Well, the shouting is over for a while — haha I’m joking, politics will be big shouting FOR THE REST OF YOUR LIFE! — but it’s died down a bit, to deal with the backlog. Chief among the things that need dealing with is “neoliberalism”, the question thereof. The term is everywhere; so, too, is the accusation, by liberals chiefly, that it has either no meaning, or means whatever you want it to. What’s the truth? Well, I would suggest that the term “neoliberalism” is 1) hideously overused, but when correctly used, 2) indispensable to understanding the current situation (and with the proviso that what follows is only one of several ways into it).

What do we talk about when we talk about neoliberalism? Many of those who object to it do so the assumption that it is being used to describe a mere idea or body of arguments — they wonder why “liberalism” will not serve equally as well. But neoliberalism doesn’t primarily describe a set of ideas, but a historical period — a set of interlocking events, institutions and conditions. Some of it has been driven by people with “classical” liberal beliefs, but it is far more than that.

By “neoliberalism” we mean the specific situation that emerged in the West, and then the wider world, in the period after the reign of post-war social democracy, from the 1940s to the 1970s. This period was characterised by the dominance of the “proprietary” state — i.e. a state that directly controlled significant sections of the economy and, in turn, shaped the character of social life. Education, apprenticeships, housing, public utilities, infrastructure, media — many people lived lives bound by non-market relations. This was paralleled by the persisting power of traditional institutions, such as churches, trade unions, voluntary associations, which resisted the market by their residual social power (the persistence of a ban on Sunday trading into the 1980s and 1990s is one small but telling example of this). How did this ban, inexplicable now, seem so obvious then? Because society embodied real limits to market relations, and that value was sufficiently established for such a ban to persist.

Invest in the journalism that makes a difference.

EOFY Sale. A year for just $99.

SAVE 50%

But that post-war ensemble disguised a dynamic process. Traditional authority was being worn away by modernity, and the desire for a wider personal freedom. By the 1970s, it was almost gone. Then social democracy started to fail too. Unable to move forward, to a socialist democracy, beset by the stagnation of the ’70s, its worst features — bureaucracy, inefficiency — came to the fore. Nationally bound capitalism was suffering from a profits crisis and sought both a lessening of boundaries (on the movement of capital) and access to socially owned institutions as a source of new markets and cut-price plant. The UK and the US, by the end of the 1970s, were in a position to convince a majority of voters that an extension of the market was the route to freedom.

This, then, was the (modest) beginning of the neoliberal era — one in which a decades-long suspicion of the extended market, born in depression and war — had been superseded by a tentative belief that it might offer a road to greater personal freedom and prosperity. Classical liberals presented this as “deregulation”, but it wasn’t; it was simply changed regulation, with the state benefiting capital rather than the general public. Thus, from the 1930s to the 1980s certain forms of union activity had been protected by law, while foreign transfer of capital had been heavily restricted. In the 1980s that was reversed; the closed shop and the secondary boycott were banned, global capital movements facilitated. A strong ideological push was then made to make such a re-regulation look natural, like the achievement of “freedom”. That is the neoliberal process par excellence.

For much of the 1980s, this was a limited transformation. But as the decade wore on, market power expanded, not merely economically, but culturally. Whatever limits traditional authority was able to impose started to be worn away, by a combination of the appetite for “transgression” — transferred from avant-garde culture to mass culture — and the atomising logic of the market. When you look back at some of the cultural controversies of the ’80s — the aforementioned Sunday trading, Madonna’s Papa Don’t Preach video, the Scorsese film Last Temptation of Christ — you are amazed at how mild was the offending text, and how much residual power traditional religious culture possessed.

Whatever limits were still in place at the end of the 1980s were swept away when the Cold War ended, and a global free trade and free-capital-transfer regime could be put in place. National regimes of “re-regulation” followed; the “end of welfare as we know it” under Clinton, full privatisation under John Major in the UK. In Australia, a wave of privatisations occurred under Labor. Social institutions that had been non-fee goods — medical, educational, utilities — became fee-based. Provision of them, when not actually privatised, was contracted out to private providers.

[Keane: neoliberalism is fine, but what we have is crony capitalism]

The wider cultural and social effect was not apparent at first, save to those looking for it; by the 2000s, it was becoming obvious. For decades, the power of capitalism to transform social relations had been held in check, either by socialist-oriented working-class forces, or, on the right, genuine conservatives. On both sides, it was understood that market relations, if allowed to take over too much of social life, are annihilatory and nihilistic. From the rise of the “axial religions” (Judaism, Hinduism, Buddhism, Christianity) onwards, the need to limit market sway had been paramount. Secular socialism had taken over that task for a century. The 1990s represented the first time in history that market logic was allowed to reach into every corner of social, cultural and institutional life, facilitated both by the state and by the cultural value of individualism, and the idea that every individual makes the meaning of their own life, from a market of images and signs available to them. “Neoliberalism” is the term we use to describe that state-market-culture ensemble, at a particular point in history. Don’t get hung up on the word — it’s just one term that stuck. Indeed, in the ’60s, “neoliberal” was used to described German-style social market politics. Didn’t stick, and in the ’80s, the word was repurposed.

Were this state-market-culture ensemble without problems, the term “neoliberal” wouldn’t exist. We use it as a form of diagnosis for a system that became autonomous, works, in part, against the deepest settings of human existence, and thus generates contradictions. Humans, as situated, encultured, bounded beings, gaining pleasure and meaning from the presence of known and loved others, abiding socio-cultural values, images and meanings, and a degree of fixed and inviolable “ground” to social life, don’t do well under a neoliberal order. As such an order wears away all social “ground”, millions seek to limit such ungrounding with simpler and more concrete “instant” values. This was the formula of the new right from the ’80s onwards. Settled social life would be winnowed by the effects of the market; state-supplied “traditional values” would surround such a process, like concrete round a nuclear reactor, and thus leave social meaning and meaningful life in place. Classical liberal theorists such as Hayek said this could be maintained if certain elements of social mystery — religion and the family chief among them — were maintained using state power.

[Rundle: Trump is the end of the left as we know it]

That isn’t what happened. Marx turned out to be a better guide to capitalism’s transformative power than Hayek. Everything people thought might be solid — their cities, their jobs, the boundaries of their culture, the social framework under which their children grow up — have been melted into air. Choice and dynamism have been amped, but even those who have benefited from that find their lives uncertain, dominated by debt, capable of catastrophic revision at a single moment. Much of the “growth” attributed to the era is erroneous. Essential costs such as housing have risen remorselessly, the expanded consumer economy has been fueled by open-ended private debt. The social revolution that took women out of the home and into the workforce has been co-opted, so it now takes two wages to gain the same life-security as could be achieved by one. And so on.

The neoliberal revolution left such social devastation, particularly in the US, that within a decade, millions were seeking out any simple formula of abiding meaning they could find. The rise of literalist religion was one example. Literalist religious-nationalism, such as the Tea Party, was another. The willingness of “centre”-right governments to use state power to extend the market in certain areas and restrict civic life in others — to give the appearance of social order — is neoliberal in the manner I’ve described. It will always default to regulate people as citizens first and capital last, if at all. In that respect, Mike Baird’s NSW government fits the bill exactly. Its lock-out laws — exempting a monolithic mega-casino, while penalising a mixed and complex social milieu like Kings Cross — use the state to reshape and repress social existence, in the interests of the smooth extension of capital’s reign. What would be anti-neoliberal — social liberal — would be to control and reshape the licensing within an area like Kings Cross and inner-Sydney to recognise the virtue of small venues, mixed neighbourhoods and multi-use streets as part of a living city.

[Rundle: the liberal centre that destroyed the world]

This is a global phenomenon. The transformation of the European Community into the open-borders, free-capital flow EU prompted the rise of nationalist movements in place of liberal social democratic dominance. Brexit and the rejection of Blairism was another. The rise of Trump and his nationalist message is another step along the way. Whether Marine Le Pen triumphs next year in France or not, the very possibility of such will indicate how egregiously the neoliberal era prompted the collapse of the liberal politics that were set within it.

Liberals confronted with this historical ensemble face a choice. They can either admit that their theory of human meaning and social existence is hopelessly one-dimensional, has predicted nothing, allows them to analyse nothing, and start to admit that the “neoliberal” sketch of existence describes a social reality that has to be addressed. Or they can become increasingly elitist, disdainful of the public, bleat on about the “nanny state” — i.e. the state controls, often demanded by the public, in the face of a culture reshaped by the market — and confine themselves to historical irrelevance. In this they will be following in the footsteps of their left complement, the Marxists (for Marxism is, in the last analysis, a form of radical social liberalism, sometimes supercharged with a bit of eschatological heft) who spent most of the ’70s trying to calculate the falling rate of profit to five decimal places, so they could keep the morning free on the day capitalism was going to collapse.

The Marxist collapse took 70 years. Liberals have had global control for less than 20, and they have been so rebelled against that little of their project remains. If they want a pluralist public sphere and a society where a robust notion of individual freedom survives, they will have to acknowledge that their politics left no place for desires and demands that people in their hundreds of millions are now making. If they’re not willing to do that, well, I hear the Henry George League has some office space it’s willing to rent out.

We now return you to your usual programming.

Save this EOFY while you make a difference

Australia has spoken. We want more from the people in power and deserve a media that keeps them on their toes. And thank you, because it’s been made abundantly clear that at Crikey we’re on the right track.

We’ve pushed our journalism as far as we could go. And that’s only been possible with reader support. Thank you. And if you haven’t yet subscribed, this is your time to join tens of thousands of Crikey members to take the plunge.

Peter Fray
Peter Fray
SAVE 50%