Re/Defining Neoliberalism

The March Of Neoliberalism: Not a coherent economic philosophy, but a fearsomely coherent political project. Its purpose: to use the coercive power of the state to thwart and/or reverse any and all attempts to empower the many at the expense of the few. Those who try to pass neoliberalism off as the crackpot economic "religion" of a handful of Act supporters, are simply attempting (like Tony Blair) to carve out a political space for themselves within the Neoliberal Settlement.

 

THE DEBATE which Matthew Hooton kicked off in earnest on Radio New Zealand this week is hotting-up. In dispute is that much-used, but imperfectly understood, political term: “Neoliberalism”.

 

Some, including economist, Brian Easton; former Finance Minister, Sir Michael Cullen; and Wellington blogger, Danyl McLauchlan; have claimed that John Key, and the government he leads, no longer fits the neoliberal description. They have not, however, moved as far down the revisionist road as Mr Hooton. His claim is that the Key Government has not only moved on from neoliberalism, but that it has also crossed the line into the full-blown leftism of that arch-socialist, Rob Muldoon.

 

Wellington-based academic, Jack Vowles, joined the fray a couple of days ago - posing the question: “Neoliberalism: Half-Full or Half-Empty?”

 

As Professor of Comparative Politics at Victoria, Jack’s purpose in entering this debate appears to be the rather dubious one of muddying the waters about what neoliberalism is – and is not. In its turn, this obfuscation seemed to be aimed at keeping open the political space currently occupied by what he calls “market pragmatists” – those particularly pusillanimous neoliberals known as Blairites.

 

Vowles’s case: that neoliberalism is a kind of economic religion, adhered to by a tiny number of extreme Hayekian economists, and only ever imperfectly applied in New Zealand, is, like most erroneous conclusions, based upon an erroneous premise.

 

Neoliberalism as never been, and is not, a coherent set of economic principles, the presence or absence of which in any given policy prescription determines the strength or weakness of its ideological credentials. Indeed, neoliberalism, far from being some sort of neo-classical economic crusade, is what it has always been: the fearsomely coherent political project of global capitalism’s ruling elites.

 

Its anti-state/free market propaganda notwithstanding, neoliberalism’s purpose has always been to use the coercive power of the state to thwart and/or reverse any and all attempts to empower the many at the expense of the few.

 

As Professor David Harvey notes in his A Brief History of Neoliberalism:

“Redistributive effects and increasing social inequality have in fact been such a persistent feature of neoliberalisation as to be regarded as structural to the whole project. Gérard Duménil and Dominique Lévy, after careful reconstruction of the data, have concluded that neoliberalisation was from the very beginning a project to achieve the restoration of class power.”

 

It is no accident that neoliberalism’s origins, as a politically effective force, may be traced to the economic, social and political upheavals of the 1970s. This was, after all, the decade in which the power of the capitalist ruling classes came under maximum pressure: the decade in which both individual capitalists and the principal organs of capitalist power (especially in the USA and the UK) commenced their still-advancing counter-offensive against the unnerving encroachments of social-democratic redistribution and reform.

 

It also explains why, in practical terms, neoliberalism has always been a more-or-less constant set of political and economic objectives rather than a coherent philosophy. The whole point of neoliberalism is to have the coercive powers of the state deployed to the exclusive advantage of the elites. This may be seen not only in the largely successful campaigns to reduce the influence of organised labour, but also in the ongoing efforts of neoliberal regimes to decouple the regulatory and administrative powers of the state from those sectors of the economy that the forces of social-democracy had once been powerful enough to wrench from private hands.

 

Vowles’s plaintive cry, that not all of the defining features of a neoliberal regime are in and of themselves bad, misses the point entirely. Of course trade liberalisation can be seen “a good thing” – but not when it’s used to gut the domestic manufacturing sector and eliminate the social milieu out of which strong social-democratic values grow. Relieving the pressure on income tax to meet all of the state’s fiscal needs may, similarly, be a good thing, but not when a deeply regressive goods and services tax is imposed on the working-class to fill the fiscal hole created by easing the “burden” of progressive taxation on the wealthy.

 

Why is Vowles unable to see this? Primarily, because he is desperate to avoid acknowledging both the Neoliberal Revolution, and the Neoliberal Settlement which it enabled, as the central political (and, increasingly, cultural) realities of our time. Were he ever to accept that neoliberalism will manoeuvre swiftly and decisively (principally through its enablers in the news media) to thwart “the alternatives that do exist to promote [a] more inclusive and egalitarian society”, then all his talk of “responsible economic management” and of not taxing and spending “without any apparent constraints” would stand revealed for what it is: mealy-mouthed Blairite blather.

 

It is, however, in the midst of all his Third Way apologetics that Vowles let’s slip the very insight he’s trying so hard to pretend he has not had. It’s when he declares: “The implicit alternative to neoliberalism implied by many on the left is simply not feasible in the 21st century.”

 

This is the crucial admission, and the crucial explanation for why Vowles and his Blairite comrades are so keen to reduce neoliberalism to something only a handful of Act supporters take seriously. What Vowles is really saying is that the Left’s alternatives are not feasible while the Neoliberal Settlement endures. And if that is true, then the only possible programme for a genuine left-wing party is the one committed to challenging that settlement head-on and reclaiming the coercive powers of the state for the many, from the few. (The sort of coercive powers that John Key’s indisputably neoliberal National Party refuses to deploy even in the name of ensuring that working people are not seriously injured or killed on the job!)

 

I have followed Jack Volwes’s highly successful career in political science for more than quarter of a century. His scholarship in dissecting the crucial general elections of the 1990s – not to mention the arrival of MMP – always possessed the reassuring feel of work undertaken by a man comfortable in his own radical skin.

 

What happened, I wonder, to the Jack Vowles who seemed to see, in the epic struggle between Labour and the Alliance, the acting out of the urgent mission to make left-wing policies “feasible in the 21st century”? When did it become okay for the Professor to put down the opponents of neoliberalism as inhabitants of a political ghetto, communicators of despair, weakeners of their own cause?

 

Was it about the same time, Jack, that you decided that if neoliberalism could not be beaten, then it could, God forgive you, be joined?

 

This essay was posted simultaneously on The Daily Blog and Bowalley Road of Saturday, 30 May 2015.