Big Ideas on Neoliberalism

We skirted around neoliberalism at Big Ideas when we discussed Democracy in an age of Individualism and then we had the opportunity to discuss it head-on in an invigorating session lead by Will Davies, a Senior Lecturer at Goldsmiths, University of London.

I was not alone in wanting to explore the subject and the room was absolutely packed. I had got back from working in Reading in good time to grab some food, a beer and a decent seat before it started.

I do not have a regular seat and almost insist in trying a different one each time (I'll run out eventually). This time I was in the middle row right at the back.

Will gave us his view of the history of neoliberalism, which I will over simplify to make my point, and to save time! I'll also freely mix in some of the comments made during the discussion and some of mine from later.

Neoliberalism was the reaction to previous financial crises that had hurt the rich, through falling share prices etc., more than the poor who were protected by the collective power of Trade Unions etc.

Neoliberalism could be seen as a deliberate attempt by the establishment to protect their wealth from these threats and to undermine labour by cutting union powers and raising unemployment. This is the Marxist line and quite plausible. I'm convinced!

The main tactic employed is to force competition in to as many activities as possible, even those where competition was difficult to create due to natural monopolies etc.

Competitions need a place to happen and that is what markets are. Money is the predominant measure of success in those markets but others exist in things like school league tables. The State has no place in these markets as it would be an unfair competitor.

Monopolies may arise (and they do) but neoliberalism sees this as OK provided that the elements for competition still exist. For example, there is nothing, in principle, to prevent somebody starting a new Facebook or Amazon.

Competition identifies winners but it also creates losers when previously there had only been peers. Competition also has hidden costs, markets cost money to operate and some of them take a vast amount of money.

Power is entrenched in the establishment as they set the rules for the competition and ensure that they win or, if possible, do not even have to take part. Rather like trench warfare.

Neoliberalism wins on simplicity (competition is good) but is proving to be less successful in practise with, for example, China winning economically, social-democrat countries like Denmark winning on happiness and German team-work winning the World Cup.

And to reinforce the point, even a neoliberal fanatic country like the UK is conveniently avoiding its avowed belief and is doing many anti-free-market things like actively creating new banks and imposing a national curriculum.

After seeing how neoliberalism was invented to keep the rich rich and how competition does not actually produce better results it was something of a surprise to find a Tory voter in the room during the informal discussion that always takes place after the formal one.

My convictions went the other way and the talk help me to understand neoliberalism and, more importantly, its inherent failings.