A fragment on Neoliberalism

The last few weeks last few years have been marked by a constantly reoccurring question of what exactly is neoliberalism. Whether that’s rethinking how neoliberal ideology shapes the current discourse around economics. How its ideas permeate society. Or in some admittedly rare cases whether neoliberalism as it’s usually conceived even exists.

Among the many interesting curiosities listed in McKenzie Wark’s latest work ‘Capital Is Dead’ is a retelling of the traditional tale of the rise of neoliberalism through what she describes as a somewhat vulgar Marxist lens. Instead of focusing on ideology Wark specifically pinpoints changes within the forces of production, creating a fairly convincing argument for these being the mainstay of what eventually became seen as neoliberalism which made me rethink how useful the tale of Hayek, The Mont Pelerin Society, Thatcher and Regan is to understanding our current times and more importantly how to overcome them.

My aim here will be to examine one particular discourse around neoliberalism which broadly speaking are drawn from some of the common, broadly, left-wing economic narratives and examine them in the light of Wark’s arguments. Given that in some cases these narratives have had a shaping effect on activism, particularly in the wake of 2008 and quite recently with the establishment of several left economic think tanks, for example, the New Economics Foundation, Commonwealth and the Institute of Public Policy Research all of which are doing incredible work but are fundamentally based on the concept of finding ways to subvert models of the current mode of production. I’m curious as to whether there are further areas for resistance or escape that lay within Wark’s ideas surrounding a new mode of production with new modes of exploitation and perhaps lay the potential groundwork for new kinds of activism.

Quæstio 1 – On the Meaning of Neoliberalism

On August 17th, 2017, the Guardian published an article by Stephen Metcalf entitled ‘Neoliberalism: the idea that swallowed the world’. In the article, Metcalf runs through a potted history of neoliberalism which begins with the IMF conceding in 2017 that neoliberalism, contrary to Daniel Altman’s 2005 article, exists and is more than just a political slur used by the advocates of Keynes and assorted economic activists. In a linked article neoliberalism is described as relying on two core planks; increased competition created by the deregulation of natural monopolies and domestic markets and a reduced role of the state due in part to the privatization of previously nationalized industries and limits on the government’s ability to run fiscal deficit’s and accumulate debt.  

Whilst there was a sharp uptick in what could be described as neoliberal policy in the 1980s. Neoliberalism as a term has a far longer history dating back to the 1930s and the Walter Lippman Colloqium that brought together many of what are now seen as the early progenitors of neoliberal ideology including, Ludwig Von Mises, Jacques Rueff, Etienne Mantoux and Frederich Von Hayek.

Their aim was to create a new form of liberalism, something beyond of collectivism, socialism and even laissez-faire liberalism which following the great depression was rapidly falling out of favour. One source of inspiration for the conference was Lippman’s book written a year prior entitled An Enquiry Into The Principles Of A Good Society. In the text Lippman warned of the dangers of collectivism whilst advocating certain government interventions to protect against the destitution witnessed during the great depression. 

Among the topics discussed at the conference were the potential causes of the decline of liberalism in recent years, how best to rehabilitate the perception of liberalism among government and the general public and what obstacles might prevent such a goal. During the conference, the group looked at factors like the concentration of productive capacity and whether that was, as Mises suggested a consequence of state intervention.

The group also looked at whether a war economy would necessitate the centralization of production under the auspices of the state. A prescient question perhaps, given the rapidly militarizing Nazi Germany.

The group also identified the precarity of wage-labourer questioning whether workers would tolerate the instability of work and subsequently the concerns around income. It’s perhaps here that one of the main ideological cleavages in the group can be seen with Lippman arguing for government intervention, believing that the activity of the market was responsible for these fluctuations within the business cycle. Whereas Mises and Rueff believed these issues were caused primarily by money mismanagement impeding the markets ability to reset wages and prices. However, a general consensus appeared to emerge that a minimal standard of living can, and should be provided to all regardless of their labour contribution.

It’s here that I think one of the most interesting facets of the conference emerges, I would contend that it is not, by mistake that those attending the conference consider the desires of the “the masses” as something that they are themselves removed from. The very real issues of unstable employment and the pressing need behind procuring one’s means of survival are here, seen as obstacles to overcome rather than issues inherent within the system.

The nature therefore of neoliberalism becomes exposed as something quite different from an ideology that organically emerges from the desires of workers, but rather one that belongs to a different class altogether. This is further highlighted with perhaps one of the other disagreements that emerged within the conference namely that of a free society and a traditional community. Rüstow with Classical Liberalism saw the undermining of traditional bonds and lineages, his argument in many ways embodied Marx’s critique written many years earlier.

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked selfinterest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom – Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation.

He believed that the appeal of National Socialism was primarily a reactionary one rooted in a resistance to the material and social displacement and dislocation of workers and warned that the appeal of liberalism had to be accompanied interventions to prevents its deterritorializing tendencies Polyani and Mises, however, were not convinced arguing instead that opposition to laissez-faire was rooted within economic ignorance and a resistance to reason. 

Polyani explained that the resistance to neoliberalism came from the fact that the market plays an important part in its participants lives that was essentially hidden to them. Instead of concessions to government intervention, he believed economic education would prove to be an adequate solution to the issue.

 Economic education would create a popular force.… But above all, economic education would dispel the cloud that at present is hiding the ‘invisible hand’ and would open to the eyes of the people the great cooperation represented by the life of the market, where they participate without any moral conscience of the role they play there.

Mises suggested that refutation of nostalgia and desire for a simpler time could be resolved simply by reminding those who purveyed such ideas of the hardships faced by many in the past reminding Rustow that:

 It is an undeniable fact that in the last one hundred years millions of men have abandoned agricultural occupations for industrial work, which certainly cannot be considered a proof of the greater satisfaction that agricultural activity has given them.

However, Rustow was unconvinced suggesting

Let me add that when Mr. von Hayek doubts that the scale of life values defended by me is reconcilable with the position of traditional liberalism, he is certainly correct… Consequently we look for the way out in a fundamental renewal of liberalism” among the lines of greater government interventionism proposed by Walter Lippmann in his, The Good Society. After all, if those in the communist, fascist and Nazi camps “haven’t listened to Moses and the prophets – Adam Smith and Ricardo – how will they believe Mr. von Mises”?

The role of democracy was also examined with liberal democracy, defined here as the enshrining of the liberal policies in a constitution backed by the power of a higher judicial executive contrasted with the socialized form of democracy, that disparagingly was said to be the preserve of demagogues and those who were more invested in the distribution of wealth than it’s production. It’s here again that liberal ideology is exposed as one that largely lends itself to technocratic management, “the masses” deemed too ignorant to understand the importance of production and its relation to consumption. 

The conference concluded with Lippman defining the new liberal agenda as one that emphasized the market price mechanism and national defence whilst allowing for government intervention in regards to social security and social services more broadly including healthcare, financial regulation and anti-monopolisation. Rüstow, coined the term neoliberalism to describe this new direction for liberalism however it wasn’t until many years later that these ideas would make their appearance within policy think tanks, academia and eventually the national governments. 

Notes

https://www.aier.org/article/the-walter-lippmann-colloquium-and-the-meaning-of-liberalism/

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