Neo-Liberalism Again

Henry Farrell summarizes neoliberalism as defined by Colin Crouch in The Strange Non-death of Neo-liberalism:

Crouch depicts classical liberalism and social democracy as mirror images of each other. Both are intensely suspicious of the intermediate zone where politics and markets influence each other, classical liberals because they fear that politics will distort markets, social democrats because they fear that markets will distort politics. But neoliberals have settled for solutions which greatly widen the zone of interaction. As neoliberals have been unable to convince the public that government should simply stop providing key collective goods, and instead leave them to the market, they have instead opted for intermediate arrangements, such as privatization (but with regulators) and the contracting out of government work.

This argument leads directly into a damning (and to me entirely convincing) indictment of the UK government’s privatization and ‘marketization’ of public services from Margaret Thatcher on. These have not created true markets. Instead, they have resulted in a kind of horrid chimera of government and private actor, with no obvious lines of accountability. The UK government turns to the private sector for project financing – but the private sector firm which leases the relevant facility back to the government has control for 20 or 30 years, under a fixed contract. “Long PFI contracts bring in private firms while limiting the role of the market, again demonstrating how the neoliberal policy shift is more about firms than about markets.” Lengthy chains of contracting and subcontracting relations mean that no-one is really accountable. The businesses who win these contracts win because they have a comparative advantage – in winning government contracts.

So here’s yet another definition (or something like it) of neo-liberalism. (My last post on the matter, which attempted to pin down other definitional boundaries, is here.)

I think this gets pretty close to what neoliberalism is in practice if not in how it’s used as self-definition. Someone like Matt Yglesias who may or may not consider himself a neoliberal, is not really arguing for anything like this and nor are many other neoliberals (whether self-defined or defined as such by others).

What I think is happening is that once you disembark from the realm of political philosophy and punditry and enter the rough waters of actual politics neoliberalism becomes a sort of global corporatist movement, mixing the worst parts of government and the private sector into an elaborate mesh of state and quasi-state actors. Neoliberalism is more of a result of corporatist centrism than it is a representation of pro-market liberalism or pro-market social-democracy or libertarianism, etc. I think that a lot of libertarian ideas are used to justify corporatist neoliberal policies, but I don’t think anything that has emerged from the neoliberal model is a great example of libertarianism or social democracy.

Neoliberalism was at least initially an experiment in government efficiency. Market mechanisms were seen as one way to make government better and leaner. This quickly transformed into a vehicle for global capital to spread and for powerful corporations and special interests to gain permanent access to government institutions. Neoliberalism blurred the lines between the state and civil society and allowed the roots of massive multi-national corporations to sink even deeper into the global economy and capture governments in the process.

It’s also interesting how social democrats and classical liberals are described as mirror images of one another. I’m much more a social democrat than a classical liberal. Still, I think both views are valid enough – that governments can pollute markets and markets can pollute government. This is why I’m basically shooting for public provision of social services like healthcare and education and collective goods like transportation on the one hand, and free markets with as few state interventions on the other. A clear wall should exist between the two. Which is, you know, Denmark.

This seems like a plausible, workable idea. But instead of anything like it the trend has been to create bizarre Frankenstein institutions, piecing together state and private parts and loosing them upon the world. That’s neoliberalism as an affliction rather than as any sort of actual ideological framework, as the natural outgrowth of politics and corporatists working in tandem toward a common cause. Which sounds a bit like fascism when you think about it – minus all the nationalist sentiment. Maybe fascism-lite, or compassionate fascism.