[20 December 2020 – the original blog post has now been broken into two posts. The part here can be considered the summary of the argument, The part now placed here is a consideration of the plausibility of the argument]
What is the theory of Neoliberal Conspiracy?
The idea of ‘neoliberal conspiracy’ is simple. It is that many of those in the wealth elites, or working for them, have acted to increase established corporate power and wealth at the expense of the general public, while pretending that ‘free markets’ result in liberty and prosperity for all.
Neoliberalism has been the dominant real politics in the English speaking world since Thatcher, Reagan, and Keating, although (in the conspiratorial mode) it often presents itself as a minor oppressed player, that is struggling valiantly against government and socialists.
Effects of the Neoliberal Conspiracy
Neoliberalism’s effects are most clearly shown in the decline in the share of wealth going to ordinary people over those last 40 years.
Over the last four decades since 1979… those in the top 0.1% had wages grow… 340.7%. In contrast those in the bottom 90% had annual wages grow by 23.9% from 1979 to 2018.
Top 1.0% of earners see wages up 157.8% since 1979. Economic Policy Institute, 18 December 2019
People are also less likely to increase their wealth class than they used to be. Some even claim that in the US and UK life expectancy has recently begun to decline [1], [2], [3] (possibly due to suicide and drugs) and hunger appears to be increasing in the US [4] (the pandemic response does not help) and elsewhere.
After steadily declining for a decade, world hunger is on the rise, affecting 8.9 percent of people globally. From 2018 to 2019, the number of undernourished people grew by 10 million, and there are nearly 60 million more undernourished people now than in 2014
World Hunger; Key facts and Statistics
Wealth seems spread so that while the top 10%, or so, of the population can be said to be comfortable, or extremely wealthy, the bottom 90% (especially younger people below 35) are heading towards a precarious existence, while the middle class is shrinking.
there is a recognition amongst these people of the novelty of their socio-economic circumstances, and thus frustration and disquiet at the nature of these circumstances. The ‘new normal’ is in fact recognised as abnormal.
[However] they focus on how they can succeed within this inherited structure rather than on pursuing structural change. There is a degree of resignation to a situation wherein precarity is deemed largely immutable…. many young people understand the prospect of improving labour market outcomes in terms of personal development and their ability to successfully navigate this more competitive environment
Craig Berry and Sean McDaniel Young people and the post-crisis precarity: the abnormality of the ‘new normal’ LSE BPP 20 January 2020
Neoliberal media, rarely suggest an approach based on structural or economic change, that might challenge the dominant power relations, or they aim to misidentify those power relations. Another important marker of neoliberal effect, is that there appears to have been growing concentrations of economic power, with higher profits going to fewer people [5].
We used to think that high profits were a sign of the successful working of the American economy, a better product, a better service. But now we know that higher profits can arise from a better way of exploiting consumers, a better way of price discrimination, extracting consumer surplus, the main effect of which is to redistribute income from consumers to our new super-wealthy.
Joseph Stiglitz “America has a monopoly problem – and it’s huge” Pearls and Irritations 15 November 2020
Corporations are now as wealthy as nations: “Of the world’s top 100 economies, 69 are corporations.” This implies they easily have the powers of wealth to buy States, especially if they ‘crony up’.
I probably don’t have to remind people, that the neoliberal response to almost every problem involves tax cuts for the wealthy and the corporate sector, possibly mixed in with some taxpayer subsidies for established big businesses not doing that well. It would seem obvious that this might help boost the wealth differentials, and gives the wealthy even more money to invest in political control. Of course they say this boost to the wealthy helps the lower classes, but the wealthy always make that argument, and it never seems to work. One study of 18 OECD countries, simply remarks:
We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.
Hope & Limberg 2020. The Economic Consequences of Major Tax Cuts for the Rich. LSE Working Paper 55.
Let us be clear. It is a reasonable hypothesis that distribution of wealth results, not from the nature of life, but from deliberate social struggle, or social engineering. In which case, the way wealth is being distributed now, as opposed to 50 years ago, marks the triumph of class war against the people. As Warren Buffett said in the context of a discussion on taxes:
BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good.
DOBBS: What a radical idea.
BUFFETT: It’s class warfare, my class is winning, but they shouldn’t be.
Buffett: ‘There are lots of loose nukes around the world’
He is also reported as saying in an interview with the New York Times “There’s class warfare, all right,…. but it’s my class, the rich class, that’s making war, and we’re winning.”
Part of that class war undoubtedly involves the attack on, and the decline of unions, which gave workers the power to organise and challenge employers who were richer than whole countries, and who cronyed up together with other employers. Unions also meant that workers had direct input into party politics, as opposed to mainly business having input.
The period is also marked by growing ecological crisis, as capitalists and developers abandoned restraint, found profit in attacking science and in locking people into expanding fossil fuel use.
Neoliberalism appears to have generated a growth of alienation from politics experienced by ordinary people, as the political system consistently ignored their interests, no matter how large the protests (such as those against the second Iraq War, or against climate inaction). This alienation seems to have lead to an increase in culture wars, and polarisation, as the neoliberal Right sought to retain support and votes by whipping up an identity politics of self-justification and hatred against ‘out-groups’. For example, making claims that the left says you are racist simply because you are white (no other reason is possible), and that the only real racists are active black people, the only sexists are feminist women and so on. This leads to the part of the neoliberal conspiracy I will discuss later in this blog.
We don’t need to look so much at what neoliberals claim they believe, some of which might be well intentioned and genuine, but look at what neoliberal politicians actually do.
Neoliberals and the Government takeover
With the mixed economies, Keynesian interventionism, and union power, of post-world war II Europe, US, UK and Australia we had a steady rise in living standards, working conditions and increasing levels of political participation. This was alarming for the corporate elites. We could have ended up with a participatory democracy. This situation has now changed.
The first part of the current version of the neoliberal conspiracy has to be to negate the obvious point that “We’ve had forty years of free market boosting, and the world is not getting better.” As we might expect, the main idea that neoliberals want to promote is that we need more neoliberalism, and more of their ‘free markets’ to fix the mess generated by neoliberalism and their ‘free markets’ – truly what you might call ‘positive thinking’: lets ignore the counter evidence and persist in destruction as long as it pays us off. Thus almost their first effort is to convince people that most of the problems we currently observe, do not stem from neoliberalism, but from the ‘fact’ we have “too much government”, by which they mean too much government which might attempt to be responsive to the people.
Now they have a point. Governments can, and often are oppressive. Sometimes this is because of “one size fits all policies” which don’t fit all (like ‘free markets’), sometimes it is because the governors want total order and rule of one principle alone (like ‘free markets’), sometimes it is because they want to build things or go to war (say in favour of protecting investment and ‘free markets’), and sometimes it’s because they govern on behalf of a particular class (like neoliberals do). Scrap the last point, we are not meant to think about the last point, we are meant to think neoliberals are against government, not trying to commandeer it, away from you.
Neoliberals tend to pretend, that in a free market, business and the State (‘government’) have nothing to do with each other, rather than that they interact all the time. In neoliberal rhetoric, government and business are somehow completely different, or their intersection is of no consequence. Thus I can be told, by quite a few people over the years, that obviously crony capitalists only have an effect because of the government, and not because of the existence of cronyism, or the intersection of business interests with the State, or business influence over the State. This argument occurs while neoliberal politicians are overtly trying to win over the State completely so they can change it, and change the regulations of that State to benefit them.
Pretending to roll back the State is part of the strategy of increasing corporate power. Rollback of the State under neoliberalism is not remotely anarchistic. It is about rolling back those parts of the State that were moderately helpful, sensitive or responsive to the people, while keeping the parts of the state which are helpful to maintaining corporate power, and providing taxpayer subsidy to that power and suppression of protest. This is one reason why government size, regulation and ‘heaviness’, has not decreased, despite the years of neoliberals apparently pushing for a smaller State. At best it has just increased the powers of bosses, in general, over their employees.
As part of the process of increasing their power, Neoliberals attempt to remove any regulations which hinder corporate ability to freeload on the public; such as regulations which impose restrictions on their ability to injure and poison people, or pollute and destroy ecologies. Trump and other hardline neoliberal politicians have been extremely helpful in removing these kinds of regulations. Such regulations can diminish profits, although they may increase the possibility of prolonging people’s lives and physical comfort. Neoliberals think that if people want prolonged lives or comfort then they should pay for it, not rely on nature.
It is fundamental to neoliberalism, being a politics of established wealth, that any living being should only get what they can afford, and if they cannot afford to live, or fight against action that harms them, then they should suffer as the judgement of the market, is against them, and they are of no worth. Neoliberalism considers protecting established capitalism more important than protecting life.
Neoliberals buy government policy which benefits corporate power, and then, when it turns out badly for people in general, claim that the situation would be much better if, rather than supporting the harmed, we did not have any government intervention at all and we just left everything to the corporate class to sort out – as if benefits inevitably flow through to those who don’t participate, and the people who caused the problems will necessarily fix them by accident.
The great thing about the strategy of pretending to be anti-State while using the State to enforce their rule, is that whenever the neoliberals use the State to shaft their supporters they can claim they could have had nothing to do with it. It was the dreaded socialists of the ‘deep State’ that are to blame. And they get even more leeway to rollback the State useful to others and build up the State useful to them.
It is common sense in neoliberal land for corporate lobbyists, or ex corporate executives to write legislation or even occupy positions in government departments. Despite his claims of employing outsiders this is what Trump has done in a big way [6], [7].
Steve Mnuchin from Goldman Sachs became the first Treasury Secretary. Gary Cohn president and chief operating officer of Goldman Sachs was picked to head the National Economic Council and manage economic policy. Steve Bannon once worked for the same organisation, before becoming a Breitbart executive chair and also obviously worked for the administration. Jay Clayton, Securities and Exchange Commission chairman, was a partner with the law firm Sullivan & Cromwell, and Goldman Sachs was a client. ExxonMobil CEO Rex Tillerson was made Secretary of State.
At the EPA, nearly half of the political appointees hired by the Trump Administration have had strong ties to industries regulated by the agency industry, according to research by the Associated Press. About a third of these EPA appointees – including the current acting administrator – formerly worked as registered lobbyists or lawyers for fossil fuel companies, chemical manufacturers, or other corporate clients….
The Administration has been pursuing a de-regulatory agenda that benefits many of these same industries by rolling back air and water pollution control regulations. This inverts the purpose of the agency, which is to protect the environment and public health, not industry profits.
Who’s Running Trump’s EPA, EPA Conflict of Interest Watch. Environmental Integrity Project nd.
The number of lobbyists Trump appointed was quite extraordinary
A lobbyist for every 14 political appointments made… The number of lobbyists who have served in government jobs is four times more than the Obama administration had six years into office. And former lobbyists serving Trump are often involved in regulating the industries they worked for….
It’s a “staggering figure,” according to Virginia Canter, ethics chief counsel for the D.C.-based legal nonprofit Citizens for Responsibility and Ethics in Washington.
Update: We Found a “Staggering” 281 Lobbyists Who’ve Worked in the Trump Administration. ProPublica, 15 October 2019
A report from early in Trump’s administration states:
The president-elect, in filling out his transition team and administration, has drawn heavily from the vast network of donors and advocacy groups built by the billionaire industrialist [Koch] brothers, who have sought to reshape American politics in their libertarian image.
From White House Counsel Don McGahn and transition team advisers Tom Pyle, Darin Selnick and Alan Cobb to Presidential Inaugural Committee member Diane Hendricks and transition-team executive committee members Rebekah Mercer and Anthony Scaramucci, Trump has surrounded himself with people tied to the Kochs….
many more Koch-linked operatives are expected to join Trump’s nascent administration in the coming weeks, according to Trump transition-team sources.
Vogel and Johnson Trump’s Koch administration. Politico 28 November 2016.
This network of lobbyists appeared to influence the taxpayer handouts to business during the Covid response:
lobbyists with ties to the president have successfully secured billions in aid for their clients—and several lobbyists may be violating President Donald Trump’s own executive order on ethics in the process.
Trump-Connected Lobbyists Are Getting Billions In Federal Coronavirus Aid, Report Finds, Forbes 6 July 2020
Instead of staring down “the unholy alliance of lobbyists and donors and special interests” as Trump recently declared, the influence industry has flourished during his administration.
Trump’s Cabinet Has Had More Ex-Lobbyists Than Obama or Bush. Fortune, 18 September 2019
No clearing ‘the Swamp,’ but a lot of importing alligators.
Neoliberalism deliberately tends to ignore how much government intervention there was in the economy in the years of rising prosperity for everyone, or tries to portray these years as some kind of disaster. They buy revisionist history, so that we can argue the Great Depression was actually caused by government and that the recovery was hindered by the New Deal. The point is that capitalism depends on a State, and capitalists attempt to control the State, so there is always state action which can be blamed, and used to direct attention away from how business was behaving, or what it was attempting to do. For example, if Hoover’s trade embargos and tariffs were the only factors causing the Great Depression, then what businesses was he defending, and why are Trump’s tariffs not going to be equally destructive?
The question about governments really should be, “Who controls the rule making and enforcement, that allows the market to be maintained?” And the answer to that, is the established corporate sector and not the people. So the market is structured and regulated to benefit the established corporate sector and not the people. That is why the proportion of wealth distributed to the people is going down, and the proportion of wealth going to the wealth elites is increasing.
Ronald Reagan was a classic example of neoliberal action, cutting taxes for the wealthy, cutting back social security and making welfare more onerous and expensive, while massively increasing military spending which benefitted corporate arms manufacturers, and increased the deficit. The idea was that the deficit should eventually be curtailed by ‘reluctantly’ cutting ‘helpful-to-the-people’ spending. Reagan’s ‘free market reforms’, not only crashed the S&Ls which severely impacted many ordinary people, but it allowed much of US industry to be asset stripped and destroyed. This helped produce the US’s current manufacturing problems and rampant business oligopolies, as small scale business was harmed. Neoliberals may say they are in favour of small business, but their actions nearly always help destroy small business, as do the actions of Wall-Mart and the other large retailers who they support.
The big difference between US Republicans and Democrats is that Republicans are hardline neoliberals who pretend to like rightwing Christians, while Democrats are more humanistic neoliberals who are suspicious of Rightwing Christians being Christians at all, and who think that people don’t need to be suppressed and persecuted by big business all the time. For example, Obama thought that bailout money given to established financial institutions should be paid back, and should not explicitly pay for parties and executive bonuses, unlike his predecessor. He did not, however, think bailout money should go to people who were going to lose their home through financial institutions calling in misleading loans, as a democratic socialist might do.
Neoliberal Media
On the whole the media is pro-capitalist, as it is largely (if not totally) funded and controlled by corporations or billionaires. Who else has the money? Most of it is hardline neoliberal, taking neoliberalism as the only position possible – especially media associated with the Murdoch Empire (like Fox, the Wall Street Journal and The New York Post in the US, or Skynews in Australia, The Sun and The Times in the UK), other Trump supporting media is similar, but it also includes Facebook and Twitter, who helped Trump win the previous election because they happily sold data to neoliberal conspirators like Cambridge Analytica, and gave them a free playground. Social media (Facebook, Youtube, Twitter) also keeps channeling people into more extreme forms of the neoliberal conspiracy if they show any interest in going along with it – so they act as advertising channels for this material. There is little escape – the internet, as currently organised, does not widen the opinion and news people are exposed to; it narrows it.
The basic principle for any analysis, given the neoliberal environment, is that no media should be trusted, and that includes small media. Small media can as easily be funded by billionaires as large media; it requires less capital and is more disposable when it has served its purpose, so it may be a better investment. Some big-billionaire-media like Breitbart or Skynews may pretend to be ‘alternate’, but they are just heavily controlled neoliberal propaganda channels – which sometimes seem coordinated in their decisions about what counts as news and what does not. They are certainly not going to portray the situation accurately or impartially.
Neoliberal Science
It is a remarkable co-incidence that nearly all science which might cause constraints on corporate action is attacked by supporters of neoliberalism, while science which allows corporations to build or manufacture products is not. Thus climate science has to go. Ecological science has to go. And the idea of pandemics has to go, even it pharmaceutical companies can make money out of vaccines.
Neoliberal Covid
Covid-19 policy and responses can be analysed in terms of their support for neoliberal principles. The main aim of neoliberal government is to keep the economy going, and keep the power relations of the established economy intact. If it cannot do that then the aim is to protect and subsidise the wealth elites during the crisis rather than the people. It is a response based defending corporate power and liberty to use workers, even if it hurts the workers. If quarter of a million, and now many more, die to keep the economy roughly intact, then that is surely a small price to pay for corporate comfort?
Neoliberal responses may not have caused redistribution of wealth, but it is clear that in the US those responses have been used, under Trump and the Republicans, to further redistribution of wealth with massive subsidies and tax breaks going to wealthy people and wealthy organisations. Some of this going to oil and fracking companies, who were already doing badly without Covid [8], [9], [10], [11]. It is well known that many billionaires have increased their wealth substantially during the crisis, as you would expect of such a pro-established wealth based response [12], [13], [14].
Interestingly I have noticed amongst Republican friends and news sources a marked hostility to the increase in the wealth of info-tech billionaires in particular, without much protest about the increases in the wealth of other kinds of billionaires. I’m not aware of any subsidy, regulatory favours, tax breaks etc, which were specifically, or only, aimed at Info tech, or at Gates, Bezos, Zuckerberg etc. However, this kind of thing tends not to get reported in the mainstream media, so if these special government aids exist, then I would welcome being informed about them, as it would add to the evidence about how the system works.
However, that some industries flourish and get ridiculously rich while others suffer and decline, would seem to be what we would expect from the free market in action. This is how the market supposedly works, and how it is meant to work, culling inefficiency, bad management and unwanted products and massively rewarding services that people need. So I’m not sure why this should be praised in some circumstances and damned in others. My current hypothesis is that the Republican party and its elites are owned by established industries and big business, and are hostile to newcomers, but I have no real idea if that is correct.
Surprisingly (?) it does not appear that many of these billionaires (tech or otherwise) have used their increased wealth to protect their workers, or make sure they have good health leave. Indeed:
One in eight workers has perceived possible retaliatory actions by employers against workers in their company who have raised health and safety concerns during the pandemic.
National Employment Law Project Silenced About COVID-19 in the Workplace
Black workers are more than twice as likely as white workers to have seen possible retaliation by their employer.
Well it might lower profits, and if some people get really ill and have lasting consequences, or some people die, its for a good cause.
The Republicans, in the US, are also demanding protection for companies from any liability law suits which claim they not properly looking after workers [15], [16], [17]. Mitch McConnell, Republican leader in the US Senate, said:
as the Majority Leader I can tell you no bill will pass the Senate that doesn’t have the liability protection in it…..
Republicans almost to a person support the liability reform and that’s not about companies. It includes companies. It’s about hospitals and doctors and nurses and teachers and universities and colleges and K-12. This is not just liability protection for businesses. They’re included along with everyone else dealing with this brand new disease. Unless you’re grossly negligent or engage in intentional misbehavior, you’ll be covered. And it will be in a bill that passes the Senate.
McConnell on CNBC’s “Closing Bell”
Strange to protect companies from being sued over a condition which Republicans apparently claim is not real, or not that harmful.
This reminds us that the majority of times we are censored, or self-censored, or forced to do unpleasant things it is not because of the government, but because of our employer. Neoliberals want most people to be subservient to bosses. Again neoliberalism is not anarchism or the activation of liberty.
Discouraging social distancing, has the side effect of boosting pharmaceutical company profit, just as Trump’s promotion of unproven drugs helped boost their profits, and as will reliance on vaccines. However, this result may not be entirely deliberate, only a ‘fortunate’ consequence of the general approach to business.
To repeat, neoliberalism has no concern over whether ordinary people survive, or not. It holds that if people can’t afford to survive, they should suffer.
What I hope is the final part of this ‘Neoliberal Conspiracy’ project, will be a simple consideration of whether the Neoliberal Conspiracy is plausible.
Tags: Disinformation, neoliberalism
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