Climate, technology and chaos Blog

See The Thirteen Commandments of Neoliberalism and Mirowski Road from Mont Peleron, pp. 434-40 (slightly shorter list). The originals are much better of course. My comments are in ‘>>’ marked paragraphs.

I’ve changed the names of the commandments, Mirowski is even less pithy than myself….

1) Neoliberal markets have to be constructed.

Neoliberal markets will not arrive naturally. They have to be constructed.

As Michel Foucault presciently observed in 1978, “Neoliberalism should not be confused with the slogan ‘laissez-faire,’ but on the contrary, should be regarded as a call to vigilance, to activism, to perpetual interventions.”

Neoliberalism is not Conservatism, or liberty in action, but a mode of authority – whatever it pretends. Society and the State have to be transformed to build the right conditions for, and maintain, their kind of ‘free markets’, and the kind of power they prefer.

2) The Market is a paradoxical God

The ‘free market’, is more or less a holy non-describable object – which has to be protected and constructed, but which has existed since the dawn of humanity, and in Mises’ arguments can be deduced from a priori principles. For Hayek, the market is the ultimate information processor – it could be seen as an abstract (perhaps all knowing) brain – no humans can understand it, influence it, or plan for it – other than to set it up and enforce it. [This sets up a paradox, how do you enforce the rule of something you cannot understand?]

Despite these difficulties, the aim of neoliberalism is to make society subordinate to the market. This will supposedly bring liberty and, in popular presentations, prosperity for all.

• It appears to me, that neoliberals use a really naïve Marxist argument to assert that society is totally conditioned by economic structures, ie. the market. So if the market can be defined as “free”, then people will be free. They conveniently ‘forget’ that groups of people in markets exert power through the market, especially with enough wealth. We need to remember that determinism can be confused, and multi-factorial, in complex systems.

3) Markets make a virtuous spontaneous order

Neoliberals assume ‘free markets’ are adaptive evolutionary forces, and always produce the best adaptations for humans. Markets are the natural, and dominant, condition of human existence.

• They don’t allow the idea that (free) markets, like other evolutionary systems, can be maladaptive from the point of view of some of the creatures participating in the System. Many creatures die out through evolutionary processes. Humans could be one of those creatures that die out in markets, for example, when profit unintentionally undermines the conditions of planetary existence.

Neoclassical, and most other forms of, economics can admit that markets fail, are incomplete, or produce strange and harmful results. Neoliberals cannot, because if we believed maladaptation was possible, we might be tempted to try and prevent harmful behaviour by corporations, and impinge upon that corporation’s liberty to do whatever it liked, even its its actions destroyed the possibility of healthy relatively stable life.

Neoliberals conventionally reject all such recourse to defects or glitches, in favor of a narrative where evolution and/or “spontaneous order” brings the market to ever more complex states of self-realization, which may escape the ken of mere humans. 

• In other words, market perfection becomes an article of faith. There is no argument, or evidence, which could, even in theory, be used to convert neoliberals to reality. All problems in the Market are, by fiat, laid at the feet of government, no matter what business people do, or how much business organisations have bought the government in the market.

4) Keep the State, but pretend otherwise

Whatever they might say, Neoliberals do not want to abolish the State. They want to make a strong State exist solely to protect the ‘free market’ and its players. The State establishes the conditions for neoliberal markets, and attempts to prevent disruption of those markets by ordinary citizens, or politicians, calling for equity or fairness.

Under neoliberalism, the State becomes subject to, and judged by, auditing and financial accountability processes. Financial accountability is more important than moral accountability, or responsibility for the effects of policies on citizens. Citizens become customers, with no impact on how they are governed. All possible Services become contracted out to the private sector, including services which monitor the market for possible corruption, and the bad decisions of large companies which are overly risky for the whole market. This renders these monitoring services open to corruption and misinformation. While deficits are bad, in practice deficits which arising from subsidies to big business can largely be ignored.

The neoliberal State does not shrink, whatever they claim:

if anything, bureaucracies become more unwieldy under neoliberal regimes…… In practice, “deregulation” always cashes out as “reregulation,” only under a different set of ukases [or arbitrary strict commands].

• In particular the State exists to protect the big players; oligopolies and monopolies. Small players are of little interest.
• The State keeps property in the hands of the deserving, and enforces contract.
• In neoliberalism, ordinary citizens are to have no impact on how they are governed. This is neoliberal liberty.

5) Treat politics as if it were a market.

The abstract “rule of law” is frequently conflated with or subordinated to conformity to the neoliberal vision of an ideal market…. there is no separate sphere of the market, fenced off, as it were, from the sphere of civil society. Everything is fair game for marketization.

• This time we get bleak Marxism. There is nothing safe from the market. Every single thing or process, and all values, should be monetarised.
• However, you must never admit that markets are political, and involve political action by companies to get the best regulations for themselves, and to gain subsidies for themselves.
• In this set up, any action that makes a profit is good. There is no responsibility outside of making a profit. Hence all political and legal acts and decisions are likely for sale. Corruption is the norm.

6) Labour is unimportant

Classical liberalism identified “labor” as the human act that both created and justified private property. Neoliberlism:

lays waste to older distinctions between production and consumption rooted in the labor theory of value, and reduces the human being to an arbitrary bundle of “investments,” skill sets, temporary alliances (family, sex, race), and fungible body parts…. Under this regime, the individual displays no necessary continuity from one “decision” to the next. 

Mirowski argues that individuals are not important to neoliberals. Individuals are just conglomerations, projects, ready to be broken up when needed. The corporation is a person, the person is a corporation. No one has any interests

• I’m not sure I entirely agree with this. I think is is possible that this is what neoliberals aim for, for the plebs, or the workers. You are what you are paid for, no more, and you are subject to the flows of the market, and if you cannot cope with that, or object to that, then tough. I suspect individual interest exists at the managerial and stockholder level, where market power exists, provided that personal interest is submerged in the corporate interest, or the owners’ interest.
• The problem for me, is that, it seems that for neoliberal rights come directly out of ownership. You have the rights of ownership of your body, for example, and no more rights than that. Which in practice means you can be bought, polluted, disposed of, paid off, and so on. If you cannot defend your property or cannot protect yourself against disposability in a court case, you have nothing.

7) Liberty has nothing to do with politics and democracy

Freedom is hard to define, but it has nothing to do with democracy, and absolutely nothing to do with cooperating in acts against the ruling class, or the ruling market.

Hayek feels he must distinguish “personal liberty” from subjective freedom, since personal liberty does not entail political liberty. Late in life, Milton Friedman posited three species of freedom — economic, social and political — but it appears that economic freedom was the only one that mattered. 

In neoliberal theory, coercion can only come from governments, never from markets, corporations, or lack of money. There is no form of human freedom which might require support, help, or a useful context. Freedom is simply the absence of any restrictions, other than market restrictions – which are considered to be natural.

They suggest that resistance to their project is futile, as going along with it is the only freedom that exists.

• As suggested by Slobodian, the only real neoliberal freedom is submission to the market, as constructed by neoliberals, and to the results it generates. Again they pretend the results of human action are as inescapable as the ‘laws’ of nature – indeed the laws of nature are apparently far more flexible than the market, which is one reason why they do not worry about market effects on the planet.
• Freedom usually becomes a choice between priced options, or products.

7a) Knowledge is limited

Knowledge is limited, except for knowledge about how good the market is. There is no real information outside the information processor of the market. We could never effectively do anything knowledgeably other than act in the market. “Knowledge can be used to its fullest only if it is comprehensively owned and priced.” Education is not aimed at being transformative, or cultivating a personal good independent of the market, but to be geared at fitting into jobs and subservience to the market.

I don’t understand the following sentence but here it is anyway:

Meditation upon our limitations leads to inquiry into how markets work, and meta-reflection on our place in larger orders, something that neoliberals warn is beyond our ken. Knowledge then assumes global institutional dimensions, and this undermines the key doctrine of the market as transcendental superior information processor.

• The fact that, if there is such a thing as a universal information processor, it is not the market but the global ecology (which gives severe feedback to people who act contrary to its dynamics), is irrelevant. In neoliberalism, markets rule over everything and this is not only supposedly a fact, but supposedly a moral good.
• Everything, and everyone, is only worth the price it can command on the market. Free stuff (like air) is only good if it can be made saleable.

8) Capital must flow globally.

No government has the right to stop the flow of its countries’ money or products. To support this lack of rights, neoliberals invented non-democratic institutions “for the economic and political discipline of nation-states.” That is, they made national attempts at financial sovereignty, or market governance, weaker still. The idea was to impose neoliberal political principles on all people engaged in trade.

• Neoliberal institutions enforced lowering of social security and social safety nets, attempted to prohibit any attempt to favour local producers or entrepreneurs. They favoured paying back debt to overseas lenders above local prosperity. They favoured the resources of small, or ‘underdeveloped’, states being plundered by overseas companies, as that is what happens in an open market. They appeared to want to free the market up for the biggest players, which would remove the smaller players who did not have the economies of scale.

This series of action probably also furthered “the growth of shadow and offshore banking”, the growth of tax shelters and so on.

• This development is helped considerably by the development of the internet and communication networks.
• This development also furthered the neoliberal protection of corporate monopolies. The bigger the company, the more effective it can be at suppressing other commercial developments throughout the world. Of course, ‘the market’ may lead to incompetent monopolies collapsing, but that is not evidence that the monopoly was great, or satisfying its customers, in the first place.

9) Massive inequality in wealth is entirely natural and beneficial

If some people starve or stagnate while others accumulate sizable proportions of the world’s wealth, it is not a failing of the market. This result is all about ability and shows the vibrancy of capitalism. Massive inequality is supposedly a force for progress, not a force for oppression; “the rich are not parasites, but a boon to mankind.” They, and only they, generate wealth. Demands for greater equality, or constraints on inequality, are just the result of envy, and come from people who are sore losers. Neoliberals pretend that inequalities of wealth do not lead to inequalities of power, life satisfaction or survival. If they did admit this, it would not bother them.

“Social justice” is blind, because it remains forever cut off from the Wisdom of the Market. 

• Indeed, any residual attempts to support ordinary people are going to be blamed for economic hardship and market collapses. In practice, the State exists to bail out the already hyper-wealthy from their mistakes and hardships. This shows the real politics of the “free market”.
• Neoliberalism insists on inheritance of wealth, but does not factor it in to its analysis of the workings of the market and the concentration of wealth. Everyone supposedly has equal opportunity to participate.

10) “Corporations can do no wrong, or at least they are not to be blamed if they do.”

starting with the University of Chicago law and economics movement, and then progressively spreading to treatments of entrepreneurs and the “markets for innovation,” neoliberals began to argue consistently that not only was monopoly not harmful to the operation of the market, but an epiphenomenon attributable to the misguided activities of the state and powerful interest groups. 

As corporations can do no wrong, it was also argued that Corporate heads needed bigger salaries, share options, and bonuses, together with golden handshakes when they stuffed up and were asked to leave.

• This excess wealth acted as a signal to the market that the firm was hiring the very best possible, while the wealth the high level executives earned showed how good they were and, by comparison, how useless ordinary workers were. It was a way of transferring wealth away from the workers, and legitimising that transfer.
• Corporate success indicates corporate virtue. They worked with the market, which is the measure of value

11) Markets always supply the best solution

“Any problem, economic or otherwise, has a market solution, given sufficient ingenuity.” In effect this means transferring power and solutions to those who are successful in the market and wealthy, and as pointed out earlier, ignoring any suggestion that systems are not always beneficially adaptive for all participants.

pollution is abated by the trading of “emissions permits”; inadequate public education is rectified by “vouchers”; auctions can adequately structure exclusionary communication channels;  poverty-stricken sick people lacking access to health care can be incentivized to serve as guinea pigs for privatized clinical drug trials; poverty in underdeveloped nations can be ameliorated by “microloans”; terrorism by disgruntled disenfranchised foreigners can be offset by a “futures market in terrorist acts.”

This tends to make financial securitisation even more complicated – as was seen in the 2007 financial crash. And it does not matter if no one understood what they were doing as the market would sort it out for the best. If the market collapsed with massive pain for those who were supposed to be served by the market, that was acceptable, as long as those who profited from the market were helped out. Thus in the financial crisis, many American Citizens lost their homes, because banks called in the loans which were geared to be unpayable. The banks then put the houses on the market and the house market collapsed, which threatened the banks, and the bank executives were looked after, not the home owners.

Neoliberals argued that:

the best people to clean up the crisis were the same bankers and financiers who created it in the first place, since they clearly embodied the best understanding of the shape of the crisis. 

• Taxpayer’s money could have been given to home owners to help pay off the loans, and the loans made less penalising. This would have prevented homelessness and kept the banks in business, but that was not even a visible option. Money had to go directly to the bankers, and many neoliberal politicians complained when Obama insisted that the money was merely a loan, not a gift which could go straight to executive bonuses and parties.

12) Expand the prison system

[N]eoliberal policies lead to unchecked expansion of the penal sector, as has happened in the United States…. [I]ntensified state power in the police sphere (and a huge expansion of prisoners incarcerated) is fully complementary with the neoliberal conception of freedom. In the opinion of the neoliberal Richard Posner, “The function of criminal sanction in a capitalist market economy, then, is to prevent individuals from bypassing the efficient market.” In other words “Participate in the market, or else!”

Criminal law applies to the people. Tort law, or escaping the law, applies to the wealthy (unless, perhaps, they have defrauded the wealthy). The poor or dispossessed need to be ordered and punished, to protect the market.

economic competition imposes natural order on the rich, because they have so much to lose. The poor need to be kept in line by a strong state, because they have so little to lose.

Again, amongst the commercial class, nobody was found guilty of any fraud or crime in the financial crisis, despite multiple appearances of deceptive behaviour, but thousands of ordinary Americans were found guilty of being behind on their mortgages and thrown out of their homes.

• Private prisons have no profit incentive to rehabilitate prisoners. They have an incentive to get repeat custom, and thus make more money, or at least stay in business. They increase crime for profit
• They also have an incentive to use prisoners as cheap slave labour, and thus compete with normal workers, to lower wages.

13) Tolerate Supportive Authoritarian movements.

Neoliberals will support whatever will support the authority of wealth and corporate power. Hence, neoliberals developed a deliberate policy of courting the religious Right, so as to justify the ‘morals’ of the market and keep votes.

• The ideal religions were those who asserted that wealth was good, that God rewarded the virtuous and ‘the saved’ with wealth, and that those without wealth were without faith, otherwise immoral, or being tested by God.
• This has now morphed into an acceptance and support of authoritarian fascism, as with Trump and the promotion of white power, to support corporate power. This will have the same consequences as it did in Nazi Germany. The initially controllable will prove not to be controllable, and wealth will be preserved by accommodation to the fascism and murder.

Conclusion

Neoliberalism provides ersatz liberty, bounded by mass imprisonment. It promotes faith in the “free market”, and denies the possibility that free markets can ever have, or do have, destructive results.

Destruction only arises through government acting on the market to make the market fairer.

Liberty is defined as having nothing to do with political participation for ordinary people. It ignores the participation of the wealthy in the State.

It pretends corporations cannot, and do not, have political power.

It disciplines workers, and rewards executive incompetence, through the State.

It is a political movement which exists to support corporate power, and plutocracy, acting within the market and the State.

Slobodian argues that one of the neoliberal objections to socialism was that because we cannot see or predict the economy we cannot govern it or reform it democratically. The ‘economy’ as such does not exist. Partly because the term oeconomy comes from Greek and means the governance of a household, not the governance of a polis or a wider sphere, which cannot, according to neoliberals, be governed in any useful way for the populace.

Hayek, for example, “says more than once in his writings that one of the great fallacies of the twentieth century is the belief that there is something called the economy, that can somehow be seen and controlled and managed. And he could say that because the invention of the economy was mostly a social democratic, Keynesian project” aimed at maintaining full employment and survivable wages. Inventing the economy “was a project of governing and collectivizing risk.” [1]

As Hayek says in his Nobel speech, “it is ‘the pretense of knowledge,’ to think that you can actually have any kind of oversight over the economy as such.” [1]

As this economy does not exist (hence Hayeks use of the term ‘catallaxy‘ for what people would normally call the economy) we can only use very precise rules to protect the market and submit to it: “we must give ourselves over to the forces of the market, or the whole thing will stop working” [2].

The only neoliberal liberty is submission to the limited options the market allows. “The normative ideal for the individual is a kind of total subjection to the forces of competition. We gain our freedom insofar as we subject ourselves to that.” [1]

Neoliberalism needs a market police to prevent people from “kept trying to make the earth a more equal and just place.” This interest people might have in not being ripped off, is a special interest in neoliberal terms, whereas corporations do not have such special interests – their interests are just the market in action. [2]

The big public idea promoted by neoliberalism is that if the ‘catallaxy,’ or what people would normally call the economy, is defended, then all will work out well or at least as well as we can ever expect.

Social Life is Complex

A more recent way of dealing with this problem, is to realise that the ‘catallaxy’ is a complex system and it is embedded in other complex systems, which are important for its functioning and survival.

Crucially, it is helpful not to subscribe to a dogmatic optimism about complex systems. Complex systems, no matter how adaptive, will not always seek a balance, harmony and efficiency which are beneficial to humans; they may require some mild corrections or interventions to achieve anything resembling what we might consider beneficial for most people, never mind all people.

This presents a problem as complex systems cannot be governed rigorously or in a guaranteed manner, neither can specific events be predicted.

We can, however, seek patterns of complex behaviour, and we can make general trend like predictions, and adjust things accordingly and carefully, getting rid of what has not been working.

It may not have been possible to predict Trump or his specific actions and failures, but we can predict that if democratic control over the economy is completely surrendered we will likely head for plutocracy, as massive wealth is where the power is. Plutocracy will likely head towards autocracy, and autocracy can look like fascism, or arbitrary rule. Consequently, we need to be aware of this possibility, and do our best to prevent it in advance, should we wish to maintain freedom.

We can predict that neoliberal ‘free markets’, will lead to a decline in the share of the wealth, generated by society, going to ordinary people defeated by the market. This will almost certainly reinforce the power differentials, and likely lead to the problems of ordinary people being dismissed from consideration. Again we need to undermine this possibility, possibly by redistribution of wealth and inheritance.

We can predict that market crashes will happen more frequently, and that big business will get bailed out by the tax payers (as the point of agitating for what are called ‘free markets’ is to protect big business) and that small people will suffer. Again we can shift our focus from just protecting the “big end of town” and make sure we attend to people in general.

We could have predicted that neoliberals would try and force people to catch a pandemic in the hope of keeping the economy going, and that they will agitate for massive taxpayer support for industries which were already failing before the pandemic hit. Mass death, and long-term disease generated incapacity and injury in people, will not help the economy recover in a way which benefits everyone in the long term. The neoliberal method is not the best for dealing with all problems. The health of the economy, can depend upon the health of the social system and people in general. Free markets cannot be isolated from everyone.

We can predict that if we do not protect and regenerate environments and ecologies, that the survival system as a whole will crash and that large numbers of people will be displaced and die – we can also predict that neoliberals, devoted to protecting existing big businesses, will object to protecting environments as it is a cost to profit, and they will spend a lot of money to persuade people they are correct. However, we do not have to accept massive environmental destruction as a part of the capitalism we need to gain a working economy. We can probably solve this problem by regulating emissions and destruction for all companies equally, and making it easier for local people to take destructive and polluting companies to court. This way, people get to participate in deciding what kind of environment they have to live in. Capitalists get to solve the problem of keeping ecologies functional, by making destruction and pollution a cost, or potential cost, to them.

It may be impossible to completely regulate markets and ecologies, but that does not mean that we have to let the bad results completely triumph. We experiment, and try and see what works, and consider the possibility of stopping doing whatever delivers more harmful results.

There is no reason we cannot have freer markets than we have now, with democratic input into preventing harmful, monopolistic, ‘crony’ and authoritarian corporate behaviour as it evolves, and with a dedication for protecting life on Earth.

Neoliberals appear to want to stop that from happening, as it challenges corporate liberty to do whatever corporations want at the expense of the populace.

Liberty is necessarily a balancing act.