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Except in encouraging a sense of the need to compete internationally to provide the most business-friendly economic environment, neoliberalism in its pure form has little time for nationalism or racism. Nationalism, national identity, sentiment of any kind, is an incidental aspect of social relations that is meaningless in a market.
Under neoliberalism, each of us only has an economic identity. Our nationality — like our sexual orientation, or gender, or political views, or skin colour — is irrelevant to our value as a producer and consumer. An Australian worker has no more (or less) innate value than a South American or Southeast Asian or African worker by virtue of her Australianness; only the value she can bring to a business, only her skills, her talent, entrepreneurship and expertise, are relevant. Similarly, the “nationality” of an investment, the country of origin of capital, is irrelevant—whether an investor is Australian, American or Chinese doesn’t matter; what matters is the value they bring measured in dollars.
Accordingly, neoliberals favour open borders both for people and investment. When it comes to borders, neoliberals would find much in common with 19th and early 20th-century Marxists who decried nationalism as a capitalist distraction: they see borders as meaningless nationalist fictions that can only hamper the free flow of resources — financial, human, intellectual, material — to where the market will make most efficient use of them.
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But as economics scholar Mary Wrenn argued in a 2014 paper, by emphasising the economic value of individuals, above and beyond community or other values, neoliberalism spurs the shift to other forms of identity. If we understand identity as a combination of what we ascribe as our personal identities, the identities society assigns to us and what relationships we choose to form socially, neoliberalism establishes the individual and their economic achievement as both a determining factor in how individuals see themselves, and the determining factor of socially assigned identity.
As Wrenn argues, “If under neoliberalism the market mentality and economic sphere dominate all other spheres of living… that piece of an individual’s identity that is other-assigned should rightly be called neoliberal identity, instead of collective social identity since neoliberal, or more broadly, economic assessments of character will dominate that other-assigned identity of an individual.” This exposes individuals to a greater risk of alienation given the changing nature of modern economies. “As the division of labor intensifies and the individual becomes more removed from both process and product, the individual is less able to identify herself with any material contribution to society.”
But there’s a further problem beyond traditional economic alienation: under neoliberalism, even though “neoliberal identity is predicated on financial success,” as Wrenn explains, not everyone can be financially successful. That’s just maths — half the population will be below the average level of income, and even those on above-average incomes will feel as though they are not as economically successful as high-income earners.
Debt offers a mechanism to feel like an economic winner, even if you aren’t one, but that often ends up trapping households in poor decisions. And neoliberalism’s intrinsic tendency to inequality means that while even the poorest have become wealthier as a consequence of economic reforms, the wealthy have become a lot wealthier. The public benchmark for economic success has thus become harder to meet. As societies, we have told people their value relates only to their economic success, and that they are responsible as individuals for that success, but the rules of the game mean that half of them must be losers and most have to miss out on the ostentatious rewards of the winners.
Neoliberalism thus provides both an economic basis for a nationalist backlash against it due to its emphasis on open borders, and a motive to reject an imposed neoliberal economic identity. Wrenn argues: “As failure of the neoliberal identity intensifies, the individual — whether consciously or not — begins to seek a relational social identity that is non-economic in nature. The individual seeks empowerment via this extra-economic, social identity.” These other identities are more likely to be achievable for people than the status of economic winner — as members of a nationality, of a regional group, of a race, or other sexual, religious or political identities.
Sometimes the economic and identity-based drivers of nationalism can seamlessly fuse. The long-running issue of Catalan nationalism flared in Spain in 2017, all the way to a brief declaration of independence, prompting Madrid to reassert full sovereignty over the region. While Catalan nationalism is centuries old, what did Catalan nationalists shout so frequently that the slogan was claimed to be the motto of this renewed push for separatism? “Madrid nos roba” (“Madrid robs us”) — the cry of a wealthy province that believes it is paying too much to a central government and subsidising other, poorer regions. People in the economic powerhouses of Lombardy and Veneto in northern Italy also voted for greater autonomy in October 2017, a continuation of the broader Northern League nationalist movement of the 1990s, that aimed for greater economic control and capacity to halt flows of illegal immigrants from the poorly controlled borders in the south of the country.
In its dismissal of non-economic forms of identity (such as nationalism) as irrelevant, neoliberalism ends up fuelling them — especially once its primary benefit, that of increasing the wealth of citizens, vanishes.
This is an edited extract from The Mess We’re In by Bernard Keane, available now where all books are sold.