Neoliberalism
This current phase of capitalism is most frequently referred to as ‘neoliberal’. This term has a wide variety of definitions and is used less frequently by its proponents (who prefer to speak of its component parts, such as free trade, privatization, deregulation and investors’ rights) than by its critics on the Left, who see it as a package of inter-related policies. If ‘neoliberalism’ is to mean something beyond a mere political swearword (reminding us of George Orwell’s accusation that the epithet ‘Fascist’ was used too loosely back in the 1930s), it needs some more precise thinking. The notion of neoliberalism implies a return to the fundamental principles and philosophies that underpinned emergent capitalism. It implies rolling back the state, which is believed to be smothering initiative through a culture of dependence, and refocusing all policy initiatives according to market logic. But it involves far more than reducing state interference in the market to the levels of the pre-welfare-state 1920s. Embedded in it is a dangerously limited notion of the human that reduces us to mere calculators of individual economic costs and benefits. As one perceptive critic sees it:
‘Neoliberalism... constructs individuals as entrepreneurial actors in every sphere of life. It figures individuals as rational, calculating creatures whose moral autonomy is measured by their capacity for “self-care”– the ability to provide for their own needs and service their own ambitions. In making the individual fully responsible for her- or himself, neoliberalism equates moral responsibility with rational action; it erases the discrepancy between economic and moral behavior by configuring morality entirely as a matter of rational deliberation about costs, benefits, and consequences. But, in so doing, it carries responsibility for the self to new heights: the rationally calculating individual bears full responsibility for the consequences of his or her action, no matter how severe the constraints on this action – for example, lack of skills, education and child care in a period of high unemployment and limited welfare benefits.’ 7
Neoliberalism in this reading, then, is about far more than just re-installing the market at the center of the economy. It is a project that reduces all human activities to ‘homo economicus’ and takes in almost every sphere of life from criminal justice to immigration. Social policy is shaped to condition prudent behavior: workfare, pension reform to keep old people in the workforce, punishment of single-parent families, minimum sentences and other harsh criminal-justice measures. If you succeed, it is entirely down to your own efforts and your rewards should be bountiful and minimally taxed. You are a high-achieving ‘rugged individualist’ and don’t owe anything to anybody. It is easy to see the appeal of this to CEOs with eight-figure pay cheques and the rest of the one per cent. If you fail, the responsibility also lies entirely on your shoulders for having ‘mismanaged’ your own life by making bad choices. You pathetic creature. No bailout for you. Government may help keep you alive if it doesn’t cost too much but don’t come crying for more than the bare minimum. You’re lucky to get that. The underlying myth here is that all of us as citizens have an equal opportunity on a level playing field – so those that don’t make it (an increasing number) must live with the consequences of their failures. Forget about class differences, inherited wealth, unequal educational opportunities, health handicaps and a profusion of other social factors.
Neoliberalism has become a sort of moral-rearmament political doctrine to accompany the market fundamentalism of economic policy. In these highly individualized economic circumstances, it is not surprising that the slogan that has become most popular with panicky voters during repeated election cycles is: ‘It’s the economy, stupid’. This captures the limits of government possibility as seen through neoliberal eyes – no room for compassion, intergenerational consideration, concern about the planet, international responsibility or democracy beyond the narrow confines of elections. There is simply no meaning outside the cold calculus of the market. This is also starting to undermine the institutions with which the establishment has traditionally been identified – the legal system, the police, parliament, local government. Under earlier forms of liberal democracy these could be counted on to play a moderately autonomous role in tempering capitalism. Under neoliberalism they are increasingly shaped so that they will not be obstacles to market priorities. Neoliberalism redefines democracy as market rationality – and the only criterion by which its political class can be judged is not principle but expediency.
Politically agnostic capitalism
The champions of the rule of capital (which they present as the rule of the market) hold forth that it is only capitalism that can deliver freedom. Market freedom is a precondition for all other kinds of freedom. Yet capitalism, with its market made up of a few winners and many losers, exists under all kinds of political arrangements – classical fascism (the Germany and Italy of the 1930s and 1940s), military dictatorship (the Latin American regimes of the 1970s and 1980s, along with so many others), feudal monarchy (Saudi Arabia), and now the state communism of China and Vietnam. The proponents of the ‘capitalism equals freedom’ point of view will hold that ‘in the long run’ the market will corrode such authoritarianism and freedom will flower. But, as John Maynard Keynes liked to say, ‘in the long run we are all dead’, and for the Saudi democrat the relationship between the House of Saud monarchy and petro-capitalism is all they can remember or even imagine. In Latin America, the overthrow of dictatorship led not to a capitalist renaissance but ultimately to various forms of populist socialism that are deeply suspicious of market forces.
Of course, to some degree it depends what you mean by freedom. The capitalist notion of freedom is all about opportunity. For the most part this means the opportunity (indeed the right, or even the obligation) of the individual to enrich themselves. This rather backward notion that you have the right to lord it over others because you are cleverer – or, more likely, better positioned due to the accident of birth – is another source of discontent with capitalism. Thoughtful people simply have the stubborn belief that we can do better than this. They have an underlying belief in the fellowship and solidarity of women and men and their capacity to co-operate with each other for the common good. Whether it is drawn from religious belief or secular conviction, or the experience of something better in their communities, families or memories, they just can’t seem to get in sync with the rightwing US writer Ayn Rand’s idea of selfishness as a virtue. They quickly come to realize that the opportunistic freedom of the derivative trader, real-estate speculator or arms dealer results in bankruptcies, evictions and corpses.
The second line of argument buttressing the case for capitalism as freedom of opportunity is that ‘a rising tide lifts all boats’. This holds that the success of a few leads to the prosperity of the many through the creation of jobs and the famous ‘trickle down’ of wealth. You need look no further than the present state of the world, where inequality and the concentration of wealth are increasing virtually everywhere, to wonder at the sheer gall of those who hold this view. Around 0.1% of the world’s population currently hold 50% of world income8 and 51 of the world’s 100 largest economies are now corporations.9 In the meantime, rates of unemployment (particularly youth unemployment) are continuing to rise, imperiling the future of a generation.
All the same, opponents of capitalism have no right to be smug. The system has proved it has staying power. It has won at least the passive adherence of hundreds of millions of people who really have no significant stake in it. It has convinced them that there is no alternative but to play by the rules of capital’s game. It has used crisis after crisis as a way of reinventing itself and opening up new avenues of profit. It has diverted scientific and technological progress to serve its own narrow ends. It has shown a flashy dynamism that still draws in the greedy and the gullible. It has undermined the alternatives that have been set up to oppose it, either through guile or force. It has appealed to what is worst in our natures, blinding us with celebrity and consumption (or at least dreams of future consumption). It has proved itself a worthy opponent and it is far from clear that capital can ever be brought to serve the purposes of humanity rather than the other way around.
For in the end it is not