The above question is often asked on this web site. William Davies, who is Assistant Professor at the Centre for Interdisciplinary Methodologies, University of Warwick, has produced a literature review to answer the question. He summarises the argument as follows:
Definitions of neoliberalism across these literatures are various. But they tend to share four things:
- Victorian liberalism is viewed as an inspiration for neoliberalism, but not a model. Neoliberalism is an inventive, constructivist, modernising force, which aims to produce a new social and political model, and not to recover an old one. Neoliberalism is not a conservative or nostalgic project.
- Following this, neoliberal policy targets institutions and activities which lie outside of the market, such as universities, households, public administrations and trade unions. This may be so as to bring them inside the market, through acts of privatisation; or to reinvent them in a ‘market-like' way; or simply to neutralise or disband them.
- To do this, the state must be an active force, and cannot simply rely on ‘market forces'. This is where the distinction from Victorian liberalism is greatest. Neoliberal states are required to produce and reproduce the rules of institutions and individual conduct, in ways that accord with a certain ethical and political vision.
- This ethical and political vision is dominated by an idea of competitive activity, that is, the production of inequality. Competition and inequality are valued positively under neoliberalism, as a non-socialist principle for society in general, through which value and scientific knowledge can best be pursued.
This bibliographic essay focuses on texts drawn from sociology, history of economics and more historical or cultural traditions of political economy, to look at the ideas, rationalities and policies through which neoliberalism is constructed and sustained. It does not address the political-economic question of how neoliberal economies have actually performed empirically.
This is a neat summary that is consistent with a lot of what I read, so I thought it worth sharing. References are all on the original blog.
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Richard,
Do you consider this to be the true core of neoliberalism, or its outward face? Since those who seem to adhere to the theory don’t appear to like competition or markets themselves (e.g. the privatisation going on in the UK which seems mainly to involve inserting yourself into a public income stream and creaming as much as possible off for yourself).
The structures are actually used to create corporate models of behaviour which are in turn used to preserve monopolies, extract rents and funnel wealth upwards
There is as a result a significant difference between liberalism and neoliberalism with the purpose of the supposedly competitive structures created having entirely different goals
That’s great! Especially 3 and 4. I _slightly_ disagree with 4. I’m not sure that “producing inequality” is seen to directly follow from “competitive activity” by neo-liberals, although I do agree they see inequality as generally positive and beneficial.
🙂 I don’t think (hope not) too many people, even socialists, will denounce me a neoliberal for believing that _some_ level of inequality is benign, and that trying to remove all inequality is probably a bad idea.
I definitely feel significant inequality is bad, and that orthogonally, certain activities, economic and otherwise, pursued by the “very” wealthy are extremely damaging to society as a whole: tax avoidance; rentier behaviour; control of national resource allocation by overwhelming capture of capital; monopoly control and maintenance; lobbying; influence of media.
I am sure that there are some who think that all inequality is a bad thing
I have to admit that I think that human beings are different, and inevitably place different significance on different qualities in life and that as a consequence measured monetary inequality is inevitably going to vary without necessarily indicating significant differences in the quality-of-life, which is what really matters. This conclusion is, however, fundamentally different from that which espoused by neoliberals
I hope we can all agree that the list which you present in your final paragraph represents behaviour needing to be addressed
Of course there really is no free market except at a very localised level -energy prices, price of gold, foreign exchange are all rigged by the high velocity traders or the power very big ‘banks’ to buy and sell quickly in trillions of dollars. We cannot speak of a market anymore where there is genuine ‘price discovery’ at work.
We can think of it as a rigged casino where the operator of the roulette wheel has a secret foot pedal.
Great post. I am minded to quote the late great Stuart Hall, who, in “The Great Neoliberal Crisis” wrote the following:
“The term neoliberal is not a satisfactory one …intellectual critics say the term lumps together too many things to merit a single identity; it is reductive, sacrificing attention to internal complexities and geo-historical specificity….however, there are enough common features to warrant giving it a provisional conceptual identity …[furthermore] naming neoliberalism is politically necessary to give resistance content, focus”
…hegemony is never a completed project, it is a process, not a state of being…[which] has constantly to be ‘worked on’, maintained, renewed, revised in ambition, depth, degree of break with the past, impact on common sense…neoliberalism does constitute a hegemonic project”
The above also reminds me of (another) late and great: Tony Benn, who frequently referred to hegemony (even though he didn’t really name it as such) “There’s no final victory, and there is no final defeat. Everything must be contested…and every generation has to fight the same battles again and again and again”
Additionally – and back to Stuart Hall:
“Permanent Revolutions in neoliberal practice:
From Privatisation to ‘public-private partnership’
From structural adjustment to ‘good governance’
From dogmatic deregulation to ‘light-touch regulation’
From no such thing as society to ‘the big society’
From budget cuts to ‘management by audit’
From welfare retrenchment to active social policy
From monetarism to prudence
From conviction politics to ‘best practice'”
All of the above I think are present in current neoliberal practice and, very importantly ways of describing the world [as it is]. It leads to, what Mark Fisher might call “Capitalist Realism” The broad acceptance of policies that actively do harm to be passed off as mere “common sense”
Thanks
One important thing that neoliberal economics has done is to conflate land and capital – and that lies at the heart of the debate about affordable housing. There is talk about rent-seeking behaviour without ever recognising that the original meaning of ‘rent’ was the return to land which is a free gift of nature.
According to Philip Mirokowsky, there is a philosophical or mystical component to the true believers in Neoliberalism. Their belief in the wisdom of the market is that the human mind is not capable of understanding its subtlety and the role of the state is to remove all impediments which could interfere with the market’s actions.
Furthermore, nature is considered even more unknowable. It is certainly not available to scientific endeavour. Only the market has any chance of working with nature. Hence, the triple action to frustrate human intervention in preventing greenhouse gas emissions. The short term has been the well funded climate denying lobbies. The intermediate action has been the setting up of ineffective carbon trading packages. Both the short term and intermediate ploys are essentially delaying tactics to facilitate the long term aim of commodifying the climate through geo-engineering – seeding the oceans/atmosphere or giant mirrors in space.
https://www.youtube.com/watch?v=I7ewn29w-9I Prof. Philip Mirowski keynote for ‘Life and Debt’ conference
I question the proponents’ mental state.
So would I
A cancer test of Neoliberalism
I worked as a research scientist for the Medical Research Council for nearly 30 years. It was in a specialist field that related to why we get cancer and why we don’t get cancer. I have been incredibly lucky that much of our understanding of cancer has arisen during my lifetime.
What I would like to suggest is that cancer is an excellent model system for evaluating neoliberalism and other economic theories. Your body can be thought of simply as a “society” of individual cells. A cancer cell undergoes a series of genetic changes, so that it has a competitive advantage. Unfortunately, this does not result in the other cells in your body becoming more efficient. Instead the cancer cell grows to form a tumour and you die.
We have a series of checks and controls that prevent genetic changes from occurring, or make it more difficult for changes to lead to cancer. I am certainly not suggesting that these Draconian systems would make an ideal model for society. What I do suggest is that in evaluating any economic or social theory, especially any model that relies on simple general patterns of individual behaviour, it is worth asking how it might work at the level of the cancer cell and the body. If it would fail disastrously, how would you expect it to work in human society?
Fascinating idea