Daily Times

Neo-liberalism, first and foremost, is a theory of political economy that puts forward that it is better to advance the well-being of humans by liberating individuals entrepreneurial freedom and skills under the powerful institutional framework of private property, free market and free trade. For example, the state must guarantee the quality and integrity of the money. It must also boost military, defence, police and legal structures and functions established to safeguard private property rights. In addition, if markets do not exist, they must be created by the national action if necessary. Countries should not take risks. State intervention in the market, once produced, must be maintained because under this theory the state cannot have enough information to guess the market signal (price) because powerful interest groups will inevitably distort and bias state interventions (especially in a democracy) for your their benefit.

Neo-liberalism is regularly used in the popular debate around the world to define the last 40 years. It’s used to refer to an economic system in which the “free” market is extended to every part of our public and personal worlds. The transformation of the state from a provider of public welfare to a promoter of markets and competition helps to enable this shift. Neo-liberalism is generally associated with policies like cutting trade tariffs and barriers. Its influence has liberalised the international movement of capital and limited the power of trade unions. It’s broken up state-owned enterprises, sold off public assets and opened up our lives to dominance by market thinking.

According to neoliberalism, substantial government and official aid to development hindered economic and social development, and deregulation, privatisation and tax cuts were necessary to achieve economic growth.

Neoliberals argue that governments prevent development; when governments get too large, they restrict the freedom of dynamic individuals who drive development forward. There is some pretty compelling evidence for this; think of communist regimes in Eastern Europe, although these governments forced through industrialisation, they would not allow people enough freedom to bring about the kind of consumer culture that emerged in Western Europe, so development stagnated in those countries because of governments having too much power. Similarly, even in capitalist countries where there is too much ‘red tape’ or too many rules, regulations, taxes and so on, it’s harder to do business and so harder for economies to develop.

Does the idea of neo-liberalism help us better understand what goes on in the world, or does it instead lead us astray?

Largely as a result of growing conceptual ambiguity, neo-liberalism is now widely acknowledged in the world as a controversial, incoherent, and crisis-ridden term, even by many of its most influential deployers. Critics describe it as ‘an oft-invoked but ill-defined concept’ that is ‘omnipresent’ and ‘promiscuous’ whose meaning ‘seems to alter its shape from paper to paper’ such that ‘what it stands for and what it explains is both confused and confusing’. The ‘neoliberal’ has come to be deployed as an adjective:

States, spaces, logics, techniques, technologies, discourses, discursive framework, ideologies, ways of thinking, projects, agendas, programs, governmentality, measures, regimes, development, ethno-development, development imaginaries, global forms of control, social policies, multiculturalism, audit cultures, managerialism, restructuring, reform, privatisation, regulatory frameworks, governance, good governance, NGOs, third sector, subjects, subjectivities, individualisation, professionalisation, normalisation, market logics, market forms of calculation, the destatalisation of government and the degovernmentalisation of the state.

Neo-liberalism is criticised for giving markets too much power over our lives. Yet in light of the rise of Donald Trump and anti-trade populists, there is a growing chorus of people extolling the virtues of neo-liberalism. What’s most evident from this ever increasing popular debate about neo-liberalism whether from left-leaning critics or right-leaning advocates is that there are many different views of neo-liberalism; not just what it means politically, but just as critically, what it means analytically.

There are a few contradictions which can be identified to explore and understand the neo-liberalism in the contemporary era. First, too little has been done analytically to address the contradiction between the supposed extension of ‘free’ markets under neo-liberalism and the growth in market power and dominance of corporate entities and monopolies like Google and Microsoft. Second, there has been too much emphasis on the idea that our lives, identities and subjectivities under neo-liberalism are framed by ‘entrepreneurial’ beliefs, attitudes and thinking. Finally, there has been little interest in trying to understand the important role of contract and contract law as opposed to ‘markets’ in the organisation of neoliberal capitalism.

In contrast, our lives, societies, and economies are dominated by diverse forms of rentiership; for example home ownership, intellectual property monopolies and market control. Rentiership is the extraction of income from the ‘ownership, possession or control of assets that are scarce or artificially made scarce’.

Neo-liberalism is perhaps best perceived of as a radical descendant of liberalism in which traditional liberal demands for equality of liberty have been bent out of shape into a demand for total liberty for the talented and their enterprises. This resembles the parallel phenomenon of ‘neo-conservatism’, which is not, either, a new form or recent revival of traditional conservatism, but rather a new and unique, and decidedly more uncompromising, set of political ideas.

In place of the original idea of neo-liberalism as an economic policy regime locked in the states versus markets debate, there is an augment and expanded version that adds power, social actors and material interests.

Economic policy is still important, but it is interlocked within a socio-political configuration. Market reforms are not the end-game, but a means to an end. Whereas earlier work on neo-liberalism treated political and social factors to explain how market reform policies emerged, this version of neo-liberalism encompasses and fuses social actors, policies, and material interests together within a grander amalgamated concept of neo-liberalism.

Importantly, whereas neo-liberalism as economic policy regime was criticised as excessively technocratic and depoliticised, this augment defines it to be the opposite that is, as a profoundly political phenomenon. The end-game is not so much the implementation of certain economic policies, but the realisation of the material interests of politically powerful economic elites.

Neo-liberalism insists that developing countries remove obstacles to free-market capitalism and allow capitalism to generate development. The argument is that, if allowed to work freely, capitalism will generate wealth which will trickle down to everyone. Another way of putting this is that neoliberals believe that private enterprise or companies should take the lead in development. They believe that if governments promote a business-friendly environment that encourages companies to invest and produce, then this will lead to exports which will promote free trade. So encouraging ‘free’ trade is a central neoliberal strategy for development.

According to the neo-liberalism approach, the developing countries are facing the multiple economic challenges. The deprived and underprivileged countries should focus on the removing restrictions on businesses and employers involved in world trade. In practice, this means reducing taxes on corporate profits or reducing the amount of ‘red tape’ or formal rules by which companies have to abide for example reducing health and safety regulations. The flexible workers should be hired on the short-term contract. They also promote privatisation.

Beyond conceptual proliferation and incoherence, there is an essential terminological feature of neo-liberalism that more clearly distinguishes it from the multitude of other stressed and stretched concepts that dot the social sciences: it dares not speak its own name. While many give out and are given the title of neoliberal, there are none who will embrace this moniker of power and call themselves as such. No contemporary body of knowledge calls itself neo-liberalism, no self-described neoliberal theorists that elaborate it, nor policy-makers or practitioners that implement it. There are no primers or advanced textbooks on the subject matter, no pedagogues, courses, or students of neo-liberalism, no policies or election manifestoes that promise to implement it (although there are many that promise to dismantle it). Pedantic as it may seem, this is a point that warrants repetition if only because there is a considerable body of critical literature that deploys neo-liberalism under the mistaken assumption that in doing so, it is being transported into the front-lines of hand-to-hand combat with free-market economics.

There are some questions which naturally arise when one is confronted with the belief that we live in the age of neo-liberalism. The most central questions are slightly irreverent towards the critical literature’s overall analysis: Is it really the case that neo-liberalism is the dominant ideology shaping our world today? Are we really on the move towards the neoliberal society, understood as a society governed by neoliberal ideology? Could we really in any meaningful sense think of ourselves as living in the age of neo-liberalism? There are also other questions to be asked. If there is a trend towards reforms of the public sector, the economy, and international trade inspired by neo-liberalism, is it a trend which is gathering speed? Or are there perhaps indications that the push for neoliberal reforms might be slowing down or stalling altogether?

On a more fundamental level, it seems pertinent also to ask a few questions about the scientific utility and fruitfulness of the concept. Does the idea of neo-liberalism help us to understand better what goes on in the world, or does it rather lead us astray? Will it make us overstate some trends and underestimate others, of which some will counteract and even neutralise public sector reforms and other developments inspired by neoliberal economic theories and ideology?

This is the enduring strain that lies at the heart of capitalist democracy and is aggravated in times of crisis.

The writer is a PhD scholar in Media and Crime and can be reached at fastian.mentor@gmail.com

Published in Daily Times, April 15^th 2018.