Wednesday, 7 February 2018

Does neoliberalism exist?

Neoliberalism. It's the buzz word of the day. Well, okay, it's not bandied around all that much in everyday life, but engage with anyone on the Left these days, and it's pretty much a done deal that the word will crop up in some context. Here's a sketch of the case you might get if you talk to a common-or-garden social democrat or Soft Leftist in the West. Neoliberalism saw all sorts of markets liberated and governance itself spun out to the private sector from around the mid-1970s, but that system of marketisation and free trade has been in crisis since the 2007-2008 financial crash, an age of falling wages, rampant inequality and government failures - typified by the UK's 'left behind' voters plumping for Brexit and the awful tragedy of Grenfell Tower, consumed by fire after the local council outsourced its everyday care to an arms-length management company.

But if this word is to do all the work it's asked to - represent a critique of an entire economic and social system, ripe now to be abolished and replaced by something rather more collectivist - then we've got to be sure that it's meaningful, useful and above all accurate in what it's trying to describe. Here there are many doubts, as we'll be outlining in this blog, though they are concerns that are perhaps in the end outweighed by the analysis that can actually be forwarded by using the idea of 'Neoliberalism' as a tool.... provided that it is mobilised in a considered, precise, thoughtful, conciliatory and above all historical way.

First, some definitions. We don't usually spend too much time on these, assuming that you know what we're talking about anyway, but here - when we're talking about a Big Word - we're going to need to get some real clarity in place before we can proceed to test its efficacy. One place to start could be the dinky-but-handy Very Short Introduction to Neoliberalism (2010). As tiny as its name suggests, this slim volume nevertheless contains some really sharp comments as to what we mean by all this talk of 'NL'. As an ideology, it is apparently always portraying 'globalizing markets in a positive light as an indispensable tool for the realization of a better world'. As a governing ethos, neoliberalism is supposedly 'rooted in entrepreneurial values such as competitiveness, self-interest and decentralization'. Then, finally, the concept contains and necessitates an actual policy agenda: 'deregulation of the economy; ...liberalisation (of trade and industry); and... privatization (of state-owned enterprises'.

We could give any number of similar examples, sometimes overlapping, sometimes differing in detail. Here's the estimable David Harvey, in his older but very readable A Brief History of Neoliberalism (2007 edition), with his definition:
Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to guarantee, for example, the quality and integrity of money. It must also set up those military, defence, police and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary. State interventions in markets (once created) must be kept to a bare minimum because, according to the theory, the state cannot possibly process enough information to second-guess market signals (prices) and because powerful interest groups will inevitably distort and bias state interventions (particularly in democracies) for their own benefit.
The first thing the reader will note is that all this isn't very snappy. The very posited ambition of neoliberalism itself, and the multi-pronged, broad-fronted attack that recent critics have mounted on it, has made the whole field look like a zig-zag of intellectual barbed wire and back-and-forth advances and retreats. The idea is, in short, shrouded in the fog of war. It is in the end, and given such fire, fury and confusion, no wonder that many authors have come to question whether neoliberalism really exists at all. It is an every-shifting, shifty, conceptually hard-to-capture concept in the first place; there is significant temporal slippage everywhere you look about its edges, with very few hard-nosed historians willing to deny that it's an idea in search of an epoch; and even as an analytical tool, there's a thick mist where it meets almost all of those underlying realities that spring to mind when we think of the late twentieth and early twenty-first century. Let's take a quick look at these objections, in no particular order.

Conceptual confusion. One grave difficulty with neoliberalism is the very range of the term as it's used. That makes it slippery. Are we talking about an intellectual agenda, an ethos, a philosophy, a general outlook, a governance agenda, a set of more discrete economic and social policies? No-one has done a truly great job of sharpening up the concept so that it truly cuts through everywhere. It does relatively well in describing the ethos of central government organisations, advised as they have been since the 1960s by management consultants, and increasingly subject to the idea that potential providers - inside and outside government - should compete for business. Even here, there's a problem, in that some of the assumed hallmarks of neoliberal governance - the Private Finance Initiative, for instance - have never added up to anything like a majority of government contracting. But set that to one side. The idea, at least, of 'competition' as a good has taken hold - even if it has ended up building something akin to a Perestroika Britain, a half-public, half-private jumble of built and imagined environments that has copied across some of the worst elements of each. Elsewhere, however, neoliberalism's reach is even less impressive.

Consider public spending. If we look at any good time series of how much the Government actually lays out (above), it doesn't vary all that much. Now neoliberal theorists have two good answers to this: firstly, that they never said that governments would vastly shrink, but rather change their nature; and, secondly, that neoliberal states demand strong governments to enforce the changes that they seek (think of the use of well-organised and more centrally-directed police forces during Britain's 1984-85 miners' strike). Well, yes. But the problem with both of these arguments is that they don't take account of the way in which the state hasn't changed. Until the last few years - when neoliberalism was apparently in relative retreat - British health and education spending had been going up for decades, and actually surged spectacularly under New Labour. More than that: as the economic historian Jim Tomlinson argues in his (very good) new book, Managing the Economy, Managing the People (2017), the liberal Keynesian managed economy never went away. When did public spending surge? When governments had to let the 'automatic stabilisers' - welfare payments, for instance - blow out and support the economy during the recessions of the early 1980s, the early 1990s, and 2008-2010. Whitehall and Westminster adjusted its micro-economic outlook, but its macro-economics? Well, they proved harder to change. Which brings us to the influence of long-term changes, and the burdens of history - as opposed to the influence of philosophers.

Historical reality. Then there's the problem of how policy change actually happens. And? It's slow, mixed, piecemeal, confused. It doesn't bear all the hallmarks of a single idea. Take the creation of East London's Enterprise Zone and the construction of Canary Wharf - usually an image of 'neoliberal' freedoms. Well, actually, that was built on a decade of public transport and infrastructure planning for a more mixed-use development, and to ensure its success civil servants took powers much like New Town Corporations (£) - supposedly the built examples, par excellence, of the social democratic age that followed the Second World War. Historians have here adopted the idea of 'assemblage' - policy as mosaic, jigsaw, blurry sketch - rather than directed ideological drive. That seems to fit the In the Thick of It nature of actual administration much better than a single word. Take another example. Is the egregious cruelty of the present Conservative Government's welfare policies 'neoliberal'? Well, yes, in that it to some extent depends on the idea that everyone should work in the paid market, if they possibly can - and in that it evokes the first-stage liberalism of the New Poor Law of the 1830s. But no, in that it has carried from its origins the hallmarks of recent conservative - very much not 'liberal' - thought on the compassionate rehabilitation and assistance of people on the margins of paid work. Its foundations are built on many things. A very tight labour market. The passage of economic power away from medium-sized Western countries like the UK, putting pressure on all sorts of public spending. Administrative confidence and ambition, rather like that displayed by Gordon Brown over the power of tax credits, not doubt that any neoliberal state - according to Harvey's definition - 'cannot possibly process enough information to second-guess market signals'.

Eras are just signposts. They merge into one another. Post-war governments built welfare states, yes, but also pursued free trade via the General Agreement on Tariffs and Trade, while most governments have remained more than wedded to under-the-radar protectionism during the era of so-called 'neoliberalism'. Social democrats maintained some controls over capital and income, it's true - but they also bulldozed controls and cut taxes. The Conservative government of the 1950s built lots of council houses: but they built more dwellings for private ownership. And any periodisation contains a multiplicity of running clocks, timeframes, caesuras... even ironies. On an international level, shock capitalism was all the rage in the 1980s and early 1990s - the period of the so-called 'Washington Consensus'. That didn't last. These days, the World Bank is more likely to turn up and agree with The Guardian than The Road to Serfdom. So where does the 'neoliberal' age begin and end? In Britain, it's for instance very hard to argue that public - as opposed to elite - attitudes have changed very much. As Andrew Hindmoor argues in his new book, What's Left Now? (2018), the electorate overall moved to the Left in the 1990s - as Thatcherism was seen to reach its limits - and then back again to the Right during the later Blair and Brown years. But those changes happened within very tight boundaries: one academic index of these things, measuring 'policy mood' on a Left-Right scale of 100-0, shows that in the modern age it has always remained within a range of 45 and 55. Yes, young people today are quite conservative: but the public mood, on inequality, on public spending, on many social judgements about what government should and shouldn't do, hasn't changed for decades. 'Neoliberal state', maybe: 'neoliberal people', no.

'Real' forces. The changes unleashed in recent years aren't all down to government decisions, and that matters. There's a problem here with our basic governance model. In our minds - partly because we still learn far too much History and Politics via the records of Cabinets and Parliaments - is the following structured story. Ideas emerge. Governments latch onto some of them. They put them into effect. Then they either succeed or fail. Governments monitor this, using statistics and qualitative reports, and then adjust the policies they've announced - or bin them and start again. So it's easy to talk about the influence of Hayek, or Milton Friedman, or the Mont Pelerin Society - all thinkers key to neoliberal concepts - and then lay out how actually-practising politicians put their views into effect. The problem is that governance doesn't actually work like that. You should often actually start with policies as they were last year, which will always form more than ninety per cent of this year's strategies - the so-called 'iceberg effect'. Then and from there the numbers come in, and influence policies that are therefore shaped not so much by universities and thinktanks as by the shape of just those statistics that are available. Hence the 'assemblage' with which we are already familiar.

The question of where to place technology in the causal change is important. The way the 'neoliberal' word is used is very often idealist in concept: that is, it starts at the realm of ideas, and then demonstrates their effects. How else to explain the constant emphasis, on the Left, placed on 'fighting neoliberalism', 'rethinking neoliberalism', 'challenging neoliberalism' - as if a new form of verbal cues and connections could cure the body politic? Well, it's just as important to say that a mix of transport revolutions (shipping containerisation in particular, in train since at least the 1960s), information technology, China's entry into the world economy, India's surge away from poverty, a set of regional trade deals (NAFTA, the EU) far more powerful than 'globalisation' or 'free trade' taken in the round, ageing Western populations, the vast power of computerisation, and so on, are far more powerful than ideas. They're affected by concepts of governance, of course - how else to explain Chinese Communists' decision to join the World Trade Organisation? - but it's just as possible that those ideas are borne aloft on structural convulsion, like barnacles on a whale.

And yet, and yet. Neoliberalism's still there - yet to be knocked off either its academic perch or off its (increasingly) popular patch. And such success has to mean something. The idea lurks in the corner of the eye all the time. Yes, it's hard to pin down, but that doesn't mean that it's not there. It's like the blast zone of an explosion. Maybe there's nothing there any more right at the point of impact, but the blackened lines around the crater tell you that even an absence can add up to a presence. To be more specific, people use this word, and they find it meaningful; and you know what they mean, even when you can raise a great big list of clever objections to almost its every use. That means that it does exist in at least some form or another.

Consider some of the key UK sectors, pretty much at random - air travel and airports; her railways; the car building industry; universities. Are we really going to say that there's nothing we can do, analytically, to distinguish between the way they were run in the mid-1970s and the early twenty-first century? The old British Airways and the British Airports Authority were sold off in the 1980s, and now the airports that constituted even the newly-privatised BAA PLC compete one against the other. State-owned British Leyland has now been replaced by a welter of foreign-owned builders who have vastly raised productivity, reliability and output, but aren't subject to anything like the same amount of national direction or Whitehall oversight. Universities used to get student quotas and block grants from the old University Grants Committee: now they dive in for just as many students as they can get, given that those students bring with them up-front loans for which, ultimately, they as well as the Government are responsible. And so on. It's hard to argue that these changes don't, in any way, meet the definitions with which we started: either 'deregulation of the economy; ...liberalisation (of trade and industry); and... privatization (of state-owned enterprises', or an insistence that 'if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary'.

All concepts, eras and causal chains come with fuzzy edges. We historians sometimes call the late nineteenth century 'an age of Empire'. Actually, it was just another age of Empire, following on from the very different Murghal, French and British Empires which a new world of steel and coal replaced. It often wasn't very 'imperial', with free trade ruling the world from the 1840s until at least the 1880s, and ideas about human liberation and equality beginning to bubble up everywhere. And the forces governing all that weren't often the imperialists. New technology - the telegraph, the machine gun, the steam propeller - were probably more important than Benjamin Disraeli and Otto von Bismarck. But we still say 'age of Empire'. We have to say something.

It's the same with 'neoliberalism'. It's a helpful myth - a story we tell ourselves about ourselves, because it allows us to understand some fundamental elements of our times. As long as we don't think that it's an unchallengeable way of knowing, an impermeable answer, or more than a helpful word, we'll be all right. One way to think about this is to say that 'neoliberalism' is an adverb or a verb, a way of understanding the moving parts in our economic and social system, rather than a noun. 'Neoliberalism' both does and does not exist. It explains some of the blur we grasp and fail to grasp about our own evolving world - and whatever new and ill-understood systems are emerging now. But it is not a thing, an obelisk-like McGuffin that explains everything else.

So if someone comes to you and says 'this policy reflects neoliberal ways of thinking in some ways', or 'these policies bear the hallmark of neoliberal ideas about efficacy', or 'that person is talking about the state and its capabilities in a neoliberal framework', you can nod and say 'that's interesting'. If instead your interlocutor says 'you're a neoliberal', or 'that's neoliberal', 'that's a neoliberal party', or just shouts 'neoliberal' at you, then you can safely dismiss the rest of what they say. Block and mute. Block and mute. It's the safest way. In the meantime, the rest of us can get on with the actual work of trying to understand public policy, rather than spinning a load of old rope and calling it a story.

Next month, we'll go back to poking people in the eye, when we begin a series about the presumptions that lie behind the main UK parties' policies. Needless to say, almost everything the two Westminster Front Benches hold dear as background assumptions is just plain wrong. In the meantime, we apologise for the balance, nuance and reasonableness displayed above, and in future will try to start some more fights in empty rooms. Never fear: normal service will soon be resumed.


  1. Among the best discussion of neoliberalism I've read. I agree it doesn't function at the macro level without some reality-denying conspiracy theory-type leaps of imagination. I found Foucault's conceptualisation of it as a technology of governance at an organisational level useful though - wrote about it here: