WHAT IS NEO-LIBERALISM?

By Judith Barben, Zurich

[This article published in: Zeit-Fragen Nr.18, 5/2/2005 is translated from the German on the World Wide Web, www.zeit-fragen.ch/.]


In her essay “What is Neo-Liberalism?” (1), the political scientist Gabriele Michalitsch analyzes the “great narratives” of neo-liberalism about he “free market, efficiency and competition” and unmasks them as myths. In reality, according to Michalitsch, neo-liberalism means the subordination of social realms under the dominance of the market. Since the seventies, an international network of foundations, institutes, research centers, publications, scholars, writers and public relations agents has been established to promote neo-liberal thinking.

August von Hayek and Milton Friedman even received the Nobel Prize for their neo-liberal theories. The “libertad economia” after Allende’s overthrow in Chile, the Thatcher policy in England and Reagan’s economic program in the US are regarded as “successful” neo=liberal experiments. The global hegemony of the neo-liberal economic model goes back to US theories.

MANUFACTURING CONSENT THROUGH “MENTAL POISONS”

The neo-liberal project ultimately owes its success to the “manufacturing of consent” (Chomsky), Michalitsch continues. This is a “consensus without consent.” Plans of the ruling class are enforced against the interests of the governed. The power of the media that belongs to economic empires plays an important role. “Mental poisons” (2) are produced like Thatcher’s Tina “There is no alternative.” That there is no other possibility than to swallow all the “bitter pills” demanded of them is instilled or drummed into people.

The grasp of the individual occurs on cognitive, emotional and social planes. This grasp aims at “voluntary submission under dominant conditions seen as without alternative.” This leads to uncertainty, fear of the future, retreat into the private, indifference and resignation. Other consequences are de-politization, de-historization (life without historical consciousness) and indifference toward democracy. Life projects are reduced to the private life.

THE MYTH OF THE FREE MARKET

In the reality marked by the rule of corporations, the “myth of the free market” and of “fair competition” is propagated without regard for the social consequences. The retreat of the state in favor of ever-greater entrepreneurial possibilities is proposed as a supposed solution to the economic problems. Taxes, above all for businesses, should be reduced along with social benefits. State spending except for the defense budget should be lowered, obstructions through employee representatives and state interventions minimized and all the obstacles for investors cleared away. These neo-liberal prescriptions are the “mental poisons” deluding people as solution. Neo-liberal thinking means the market economy has a quasi-natural capacity for automatic control. Therefore all state influence on the private sector is regarded as harmful.

PEOPLE DEGRADED TO “HUMAN CAPITAL”

In neo-liberal thinking, no area is excluded from economic analysis. Even marriage and family, the individual, are economized. The individual is degraded into “human capital.” The value of a person is measured by whether he “is profitable” or not. Educational training, further training and health care contribute to the formation of “human capital” and are paid when it is “worthwhile,” when profit arises out of labor power. The extent of investment always depends on the expected profitability (“return on investment”). They are not paid for without expected profit, for example with older people. Thus human capital-theory defines the person only with regard to his or her valorization on the market. Market logic is inscribed in the individual.

THE UNDERMINING OF THE NATION-STATE

The new global order under the hegemony of the neo-liberal paradigm means deregulation of national economies and undermining the nation state. The market assumes control more and more while social policy is driven down with the argument of “personal responsibility.” Growing impoverishment and social exclusion of ever-larger groups are the inexorable consequences.

In the course of the worldwide liberalization of markets since the seventies, tariffs and quotas to protect national economies were dismantled and borders were opened to grant boundless “freedom of control” to transnational corporations. An increasing power shift away from the nation state to “global players” (transnational corporations) is in full swing. Ever more often, authorities without responsibility for the population decide over existential questions for the whole society. Public responsibility is denied. Freedom is understood as freedom of economic concentration of power. The market itself is elevated to the organizing and regulating principle of the state.

THEORIES OF PHILOSOPHERS AND ECONOMISTS

Michalitsch’s excellent analysis of the anti-human neo-liberal paradigm helps us understand the contemporary world and deserves acknowledgment. My only criticism is that the authors judges neo-liberal ideology as “masculine” from a feminist perspective in referring to Eva Kreisky’s essay “The Masculine Ethic of Neo-Liberalism” (3). That neo-liberal policy is also advanced by women is ignored. In modern history, women can be found in many high positions of politics and the economy (for example Margaret Thatcher).

Michalitsch ends her important essay with a quotation whose truthfulness and significance cannot be overrated:

“The ideas of economists and philosophers, whether right or wrong, are more powerful than people generally think. In truth, there is nothing else that rules the world.” (Keynes)


1 Michalitsch, Gabriele, “What is Neo-Liberalism?”, www.attac.de
2 Gerlach, Thomas, Denkgifte, 2001
3 Kreisky, Eva, The Masculine Ethic of Neo-Liberalism, 2001