George Monbiot - Neoliberalism – the ideology at the root of all our problems
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.
In 1944, Hayek argued that government planning... would lead inexorably to totalitarian control. .. 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... “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...
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
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”.
*****
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?
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.
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.
The paper version can be accessed here: https://www.academia.edu/23908958/Fuc...
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.
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.”
***
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...
Read more:
See also
A Historical View of Economic Categories
Albert Einstein - Why Socialism?
Sheldon Wolin - Can capitalism and democracy co-exist?
The meaning of autonomy
Terry Eagleton - Why Marx was right
Is there any such thing as ethical capitalism
Athens 1944: Britain’s dirty secret
Katharine Viner - The plight of refugees is the crisis of our times ...
THIS CHANGES EVERYTHING by Naomi Klein
THIS CHANGES EVERYTHING by Naomi Klein
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