What is neoliberalism and how does it work?

by Dr Robert Muller, Medium: https://medium.com/@DrRobertMuller/what-is-neoliberalism-and-how-does-it-work-34c6e6e96030

(Image: uncomputing.org)

We are currently living in a neoliberal era, but what does this actually mean? We need to differentiate neoliberalism from what came before; so this paper is an attempt to clarify this issue.

Firstly, let us say for the sake of the argument that the neoliberal ascendancy started in around 1974, just after the oil shock. This date gives us the generation of approximately 30 years of development of the ideas of Hayek and the Austrian School of Economics before the ideas started to gel into a dominant discourse in the mid-1970s.

In terms of neoliberal political figures, we can say that Margaret Thatcher was the first of the significant neoliberals; however, there were still significant opposing currents of thought. Today, we have what I would characterise as a neoliberal western world which has the ideological power to have an enormous imperialist influence over much of the global south (or the developing world). This can be seen in the push for the developing nations to take on board policies to ‘reform’ their public services through outsourcing, privatisation, the expensive application of outside consultancies, and so on, all to gain access to loans by global neoliberal agencies such as the World Bank, the IMF, and the European Central Bank, in the case of the ‘European south’.

Secondly, one can say that neoliberalism is an ideology that combines personal technologies with governmental technologies. These personal technologies are concerned with regulating the self, while the governmental technologies are concerned with regulating the state.

It is the intersection of these two sets of technologies that characterises neoliberal capitalism and that I will explain in some detail below.

Personal technologies

The particular personal technologies of the neoliberal era have deep roots in history, stemming from what Max Weber called the Protestant Ethic. According to Weber, in the early stages of capitalism, Protestants worked hard (hence the Protestant work ethic) and lived frugally, seeing this as a sign that they were good and righteous, and therefore, that this MIGHT be a further sign of being one of the chosen few to be taken up to heaven after they die. Of course, there was no guarantee of this, but Weber says that they constantly worked hard and looked for these signs. This was what set Protestantism apart from Catholicism and, according to Weber, led to the development of Capitalism. This was also a very strong manifestation of self-regulation. They curbed their desires and appetites and lived very sober, frugal, hard-working lives.

It is these attempts at self-regulation that we call ‘personal technologies’. They are techniques employed to ‘work on the self’ and to continuously improve oneself.

Governmental technologies

If we take the state in its widest possible sense, then we can talk about, not only the government as part of the state, but also many other institutions of society, such as corporations, trade unions, banks, the parliament, and so on. In fact, any institution that is in negotiation with others to ‘govern’ or ‘manage’ the population can be considered to be part of the modern western state.

This was not necessarily as apparent prior to the neoliberal era, as previously, it appeared that the state was ‘the government’, whatever that actually means. In the neoliberal era, after the mass privatizations, the public-private partnerships, and the outsourcing of public services, there has been a blurring of the notion of what constitutes ‘the state’.

The neoliberal era

What sets the neoliberal era apart from previous political and social configurations is the combining of personal and governmental technologies. Some examples here will be instructive:

1. There is a constant discourse emanating from ‘the state’ that individuals (the building block of a society) should (which is a moral term) improve themselves and that those who don’t are users, bludgers, or even worse, criminals. We can see this in the language used in the 2014 Australian federal budget in which the Treasurer used the terms “lifters” and “leaners” and “the deserving” and “the undeserving” when referring to basically the middle-classes and the working classes (of course, there was no word for the rich because they, apparently do not require one, because who they are, is apparently, obvious). This is an example of the state stepping in to label various sectors of the population, ‘assisting’ them to regulate their own behaviours. This, of course, is not a conscious thought process, but is more of a manifestation of the ‘conscience collective’, as Emile Durkheim would have put it.
2. There has also been a ‘psychologisation’ of society in the neoliberal era which has facilitated the process of self-regulation. We see the explosion of self-help books and resources, and the proliferation of coaches, with so much of the population wanting to coach the rest of the population who have little desire to be coached. We see a huge proliferation of psychologists in all companies and organisations, and we see thriving schools of psychology propping up entire collapsing faculties of social sciences in our universities. And we see the state using this psychologisation as a convenient way to label people as failures or winners. Those who can regulate themselves and compete as time-crazed producers and consumers are the apparent winners, while those who can’t are the losers. This labelling results in our elected representatives justifying the cutting of services that affect those labelled as ‘losers’ the most.
3. Finally, neoliberalism is also perversely associated with neoclassical economics, even though this link is contingent on a number of factors rather than a link made of necessity. Again, the sense of self-regulation moves across to the realm of economics in which people, as individuals, are expected to operate their lives as if they were running a business. This, of course, is also linked to the notion of avoiding any sense of subsidisation. Thus, in the economy, every service or good must “stand alone” and not be subsidised by any other part of the organisation or of the economy. If IT does not make a profit, then IT must be left to fall over at the whim of the market. In the personal economy of the neoliberal world (that is, in the life of the individual), one must not be subsidised (or propped up or helped) by the collective (by public services for example) — if one succeeds, then one is contributing; if one fails, then they must be left to fall through the cracks.