Climate, technology and chaos Blog

Often people speak of ‘crony capitalism’ as if it was an aberration of economics. However it is an inherent part of the capitalist system.

It was recognised by Adam Smith when he said that:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

It seems to be an essential part of human nature for people to cooperate to further their group interests, and when the powerful and wealthy do this it has large consequences. They also try and break up cooperation amongst ordinary people by demonizing Unions and preaching individualism to workers. That helps magnify the power of their own cooperation.

If business people can team up to manipulate the markets then they will. If capitalists can team up to make a State to enforce laws that benefit them, then they will. If capitalists can team up to take over the State to enforce laws that benefit them then they will. All of these acts help make money for them, and that is the point; such behaviours are a normal part of profit seeking. The bosses will call these laws, and these power structures, ‘free markets’, or say they are essential to the functioning of those markets.

In a society in which profit is the prime good, then the wealthy become the epitome of virtue and talent. They are by definition the good and worthy people, who have their status because of that virtue. They are supposedly the admirable and intelligent people who are worthy to rule, and critising them is base envy. They make sure that their kin inherent the wealth, and form a ruling class with a State to support them to make sure that even more of the social wealth goes to them. That is basically the history of the last couple of hundred years with a short interlude after the second world war.

In capitalism, wealth eventually comes to control the means of communication, the means of learning and the modes of thought, and the means of violence and law enforcement. By owning and controlling these essential parts of social process, the wealthy make sure they cannot be attacked, and that ‘free markets’ seem sensible and legitimate – and if you don’t like these markets, well you are an enemy.

The wealthy elites may try and deflect attention from their power by paying people to attack other groups as elites, but generally these other ‘elites’ are not that powerful to begin with – they don’t have that much wealth. Wealth ends up controlling the other elites (where do they get the money from to live on?)

The system of free markets always makes plutocracy, and the State grows to maintain the systems of wealth and oppression.

Indeed people/politicians who talk a lot about free markets carry out these policies all the time – this is what is called neoliberalism – and it has been working quite well for the wealthy for over the last 40 years.

I keep facing people who ask me what neoliberalism is, or who argue that as no-one calls themselves neoliberal, it is just a meaningless slur.

One definition is that neoliberalism is the corporately sponsored philosophy that makes ‘the market’ (not the economy) the only important function in society. And the market should, ideally, be ‘free’. Nothing else really counts.

The idea of free markets, in practice, means that governments should support and pander to business, as business is the only worthwhile activity. This becomes a moral imperative: if something cannot make a profit, then it should not exist. Everything should be administered as if it was a business, with profit coming before pleasure or effectiveness.

Furthermore, the free market idea means that government has to look after business by breaking unions whenever possible and lowering wages and working conditions to let business be ‘flexible’ and ‘responsive’ – although it is the workers who always suffer the discipline. As part of this process, government tries to reduce welfare spending, so that people are forced into working for low wages – but it always fails because governments simply spend more on bribing the prosperous middle class or in providing subsidies to business.

The free markets idea is used to argues for tax cuts for business, and wealthy individuals as they are the virtuous and they earned that money supposedly without any help from anyone, or without any history of theft.

It claims that these activities are all about getting the government off your back, which it does if you are wealthy and wish to pollute as part of your business, but the government is necessary to stop ordinary people from protesting or organising, and prevent them from taking power.

Neoliberalism has proven completely incapable of dealing with ecological despoliation and climate change, because as far as it can see, if nature or the environment is not owned by someone then it is simply an externality and a cost. It cannot effectively be factored into the ‘free market’ model. All costs should be minimized.

Few people would actually vote for this mish-mash – hence no one calls themselves neoliberal and neoliberals pretend they are about liberty, and something called ‘values’. These ‘values’ are used to hit dissenters, but are rarely important if there is a clash between values and established profit. Hence the promotion of the supposed ‘culture wars’ by neoliberals, as a distraction, as a way of recruiting conservatives to their cause, and as a way of getting government back on your backs, more stringently than before.

In the English speaking world we have had neoliberalism as the dominant ideology since the late seventies or early eighties of the last century (with Thatcher, Reagan and Keating), so we have had nearly 40 years of it. We know what it produces. It is not a mystery.

Neoliberalism uses “free market talk” to support and entrench corporate power.