Monbiot G 2013 If You Think Were Done With Neoliberalism Think Again
I magine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no proper name. Mention it in conversation and y'all'll be rewarded with a shrug. Even if your listeners have heard the term before, they volition struggle to define information technology. Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. Information technology has played a major function in a remarkable variety of crises: the financial meltdown of 2007‑eight, the offshoring of wealth and power, of which the Panama Papers offer the states merely a glimpse, the slow collapse of public health and instruction, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises every bit 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 tin can there be than to operate namelessly?
So pervasive has neoliberalism become that nosotros seldom even recognise information technology as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological police force, like Darwin'south theory of evolution. Only the philosophy arose as a witting effort to reshape man life and shift the locus of power.
Neoliberalism sees contest as the defining characteristic of man relations. It redefines citizens equally consumers, whose democratic choices are best exercised by buying and selling, a procedure that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never exist accomplished by planning.
Attempts to limit contest are treated as inimical to freedom. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as marketplace distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast equally virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal social club are both counterproductive and morally corrosive. The market place 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 form – that may have helped to secure information technology. The poor begin to blame themselves for their failures, even when they can do fiddling to alter their circumstances.
Never mind structural unemployment: if you don't have a job it's because yous 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 fatty, it's your fault. In a earth governed by competition, those who autumn behind get defined and self-divers as losers.
Amidst the results, as Paul Verhaeghe documents in his book What Nigh Me? are epidemics of cocky-harm, eating disorders, low, loneliness, operation anxiety and social phobia. Mayhap it's unsurprising that Uk, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.
T he term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were ii men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social commonwealth, exemplified past Franklin Roosevelt's New Deal and the gradual development of Britain's welfare state, as manifestations of a collectivism that occupied the same spectrum every bit nazism and communism.
In The Route to Serfdom, published in 1944, Hayek argued that government planning, past crushing individualism, would lead inexorably to totalitarian command. Like Mises'south 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 gratis themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – information technology was supported financially past 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 Establish, the Establish of Economical Affairs, the Centre for Policy Studies and the Adam Smith Plant. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.
As it evolved, neoliberalism became more than strident. Hayek's view that governments should regulate contest to foreclose monopolies from forming gave way – amidst American apostles such as Milton Friedman – to the conventionalities that monopoly power could exist seen every bit a reward for efficiency.
Something else happened during this transition: the motion lost its proper noun. In 1951, Friedman was happy to draw himself as a neoliberal. But soon later on that, the term began to disappear. Stranger withal, fifty-fifty equally the ideology became crisper and the motion more coherent, the lost name was not replaced by whatever common alternative.
At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was about universal: John Maynard Keynes'south economic prescriptions were widely applied, total employment and the relief of poverty were mutual goals in the United states of america 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 autonomously and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. Equally Friedman remarked, "when the time came that you had to modify ... there was an alternative fix there to exist picked up". With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for budgetary policy, were adopted by Jimmy Carter's assistants in the United states and Jim Callaghan's government in Great britain.
Afterwards Margaret Thatcher and Ronald Reagan took power, the rest of the packet soon followed: massive revenue enhancement cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Banking concern, the Maastricht treaty and the Earth Trade Organisation, neoliberal policies were imposed – oft without democratic consent – on much of the earth. Nigh remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for instance. As Stedman Jones notes, "information technology is hard to recall of some other utopia to have been as fully realised."
I t may seem strange that a doctrine promising selection and freedom should have been promoted with the slogan "there is no alternative". But, as Hayek remarked on a visit to Pinochet'due south Chile – i of the first nations in which the program 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 thruway, 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 pattern exotic fiscal instruments. Freedom from taxation ways freedom from the distribution of wealth that lifts people out of poverty.
As Naomi Klein documents in The Stupor Doctrine, neoliberal theorists advocated the utilize of crises to impose unpopular policies while people were distracted: for example, in the backwash of Pinochet's coup, the Iraq war and Hurricane Katrina, which Friedman described as "an opportunity to radically reform the educational organization" in New Orleans.
Where neoliberal policies cannot exist imposed domestically, they are imposed internationally, through trade treaties incorporating "investor-state dispute settlement": offshore tribunals in which corporations tin 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 free energy bills or prevent pharmaceutical firms from ripping off the country, corporations have sued, often successfully. Democracy is reduced to theatre.
Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The event is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to place 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 i.
Neoliberalism was not conceived as a self-serving racket, just information technology speedily became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Uk and the US) than information technology 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, rise rents, privatisation and deregulation.
The privatisation or marketisation of public services such as free energy, water, trains, health, education, roads and prisons has enabled corporations to gear up up tollbooths in front of essential avails 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, but 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.
Those who own and run the United kingdom's privatised or semi-privatised services brand stupendous fortunes by investing trivial and charging much. In Russia and India, oligarchs caused state avails through firesales. In Mexico, Carlos Slim was granted command of almost all landline and mobile phone services and soon became the world'due south richest man.
Financialisation, as Andrew Sayer notes in Why We Tin't Afford the Rich, has had a like impact. "Similar hire," he argues, "involvement is ... unearned income that accrues without any endeavor". As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Involvement 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 (recall of the switch from student grants to pupil loans), the banks and their executives clean upward.
Sayer argues that the past four decades take 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 brand their coin by producing new goods or services to those who brand their money by controlling existing assets and harvesting rent, interest or uppercase gains. Earned income has been supplanted by unearned income.
Neoliberal policies are everywhere aggress past market failures. Not only are the banks too big to fail, just then are the corporations at present charged with delivering public services. As Tony Judt pointed out in Sick Fares the Land, Hayek forgot that vital national services cannot exist allowed to plummet, which means that contest cannot run its course. Business organization takes the profits, the state keeps the run a risk.
The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises equally both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social condom net, deregulate corporations and re-regulate citizens. The self-hating land now sinks its teeth into every organ of the public sector.
Perhaps the well-nigh dangerous bear upon of neoliberalism is not the economic crises information technology has caused, simply the political crisis. As the domain of the state is reduced, our power to change the course of our lives through voting as well contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. Merely some have more to spend than others: in the great consumer or shareholder democracy, votes are non equally distributed. The result is a disempowerment of the poor and middle. Equally parties of the correct and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Big numbers of people accept been shed from politics.
Chris Hedges remarks that "fascist movements build their base of operations 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 united states, people become responsive instead to slogans, symbols and awareness. To the admirers of Trump, for example, facts and arguments announced irrelevant.
Judt explained that when the thick mesh of interactions between people and the state has been reduced to zip merely authority and obedience, the just remaining forcefulness that binds usa is state power. The totalitarianism Hayek feared is more than likely to emerge when governments, having lost the moral authority that arises from the commitment of public services, are reduced to "cajoling, threatening and ultimately coercing people to obey them".
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 paw is promoted by invisible backers. Slowly, very slowly, nosotros 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 confronting the farther regulation of the tobacco manufacture, has been secretly funded by British American Tobacco since 1963. We detect that Charles and David Koch, 2 of the richest men in the earth, founded the institute that set up the Tea Political party motility. We find that Charles Koch, in establishing 1 of his thinktanks, noted that "in order to avoid undesirable criticism, how the arrangement is controlled and directed should not be widely advertised".
The words used by neoliberalism often muffle more than they elucidate. "The market" sounds like a natural organization that might acquit upon the states equally, similar gravity or atmospheric force per unit area. Only information technology is fraught with power relations. What "the market wants" tends to mean what corporations and their bosses want. "Investment", equally Sayer notes, ways ii quite dissimilar things. One is the funding of productive and socially useful activities, the other is the buy of existing assets to milk them for hire, interest, dividends and capital letter gains. Using the same word for different activities "camouflages the sources of wealth", leading u.s. to confuse wealth extraction with wealth creation.
A century ago, the nouveau riche were disparaged past those who had inherited their coin. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the human relationship has been reversed: the rentiers and inheritors mode 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 non know for whom they toil; the companies registered through a network of offshore secrecy regimes and then circuitous that fifty-fifty the police force cannot discover the beneficial owners; the revenue enhancement arrangements that bamboozle governments; the financial products no 1 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 united states no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that at that place is aught novel nigh The Road to Serfdom, Bureaucracy or Friedman's classic work, Capitalism and Liberty.
F or 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'southward triumph too reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economical theory to replace it. When Keynesian demand management hitting the buffers in the 70s, there was an culling ready. Simply 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 economical idea for eighty 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 issues. It is hard to mobilise people around old ideas; the flaws exposed in the 70s take non gone abroad; and, most importantly, they have nothing to say nigh 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 ecology destruction.
What the history of both Keynesianism and neoliberalism bear witness is that information technology's not enough to oppose a cleaved system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the fundamental task should be to develop an economic Apollo programme, a witting try to design a new system, tailored to the demands of the 21st century.
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Source: https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot