Sunday, 28 June 2015

Ten Neoliberal Lies And How To Counter Them

Neoliberalism is a poisonous political religion that threatens our personal freedom, our health, our jobs, and our lives by degrading the democratic process and handing over control to multinational corporations. It is behind the dangerous FTAs (free trade agreements) like CETA and TTIP that I'm helping to fight at the moment. Let's take a closer look at it.

The lies

Since the 1980s, the term has been used primarily by scholars and critics in reference to the resurgence of 19th century ideas associated with laissez-faire economic liberalism beginning in the 1970s and 1980s, whose advocates support extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy. - Wikipedia, Neoliberalism

It began as an attempt to reconcile the differences between laissez-faire economics and the emergent socialist/collectivist ideas that were gaining ground in the early 20th century. However, the term was co-opted by the Latin American scholars with regard to the Pinochet regime's economic reforms in the 1980s.

Now it's all about corporate profits trumping democracy and human rights, and I'm having none of it. These are the lies they tell to get us on side:

1. The free market

There is no such thing as the free market, but market forces exist and ought to be respected. The reason is, the push and pull of supply and demand exist whether we are paying with money for things or not. The market is not free because of distortions created by people on the supply side who hoard items to force the price up by creating an artificial scarcity. They also engage in anti-competitive practices to create monopolies, oligopolies, and cartels, which keep new entrants out and lock down innovation by claiming property rights on copyright and trademarks, etc.

The myth of the free market is so pervasive that even though people know the market is not free, they keep talking about it and pretending that it is. All neoliberal policies are predicated on the idea that the push and pull of supply and demand will solve all our problems because when there's a demand, someone will supply it. In theory, this is true, in practice, a myriad of disruptions interferes with this, affecting availability and price.

Belief in the free market is predicated on an unspoken assumption that each person taking part in it has equal access and equal opportunity to engage in it. In practice, the rich have the advantage and have rigged the market to work in their favour. They're just in denial about it. One of the reasons George "Dubya" Bush was so slow to respond to Hurricane Katrina is because he believed that the market would provide for the people left behind. He appears to have forgotten that markets require money, not chickens, to pay for things. Free market enthusiasts keep forgetting that the market is not free no matter how many times we remind them of this, it's called "cognitive dissonance." Therefore, when the supply-side has the advantage, they're not going to accept your handicrafts, etc. People resort to barter when they don't have money. We use money because it's more portable than products.

The forces of supply and demand can and do respond to demands and needs but they are subject to the availability of payment; wanting something doesn't mean you're going to get it. That the market is able to provide is one thing but whether it's willing to is another matter altogether. Markets are volatile and therefore unpredictable. It's foolish to rely on them to meet essential needs.

2. Reducing or eliminating taxes on the rich will create jobs, then wealth will trickle down to the rest of us

Trickle-down theory appeals to people who believe that rich people create jobs because they have money, and that they do so as an investment to make more money. In practice, the rich tend to invest in the stock market or stash their money away in offshore accounts. This doesn't result in jobs being created because the price of stock is artificially inflated via stock buy-backs. This money isn't being used to provide finance to businesses to expand, it's used to pay dividends to shareholders to convince them to invest more money in the company. Needless to say, top company officers tend to have the lion's share of the company stock, so make the most money from this legal practice.

3. We don't need social services, philanthropists and private initiatives can provide for the needs of the poor

The Welfare State was created by the Labour government in 1945 to counter the social problems caused by endemic poverty in the aftermath of the Second World War. Had private initiatives and philanthropists been sufficient to meet people's needs, it wouldn't have been implemented. As it is, we've always had to have some form of government intervention to aid the poor, etc., because charities, etc., tend to discriminate in favour of certain individuals and groups, leaving everyone else out in the cold. Neoliberalism denies this, saying that public services are an unnecessary intrusion of the state into communities and civic organisations.

Opposition to the welfare state hinges on framing the argument as state interference in individual liberties, but that's a violation of the Twofold Principle,

The individual must be free to act and the will of the people must be respected.

So... which individual's liberties are being infringed? It seems ridiculous to me to equate the existence of the NHS with dragging a blogger off to prison for saying David Cameron is a prat. In any case, that's not the issue. Neoliberals believe that public services usurp the position and role of charities, etc., in our society. See Item 27, Social Action, in this Coalition-era document for details. Actually, charities and civic groups are under a great deal of strain trying to bear the load of dealing with the mess caused by austerity measures; they're struggling to cope.

4. Welfare makes you dependent on the state and robs you of personal agency, etc.

This is the central plank of neoliberal theory of The State. The argument goes thus: Tim loses his job in the factory, so goes on the dole. Other jobs exist but don't pay as well as his former factory job so he refuses to take them because he wants more money, the swine. After a while, Tim becomes accustomed to not having a job and settles down to a life of lying on the couch watching Jeremy Kyle of an afternoon between bouts of swigging rotgut and smoking several packs of cigarettes a day, while his kids run riot in the street.

The truth: working gives you dignity and purpose but it needs to pay enough to cover your expenses. When it doesn't you risk ending up homeless because you can't afford your rent. Bills for other things start piling up and you risk having your utilities cut off if you don't keep up to date with payments. Don't fall sick, whatever you do; working people have to pay prescription charges. You can get a pre-payment certificate for £100 but you've got to be able to afford it, even if you're paying it piecemeal via direct debit. One unexpected deduction can send you into overdraft and if that ain't been arranged in advance, you get dinged for £30 or more depending on which bank you're with.

So basically, when you've got a choice between being able to afford to live in your home and keep the lights on, etc., and living hand to mouth in fear of going overdrawn, you'll take the one that hurts less. Paying workers at the living wage rate would solve the problem because it would pay to work but lie #5 is keeping that off the table for now.

5. Eliminating the minimum wage will increase the number of jobs

Libertarians believe this with all their heart, all their soul, all their mind, and all their strength. The argument goes that paying wages is prohibitively expensive, a great burden on companies, so if labour was cheaper they would hire more workers, so fewer people would be on the dole, which would mean more people paying taxes. Everybody wins!

The truth: say what now? Erm, no. The minimum wage sets a floor, not a ceiling, for our remuneration. This is because people who don't earn enough to live on become a burden on the state because they need help with rent, etc. So if the minimum wage, as pitiful as it is, was eliminated, more people would be claiming benefits because employers would be permitted to pay as little as they could get away with, and believe me they would. We are subsidising these parasites as it is via workfare schemes that provide them with free labour. Result: few if any people actually benefiting.

6. Take a job, any job, and you'll get there in the end

I remember back in the day being angry with a young man who had a degree but was not working, and I chided him with those exact words. He replied that he was afraid that if he did in fact take any old job he would be pigeonholed and end up locked out of his chosen profession. I laughed it off as a scrounger's excuse.

Fast forward twenty years and I owe him an apology. He was right. Employers are prone to discriminating. They want skilled, trained, experienced staff ready to hit the ground running, as my friend Dorothy is discovering. A former lab assistant with a background in medical science, she's looking for shop work because it's all she can get. However, she's so massively overqualified, even after years out of the job market rearing her son, she's finding it hard to get anything at all. She's a lovely woman and I hope she gets something soon, but this is the reality. I personally found it hard to get into office work after years of working as a waitress even with an RSA 1 and a City & Guilds in office IT. "The end" took a long time to come and only came about because a friend put in a good word for me with an agency. I should point out that temping is precarious at the best of times and employers tend to discriminate against them. However, I got a decent temp-to-perm gig, which is how I ended up in my current fortunate position.

7. Government must be downsized

Ronald Reagan famously said,

"The most terrifying words in the English language are: I'm from the government and I'm here to help." 

Neoliberals promise to "reduce the size of government" to reduce the impact of the state on the lives of individuals and groups, claiming that government is inefficient and exists but to perpetuate itself. However, just a cursory glance at the facts will quickly demonstrate that the opposite is true. What they actually do is shut down public services but increase surveillance; reduce taxes on the rich but increase them on the poor, and shift spending from infrastructure to the military-industrial complex and special interest groups. So when they talk about reducing the size of government, they mean they're reducing those government agencies that benefit us and transferring the funding to those government agencies that benefit their friends in the corporate sector.

8. Private enterprise is better at delivering services than the government

One of the justifications for privatisation is that the government is useless at getting things done. Private enterprise, they claim, is more efficient because it's not part of a system intended to perpetuate itself, it runs on a "work properly or get fired" basis.

Yeaaaah... you do NOT want private enterprise running the fire service or your healthcare. Private firefighting services require insurance to be paid OR you can pay by the hour for them to save your home, otherwise they'll watch it burn to make an example of you. Private healthcare requires you to be sick so they can make a profit from treating you. Not sick? That's okay, they'll make you feel insecure about your body and take advantage of that by offering you surgery you don't need. By contrast, tax-funded essential services deliver the care, etc. on the basis of need because they're not obliged to make a profit, which is why they tend to do better than the private sector: they don't generally cut corners to save money. That this is happening now is an indictment of neoliberal policy; they're deliberately withholding the funds required to run our services properly to convince people that privatising them would improve them.

9. Regulations are strangling enterprise

This is a favourite old chestnut. Deregulation is something of an obsession with them. The most rabid neoliberals and their libertarian allies insist that any and all regulation of business is bad, as if capitalism, in and of itself, is a utilitarian construct at heart and that its purpose is to benefit society. It therefore follows that any attempt to restrict what a company can or cannot do interferes with its ability to provide those benefits. The really crazy ones appear to believe that the act of making money somehow purifies people and absolves them of all sin, which explains the bashing Pope Francis is getting from American conservatives at the moment for daring to question capitalism.

The government’s only role in capitalism is to protect the individual rights of its citizens by barring initiation of physical force. - Jaana Woiceshyn, Capitalism magazine, Capitalism: The Solution to Mass Poverty

The market, they argue, can regulate itself, thank you very much. Competition and the threat of lawsuits for making people sick, etc., will keep companies honest in their dealings. This assumes that there is competition, that consumers are informed about what is making them sick, etc., and that it's easy to take the offender to court. In practice, this turns out to not be the case. As soon as you mention this they'll say, "Ah, but that's crony capitalism, not pure capitalism." Whatever. The purpose of capitalism is to make money. Anyone who believes differently is deluded, as a cursory glance at the facts will soon reveal.

10. Tax is theft by force

This is the silliest lie so I've left it till last. The idea runs thus: the government takes your money that you worked hard to earn under threat of imprisoning you if you don't cough up. This is force; effectively you're the subject of a holdup weekly or monthly — as often as you're paid and the tax is deducted. Yes indeed, Dick Turpin works in your payroll department, mate, on behalf of HMRC. Whoa, Nellie, let's sit down and talk about this, shall we?

Assume it's true. Okay, how do we pay a government whose job it is to protect the country from invaders and enforce the law to prevent people from being robbed at gunpoint or whatever? Since we also need prisons to lock up the people who break the one and only law (no force please, we're neoliberals!), who is going to build and staff them? What are they going to do, hold cake sales? Crowdfund it?

Unless you're planning to live in an anarchist settlement, Mad Max-style, you're going to have to pay something towards the upkeep of your skeleton government, aren't you? So how are you going to fund it?

Tax is the price you pay for living in a civilised society. The alternative is a system of gated communities linked by toll roads patrolled by security contractors who enforce the tolls and keep the rabble outside, employing some of the lucky few as and when they're required. We're heading in that direction now, is that the world you want us to live in?


Neoliberalism is a pack of lies from top to bottom and it has no discernible benefits to the people as a rule. Since it tends towards crony capitalism and authoritarianism, it's anti-democratic at heart and therefore a threat to the middle-income earners it relies on to pay tax for the upkeep of the ever-expanding system. These are but ten of the lies neoliberals tell, there are many, many more. Feel free to hop into the comments section to discuss them, I'd love to hear from you.

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