27 December 2016

"Neoliberalism" castigated

From an op-ed column in The Guardian:
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 [neoliberalism]...

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...

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...

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...

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...

Neoliberalism’s triumph also reflects the failure of the left.  
Much more at the source, or at the Wikipedia entry:
Neoliberalism (neo-liberalism) refers primarily to the 20th century resurgence of 19th century ideas associated with laissez-faire economic liberalism. These include extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to increase the role of the private sector in the economy...


  1. This piece has so many problems that it is tough to know where to begin.

    First, even the term itself should be questioned. Neoliberalism, as this author defines it, should rather be described as "Classical Liberalism." That's a small quibble, but classical liberalism is nothing new.

    Second, the author of this piece claims Neoliberalism is to blame for a variety of maladies. We can see that the size and scope of government in nearly every country has increased dramatically since the days of Hayek and Mises. We're not living in an environment where government planning and control has been reduced, but instead living in an environment where many countries are increasingly headed in that direction.

    Third, while I have not read the book referenced in this piece, it is laughable to blame, "epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia..." all on neoliberalism. The logical hurdles that must have been passed to come to that kind of conclusion must be something to behold.

    Fourth, "the financial meltdown of 2007‑8, the offshoring of wealth and power... the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump..." are incorrectly ascribed to neoliberalism. This is fraught with issues. The financial meltdown was a combination of lack of regulation alongside direct government interference in the market (hello, Fannie Mae and Freddy Mac). To pin the financial crisis and resulting awful bailouts on "the market" misses the mark. This, as well as most maladies we're seeing, can be pinned instead on crony capitalism. The market is anything but free when the government is extremely involved.

    See also: The Affordable Care Act (which was a nasty collaboration between insurance companies and the government), the offshoring of wealth and power (see: high taxes and government regulation such as the ACA exacerbating the issue), child poverty (which is actually decreasing worldwide, and quite dramatically).

    I'm honestly not sure what he means by the "collapse of ecosystems," and blaming Donald Trump on neoliberalism (Libertarians?) is just laughable.

    1. In Social Welfare research, we use the term "neoliberalism" quite a bit, as it's a broad explanation for changes we've seen in the interplay between human welfare and work (i.e. the primary role of a citizen is to work in the marketplace.) I think this is fairly different from the political science perspective, but it does provide some avenue for discussing societal forces.

      To me, neoliberalism is more about this common perspective that civil and human rights are only worth as much as they benefit the marketplace. For example, union-busting, "welfare-to-work" programs, heck, we even put our refugees to work. From this perspective, it's easy to see how neoliberalism can be a cause of "self harm, eating disorders, depression..." When your value is defined by your work and consuming, it leaves little for inherent self-worth.

      I don't think of neoliberalism as a singular cause of these problems, nor do I think of it as a thing out there we can interact with, or even a conscious perspective shared by powerful individuals. I think it's more an explanation of a societal trend that dominates our current worldview. It's how some people can say "republicans and democrats are the same" and be, at least partially, right. Bill Clinton placed welfare restrictions that force people into work, but made no effort to ensure that the work would actually support them. We have a minimum wage that barely covers an individual, let alone a family. The marketplace isn't working for us, we're working for it.

      The government intervening in the housing market, crony capitalism, and most certainly Donald Trump, are all part of this same perspective. Very generally, it's neo- because it's not obvious. Neoliberalism is not the same as an open/unrestricted marketplace or libertarianism, it has to do with societal forces that shape how we even consider the marketplace.

      At least, this is one guy's perspective from within one slightly (slightly?) partial discipline.

      For reference, I like readings by Wacquant, Soss, Garfinkel, and/or Katz.

  2. At some point this stuff becomes a matter of faith, dependent on religious leanings of some sort rather than a set of demonstrable facts. I mean, you can occasionally say, 'this event led to that event' with some evidence to support your argument... but once you get to the level of big/vague/imaginary terms like 'neoliberalism' I think you're listening to a sermon.

  3. The underlying fact remains that whether you call it neoliberalism or something else, this worship of corporate capitalism has had profound effects on the shape of the world. The majority of these effects haven't been particularly beneficial.

  4. Funny, I'd associate the conservatives with corporate capitalism. The liberals are usually "bleeding hearts" and "tax and spend" - depending on the mood of the authoritarian right. I'm just going to reclaim the word Liberal as meaning free and open minded and generous, as well as educated in the humanities.

  5. "A rose by any other name..."

    Anyway you spell it, it still adds up to Right Wing economic Conservatism.

    War is peace, freedom is slavery, ignorance is strength.

  6. Economic conservatism stresses balanced budgets, reduced govt spending & reduced regulations. That is not the current approach in Washington, nor has it been in decades. I agree the current federal approach is more rightly called crony capitalism - which does not align with conservatuve principles, nor with classic liberalism - and both parties have advanced this crony capitalism.



Related Posts Plugin for WordPress, Blogger...