The Long March of Neoliberalism
Friedman, Thatcher and ideological power
“Only a crisis — actual or perceived — produces real change,” Milton Friedman once wrote, and real change he did produce. As him and his fellow travellers understood, in the debris of such social crisis, “the actions that are taken depend on the ideas that are lying around.” If the proselytizers of neoliberalism succeeded in anything, then, it was this: developing an intellectual infrastructure that would spread their ideology far and wide, so that, when the Keynesian sky fell in, it was their ideas — not a hard left turn to radical socialism — that stepped in to fill the vacuum. In inculcating the presence of a viable alternative to the inflationary tendencies of the post-war settlement, the neoliberals met economic stagnation with an coherent programme for social rejuvenation.
Buoyed by an experiment in Pinochet’s Chile in 1973, the dual ascendancies of Thatcher and Reagan soon ensured neoliberalism captured the spectacular epicentres of global capitalism. Prior to their synchronicitous electoral success, the social democratic compromise between capital and labour was breaking apart at the seams. As the tension between the actors increased, the Keynesian pact fractured under the weight of the conflicting demands it had been constructed upon. Against the backdrop of a global economic shock precipitated by the OPEC oil crisis, the antagonisation of capital by a unionised and increasingly powerful workforce, in conjunction with the breakdown of the Bretton Woods system, led to a crisis of profitability. The material basis that sustained this embedded liberalism shattered in the wake of ‘stagflation’, and so the economy plunged into deep recession.
As Harvey notes, this conjuncture represented a double-pronged threat to the interests of the capitalist class. The political predominance of organised labour, ‘internalized’ as they were in the social democratic state, conjoined to the ‘urban social movements’ of the radical 60’s, amounted to a profound ‘political threat’. But the ruling classes were met too by an ‘economic threat’. Their discontent with the redistributive measures that constrained their income share was alleviated by a faith in strong growth. But as recession dawned and ‘interest rates went negative’, the value of their assets — the bedrock of their economic dominance — ‘collapsed’. Staring down the barrel of an increasingly recalcitrant populace and the ‘annihilation’ of their wealth, the upper classes had to shift social power decisively in their favour. And neoliberalism constituted the means to do so.
It is in this context that we can begin to sketch out the multifaceted nature of neoliberalism, ultimately to elucidate how it became hegemonic. Undoubtedly, the sheer prevalence of the term and objections arising from it may complicate more than it illuminates. Some do indeed hold that it is far too nebulous, or used too indiscriminately, to be of use. But the misapplication of a term need not necessarily signal its redundancy. Far from being a catch-all pejorative applicable to anyone to the right of Tony Benn, neoliberalism refers to a sociologically significant ideology, policy programme and hegemonic project. Such components are not isolated and discrete, however, but intimately intertwined. To begin, though, we should ask: what is neoliberal ideology? Or, as Will Davies inquired, what exactly is ‘neo’ about neoliberalism?’
As Malinowski notes, conventional understanding of the axioms of the Neoliberal Thought Collective (as he calls its intellectual architects) are routinely mired in the popular reductionism of “market good, government bad.” Friedman, whilst being a ‘master simplifier’, could not so easily be said to be masterfully honest, ‘falsely conflating] neoliberalism with libertarianism.’ Whilst the latter presumes that markets arise organically, the former is animated by the insistence that the state has a central role in imposing market modalities across all aspects of social existence; with any fugitive realms not characterised by acrid competition to be crowbarred open to the ‘inexorable logic of the catallaxy.’ Unlike the comparatively conservative separation of the political and economic that is core to the liberal tradition, then, neoliberalism uses the state to barge open the doors of all spaces of human conduct, with the market noisily rushing in.
In this colonising sense, we can follow Will Davies definition and contend that neoliberalism ‘is the pursuit of the disenchantment of politics by economics.’ It is not primarily ‘about the use of market competition to solve narrowly economic problems’, he writes in OpenDemocracy, ‘but about extending them to address fundamental problems of modernity.’ Such society wide applicability is justified in two ways. First, it is undeniably premised upon faith in the way in which the market corresponds and interacts with universal issues of human behaviour. For neoliberals, the price mechanism is an incomparably elegant way to circumvent political, and indeed democratic, problems of what is valuable or right; markets are the most efficient information processing system; and atomised competition is the natural mode of human behaviour. Second, and slightly distinct in its historical salience, is that such mechanisms are uniquely placed to cope with those ‘fundamental problems of modernity’, central of these being value relativism. Identified by Durkheim but radicalised by the social movements of the 1960s, as the sterility of traditional authority was washed away in swell of tie dye and Timothy Leary, the impossible question of how to live could no longer be answered by your parent or priest. Neoliberalism offered individual market competition as the solution. In subsuming the currents of the counterculture into the panoply of choices present in consumer society, freedom to be became freedom to buy. In the words of Barbara Kruger, ‘I shop therefore i am’. Competition as an organising principle is thus not venerated by the neoliberals primarily for its capacity to ‘maximise [economic] welfare’, but because it is ‘agnostic about the right solution to institutional, cultural and political problems.’ Under neoliberalism, then, the thorny negotiation of social issues, and the democratic sublime that once accompanied it, is chipped away by the arbitrary certainty of cold quantification. In the place of the hallowed ideals of political liberalism — citizenship, rights, justice — stands ‘technocratic questions of productivity, incentives, risk, and return on investment.’ One Market under God, I suppose.
What we have with neoliberalism then is not the ambivalent laissez-faire of the liberal tradition (if such a thing ever existed anyway), but an ideology that has no qualms with the existence of an intrusive state, as long as that intrusive state is committed to prying open new areas for market domination, and contorting socio-politico life to conform to their pecuniary utopia of profit motives and pseudo-markets. But, as Eagleton attests, what makes ideology, well, ideology — and not merely a worldview or philosophy — is its role in the ‘promotion or legitimation of interests’ of a particular social group engaged in political conflict; colliding over the ‘reproduction of social power as a whole.’ That is, the symbolic and discursive elements of neoliberal thought are intimately bound to political regimes and aspirations. And it is in this interrelation of neoliberalisms ideological power with political and hegemonic ambitions that the scope of the project emerges.
As the ultimate lever of policy making, state power is fundamental to any project of social transformation. For the capitalist class, bruised and shaken by the instability of Keynesian breakdown, access to such levers were necessary to their restoration to dominance. It is in this immediate sense that what Harvey calls the ‘utopian project’ of neoliberalism enabled the advancement of ruling class interests, shrouding what was an elite political project in the garb of a populist defense of liberty.
In Britain, Hayek’s confabulation of the invariably tyrannical collective was refracted through Thatcher’s rhetoric into the declaration of ‘no such thing as society’. Such civic nihilism constructed its own heroes and villains, counterposing the nimble entrepreneurial self against the ‘creeping collectivism’ embodied by the ossified institutions of labourism, and the pathetic ‘scroungers’ and obstinate unions that they protected. As Hall writes in The Great Moving Right Show, ‘the essence of the British people was identified with self-reliance and personal responsibility, as against the image of the overtaxed individual, enervated by welfare-state ‘coddling’, his or her moral fibre irrevocably sapped by ‘state handouts’.’ By condensing a ‘theoretical ideology into a populist idiom’, Thatcher was able to marshall broad support around a normative vision of a society liberated from the strictures of Keynesianism. ‘Freedom of the people’ came to be rigidly identified with ‘freedom of the market’, as the pillars of the postwar settlement were hacked to pieces.
Following the ideological thematics of market supremacy as enabled by state power, Thatcher embarked upon the widespread deregulation of the British economy (most notably in the banking sector with Lawson’s Big Bang); the privatisation of key industries, thereby flooding the newly liberated capital markets; the dissolution of social housing stock, and the shift from a cradle-to-grave welfare system to one of ‘workfare.’ Not to dwell on the specifics of her policy agenda, neoliberalism, wherever established, broadly sought to construct an ‘institutional framework characterized by strong, private property rights, free markets, and free trade.’ In keeping with Davies analysis, where ‘markets do not exist, then they must be created’, willed into reality by the transformative hand of the state. As Harvey notes, citing Dumenil and Levy, these policies were primarily a project for the restoration of class power. Upward redistribution and the catalyzation of increasingly absurd inequalities were not mere accidents of this policy package, but ‘structural to the whole’ of neoliberalisms political form. The share of income captured by the top 1% has increased markedly, as the holy liberty of markets has plunged the rest of us into stifling precarity. And all the while, the ‘political idiom’ of market populism; of inherent efficiency and delicate freedom; of strivers, skivers, and the dead hand of the state, served to legitimate and obscure its elitist essence.
But there is a question that hangs over neoliberalism in its narrowly — that is, electorally and governmentally — political sense. How is it that, after all these years, it remains paradigmatic? Despite the fact that its central processes (privatisation, marketisation) never had broad popular legitimacy in the first place, it has rooted itself not only into the core political economy of various nations, but too infected our very conceptions of human behaviour. The neoliberalism of the eighties, unlike perms and spandex, did not drift out of fashion. Rather, it naturalised itself, gripping nations so tight that it was incidental which party was nominally in charge. Whether one voted Democrat or Republican, Conservative or Labour, neoliberalism was what you received. It is to this predominance — wherein neoliberal policy, propelled by and concealed within an ideological discourse, has resolutely attached itself to the horizons of social life — that we now turn.
“Economics is the method,” Thatcher once declared, “the object is to change the soul.” On this, she was partially correct. She unwittingly betrayed her hegemonic ambitions, borrowing implicitly the strategic impetus from Italian Marxist Antonio Gramsci. But where her aphorism is inaccurate is in its ignorance of the ‘long march through the institutions’ that enabled her economic remodelling; the wider role of civil society in shaping and sustaining the ideology embodied in her policy platform. Hegemony, briefly defined, is the ‘engineering of consent according to the dictates of one particular group.’ Such a process is dependent upon civil institutions — media, culture, education, religion, etc — as ‘hegemonic apparatuses’; levers wielded to manufacture consent, gradually but decisively elevating the bloc in question into a position of social leadership. Hegemony can be conceptualised as encompassing both ideological discourse and state power, as acting on and diffused through cultural and economic spheres. It depriveleges the role of the state in determining the direction of society, opening up strategic cracks in the facade of power through which resistance movements and counter-hegemonic projects can operate. But central is the notion of ‘common sense’, whereby the contingent and particular ideology of the hegemonic bloc becomes coextensive with social reality itself, ‘as indossicable as a sleeve and its lining.’ This reification, as Marx would put it, precludes the possibility of possibilities themselves, foreclosing alternative arrangements behind the dismal fence of reality. It would be great if people were cooperative, one might admit, but alas, that’s just not the way things are. Better to accept our innate greed, we are told, then to fight against what cannot be changed.
The power of this naturalisation is pertinent in the way it reveals the irrelevance of total ideological loyalty. A hegemonic bloc need not convince everyone of the normative truth of their ideology, in the sense of active consent, but rather convince people that ‘there is no alternative.’ In other words, neoliberalism need not convince you that the avariciousness of bankers is morally justified, so much as getting you to think it is impossible to do away with nonetheless. The principles of neoliberalism, then, far from being ahistorical axioms, have only recently been injected into our ‘common sense’. To construct such a realism, though, is not something that occurs overnight.
In recalling the Neoliberal Thought Collective that Mirowski Identifies, we should note the ‘organisational ecology’ through which their ideology was disseminated. Initiated with the renowned Mont Pelerin Society (MPS), the loose vision of the neoliberals was propagated through a network of think-tanks, coordinated through an ‘informal division of labour’. Some produced more theoretical tracts, whilst others were concerned with immediate policy proposals. Funded by wealthy backers, the “mother of all think tanks” — the Atlas Economic Research Institute — was employed ‘to seed their spawn across the globe.’ Linked to sympathetic media apparatchiks and boardroom evangelists, a narrative was spun that diagnosed Keynesianism’s pathologies, and pointed to the way out; glinting off the facades of corporate towers. These persuasive strategies amounted to a ‘long run war of position in the “battle of ideas”’, with transnational think-tanks, media and academia comprising nodes in a counter-hegemonic network. Cognisant of the dispersed character of power in contemporary society, the neoliberals were aware that it was only through beginning to reformulate civil societies ‘common sense’ that their market utopia could be realised. Universities thus became front-lines in the conflict for ideological leadership, as ‘business schools and management consultancies’ were recruited into the fight. Even Friedman himself, in his PBS documentary series Free To Choose, stepped out onto the battlefield to capture the popular imaginary. Ambitious and organizationally adept, it was only a matter of time before the neoliberals emerged from their fringe position, once drowned amidst a cacophony of Keynesian complacency, and became the only game in town. In a few decades, their hegemonic strategy transformed the ‘politically impossible’ — to quote again from Friedman — into the ‘politically inevitable.’
What this trajectory underlines, then, is that before ‘grasping the wheel’ of state power in pursuit of transformative objectives, politics must first be conducted in the arena of civil society. For the electorate to see you as legitimate, your ideology must both be comprehensible and axiomatic enough to overcome scepticism. Without such a hegemonic strategy, you will forever dwindle at the far edges of the Overton Window, ridiculed and excluded. But this is merely one part of the building of hegemony. In order to more fully legitimise and naturalise the ideology, and so perpetuate the dominance of the social bloc, a process of ‘embedding’ must take place. In conjunction with a discursive monopolisation through civil society, hegemony can be entrenched through the utilisation of ‘material concessions’ to attract adjacent social groups (through say, lower taxation or asset price inflation), and social technologies to craft an ideal social subject (that is, changing the ‘soul’).
On the first, we can see how the crafting of political alliances in the case of Thatcherism was largely driven by her Right to Buy policy, making many petty bourgeoisie out of what was the working-class. This ‘alignment of interests between classes’ is an important factor in securing consent, negating antipathies by recruiting groups into the structural nexus. Asset price inflation and mass consumption fuelled by cheap credit too drove many into the neoliberal orbit, drunk on vacuous consumerism. Challenges to this arrangement are thus pragmatically dismissed, not wishing to endanger the continuity of their material stability, however ephemeral or simulated. But in the aftermath of 2008, this tool for pacification seems no longer sustainable. Hence the central importance of social technologies in creating a ‘path dependency.’
As Eagleton writes, ‘it is with Gramsci that the crucial transition is effected from ideology as “systems of ideas” to ideology as lived, habitual social practice.’ And it is through the construction of institutional forms, organised around the ‘norms and values of the hegemonic’ bloc, that that system of ideas becomes ‘diffused … throughout the’ very ‘fabric of society.’ And thus, internalised by its inhabitants. Neoliberalism, exemplified by Thatchers atomism and the rapacious competitive addiction that Davies analysed, seeks to remake us according to a particular individualist form. Its rationalising tendencies raises homo economicus above our own foolish normality, the model to breathlessly emulate. And whether we like it or not, emulate it is what we do. Take the imposition of marketisation on the education system. A collaborative, pluralist and experimental pedagogy has been shunted to the side, as ceaseless quantification in the form of ‘standardised testing, league tables’ and efficiency markers has infected classroom relations. Such forms of measurement become ends in themselves, as teachers scramble to tick boxes (literally and metaphorically) consumed by the overriding ‘commercial logic’ of pseudo-markets. For neoliberalism, though, the question of whether this produces better outcomes is incidental. The very act of marketisation has its own inherent power: the brutal emphasis on competition conceived as a sacred ‘discovery process’, cleaving the ‘leaders from the followers; the winners from the losers.’ As education is commodified, and its students internalise the principles tacitly inculcated in them, their very self-conception — of what intellectual path to follow; of how they interrelate with those around them — is morphed; subjugating their holistic development to the cold logic of economic instrumentality. A similar pattern emerges in regards to our physical environment, too, as the privatisation of public space subconsciously policies the sterile individualism so central to the neoliberal subject. Territories of collective joy, once potential crucibles of solidarity, are cut ever further; the ground beneath our feet shrinking for the plazas and gardens of the rich. Physical infrastructures are ‘projects concerning human possibilities’, as Harvey encapsulates, and from the isolating solemnity of the suburbs to the imposing verticality of inaccessible skyscrapers, they too have become mechanisms of neoliberal hegemony.
The potency of such habituated social practises lies in how they posses a magnetism independent of any normative capitulation to them. That is, they exemplify the naturalising tendency of ideology. As Zizek is prone to remind us, ideology works, whether or not you believe in it. You may not believe education should exist primarily as a commodity. But, nevertheless, competitive pressures and mountains of debt push you to act as if you do. ‘Ideology,’ writes Eagleton, ‘is not just a matter of what I think about a situation; it is somehow inscribed in that situation itself.’ The hegemonic manipulation of social structures, then, is an articulation ‘of the dehistoricizing thrust’ of ideology. By inculcating a human nature, they carve out a ‘path dependency’ that appears immutable and inevitable, rather than constructed and historically unique. Social existence becomes locked on the single track of the fantastically competitive, financially-minded, deferent and detached individual. Here is the pertinence of this type of structural embedding (rather than that of building social alliances): it moulds people’s behaviours, shifting the hand of on the dashboard of human nature further and further toward the ideal subject. Not only of your ownself, but also of one’s conception of what Others think. That is to say, even if you may not believe people are naturally competitive, or acquisitive, or self-interested, the structural imperatives that shape behaviour makes it look as if everyone else is. The cumulative effect of this, then, is that such hegemony becomes very difficult to overturn indeed.
Much to the dismay of the hopes of neoliberals, though, in this pecuniary hellscape, we have become our own bureaucrats; constantly self-promoting and reassessing. Teachers and nurses, caught in the Frankenstein’s monster of PFI and market reforms, are crushed under the weight of functionless forms. The complexities of social life are dissected into neat little quantifiable packages, endlessly contrasted against others. Ultimately, the result of all this rationalisation is irrationality. Psychopathologies proliferate, intellectual development slips, health is damaged, solidarities are broken. And everytime we proclaim, indignant and exhausted, that enough is enough, we are met, invariably, with the brick-wall of impossibility. The Sad Resignation is plucked out again, pushed to the front of the queue to promote its terrible message. However awful this is; this totalising regime of individualised neuroticism and perennial strife — there just is no alternative. Such is the nature of ideology.
But neoliberalism is not invulnerable. In understanding the contingency of ideology itself, and the mechanisms which cloak this, its mystification vanishes. Like pulling back the curtain on the grand wizard of Oz, to deconstruct the hegemonic ascent of an ideology like neoliberalism is to deny it its power. The social bloc it defends — finance capital and its adjacent managers, the corporate giants of Silicon Valley — can not sustain its leverage once the same hegemonic techniques are used back against them. Capturing the deep push for freedom that neoliberalism co-opted and neutered, a resurgent Left can claim autonomy for itself, piercing through the stifling bureaucracy of neoliberal modernity. By reaching out from these protracted horizons and building its own organisational ecology, the Left may liberate itself from the rut it has been stuck in. To avoid the old ‘occupational hazard’ of ‘whistling in the dark’, as Hall once wrote, radicals only option is to follow the strategic formula of their adversaries. Against neoliberalisms last lights of consent, a coherent alternative can be built. It is up to us — through the realm of contestation that is civil society — to convey it, institutionalise it, and embed it. Only then can its spell of disenchantment finally be broken.