The Death of Neoliberalism In the Pandemic

Monday 13 April 2020 11:48

The death of neoliberalism during the pandemic


What are states for? For the rich 5% or for the people?


David Harvey describes neoliberalism as a set 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 characterised by strong private property rights, free markets and free trade.’ The fundamental concepts are that in a free market the price of everything is known and correctly valued and that all things necessary for human existence are best 

provided for by the market because the market assigns everything its just value. The corollaries include: the reduction of government ‘interference’ in the labour market (minimum wages, labour rights, health and safety etc); the reduction of government ‘interference’ in business and industrial activity (environmental protections, safety regulations for products and production, corporate taxes etc); the privatisation of all publicly owned assets on the spurious argument that it can be done more efficiently and more cheaply by private industry. So the neoliberal project is essentially a set of dream scenarios for the super rich and the corporations - a free for all where the only limit on their ability to extract wealth from workers and the state is their own lack of conscience.

By this stage, after the great bank bail-outs post 2008 and the enormous state-led efforts to control the COVID-19 pandemic and to support incomes and industry, we all know that there is no such thing as a free market and, more importantly, that no market can provide what we need as human beings to survive. The free market, even with funding from governments and NGOs has not bothered to work on coronavirus vaccines other than for seasonal flu because they can’t work out a way to make profit out of it. When a pandemic comes industry must shut down or die from lack of workers and it looks to government for support. In effect, neoliberalism works fine as long as profits are strong. When profits drop industry wants to be supported by the people through the state.

Where, then, is the idea that the market can provide everything we need most efficiently and most cheaply?

It is self-serving nonsense.

Neoliberalism as a theory is dead. Its theoretical foundations have been shown to be, literally, bankrupt. When the banks started to collapse the state stepped in to support shareholders earnings. When we think of the great corporations of the West we tend to think of brilliant entrepreneurs going it alone against all the odds. But in fact the biggest corporations began by piggy backing on state sponsored university research, or relied on state support in the form of government contracts, state defence spending, state built infrastructure, low taxation, grants of various kinds, benefit in kind allowances, laws that permit offshoring of profits, foreign domiciles in states that allow tax exiles and state supported tax hiding practices whether in their home country or in other states. They have usually sought and mostly obtained the power of the state to fight their labour struggles. So when a workforce unionises and wants to strike for rights or higher pay, the corporation lobbies government for legislation. Such legislation includes the removal of the right to ‘sympathy strikes’, otherwise known as solidarity, whereby, say workers at a supplier can refuse to send supplies to a company fighting a strike.

When we talk about free markets, the one market that is never liberalised is the labour market. Whereas corporations can combine to defeat a strike, workers cannot combine to support it. Whereas corporations can combine to force governments to save them, workers are divided into company groups and can only fight within that company. Money is organised globally, labour locally because the corporations want it that way and force governments to make it that way.

All of this is well-known to everybody and I rehearse it here only to argue that neoliberalism as a theory was, on the one hand, never theoretically rigorous and, as applied to the real world, positively ridiculous, and on the other hand, highly effective at attracting state support even to the extent that it is the dominant philosophy behind business and economics education right down to the level of the secondary and primary school curriculums (if you doubt the latter take a look at this link http://www.juniorentrepreneur.ie). For a complete discussion of neoliberalism in education see the link at the end of the article.

The reality is that neoliberalism was never more than a pseudo-philosophical justification for unrestrained capitalism.

Capitalism has not gone away just because this particular wheeze has been found out. The question I would like to pose - and to which I have no answer - is what next? Certainly, a new theoretical justification will develop, though it may take some time. But is it possible that the experience of state intervention on a previously unimaginable scale (except in wartime which is anyway a capitalist profit-fest) will shape our expectations of what the state can do for us for the future?

States are not natural. We have come to think of them as natural occurrences, or perhaps as the result of progress (first tribes then fiefdoms then states etc).  But given that they are not naturally occurring phenomena we should ask ourselves what is the purpose of a state. My anarchists friends would answer, with some justification, that their purpose is repression. But if we are to accept the existence of the state we should at least ask ourselves What Is The State For? Is it for the people - to protect them, nurture them, provide them with sustenance and shelter and warmth, to provide public good that we can all share in? Or is the state for the rich, to help them to extract wealth from us, to keep us in line, to protect their property and their wealth and to establish the laws and infrastructure that allows them to continue to get rich at our expense? 

The question of what the state is for comes down to two simple questions:

Is the state for the people?

Or is the state for the 5%?

Neoliberalism served the 5%. What comes next is up to us. We should begin to talk about it now while we still have time, before the forces of the 5% gather themselves for the next assault. By the time that comes they will have their theory and their practice well-honed.


Links

For a complete discussion of neoliberalism in education see this link: https://cora.ucc.ie/bitstream/handle/10468/2208/KirwanEP_PhD2012.pdf?sequence=1&isAllowed=y


David Harvey on Neoliberalism: https://www.youtube.com/watch?v=D-YO5EROH-I

http://www.juniorentrepreneur.ie