
This is not a conspiracy or government malfunction. It is a quirk of history. Get over it and try working.
Arma Geddon 15 Nov 2016 21:11
Another nasty neoliberal policy of Reagan and Thatcher, was to close all the mental hospitals, and to sweeten the pill to sell to the voters, they called it Care in the Community, except by the time those hospitals closed and the people who had to relay on those institutions, they found out and are still finding out that there is very little care in the community left any more, thanks to Thatcher's disintegration of the ethos community spirit.
In their neoliberal mantra of thinking, you are on your own now, tough, move on, because you are hopeless and non productive, hence you are a burden to taxpayers.
Its been that way of thinking for over thirty years, and now the latest group targeted, are the sick and disabled, victims of the neoliberal made banking crash and its neoliberal inspired austerity, imposed of those least able to fight back or defend themselves i.e. vulnerable people again!
AlfredHerring GimmeHendrix 15 Nov 2016 20:23
It was in reference to Maggie slapping a copy of Hayek's Constitution of Liberty on the table and saying this is what we believe. As soon as you introduce the concept of belief you're talking about religion hence completeness while Hayek was writing about economics which demands consistency. i.e. St. Maggie was just as bad as any Stalinist: economics and religion must be kept separate or you get a bunch of dead peasants for no reason other than your own vanity.
Ok, religion based on a sky god who made us all is problematic but at least there's always the possibility of supplication and miracles. Base a religion on economic theory and you're just making sausage of your neighbors kids.
TanTan -> crystaltips2 15 Nov 2016 20:10
If you claim that the only benefit of private enterprise is its taxability, as you did, then why not cut out the middle man and argue for full state-directed capitalism?
Because it is plainly obvious that private enterprise is not directed toward the public good (and by definition). As we have both agreed, it needs to have the right regulations and framework to give it some direction in that regard. What "the radical left" are pointing out is that the idea of private enterprise is now completely out of control, to the point where voters are disenfranchised because private enterprise has more say over what the government does than the people. Which is clearly a problem.
As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism, no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education, vaccines, antibiotics, and massive availability of energy has nothing to do with those things.
As for this computer being the invention of capitalism, who knows, but I suppose if one were to believe that everything was invented and created by capitalism and monetary motives then one might believe that. Energy allotments referred to the limit of our usage of readily available fossil fuels which you remain blissfully unaware of.
Children have already been educated to agree with you, in no small part due to a fear of the communist regimes at the time, but at the expense of critical thinking. Questioning the system even when it has plainly been undermined to its core is quickly labelled "radical" regardless of the normalcy of the query. I don't know what you could possibly think left-wing motives could be, but your own motives are plain to see when you immediately lump people who care about the planet in with communist idealogues. If rampant capitalism was going to solve our problems I'm all for it, but it will take a miracle to reverse the damage it has already done, and only a fool would trust it any further.
YouDidntBuildThat -> Filipio 15 Nov 2016 20:06
Filipo
You argue that a great many government functions have been privatized. I agree. Yet strangely you present zero evidence of any downsides of that happening. Most of the academic research shows a net benefit, not just on budgets but on employee and customer satisfaction. See for example.
And despite these privitazation cost savings and alleged neoliberal "austerity" government keeps taking a larger share of our money, like a malignant cancer. No worries....We're from the government, and we're here to help.
Keypointist 15 Nov 2016 20:04
I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really afford to service the loans.
It was this that created too big to fail and the financial crisis of 2008. Conservative neo-liberals believe passionately in competition and hate monopolies. The liberal left removed was was productive about neo-liberalism and replaced it with a kind of soft state capitalism where big business was protected by the state and the tax payer was called on to bail out these businesses. THIS more than anything else led to Trump's victory.
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Aug 18, 2017 | www.theguardian.com
The word ["neoliberalism"] has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human.
Last summer, researchers at the International Monetary Fund settled a long and bitter debate over "neoliberalism": they admitted it exists. Three senior economists at the IMF, an organisation not known for its incaution, published a paper questioning the benefits of neoliberalism . In so doing, they helped put to rest the idea that the word is nothing more than a political slur, or a term without any analytic power. The paper gently called out a "neoliberal agenda" for pushing deregulation on economies around the world, for forcing open national markets to trade and capital, and for demanding that governments shrink themselves via austerity or privatisation. The authors cited statistical evidence for the spread of neoliberal policies since 1980, and their correlation with anaemic growth, boom-and-bust cycles and inequality.
Neoliberalism is an old term, dating back to the 1930s, but it has been revived as a way of describing our current politics – or more precisely, the range of thought allowed by our politics . In the aftermath of the 2008 financial crisis, it was a way of assigning responsibility for the debacle, not to a political party per se, but to an establishment that had conceded its authority to the market. For the Democrats in the US and Labour in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony Blair, it was said, had abandoned the left's traditional commitments, especially to workers, in favour of a global financial elite and the self-serving policies that enriched them; and in doing so, had enabled a sickening rise in inequality.
Neoliberalism: the idea that swallowed the world – podcast
Over the past few years, as debates have turned uglier, the word has become a rhetorical weapon, a way for anyone left of centre to incriminate those even an inch to their right. (No wonder centrists say it's a meaningless insult: they're the ones most meaningfully insulted by it.) But "neoliberalism" is more than a gratifyingly righteous jibe. It is also, in its way, a pair of eyeglasses.
Peer through the lens of neoliberalism and you see more clearly how the political thinkers most admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market (and not, for example, a polis, a civil sphere or a kind of family) and of human beings as profit-and-loss calculators (and not bearers of grace, or of inalienable rights and duties). Of course the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But "neoliberalism" indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals.
Still peering through the lens, you see how, no less than the welfare state, the free market is a human invention. You see how pervasively we are now urged to think of ourselves as proprietors of our own talents and initiative, how glibly we are told to compete and adapt. You see the extent to which a language formerly confined to chalkboard simplifications describing commodity markets (competition, perfect information, rational behaviour) has been applied to all of society, until it has invaded the grit of our personal lives, and how the attitude of the salesman has become enmeshed in all modes of self-expression.
In short, "neoliberalism" is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity.
No sooner had neoliberalism been certified as real, and no sooner had it made clear the universal hypocrisy of the market, than the populists and authoritarians came to power. In the US, Hillary Clinton, the neoliberal arch-villain, lost – and to a man who knew just enough to pretend he hated free trade . So are the eyeglasses now useless? Can they do anything to help us understand what is broken about British and American politics? Against the forces of global integration, national identity is being reasserted, and in the crudest possible terms. What could the militant parochialism of Brexit Britain and Trumpist America have to do with neoliberal rationality? What possible connection is there between the president – a freewheeling boob – and the bloodless paragon of efficiency known as the free market?
It isn't only that the free market produces a tiny cadre of winners and an enormous army of losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; between the market as unique discloser of value and guardian of liberty, and our current descent into post-truth and illiberalism.
Moving the stale debate about neoliberalism forward begins, I think, with taking seriously the measure of its cumulative effect on all of us, regardless of affiliation. And this requires returning to its origins, which have nothing to do with Bill or Hillary Clinton. There once was a group of people who did call themselves neoliberals, and did so proudly, and their ambition was a total revolution in thought. The most prominent among them, Friedrich Hayek, did not think he was staking out a position on the political spectrum, or making excuses for the fatuous rich, or tinkering along the edges of microeconomics.
He thought he was solving the problem of modernity: the problem of objective knowledge. For Hayek, the market didn't just facilitate trade in goods and services; it revealed truth. How did his ambition collapse into its opposite – the mind-bending possibility that, thanks to our thoughtless veneration of the free market, truth might be driven from public life altogether?
When the idea occurred to Friedrich Hayek in 1936, he knew, with the conviction of a "sudden illumination", that he had struck upon something new. "How can the combination of fragments of knowledge existing in different minds," he wrote, "bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess?"
This was not a technical point about interest rates or deflationary slumps. This was not a reactionary polemic against collectivism or the welfare state. This was a way of birthing a new world. To his mounting excitement, Hayek understood that the market could be thought of as a kind of mind.
Adam Smith's "invisible hand" had already given us the modern conception of the market: as an autonomous sphere of human activity and therefore, potentially, a valid object of scientific knowledge. But Smith was, until the end of his life, an 18th-century moralist. He thought the market could be justified only in light of individual virtue, and he was anxious that a society governed by nothing but transactional self-interest was no society at all. Neoliberalism is Adam Smith without the anxiety.
That Hayek is considered the grandfather of neoliberalism – a style of thought that reduces everything to economics – is a little ironic given that he was such a mediocre economist. He was just a young, obscure Viennese technocrat when he was recruited to the London School of Economics to compete with, or possibly even dim, the rising star of John Maynard Keynes at Cambridge.
The plan backfired, and Hayek lost out to Keynes in a rout. Keynes's General Theory of Employment, Interest and Money, published in 1936, was greeted as a masterpiece. It dominated the public discussion, especially among young English economists in training, for whom the brilliant, dashing, socially connected Keynes was a beau idéal . By the end of the second world war, many prominent free-marketers had come around to Keynes's way of thinking, conceding that government might play a role in managing a modern economy. The initial excitement over Hayek had dissipated. His peculiar notion that doing nothing could cure an economic depression had been discredited in theory and practice. He later admitted that he wished his work criticising Keynes would simply be forgotten.
... Hayek built into neoliberalism the assumption that the market provides all necessary protection against the one real political danger: totalitarianism. To prevent this, the state need only keep the market free.
This last is what makes neoliberalism "neo". It is a crucial modification of the older belief in a free market and a minimal state, known as "classical liberalism". In classical liberalism, merchants simply asked the state to "leave us alone" – to laissez-nous faire. Neoliberalism recognised that the state must be active in the organisation of a market economy. The conditions allowing for a free market must be won politically, and the state must be re-engineered to support the free market on an ongoing basis.
That isn't all: every aspect of democratic politics, from the choices of voters to the decisions of politicians, must be submitted to a purely economic analysis. The lawmaker is obliged to leave well enough alone – to not distort the natural actions of the marketplace – and so, ideally, the state provides a fixed, neutral, universal legal framework within which market forces operate spontaneously. The conscious direction of government is never preferable to the "automatic mechanism of adjustment" – ie the price system, which is not only efficient but maximises liberty, or the opportunity for men and women to make free choices about their own lives.
As Keynes jetted between London and Washington, creating the postwar order, Hayek sat pouting in Cambridge. He had been sent there during the wartime evacuations; and he complained that he was surrounded by "foreigners" and "no lack of orientals of all kinds" and "Europeans of practically all nationalities, but very few of real intelligence".
Stuck in England, without influence or respect, Hayek had only his idea to console him; an idea so grand it would one day dissolve the ground beneath the feet of Keynes and every other intellectual. Left to its own devices, the price system functions as a kind of mind. And not just any mind, but an omniscient one: the market computes what individuals cannot grasp. Reaching out to him as an intellectual comrade-in-arms, the American journalist Walter Lippmann wrote to Hayek, saying: "No human mind has ever understood the whole scheme of a society At best a mind can understand its own version of the scheme, something much thinner, which bears to reality some such relation as a silhouette to a man."
It is a grand epistemological claim – that the market is a way of knowing, one that radically exceeds the capacity of any individual mind. Such a market is less a human contrivance, to be manipulated like any other, than a force to be studied and placated. Economics ceases to be a technique – as Keynes believed it to be – for achieving desirable social ends, such as growth or stable money. The only social end is the maintenance of the market itself. In its omniscience, the market constitutes the only legitimate form of knowledge, next to which all other modes of reflection are partial, in both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a special interest. Individually, our values are personal ones, or mere opinions; collectively, the market converts them into prices, or objective facts.
... ... ...
The more Hayek's idea expands, the more reactionary it gets, the more it hides behind its pretence of scientific neutrality – and the more it allows economics to link up with the major intellectual trend of the west since the 17th century. The rise of modern science generated a problem: if the world is universally obedient to natural laws, what does it mean to be human? Is a human being simply an object in the world, like any other? There appears to be no way to assimilate the subjective, interior human experience into nature as science conceives it – as something objective whose rules we discover by observation.
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More than anyone, even Hayek himself, it was the great postwar Chicago economist Milton Friedman who helped convert governments and politicians to the power of Hayek's Big Idea. But first he broke with two centuries of precedent and declared that economics is "in principle independent of any particular ethical position or normative judgments" and is "an 'objective' science, in precisely the same sense as any of the physical sciences". Values of the old, mental, normative kind were defective, they were "differences about which men can ultimately only fight". There is the market, in other words, and there is relativism.
Markets may be human facsimiles of natural systems, and like the universe itself, they may be authorless and valueless. But the application of Hayek's Big Idea to every aspect of our lives negates what is most distinctive about us. That is, it assigns what is most human about human beings – our minds and our volition – to algorithms and markets, leaving us to mimic, zombie-like, the shrunken idealisations of economic models. Supersizing Hayek's idea and radically upgrading the price system into a kind of social omniscience means radically downgrading the importance of our individual capacity to reason – our ability to provide and evaluate justifications for our actions and beliefs.
As a result, the public sphere – the space where we offer up reasons, and contest the reasons of others – ceases to be a space for deliberation, and becomes a market in clicks, likes and retweets. The internet is personal preference magnified by algorithm; a pseudo-public space that echoes the voice already inside our head. Rather than a space of debate in which we make our way, as a society, toward consensus, now there is a mutual-affirmation apparatus banally referred to as a "marketplace of ideas". What looks like something public and lucid is only an extension of our own pre-existing opinions, prejudices and beliefs, while the authority of institutions and experts has been displaced by the aggregative logic of big data. When we access the world through a search engine, its results are ranked, as the founder of Google puts it, "recursively" – by an infinity of individual users functioning as a market, continuously and in real time.
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According to the logic of Hayek's Big Idea, these expressions of human subjectivity are meaningless without ratification by the market – as Friedman said, they are nothing but relativism, each as good as any other. When the only objective truth is determined by the market, all other values have the status of mere opinions; everything else is relativist hot air. But Friedman's "relativism" is a charge that can be thrown at any claim based on human reason. It is a nonsense insult, as all humanistic pursuits are "relative" in a way the sciences are not. They are relative to the (private) condition of having a mind, and the (public) need to reason and understand even when we can't expect scientific proof. When our debates are no longer resolved by deliberation over reasons, then the whimsies of power will determine the outcome.
This is where the triumph of neoliberalism meets the political nightmare we are living through now. "You had one job," the old joke goes, and Hayek's grand project, as originally conceived in 30s and 40s, was explicitly designed to prevent a backslide into political chaos and fascism. But the Big Idea was always this abomination waiting to happen. It was, from the beginning, pregnant with the thing it was said to protect against. Society reconceived as a giant market leads to a public life lost to bickering over mere opinions; until the public turns, finally, in frustration to a strongman as a last resort for solving its otherwise intractable problems.
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What began as a new form of intellectual authority, rooted in a devoutly apolitical worldview, nudged easily into an ultra-reactionary politics. What can't be quantified must not be real, says the economist, and how do you measure the benefits of the core faiths of the enlightenment – namely, critical reasoning, personal autonomy and democratic self-government? When we abandoned, for its embarrassing residue of subjectivity, reason as a form of truth, and made science the sole arbiter of both the real and the true, we created a void that pseudo-science was happy to fill.
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Aug 30, 2017 | www.defenddemocracy.press
By Manuela Cadelli, President of the Magistrates' Union of Belgium
The time for rhetorical reservations is over. Things have to be called by their name to make it possible for a co-ordinated democratic reaction to be initiated, above all in the public services.
Liberalism was a doctrine derived from the philosophy of Enlightenment, at once political and economic, which aimed at imposing on the state the necessary distance for ensuring respect for liberties and the coming of democratic emancipation. It was the motor for the arrival, and the continuing progress, of Western democracies.
Neoliberalism is a form of economism in our day that strikes at every moment at every sector of our community. It is a form of extremism.
Fascism may be defined as the subordination of every part of the State to a totalitarian and nihilistic ideology.
I argue that neoliberalism is a species of fascism because the economy has brought under subjection not only the government of democratic countries but also every aspect of our thought.
The state is now at the disposal of the economy and of finance, which treat it as a subordinate and lord over it to an extent that puts the common good in jeopardy.
The austerity that is demanded by the financial milieu has become a supreme value, replacing politics. Saving money precludes pursuing any other public objective. It is reaching the point where claims are being made that the principle of budgetary orthodoxy should be included in state constitutions. A mockery is being made of the notion of public service.
The nihilism that results from this makes possible the dismissal of universalism and the most evident humanistic values: solidarity, fraternity, integration and respect for all and for differences.
There is no place any more even for classical economic theory: work was formerly an element in demand, and to that extent there was respect for workers; international finance has made of it a mere adjustment variable.
Every totalitarianism starts as distortion of language, as in the novel by George Orwell. Neoliberalism has its Newspeak and strategies of communication that enable it to deform reality. In this spirit, every budgetary cut is represented as an instance of modernization of the sectors concerned. If some of the most deprived are no longer reimbursed for medical expenses and so stop visiting the dentist, this is modernization of social security in action!
Read also: The only real way to stop atrocities like the Manchester attack is to end the wars which allow extremism to growAbstraction predominates in public discussion so as to occlude the implications for human beings.
Thus, in relation to migrants, it is imperative that the need for hosting them does not lead to public appeals that our finances could not accommodate. Is it In the same way that other individuals qualify for assistance out of considerations of national solidarity?
The cult of evaluation
Social Darwinism predominates, assigning the most stringent performance requirements to everyone and everything: to be weak is to fail. The foundations of our culture are overturned: every humanist premise is disqualified or demonetized because neoliberalism has the monopoly of rationality and realism. Margaret Thatcher said it in 1985: "There is no alternative." Everything else is utopianism, unreason and regression. The virtue of debate and conflicting perspectives are discredited because history is ruled by necessity.
This subculture harbours an existential threat of its own: shortcomings of performance condemn one to disappearance while at the same time everyone is charged with inefficiency and obliged to justify everything. Trust is broken. Evaluation reigns, and with it the bureaucracy which imposes definition and research of a plethora of targets, and indicators with which one must comply. Creativity and the critical spirit are stifled by management. And everyone is beating his breast about the wastage and inertia of which he is guilty.
The neglect of justice
The neoliberal ideology generates a normativity that competes with the laws of parliament. The democratic power of law is compromised. Given that they represent a concrete embodiment of liberty and emancipation, and given the potential to prevent abuse that they impose, laws and procedures have begun to look like obstacles.
Read also: EU lies on Cyprus, Ireland, Portugal and GreeceThe power of the judiciary, which has the ability to oppose the will of the ruling circles, must also be checkmated. The Belgian judicial system is in any case underfunded. In 2015 it came last in a European ranking that included all states located between the Atlantic and the Urals. In two years the government has managed to take away the independence given to it under the Constitution so that it can play the counterbalancing role citizens expect of it. The aim of this undertaking is clearly that there should no longer be justice in Belgium.
A caste above the Many
But the dominant class doesn't prescribe for itself the same medicine it wants to see ordinary citizens taking: well-ordered austerity begins with others. The economist Thomas Piketty has perfectly described this in his study of inequality and capitalism in the twenty-first century (French edition, Seuil, 2013).
In spite of the crisis of 2008 and the hand-wringing that followed, nothing was done to police the financial community and submit them to the requirements of the common good. Who paid? Ordinary people, you and me.
And while the Belgian State consented to 7 billion-euro ten-year tax breaks for multinationals, ordinary litigants have seen surcharges imposed on access to justice (increased court fees, 21% taxation on legal fees). From now on, to obtain redress the victims of injustice are going to have to be rich.
All this in a state where the number of public representatives breaks all international records. In this particular area, no evaluation and no costs studies are reporting profit. One example: thirty years after the introduction of the federal system, the provincial institutions survive. Nobody can say what purpose they serve. Streamlining and the managerial ideology have conveniently stopped at the gates of the political world.
The security ideal
Read also: DEMOCRATIC MENTAL HEALTH SOLIDARITY NETWORKTerrorism, this other nihilism that exposes our weakness in affirming our values, is likely to aggravate the process by soon making it possible for all violations of our liberties, all violations of our rights, to circumvent the powerless qualified judges, further reducing social protection for the poor, who will be sacrificed to "the security ideal".
Salvation in commitment
These developments certainly threaten the foundations of our democracy, but do they condemn us to discouragement and despair?
Certainly not. 500 years ago, at the height of the defeats that brought down most Italian states with the imposition of foreign occupation for more than three centuries, Niccolo Machiavelli urged virtuous men to defy fate and stand up against the adversity of the times, to prefer action and daring to caution. The more tragic the situation, the more it necessitates action and the refusal to "give up" (The Prince, Chapters XXV and XXVI).
This is a teaching that is clearly required today. The determination of citizens attached to the radical of democratic values is an invaluable resource which has not yet revealed, at least in Belgium, its driving potential and power to change what is presented as inevitable. Through social networking and the power of the written word, everyone can now become involved, particularly when it comes to public services, universities, the student world, the judiciary and the Bar, in bringing the common good and social justice into the heart of public debate and the administration of the state and the community.
Neoliberalism is a species of fascism. It must be fought and humanism fully restored.
Published in the Belgian daily Le Soir, 3.3.2016
translated from French by Wayne Hall
Le néolibéralisme est un fascisme, par Manuela Cadelli
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[Apr 15, 2016] theguardian.com
The article in question: Neoliberalism – the ideology at the root of all our problems
MoreNotLess 7d agoPart of the problem is that Neoliberalism isn't as clearly defined as communism. This also means that anything bad that happens in society today can be hung on to neoliberalism whether warranted or not. Zika causes microcephaly? another consequence of neoliberalism to be sure!
So we have two problems now. One like the author points out, there is no coherent alternative from the left (interestingly the Canadian NDP party tried and your much beloved Naomi Klein was part of a group who sabotaged the effort and produced a neo-stalinist proposal instead that went nowhere) and second, since is so diffuse a target it becomes a boogey man rather than actual target to be loathed.
vastariner , 2016-04-15 14:38:19
dreamer06 , 2016-04-15 14:38:54Are they though? Even ignoring trade subsidies, it's a bit difficult to compete in e.g. politics, the media, the law and many other areas unless you have money behind you. It's more a self-perpetuating protectionist oligarchy. And therefore as much neoliberalism as North Korea is communism.Attempts to limit competition are treated as inimical to liberty.
Another incisive article by George, one area where neo-liberalism is dominant is that of 'welfare reform', a key component of the ideology, In this sphere the lack of interest and action by the left, civil society, etc, has been shameful, I can recall here in the UK that at one weekend during the New Labour reign at a Labour Party Conference 60,000 people protested anti-war issues while only about 80 were there for the Monday event against N/L's nascent Welfare Reform Bill which created the policy architecthure for all the coming changes..Owlyrics dreamer06 , 2016-04-15 14:48:54Now there are suicides, misery for milllions, etc, it was left to a few disability groups, a few allies, Unite Community, UkUncut, etc to challenge the behemoth. The Left has a hierarchy of oppression which often means it operates in a bubble aloof from wider concerns.
People have been set up for decades to respond offensively to some words like unions, unemployed, sole parents, Greenies (environmentalists), female leaders, you name it, anyone they don't like. There is white trash, bogans, bludgers like trained pets they repeat the mantra as soon as anyone opposes them and people go against their best interests.umopapisdn -> dreamer06 , 2016-04-15 16:45:04New Labour was a con trick. JC's version will, imho, reverse a lot of the damage done - that's if the Blairites will stop throwing their toys out the pram.Shelfunit umopapisdn , 2016-04-17 07:46:11KellySmith81 , 2016-04-15 14:39:03New Labour was a con trick. JC's version will, imho, reverse a lot of the damage done
Yup, no more of this getting elected rubbish. Protests now and forever more.
neoliberalism is so wide spread that those that are actual neo-liberals don't even know they are. neoliberalism is core of The Conservatives and New Labour , Lid Dem even Green Party could be classed as neo-liberals, so the alternative is the communist party who are actually against staying in the EU or the idiots on the the right like UKIP and so on.Josh Phillips -> KellySmith81 , 2016-04-15 14:45:36We need common sense party instead of the terrible state of politics we have all over the Globe. The rise in the far-left and the far-right the non-platform anti free speech left with their phobia labels or the neanderthals of the far-right like rise of Golden Dawn and the anti-Muslim rhetoric by Trump.
Greens are neo-liberals? Mate, we're left of labour even now. We believe economic growth is fundamentally incompatible with a sustainable future, for exampleLuminaire -> KellySmith81 , 2016-04-15 14:54:54
(academic research beyond the faulty national statistics supports this), and the only way to tackle this is a wholesale redistrbutive system. The poor would be hit hardest by radical cuts in consumption and carbon limits. Enough to impoverish millions in this country alone. So we need to be redistributive in a far more radical way than even corbyns labour would be.Agreed, it feels like there's a HUGE gap in politics that simply isn't being filled at the moment. The false starts for real 'multi-party' politics that were the Lib Dem gains, Green Party and UKIP have all turned out to be more of the same, damp squibs or total mess.zolotoy -> Josh Phillips , 2016-04-15 14:59:26People are sick of politics, they're sick of bizarre single-issue parties and they're sick of even the language of politics. Such opportunity and yet nothing is appearing.
Depends on which Greens. The German Greens, for instance, after some initial party, are now just another corporate-friendly party that will compromise with anyone and anything.BarbecueAndBullshit , 2016-04-15 14:39:15Good article apart from the schoolboy error of characterizing the USSR as Communist. No advanced Communist State has yet existed. For clarification of the theory, try reading Etienne Balibar's On the Dictatorship of the Proletariatbobthebuilder2017 BarbecueAndBullshit , 2016-04-16 13:56:16also available online ( http://www.marx2mao.com/Other/ODP77NB.html ).
Yes, Lenin's attempt at implementing the abstract theories of Marx (he believed he found a way to short circuit the stages of socioevolution by skipping the Capitalist phase by jumping from Feudalism.to Socialism - the goal of the USSR.NietzscheanChe , 2016-04-15 14:39:15The people were the eggs in the theoretical omlet that was made.
The fact that so many were brutally murdered in the pursuit of and ends propagandized as 'liberation' can never be a allowed to be forgotten.
The next time will not be different, nor the time after that or the one after that.
The world has been written off and fucked into the shite heap to rot.Pratandwhitney , 2016-04-15 14:39:52Well said.platopluto , 2016-04-15 14:39:55
But I think we are too far in it and cant see any opposition for this.
Big corpos will try to keep status quo or even push harder their own agenda. They have easy job as they only have to buy (already done this) few politicians.We haven't failed to come up with an alternative- we've been shouting it at you. Its name is socialism. Thankfully we have Bernie Sanders, Jeremy Corbyn et al to represent our cause yet still it falls on deaf ears with the press and the political establishment.countyboy -> platopluto , 2016-04-15 14:49:48Power to the people!
Unfortunately power requires money and socialism does not provide it.zolotoy -> countyboy , 2016-04-15 15:02:42Power . . . or guns. And of course the servants and dupes of capitalism have most of the guns.MoreNotLess -> platopluto , 2016-04-15 15:11:38He meant an alternative that has a track record of working.bithoo , 2016-04-15 14:40:00In the 20th century more people were killed by their own governments than in war. But to the left the real threat to people comes not from a concentration of power wielded by governments but of concentrations of wealth in private hands.koichan bithoo , 2016-04-15 14:54:30The problem is that concentration of wealth leads to the buying of government power.septicsceptic -> bithoo , 2016-04-15 17:52:11It's not simple government bad, wealth good or indifferent. It's the wealthy using said wealth to buy government power to further enrich the wealthy.
Government is just a tool, who drives it matters.This comment is predicated entirely on the assumption that history repeats itself in identical form.bobthebuilder2017 -> septicsceptic , 2016-04-16 14:02:22No, history doesn't repeat: it rhymes.Cornus -> PaulBowes01 , 2016-04-15 18:05:19In addition to neoliberalism being adopted by the Democrats and Labour, another distinct ideology has the traditional parties of the left tied in knots.brovis -> Cornus , 2016-04-15 18:55:17One YouTuber has called it 'Neoprogressivism' - the creed underpinning identity politics.
Above Monbiot describes how neoliberalism was in large part born as Hayek's alternative to the early twentieth century nationalism/communism clash; worryingly it seems a century later our politics is again hamstrung by two pernicious ideologies as the world blindly races towards another disaster.
Whereas neoliberalism is now widely recognised and eviscerated, light is just starting to be shone on 'Neoprogressivism'. I recommend the YouTube video of this title for an account of the second 'rock' around which contemporary politics navigates.
Anarchy4theUK PaulBowes01 , 2016-04-15 20:56:56So we can safely dismiss it as the ramblings of a disgruntled attention seeker who is too dumb to realise that s/he isn't an overlooked genius.One YouTuber has called it 'Neoprogressivism'
Good.No, it's not. That's the point.Whereas neoliberalism is now widely recognised and eviscerated
That's not what happens in Venezuela, Chavez was the big hero of the left, now look at Venezuela, how's it working out for them?amberjack Osager , 2016-04-15 14:56:41Shanajackson Osager , 2016-04-15 15:07:42This is pretty much the only reason why I still read the Guardian. Monbiot and the quick crossword.this is why I read the guardian
Monbiot is the best journalist the Guardian has, he can actually make a logical fact based argument unlike the majority of Guardian journalist.qzpmwxonecib , 2016-04-15 14:40:53Any ideology will cause problems. Right wing and left wing. Pragmatism and compassion are required.Tad Blarney -> qzpmwxonecib , 2016-04-15 15:17:22'The Invisible Hand' is not an ideology or dogma. It's just a metaphor to describe those with problems grasping abstract concepts: when there are a large number of buyers and suppliers for a good, the 'market finds a price' which is effectively the sum of all the intelligence of the participants, their suppliers, customers etc..brovis -> Tad Blarney , 2016-04-15 18:38:35The Socialists, who have difficulty grasping this reality, want to 'fix' the price, which abnegates the collective intelligence of the market participants, and causes severe problems.
Capitalism is freedom, Socialism is someone's ideology.
unheilig , 2016-04-15 14:41:23'The Invisible Hand' is... a metaphor to describe those with problems grasping abstract concepts: when there are a large number of buyers and suppliers for a good, the 'market finds a price' which is effectively the sum of all the intelligence of the participants
You clearly haven't read Wealth of Nations. The only mention of an invisible hand is actually a warning against what we now call neoliberalism. Smith said that the wealthy wouldn't seek to enrich themselves to the detriment of their home communities, because of an innate home bias. Thus, as if by an invisible hand, England would be spared the ravages of economic rationality.
Your understanding of the 'invisible hand' is a falsehood perpetuated by neoliberal think tanks like the Adam Smith institute (no endorsement or connection to the author, despite using his name).
You definitely know a lot about dogma (and false dichotomies):'The Invisible Hand' is not dogma.
Capitalism is freedom, Socialism is someone's ideology.
EricBallinger , 2016-04-15 14:42:51All very well, but how? Did anyone hear the screams of rage when Sanders started threatening Hillary, or when Corbyn trounced the Blairites? The dead hand of Bernays and Goebbels controls everything.A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century
There is no alternative on offer by the left.oreilly62 EricBallinger , 2016-04-15 14:52:26
The socialist/trade union package is outmoded.
The failure to describe reality in a way that concurs with what ordinary people experience has driven off much support and reduced credibility.
There is no credible model for investment and wealth creation.
The focus on social mobility upwards rather than on those who do not move has given UK leftism a middle-class snobby air to it.
Those entering leftist politics have a very narrow range of life experience. The opposition to rightist politics is cliched and outmoded.
There is a complete failure to challenge the emerging multi-polar plutocratic oligarchy which runs the planet - the European left just seeks a comfy accommodation.
There is no attempt to develop a post-socialist, holistic worldview and ideology.The trade union package, gave us meal breaks, holidays, sickness benefits, working hours restrictions, as opposed to the right wing media agenda, that if you aint getting it nobody should, pour poison on the unions, pour poison on the public sector, a fucking media led race to the bottom for workers, and there were enough gullible (poor )mugs around to accept it. You can curse the middle class socialists all you like, but without their support the labour movement would never have got off the ground.Paidenoughalready -> oreilly62 , 2016-04-15 14:59:02Okay, so you've described the 1950's through to the 1980's.oreilly62 Paidenoughalready , 2016-04-15 15:18:26So what have the unions done for us isn the last two decades ?
Why is it all the successful, profitable and productive industries in the Uk have little or no union involvement ?
Why is it that the least effective, highest costs and poorest performing structures are in the public sector and held back by the unions ?
Here's a clue - the unions are operating in the 21st century with a 1950's mentality.
During the industrial revolution, profitability and productivity were off the scale because the workforce were just commodities, Unionisation instigated the idea that without the workforce, your entrepreneurs can't do anything on their own, Henry Ford wouldn't have become a millionaire without the help of his workforce. 'Poorest performing structures' Guess what! some of us are human beings not auto- matrons. I hope you dine well on sterling and dollars, cause they're not the most important things in life.countyboy , 2016-04-15 14:43:30It's the only way. It's not perfect but it achieves the best ( not ideal ) possible result.fumbduck countyboy , 2016-04-15 14:54:56What if in the end there's no where left to go ?
What if the highest possible taxes, zero avoidance / evasion and high employment still equals deficits and increasing national debt ?
What then ?
makirby -> countyboy , 2016-04-15 15:23:23What if the highest possible taxes, zero avoidance / evasion and high employment still equals deficits and increasing national debt ?
The paragraph written above neatly describes the post WW2 years, where the UK was pretty much in perpetual surplus. High employment does not equate to national debt/deficit. Quite the opposite, the more people in gainful employment the better. Increasing unemployment, driving wages down while simultaneously increasing the cost of living is a recipe for complete economic failure.
This whole economics gig is piss easy, when the general mass of people have cash to spare they spend it, economy thrives. Hoard the cash into the hands of a minority and starve the masses of cash, economy dies. It really is that simple.
Public deficits exist to match the private surplus created by the rich enriching themselves. To get rid of the deficit therefore we need to get rid of the private wealth of the rich through financial repression and taxationCoobyTavern , 2016-04-15 14:43:38I read, cannot remember where, that with neo liberalism the implementation is all that matters, you do not need to see the results. I suppose because the followers believe when implemented it will work perfectly. I think it's supporters think it is magic and must work because they believe it does.dreamer06 CoobyTavern , 2016-04-15 15:20:42Yes, a high priest of neo-liberalism, Lord Freud, was given only 13 weeks to investigate and reform key elements of the the UK's welfare system, it hasn't worked and Freud is now invisible.tonyeff , 2016-04-15 14:43:45Hopeful this is the start for change through identifying issues and avoiding pitfalls.Failed neoliberalism and not restricting markets that do not benefit the majority are the cause and we stand on the brink of falling further should the Brexiter's have their way. If there's one thing the EU excels at it's legislating against the excesses of business and extremism.
Let's make a start by staying in the EU.
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Nov 03, 2015 | Dissent Magazine
Booked is a monthly series of Q&As with authors by Dissent contributing editor Timothy Shenk. For this interview, he spoke with Wendy Brown about her new book Undoing the Demos: Neoliberalism's Stealth Revolution (Zone Books, 2015).
Timothy Shenk: You note early in Undoing the Demos that while references to "neoliberalism" have become routine, especially on the left, the word itself "is a loose and shifting signifier." What is your definition of neoliberalism?Wendy Brown: In this book, I treat neoliberalism as a governing rationality through which everything is "economized" and in a very specific way: human beings become market actors and nothing but, every field of activity is seen as a market, and every entity (whether public or private, whether person, business, or state) is governed as a firm. Importantly, this is not simply a matter of extending commodification and monetization everywhere-that's the old Marxist depiction of capital's transformation of everyday life. Neoliberalism construes even non-wealth generating spheres-such as learning, dating, or exercising-in market terms, submits them to market metrics, and governs them with market techniques and practices. Above all, it casts people as human capital who must constantly tend to their own present and future value.
Moreover, because neoliberalism came of age with (and abetted) financialization, the form of marketization at stake does not always concern products or commodities, let alone their exchange. Today, market actors-from individuals to firms, universities to states, restaurants to magazines-are more often concerned with their speculatively determined value, their ratings and rankings that shape future value, than with immediate profit. All are tasked with enhancing present and future value through self-investments that in turn attract investors. Financialized market conduct entails increasing or maintaining one's ratings, whether through blog hits, retweets, Yelp stars, college rankings, or Moody's bond ratings.
Shenk: Discussions about neoliberalism often treat it as an economic doctrine, which also means that they concentrate on its economic ramifications. You shift the focus to politics, where, you argue, neoliberalism has "inaugurate[d] democracy's conceptual unmooring and substantive disembowelment." Why does neoliberalism pose such a threat to democracy?
Brown: The most common criticisms of neoliberalism, regarded solely as economic policy rather than as the broader phenomenon of a governing rationality, are that it generates and legitimates extreme inequalities of wealth and life conditions; that it leads to increasingly precarious and disposable populations; that it produces an unprecedented intimacy between capital (especially finance capital) and states, and thus permits domination of political life by capital; that it generates crass and even unethical commercialization of things rightly protected from markets, for example, babies, human organs, or endangered species or wilderness; that it privatizes public goods and thus eliminates shared and egalitarian access to them; and that it subjects states, societies, and individuals to the volatility and havoc of unregulated financial markets.
Each of these is an important and objectionable effect of neoliberal economic policy. But neoliberalism also does profound damage to democratic practices, cultures, institutions, and imaginaries. Here's where thinking about neoliberalism as a governing rationality is important: this rationality switches the meaning of democratic values from a political to an economic register. Liberty is disconnected from either political participation or existential freedom, and is reduced to market freedom unimpeded by regulation or any other form of government restriction. Equality as a matter of legal standing and of participation in shared rule is replaced with the idea of an equal right to compete in a world where there are always winners and losers.
The promise of democracy depends upon concrete institutions and practices, but also on an understanding of democracy as the specifically political reach by the people to hold and direct powers that otherwise dominate us. Once the economization of democracy's terms and elements is enacted in law, culture, and society, popular sovereignty becomes flatly incoherent. In markets, the good is generated by individual activity, not by shared political deliberation and rule. And, where there are only individual capitals and marketplaces, the demos, the people, do not exist.
Shenk: It's easy to depict neoliberalism as a natural extension of liberalism, but you insist that the relationship is much more complicated than that. You illustrate the broad transformation by examining the intellectual history of homo economicus, a term whose meaning you claim has shifted radically since the time of Adam Smith. How has "economic man" changed in the last century?
Brown: You're right, the relationship is quite complicated, especially if one accepts Foucault's notion that neoliberalism is a "reprogramming of liberalism" rather than only a transformation of capitalism. Here are the simplest things we might say about the morphing of homo economicus. Two hundred years ago, this creature pursued its interest through what Adam Smith termed "truck, barter, and exchange." A generation later, Jeremy Bentham gives us the utility maximizer, calculating everything according to maximizing pleasure, minimizing pain-cost/benefit. Thirty years ago, at the dawn of the neoliberal era, we get human capital that entrepreneurializes itself at every turn. Today, homo economicus has been significantly reshaped as financialized human capital, seeking to enhance its value in every domain of life.
In contrast with classical economic liberalism, then, the contemporary figure of homo economicus is distinctive in at least two ways. First, for neoliberals, humans are only and everywhere homo economicus. This was not so for classical economists, where we were market creatures in the economy, but not in civic, familial, political, religious, or ethical life. Second, neoliberal homo economicus today takes shape as value-enhancing human capital, not as a creature of exchange, production, or even interest. This is markedly different from the subject drawn by Smith, Bentham, Marx, Polanyi, or even Gary Becker.
Shenk: You mentioned Foucault just now, and you devote two chapters to him in the book, where you also call Birth of Biopolitics-the volume that emerged from lectures he gave in the late 1970s on neoliberalism-a "remarkable" work of "extraordinary prescience." But he also comes in for a hefty amount of criticism. What do you think Foucault got right, and what did he miss?
Brown: What's amazing about Foucault's lectures is that he grasped neoliberalism as Europe's present and future in the 1970s-before Reagan or Thatcher were elected, and before the Washington Consensus. What's also extraordinary is his appreciation of neoliberalism as a form of political reason and governing that reaches from the state to the soul, and not simply as economic policy. Then there's simply the fact that Foucault is a fearless, deep, and profoundly original political-historical thinker, who probes archives or a single utterance with equal brilliance and imagination. These features make Foucault's lectures illuminating despite the fact that he is mostly discussing neoliberal ideas, not neoliberalism as it has unfolded over the past three decades.
But there are some distinctive gaps in Foucault's account of what neoliberalism is and does resulting from his allergies to Marxism at the point in his life when he's giving these lectures. For Foucault, as I said, neoliberalism is fundamentally a "reprogramming of liberalism," not of capitalism, and there is astonishingly little discussion of the latter. He is also largely indifferent to my own central concern, democracy, which was true across his work. So one takes the useful insights and then builds on them. It would be silly to be an "orthodox Foucauldian" on the subject of neoliberalism, or for that matter, on any subject.
Shenk: What about the politics of Foucault's analysis? There's been a lot of debate recently about whether he was so attuned to neoliberalism's rise because his own work was compatible with neoliberalism. What's your position on this?
Brown: Well, on the one hand, Foucault's degree of sympathy with what he was studying is not, for me, particularly important. The usefulness of certain historical accounts and theoretical formulations turns on their capacities for illumination, not on the theorist's political affinities. (No one who mines the history of political theory to think about our present can draw only from theorists whose affinities line up with contemporary progressive values. None would survive the test, and that's also a poor approach to learning from great minds.) Moreover, he didn't and couldn't have anticipated the neoliberal formations we are grappling with today. On the other hand, the idea that Foucault was deeply attracted to neoliberalism for its "emancipatory" dimensions strikes me as incompatible with a careful reading of his lectures where, among other things, he considers neoliberalism as a novel form of governing human beings that requires the individual, as human capital, to become a "portfolio of enterprises" and that makes us into both "producers and consumers of freedom." Foucault's signature theoretical move is to grasp human beings as produced by governing powers, not "freed" by them.
Shenk: Homo economicus is a fairly common term; less common is the notion you oppose it to, homo politicus. What's the genealogy of homo politicus, and how is it related to its more famous counterpart?
Brown: To understand what neoliberalism is doing to democracy, we have to return to the point that, until recently, human beings in the West have always been figured as more than homo economicus. There have always been other dimensions of us imagined and cultivated in political, cultural, religious, or familial life. One of these figurations, which we might call homo politicus, featured prominently in ancient Athens, Roman republicanism, and even early liberalism. But it has also appeared in modern democratic upheavals ranging from the French Revolution to the civil rights movement. Homo politicus is inconstant in form and content, just as homo economicus is, and certainly liberal democracy features an anemic version compared to, say, Aristotle's account of humans as realizing our distinctively human capacities through sharing rule in the polis. But it is only with the neoliberal revolution that homo politicus is finally vanquished as a fundamental feature of being human and of democracy. Democracy requires that citizens be modestly oriented toward self-rule, not simply value enhancement, and that we understand our freedom as resting in such self-rule, not simply in market conduct. When this dimension of being human is extinguished, it takes with it the necessary energies, practices, and culture of democracy, as well as its very intelligibility.
Shenk: Some of the major interpreters of neoliberalism, especially those who approach it from a Marxist perspective, depict it as a straightforward byproduct of 1970s economic turmoil and backlash against welfare states led by a revanchist capitalist elite. It seems like you're not satisfied with that interpretation. This is a big question, but do you have an alternative explanation for how we got here?
Brown: That's too long and complicated a story to rehearse here but I can say this. For most Marxists, neoliberalism emerges in the 1970s in response to capitalism's falling rate of profit; the shift of global economic gravity to OPEC, Asia, and other sites outside the West; and the dilution of class power generated by unions, redistributive welfare states, large and lazy corporations, and the expectations generated by educated democracies. From this perspective, neoliberalism is simply capitalism on steroids: a state and IMF-backed consolidation of class power aimed at releasing capital from regulatory and national constraints, and defanging all forms of popular solidarities, especially labor.
The grains of truth in this analysis don't get at the fundamental transformation of social, cultural, and individual life brought about by neoliberal reason. They don't get at the ways that public institutions and services have not merely been outsourced but thoroughly recast as private goods for individual investment or consumption. And they don't get at the wholesale remaking of workplaces, schools, social life, and individuals. For that story, one has to track the dissemination of neoliberal economization through neoliberalism as a governing form of reason, not just a power grab by capital. There are many vehicles of this dissemination-law, culture, and above all, the novel political-administrative form we have come to call governance. It is through governance practices that business models and metrics come to irrigate every crevice of society, circulating from investment banks to schools, from corporations to universities, from public agencies to the individual. It is through the replacement of democratic terms of law, participation, and justice with idioms of benchmarks, objectives, and buy-ins that governance dismantles democratic life while appearing only to instill it with "best practices."
Shenk: Undoing the Demos covers a sizable amount of ground in just over 200 pages, but, as your discussion of governance just now indicates, you also spend a lot of time with specific instances of neoliberalism in action. My favorite of these more focused studies is your extended analysis of Citizens United. What does that case tell us about neoliberalism more generally?
Brown: Progressives generally disparage Citizens United for having flooded the American electoral process with corporate money on the basis of tortured First Amendment reasoning that treats corporations as persons. However, a careful reading of the majority decision also reveals precisely the thoroughgoing economization of the terms and practices of democracy we have been talking about. In the majority opinion, electoral campaigns are cast as "political marketplaces," just as ideas are cast as freely circulating in a market where the only potential interference arises from restrictions on producers and consumers of ideas-who may speak and who may listen or judge. Thus, Justice Kennedy's insistence on the fundamental neoliberal principle that these marketplaces should be unregulated paves the way for overturning a century of campaign finance law aimed at modestly restricting the power of money in politics. Moreover, in the decision, political speech itself is rendered as a kind of capital right, functioning largely to advance the position of its bearer, whether that bearer is human capital, corporate capital, or finance capital. This understanding of political speech replaces the idea of democratic political speech as a vital (if potentially monopolizable and corruptible) medium for public deliberation and persuasion.
Perhaps what is most significant about the Citizens United decision, then, is not that corporations are rendered as persons, but that persons, let alone a people, do not appear as the foundation of democracy, and a distinctly public sphere of debate and discussion do not appear as democracy's vital venue. Instead, the decision presents speech as a capital right and political life and elections as marketplaces.
Shenk: You're clear that democracy is an ideal that deserves defending, but you're skeptical about actually existing democracy, which you describe as a system where "the common rage of the common citizen has been glorified and exploited." And you worry that matters could get much worse, with democracy as we know it giving way to "a polity in which the people are pawns of every kind of modern power." Do you see a tension between your tributes to democratic ideals and your grim assessment of its current state?
Brown: Democracy is always incomplete, always short of its promise, but the conditions for cultivating it can be better or worse. My point was that democracy is really reduced to a whisper in the Euro-Atlantic nations today. Even Alan Greenspan says that elections don't much matter much because, "thanks to globalization . . . the world is governed by market forces," not elected representatives. Voting has been declining for decades everywhere in the Western world; politicians are generally mistrusted if not reviled (except for Varoufakis, of course!); and everything to do with political life or government is widely considered either captured by capital, corrupt or burdensome -- this hostility to the political itself is generated by neoliberal reason. Thus, today, the meaning of democracy is pretty much reduced to personal liberty. Such liberty is not nothing, but could not be further from the idea of rule by and for the people.
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Shanajackson Osager , 2016-04-15 15:07:42Monbiot is the best journalist the Guardian has, he can actually make a logical fact based argument unlike the majority of Guardian journalist.Read also:
- Neoliberalism has spawned a financial elite who hold governments to ransom
- Who's in control – nation states or global corporations?
- Who can control the post-superpower capitalist world order?
- If you think we're done with neoliberalism, think again
- How a corporate cult captures and destroys our best graduates (June 3, 2015)
- 'Wealth creators' are robbing our most productive people
- Growth: the destructive god that can never be appeased Nov 18, 2014)
- Taming corporate power: the key political issue of our age (Dec 8, 2014)
- The rich want us to believe their wealth is good for us all (July 29, 2014)
- Sick of this market-driven world? You should be Aug 5, 2014
- The real enemies of press freedom are in the newsroom Jun 30, 2014
- How have these corporations colonised our public life? Apr 8, 2016
- The lies behind this transatlantic trade deal
- This transatlantic trade deal is a full-frontal assault on democracy
- When the rich are born to rule, the results can be fatal
- When corporations bankroll politics, we all pay the price
- Mitt Romney and the myth of self-created millionaires
- How Ayn Rand became the new right's version of Marx
- We need to know who funds these thinktank lobbyists
- This bastardised libertarianism makes 'freedom' an instrument of oppression
- Secretive thinktanks are crushing our democracy
- Academic publishers make Murdoch look like a socialist
- Almost everyone condemns naked short selling. But not the British Treasury
- Curb the banks? The government has propped them up at every opportunity
- These astroturf libertarians are the real threat to internet democracy
- This state-hating free marketeer ignores his own failed experiment
- New Labour is a parasite. A vote for them is born of fear, not hope
Society
Groupthink : Two Party System as Polyarchy : Corruption of Regulators : Bureaucracies : Understanding Micromanagers and Control Freaks : Toxic Managers : Harvard Mafia : Diplomatic Communication : Surviving a Bad Performance Review : Insufficient Retirement Funds as Immanent Problem of Neoliberal Regime : PseudoScience : Who Rules America : Neoliberalism : The Iron Law of Oligarchy : Libertarian Philosophy
Quotes
War and Peace : Skeptical Finance : John Kenneth Galbraith :Talleyrand : Oscar Wilde : Otto Von Bismarck : Keynes : George Carlin : Skeptics : Propaganda : SE quotes : Language Design and Programming Quotes : Random IT-related quotes : Somerset Maugham : Marcus Aurelius : Kurt Vonnegut : Eric Hoffer : Winston Churchill : Napoleon Bonaparte : Ambrose Bierce : Bernard Shaw : Mark Twain Quotes
Bulletin:
Vol 25, No.12 (December, 2013) Rational Fools vs. Efficient Crooks The efficient markets hypothesis : Political Skeptic Bulletin, 2013 : Unemployment Bulletin, 2010 : Vol 23, No.10 (October, 2011) An observation about corporate security departments : Slightly Skeptical Euromaydan Chronicles, June 2014 : Greenspan legacy bulletin, 2008 : Vol 25, No.10 (October, 2013) Cryptolocker Trojan (Win32/Crilock.A) : Vol 25, No.08 (August, 2013) Cloud providers as intelligence collection hubs : Financial Humor Bulletin, 2010 : Inequality Bulletin, 2009 : Financial Humor Bulletin, 2008 : Copyleft Problems Bulletin, 2004 : Financial Humor Bulletin, 2011 : Energy Bulletin, 2010 : Malware Protection Bulletin, 2010 : Vol 26, No.1 (January, 2013) Object-Oriented Cult : Political Skeptic Bulletin, 2011 : Vol 23, No.11 (November, 2011) Softpanorama classification of sysadmin horror stories : Vol 25, No.05 (May, 2013) Corporate bullshit as a communication method : Vol 25, No.06 (June, 2013) A Note on the Relationship of Brooks Law and Conway Law
History:
Fifty glorious years (1950-2000): the triumph of the US computer engineering : Donald Knuth : TAoCP and its Influence of Computer Science : Richard Stallman : Linus Torvalds : Larry Wall : John K. Ousterhout : CTSS : Multix OS Unix History : Unix shell history : VI editor : History of pipes concept : Solaris : MS DOS : Programming Languages History : PL/1 : Simula 67 : C : History of GCC development : Scripting Languages : Perl history : OS History : Mail : DNS : SSH : CPU Instruction Sets : SPARC systems 1987-2006 : Norton Commander : Norton Utilities : Norton Ghost : Frontpage history : Malware Defense History : GNU Screen : OSS early history
Classic books:
The Peter Principle : Parkinson Law : 1984 : The Mythical Man-Month : How to Solve It by George Polya : The Art of Computer Programming : The Elements of Programming Style : The Unix Hater’s Handbook : The Jargon file : The True Believer : Programming Pearls : The Good Soldier Svejk : The Power Elite
Most popular humor pages:
Manifest of the Softpanorama IT Slacker Society : Ten Commandments of the IT Slackers Society : Computer Humor Collection : BSD Logo Story : The Cuckoo's Egg : IT Slang : C++ Humor : ARE YOU A BBS ADDICT? : The Perl Purity Test : Object oriented programmers of all nations : Financial Humor : Financial Humor Bulletin, 2008 : Financial Humor Bulletin, 2010 : The Most Comprehensive Collection of Editor-related Humor : Programming Language Humor : Goldman Sachs related humor : Greenspan humor : C Humor : Scripting Humor : Real Programmers Humor : Web Humor : GPL-related Humor : OFM Humor : Politically Incorrect Humor : IDS Humor : "Linux Sucks" Humor : Russian Musical Humor : Best Russian Programmer Humor : Microsoft plans to buy Catholic Church : Richard Stallman Related Humor : Admin Humor : Perl-related Humor : Linus Torvalds Related humor : PseudoScience Related Humor : Networking Humor : Shell Humor : Financial Humor Bulletin, 2011 : Financial Humor Bulletin, 2012 : Financial Humor Bulletin, 2013 : Java Humor : Software Engineering Humor : Sun Solaris Related Humor : Education Humor : IBM Humor : Assembler-related Humor : VIM Humor : Computer Viruses Humor : Bright tomorrow is rescheduled to a day after tomorrow : Classic Computer Humor
The Last but not Least Technology is dominated by two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt. Ph.D
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Last modified: February, 23, 2021
