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.
Markets distort nothing. That’s simply silly. Monopolies and oligopolies have so much spare money that they distort politics. Need I mention AccuWeather?Report
My, but you read this quickly.Report
… err, right!
I don’t think we’re quite China, where corporations run the state, but I do think we ought to strive not to be China.Report
That seems right. It’s more market worship that distorts politics than markets themselves. A certain set of people are bound and determined to convince everyone that every problem is a nail.Report
I think it can be the use of false markets to influence politics – i.e. the contracting out of government functions to ostensibly private contractors who are in fact gaining monopoly rents with less accountability than the government agency would have itself. So it’s not *true* markets at all, it’s the mixture of non-competitive faux markets with government functions that gets messy.Report
Markets distort nothing.
But market players can, without the aid of government. And market players can in turn influence government to shape markets to their advantage.Report
And like it’s foreign policy cousin, neoconservatism, the answer to all neoliberal failings is more neoliberalism.
It appears to me at least, as if there is this sort of “burn through” strategy that both positions rely on in the face of unfortunate circumstances. And both of them precisely related to globalization.
The neoliberal approach to the economic upheavel of globalization is to speed it up, in the hope that some sort of hyper-globalization will lead to a more balanced and stable tomorrow, even if today’s displaced workers must be sacrificed.
Similarly, neoconservatism urges a hyper-clash of civilizations approach to foreign policy, in the hope that the faster and more forcefully these geopolitical differences are ironed out, the quicker we can reach some world-historical liberal democratic moment (Fukyama’s take on Hegels end of history).
The result is full scale western imperialism. Neoliberal hegemony in developing markets that get on board with our notiong of “modernization,” and neoconservative occupations/sanctions for those regimes which are still seen to be culturally antithetical to our own.Report
Well said. It’s not exactly imperialism, but it’s a sort of economic imperialism that uses a mixture of government, corporate, and military power to force trade agreements as opposed to actually freeing global markets. The infrastructure of globalism has not been built organically.Report
Would housing, energy, food and clothing live in the socialist unit of this American duplex or in the partially-free-market unit?Report
If you’re willing to change the rules so I don’t have to wear pants if I don’t want, I’m willing to let the free market handle them.Report
Mike – we live in a democracy, and all that stuff is decided by society through the crappy democratic process. It sucks, but it’s better than the alternatives, including what I’ve come to see more and more as a intensely anti-democratic vision of the libertarian society.Report
Really? It’s decided by majority rule, and that’s better than any alternative, especially libertarianism? I’m just trying to get a clear view of where you’re coming from.Report
As part of the majority, which side would you prefer they be on, the collective side or subject to a free market?Report
Quit being simplistic. You should realize by now that democracy in practice is not simply rule of the majority. At least not in America.Report
I’m not being simplistic — words have meanings, and I’m trying to determine what you mean. If you don’t want to clarify, fine, but don’t call it simplistic to ask for clarity.Report
Plus to say it’s decided by democracy is indeed saying it’s decided by majority rule, otherwise, you would say it’s decided by the limited powers granted to government through our Constitution.Report
“Mike – we live in a democracy, and all that stuff is decided by society through the crappy democratic process.”
We actually live in a constitutional republic. Some aspects of our political process are democratic. I guess I need to know what you mean by “democracy”. In many ways, with constitutional limits being surpassed, we have become somewhat of a democracy, but is this a good thing, or should we adhere to a limited constitutional republic?Report
I think we have adhered to the limited Constitutional republic for the most part.Report
We are a constitutional democratic-Republic with various degrees of representative democracy.
I think we should stick to that, maybe modify it a bit here and there, and then expand that democracy to the workplace as much as possible.Report
“We are a constitutional democratic-Republic with various degrees of representative democracy.”
But can government control food production, energy, housing and clothing as a collective good in your duplex set-up if the majority wants to do so?Report
Yes, Mr. Farmer, it can, pretty much. I recommend consensus, though. Fact is, the New Deal did and does enjoy consensus.
[The Obamacare bill, not so much.]Report
Then I don’t see how even a partially free market can survive in this set-up, because the majority can decide what is a collective good, and, over time, there won’t be much left of a free market.Report
This is the problem when there are strict limits placed on government power, and it’s the problem with democracy. Social democracy is a recipe for tyranny of the majority, which never really places the majority as the tyrant, just those who represent the majority. The majority gets some goodies, but they quickly become meaningless in a stagnant, declining economy. Collapse is the end-result.Report
aren’t strict limitsReport
Yup, I’ve noticed the riots in Copenhagen. And the lack of rich people in Sweden.Report
Facile, Mr. Ewiak. Those Nordic paradises would be under the Axis or Soviet jackboot right about now except for you-know-who.
And Greece 2012 is as valid a comparison as Scandinavia 2012, and it’s a frigging mess.Report
Not really. Greece’s number one problem isn’t it’s spending, it’s the way they set up their spending, their lack of ability to actually collect taxes, and of course, being in a fiscal union but not a political union.
Same thing with the rest of the Europe. Before the crash, Spain and Ireland were running surpluses. Hell, Ireland was the toast of the right-wing due to their lack of corporate taxation.Report
You’re into No True Scotsman territory here. Regardless, drivebys in praise of the self-evident superiority of the Eurostate ain’t gonna get it done. a) It’s that, and we don’t want that and b) These systems only exist because the US saved their asses and c) The Eurostate model is only decades old and it’s far from self-evident they’re sustainable. It’s just as likely they’re running on the fumes of the Pax Americana.
That said, I’ve been trying to stick up for the New Deal a bit and a healthy chunk of the Great Society to boot. We as a people and a nation want that; we just have to figger out how to afford it.Report
> The Eurostate model is only decades
> old and it’s far from self-evident
> they’re sustainable.
I’m going with, “Signs Point to ‘No’,” myself.Report
Well, it may be unworkable, but it has the consent of the governed. A workable system without consent ain’t gonna work either.
This is why I fancy the “muddling through” approach; when in doubt, go with the principle of liberty, but allow for Freakonomics. For in the end, any successful system must account for the realities of human nature. Liberty without order, [and a chicken in every pot] is unenjoyable.Report
You mean it has the consent of the majority.Report
Hear, hear Tom.Report
MFarmer, you say that if the majority decides what is and isn’t a public good, then eventually they’ll remove everything from the sphere of the free market.
My question is, why? Why would the majority want to remove things from a free market sphere and place them into a government-controlled sphere? If people are clamoring for government control, doesn’t that mean that the private sector has really fucked something up?Report
No, pace Bryan Caplan, people on average are irrational in their economic policy preferences. They prefer anti-market policies even if said policies would hurt them or the constituency they care about (i.e. the worst off). That makes democracies systematically irrational.Report