This will obviously repeat what I have said before, in various places, but it comes out of a circling process and hopefully is more precise than previously. This repetition is also relevant to this blog as neoliberalism appears to form the main institutional block to climate action, energy transition, degrowth and repair of the world ecology. It may also be the main danger to democracy and liberty, as it protects corporate power at the cost of human life.
Introduction
First of all, like fascism, neoliberalism is not primarily a body of theories, although it does point to landmark theorists in neoclassical, monetary and ‘Austrian’ economics. It is primarily a set of techniques for increasing and entrenching the power of the corporate sector, which organises the economy so that most of the wealth goes to the already hyper-wealthy. It is quite happy to ignore its pet theorists, and official principles, if they are inconvenient for these aims.
Origins
Neoliberalism seems to have arisen in the context of a series of challenges to corporate power by governments acting to regulate corporations for the public good.
It seems to have begun in the 30s, with corporate sponsorship, during the great depression. It went to sleep during the second world war, when governmental organisation seemed necessary for corporate survival. It survived primarily as corporately sponsored anti-socialism after the second world war when socialism, or a mixed economy, was boosting the standards of living of the general populace to an extent never before seen. This was the era of the founding of the Mont Pelerin Society, home of Friedrich August von Hayek and Ludwig Heinrich Edler von Mises among other anti-socialists. However, they had relatively little influence as the elite also feared the possibility of worker revolution, which could be stopped by a little wealth and power sharing.
Neoliberalism returned, with the usual sponsorship, in the early 1970s as a response to the fear that democracy and activism (of all kinds, including environmental) was taking power away from the corporate elites to do what they wanted, and that confusion would result. It also proposed a simple ‘solution’ to the problems of stagflation, and the oil shock – which effectively increased levels of unemployment and reduced wages for most people. It came into its true ascendency after the collapse of the Soviet Union, when there seemed no longer to be any fear of a workers’ revolution, and we were faced with what some called the end of history, namely the triumph of capitalism and its then neoliberal ideas.
Neoliberalism was also helped by the Left arguing that the welfare state was a mode of control over the working class. This was partially correct, but the welfare state was clearly better than the previous alternatives. The solution would have been not to attack welfare but to improve it and liberate it.
The left had little defense against neoliberal ‘liberty’ but naïve anti-capitalism or accommodation. Accommodation won out, as it often does, and we got market based Labour parties in the UK and Australia, who followed the neoliberal lead and treated the corporately dominated ‘market’ as the most important social institution and thus the corporate sector as the most important and privileged part of society. The Democrats likewise largely followed the Republicans in the US, as with Bill Clinton’s slogan “Its the economy, stupid.” Socialism was dead.
Neoliberal “Free Markets”
The language that neoliberalism uses tends to resemble the language of libertarians, but it is not the same, even if libertarians can themselves be confused by it, and used by it.
To explain the confusion, we can return to the primary function of neoliberalism which is to extend the power of the corporate sector and prevent it from being “interfered with”, made to act responsibly, “civilised” or encouraged to share wealth, on behalf of the people. Neoliberalism tends towards corporate authoritarianism not libertarianism. Once we understand these are the aims, then many otherwise puzzling features of neoliberalism become clear.
Thus neoliberals talk a lot about the “free market” but they do not mean a market open to all without regulation within which people can live freely, they mean a market that is regulated in favour of the corporate class. This is a market which allows tax evasion, suppresses unions, lowers wages, transfers wealth upwards, hinders organisation against corporations, lowers corporate responsibility towards anyone other than their shareholders, makes it harder for corporations to be sued for harm, lowers environmental regulation or other forms of prevention of damage, and otherwise distorts markets to favour the wealthy and what they do to get wealthy.
By focusing on the market, they also tend to undermine any realisation than societies are more than markets, or more than obedience to markets and the corporate sector.
Neoliberals also try to “externalise” the costs of the markets. That is, in more normal English, put the costs of market operation upon the non-corporate sector. For neoliberals it is the people who ideally, should bear the costs of pollution, poisoning, ecological destruction and worker injury, and not the corporate sector. They make it harder to hold corporations legally responsible for damage, or for people to protest against that damage. Although they have not yet suppressed public opinion, they can suppress public information.
Likewise, in neoliberal thought, the corporate sector should own anything valuable, and the people should own everything that costs, or ‘anything which costs’ should be abandoned. This is what privatisation is about. The idea is to make the state, simply an arm of the corporate class, so it can exert maximal control over your lives.
Public or common property, like tax payers money, should be gifted to the corporate sector, or provided as a service at minimum charge. This, of course, encourages governmental corruption, as it becomes normal to sell public property off to the wealthy. It also becomes normal to have corporate lobbyists embedded in government.
In this framework, mining companies who take the public’s resources, should pay minimum cost for that privilege and the public should get as little as possible. If the mining destroys villages, towns and countryside and uses or poisons water supplies, that is a problem for the people not the company.
If gas pipes and drilling sites leak, helping to increase global warming, that is not the company’s problem, and so on. Again this is a major aim of neoliberal activism.
Neoliberalism can also support monopolies as an efficient and competitive form of trade, as long as they are private corporate monopolies. Partly this was to challenge anti-trust laws, partly to keep the new monopolies safe, and partly to justify privatisation of governmental monopolies. This, of course, violates the normal standards of an open and competitive market, but it does justify and protect corporate power. It is done by pretending that competition could enter the market if the monopoly was abusing its privilege. This idea ‘forgets’ that market occupiers have power and resilience, that consumers have to have a no-risk transfer of allegiance, that new competitors do not face a deficit of experience or have to sink lots of losable capital to get going in the market, that they cannot be undercut until they leave the market, or regulated out of the market by politicians indebted to the monopoly. The reality of actual capitalist economic behaviour is not the same as in the fantasy markets promoted by neoliberals.
One of the main neoliberal fantasies is that the wealthy and powerful will not team up to gain benefits for themselves, and that it is only the envious workers who will exert political force on markets. In a capitalist economy, everything is up for sale, virtue, integrity, and power, and it is much easier for team-ups of the wealthy to have an effect. This is rarely to never considered, or it is thought that these people will always be in competition and so never team up – this simply shows probably deliberate, selective ignorance of human nature, which just benefits the wealthy.
It is correct that, just occasionally, neoliberals do acknowledge this problem and call it ‘crony capitalism’ which aims to imply this is an aberration, which can be blamed on State action, and normal capitalism does not work this way normally, but this is unreal. This is how capitalism generates the State it can buy, and how neoliberalism itself manages to gain influence.
In practice “free markets” in neoliberalism can be defined not as voluntary trade or exchange, but as allowing powerful corporations to behave as they will with any deleterious consequences to the public being ignored, or being claimed to be good. Whatever corporations do, is the neoliberal ‘free market’ in action. The idea of the free market exists to prevent people exerting power over their corporate masters.
The State
Neoliberals need the State to protect: what they define as private property; the organisation of labour; military defense and expansion; contract; investment and; the power of the corporate sector.
While neoliberals make a great deal of fuss about shrinking the State, they wish the State to be shrunk, not to provide people with liberty or to encourage an active local politics, but to provide the powerful with more wealth and the liberty to stand over and exploit everyone else. What neoliberals mean to end forever, is the idea that the State might be useful to the general populace, as opposed to the wealthy. In this they have been extremely successful; people nowadays generally have little faith in the State, in political action or in the power of non-neoliberal political parties to change anything (“both sides are equally bad”).
Thus despite neoliberals having power since the 1980s, there has been no diminution of the State or decline in State regulation. What has declined is the ability of ordinary people to affect the State, or the ability of the State to help people. The State has made the welfare it provides interfering and dominating. The point of neoliberal welfare is to penalise people and encourage people to get off it, not to support them through difficulty as a humanitarian right, and certainly not to support them while they start a new venture.
However, despite this neoliberal hostility to the State possibly helping people and the amount of effort they put into discouraging small frauds by ordinary people, neoliberals think it quite acceptable for financial corporations to be bailed out at taxpayer expense, even if (particularly if?) the corporation has behaved stupidly and and dangerously, and the bailout money is used fund executive bonuses, or share buybacks, rather than to support the workers, or stop them being thrown out of their homes (even if workers loosing their homes is bad for the economy as a whole – maintaining power is more important). A non-neoliberal state might think that the best way to help everyone in a financial or loan crisis, is to subsidise ordinary people’s mortgage payments, so they can keep their homes, eat and keep spending so small local businesses survive. But that is not the aim of free market talk.
Again if a powerful corporate group is affected by neoliberal policies, for example agribusiness, then it can be said farmers are being helped out, when all the money goes to the wealthy parts of the sector, not to the more precarious smaller famers.
This strategy helps make the State more unpopular, and thus justifies rollback of the State’s democratic helpfulness, while keeping the State as the support for the elite. The State becomes more traditional, a thing which protects hierarchy, wealth and property alone.
Neoliberalism also encourages an unrealistic individualism which denies human sociability, interdependence and collaboration for ordinary people. This functions to discourage collaboration against the neoliberal state and corporate sector, while allowing people to seek individuality through supporting neoliberal propaganda.
Deliverables
Neoliberalism has delivered what you would expect, given its inclinations.
Inequality of wealth and power has increased. Vast amounts of wealth have been concentrated in fewer and fewer hands. Social mobility has lessened – it is now much harder for most people’s children to be wealthier than their parents were, or for a person to crawl out of the working class into the middle class, than it was in the 20-30 years after World War 2. Political alienation has increased. Corporations rule the Western world. The rise and success of neo-fascism seems probable. The World is on the brink, possibly over the brink, of ecological crisis. Nothing is likely to be done to prevent, or even accommodate to, this crisis, if it causes problems for the corporate establishment.
Positive psychology and ‘information mess’
As I have suggested elsewhere positive thinking is a hallmark of neoliberalism, and this leads to distortion and suppression of information.
The neoliberal “free market” is dogmatically thought to always deliver the best result possible. The only thing that can ever officially go wrong with the market is government intervention.
Unfortunately markets often go wrong and have unintended and sometimes harmful consequences – this is life – this is what happens in complex systems, and anyone who denies this is a property of all such systems is engaging in selective truth.
However, because the neoliberal State and neoliberal policy exists solely to protect the market and its big players, and it is impossible to separate the market from politics, or from attempts at control, it is always possible to say that something a government has done is the cause of the problem. Even when that action was a result of neoliberal protections for the corporate sector.
Neoliberals are positive the market delivers good things, and that paradise will emerge in the future (even when the market appears to be delivering global destruction), in order to defend corporate power and action.
To keep this positivity, neoliberals have to ignore all the counter evidence, or define that evidence as political bias, again because the purpose of neoliberalism is not to deliver a good economy, but to deliver an economy in which established power is preserved. Counter-evidence is defined as political as it shows the politics of neoliberalism does not deliver quality results for the majority of the population.
Neoliberalism can only flourish an environment of ‘positive’ or cheerful lies, that hide difficulties. Truth would demand the system be changed as it is not working.
Neoliberalism needs misinformation, just as President Trump does, because it is unlikely to be successful campaigning on its real aims of increasing corporate power and wealth, and decreasing the power, wealth and security of everyone else. This need for misinformation is magnified when society as a whole faces great challenges, which may not be able to be solved by maintaining the old ways of life and power.
Neoliberals act to impoverish information and education, to preserve ignorance, so as to increase support.
It is also standard for corporations to use misinformation to boost sales, halt competition, misdirect competition, claim they have working products when they don’t, shift away responsibility for disaster, promote false financial statements and so on. This is the normal behaviour demanded of business people. Support of corporate power without responsibility, is simply to support this already existing flood of misinformation. Misinformation is part of capitalist power, just as much as it is part of other non-democratic sources of power. Capitalist Advertising and PR are big businesses, and it is naïve to think they do not know how to manipulate people with fiction.
Corporations control almost all the media and promote neoliberalism, a good example being the Murdoch Empire. Corporations control and fund large numbers of think tanks, while neoliberal policy aims to make sure that universities are servants of the corporate sector and only do research useful to consolidate the profitability of that sector.
Some extremely neoliberal pro-corporate media has developed the strategy of arguing that other media is left wing and socialist. This is simply not true, as they are nearly all corporately owned, and dependent on corporate advertising for survival. However, it does help to smear any possible alternative to hardline neoliberal corporate domination, and keep its audience loyal and thinking they are being radical, rather than supporting their own submission.
As suggested elsewhere in this blog, neoliberals will embrace fascism to keep power in a crisis. They will attack socialism and communism, because however defective those movements are, they are intended to end the domination of people by corporate wealth, and that cannot be thought.
For neoliberals the lives of ordinary citizens are unimportant when compared to retaining corporate profit – hence they have no difficulty pretending there are no problems with climate change or pandemics.
Neoliberal Conspiracy
In the series of posts on this blog called “Neoliberal Conspiracy” I have suggested that because Neoliberals cannot campaign easily on the grounds of their real policies, they conspire together to try and manipulate people into thinking that hardline neoliberal politicians have another, more populist and libertarian, agenda. In practice, by liberty they mean the equal liberty of all to crush those weaker or less wealthy than themselves. The Murdoch Empire has been an important part of this propaganda war for a long while.
The main aim of the conspiracy is to maintain corporate dominance amidst ecological and other forms of collapse.
However it is important to remember, that due to this conspiracy, most people who end up supporting neoliberal politicians are not neoliberals themselves.
Neoliberalism as capitalism?
I would argue that while neoliberalism is a ‘happy’ form of capitalist ideology, it is not an inevitable part of capitalism itself. It is common, because capitalism is not just about trade, but about forms of power, organisation, and exclusion of others from property. Neoliberalism is simply a tool used to protect and intensify those forms.
I personally feel that 1960s capitalism was much more realistic. It would probably have been less suicidal and able to deal with the pressures of climate change, even without the alternate energy sources we have now. There would have been big research projects, massive amounts of investment and so on. People would have accepted rules to lower emissions, just as they accepted the rules to lower deaths from smog, even if it cost profit.
There is, of course, no evidence for this because they did not face the same problems with the same intensity. Perhaps if they had, then they would have locked down into protecting wealth and ending democracy so as to preserve the inequalities of the system as a whole, but they may not. We cannot know what would have happened, but we can expect that neoliberalism will continue to prefer to kill us, before it does anything to solve the problems.
However, it might be possible to change the forms and ideology of Anglo-capitalism, and help people to become aware that neoliberalism is a useless, deceiving and harmful, ideology.
Tags: Disinformation, economics, neoliberalism, politics
Climate, technology and chaos Blog 
Leave a comment