Skip to main content

Neoliberalism – the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald Trump – neoliberalism has played its part in them all. Why has the left failed to come up with an alternative?

by George Monbiot

PART 3

It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Hayek remarked on a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as “an opportunity to radically reform the educational system” in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.

Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is ... unearned income that accrues without any effort”. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.

Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the ‘losers’ who feel, often correctly, they have no voice or role to play in the political establishment”. When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.

Source:


[1] [2] [4] [5]

Read also:

Comments

Popular posts from this blog

How CIA altered the ending of Orwell's 'Animal Farm' to project Communism as the sole tyrannic system

globinfo freexchange

This interesting short documentary by AJ+, explores the cultural war between the United States and the Soviet Union during the Cold War. In an effort to project Communism as the evil against capitalist West and the "free world", CIA had to covertly interfere through various ways in art, music, literature, philosophy.

In one of these cases, the documentary reveals how CIA altered the ending of Orwell's 'Animal Farm' to project Communism as the sole tyrannic system. It is also interesting the fact that the case involved an animated film, indicating that CIA's cultural propaganda was targeting minor Americans in order to "train" them ideologically.

According to the story, George Orwell, who wrote such middle-school classics as 1984 and Animal Farm, described himself as a Democratic Socialist. And he was actually pretty anti-Stalinist and anti-Soviet-style socialism, something which was unusual among Leftist circles at the time.

We already live in a permanent recession in which the Wall Street mafia secretly and continuously is being bailed out with billions by the Fed!

globinfo freexchange
Jimmy Dore and Dylan Ratigan explain in this video the secret mechanism through which the Fed is permanently bailing out the Wall Street mafia with billions. 
Dore refers to a September article by CNN Business with information that, under normal circumstances, should have made big headlines, generating massive anger.
We were trained not to be surprised by the liquidity injections that the central banks like the Fed and ECB provide to the biggest financial institutions. When at the same time, the real economy, and especially the small-medium business sector is literally struggling to survive in the capitalist West.
Yet, in this case, some additional information reveals something impressive. As Dore highlights from the article: 
                  Until this week, the Fed hadn't launched an operation like this since 2008. [...] Still, the fact the Fed needed to pump $128 billion into the system on successive days shows that a crack has emerged in a seldom-discusse…

The global youth radicalization and the fight for Socialism

by Eric London
Across the world, in countries as culturally distinct as Ecuador, Lebanon, France, Germany, the US, Iraq, Chile and Haiti, a new generation of working class youth is making its powerful entrance onto the battlefield of the global class struggle.

Citing the international scope of recent mass demonstrations, the Guardian's Simon Tisdall recently wrote: “Each country’s protests differ in detail, but recent upheavals do appear to share one key factor: youth ... This global phenomenon of unfulfilled youthful aspirations is producing political time bombs. Each month in India, one million people turn 18 and can register to vote. In the Middle East and North Africa, an estimated 27 million youngsters will enter the workforce in the next five years.

The political awakening of the most educated, urbanized and technologically interconnected generation in history is of critical strategic significance for the entire working class. 
Born beginning in the 1990s, today's youth…

Το Μητσοτακικό καθεστώς βάζει σε εφαρμογή το σχέδιο για τη δημιουργία κράτους σκληρής καταστολής

globinfo freexchange

Μετά το πρώτο βήμα που έκανε το Μητσοτακικό καθεστώς για τη δημιουργία Ειδικών Οικονομικών Ζωνών εντός της Ελληνικής επικράτειας, δηλαδή για τα φέουδα του 21ου αιώνα, όπως είχαμε προβλέψει, φαίνεται ότι, δυστυχώς, αρχίζει να επαληθεύεται και το σχέδιο για την ανασύσταση του δεξιού παρακράτους.  
Ήδη από το Μάιο του 18, είχαμε επισημάνει ότι σε ομιλία του στη βουλή, ο Μητσοτάκης ξεκίνησε το παραλήρημα του περί βίας αναφερόμενος συγκεκριμένα στα 'Εξάρχεια', τους 'Ρουβίκωνες' και τους 'αγανακτισμένους'. Και στο σημείο αυτό, πάλι κάτι ξέχασε: τους φασίστες.
Έτσι, έστειλε σήμα στους μηχανισμούς του αστικού καθεστώτος ότι θα συνεχίζει να το προστατεύει εγκαθιστώντας ένα κράτος σκληρής καταστολής, χωρίς να πειράξει το ακροδεξιό βαθύ κράτος που επιστρατεύει η εγχώρια ολιγαρχία όταν αισθάνεται κίνδυνο. Ένας κίνδυνος που μπορεί να έρθει σε περίπτωση νέων αναταραχών από τις βάναυσες πολιτικές λιτότητας που ο Μητσοτάκης θα συνεχίσει να εφαρμόζει π…

Trump threatens to transfer the endo-capitalist war into a civil war level

globinfo freexchange
Donald Trump finally counter-attacked against corporate Democrats and their persistent desire to impeach him, through the ultimate threat: a civil war. In a recent tweet he wrote:
"... If the Democrats are successful in removing the President from office (which they will never be), it will cause a Civil War like fracture in this Nation from which our Country will never heal.
....If the Democrats are successful in removing the President from office (which they will never be), it will cause a Civil War like fracture in this Nation from which our Country will never heal.” Pastor Robert Jeffress, @FoxNews — Donald J. Trump (@realDonaldTrump) September 30, 2019
Speaking to the Real News Network, Jeet Heer of The Nation pointed out:
The civil-war tweet is almost like a threat. It’s like, 'Well, this is a nice little Republic you got here, and it’d be a shame if anything happened to it.' But the thing is that this civil-war talk did not originate from T…

It's now or never: the first step for a Sanders/Corbyn synchronization in power must be done on 12 December in UK

This is a once-in-a-lifetime opportunity for the global working class
by system failure
Two years ago, we wondered whether a US government under Bernie Sanders, together with a UK government under Jeremy Corbyn, could mark a decisive victory against neoliberalism. Whether it could mark the beginning of the end of the Reagan/Thatcher awful legacy.

It seems that the time has come for the first step towards this prospect.

The oncoming UK general election on Thursday 12 December 2019, will be the most critical for decades, especially for the global working class. The outcome will determine to a significant degree, whether the capitalist West will change course away from the destructive neoliberalism, towards a form of Democratic Socialism. A new model that will resurrect the social state, while at the same time, will seriously deal with the great environmental challenges, defying big interests and rejecting the for-profit-wars model.



As we already pointed out, the whole Brexit issue is pri…

Slavoj Zizek: we may be entering an era of widespread civil unrest

RT
Anti-establishment protests are popping up all over the world, in countries with different political systems, and various levels of wealth. We may be entering an era of widespread civil unrest.

Under digital surveillance: how American schools spy on millions of kids

Fueled by fears of school shootings, the market has grown rapidly for technologies that monitor students through official school emails and chats
by Lois Beckett

Part 5 - Shifts in culture

School officials say that their primary motivation for using surveillance technology is the chance to save a student’s life. But schools are monitoring students’ digital documents in real time for a wide range of content they see as problematic, from swear words to nude images and pornography to cyberbullying to evidence of drug and alcohol use.

In Weld county, Colorado, a student emailed a teacher that she heard two boys were going to smoke weed in a bathroom, Hernandez, the student services and safety director, said. Gaggle immediately alerted school officials: “Within four minutes of her sending this email, the troops had deployed,” she said.
Gaggle also automatically sends students a scolding email any time they use a profanity.

A few school districts have chosen not to send students Gaggle’s war…

Julian Assange's extradition process is 'a charade'

The Real News Network
Filmmaker John Pilger attended Julian Assange's last court hearing and observed not only that Assange is visibly suffering from prison mistreatment, but his defense is not being given a fair chance to make its case against his extradition to the US.


Bernie and AOC demonstrate how Baby Boomers could help Millennials escape the neoliberal Matrix

globinfo freexchange
In a recent ad, Alexandria Ocasio-Cortez explains why she endorsed Bernie Sanders for President. Yet, it would be interesting to examine a specific point she makes at the beginning of this short video. AOC says:
                    The first time I ever heard about Bernie Sanders was when I was a waitress in a greasy spoon diner type of restaurant in downtown Manhattan. And I had been working 12 hour days. I didn't have health insurance. I was being paid less than a living wage. And I didn't think that I deserved any of those things, I thought that that's just how life was.

Her last (highlighted) phrase tells you a lot of how deeply the neoliberal perception has penetrated inside societies and especially inside the minds of new generations. Entire generationshave been trained to believe that that's how things are, in order to accept the neoliberal order and retire from any attempt to overthrow it.
As we wrote in a previous article, during the last f…