The Neoliberal Revolution
by Stuart Hall
Lawrence & Wishart Books
The neoliberal model
What, then, are the leading ideas of the neoliberal model? We can only pull at one thread here. However anachronistic it may seem, neoliberalism is grounded in the ‘free, possessive individual’, with the state cast as tyrannical and oppressive. The welfare state, in particular, is the arch enemy of freedom. The state must never govern society, dictate to free individuals how to dispose of their private property, regulate a free-market economy or interfere with the God-given right to make profits and amass personal wealth. State-led ‘social engineering’ must never prevail over corporate and private interests. It must not intervene in the ‘natural’ mechanisms of the free market, or take as its objective the amelioration of freemarket capitalism’s propensity to create inequality. Harvey’s book offers a useful guide. Theodore, Peck and Brenner summarise it thus: ‘Open, competitive and unregulated markets, liberated from state intervention and the actions of social collectivities, represent the optimal mechanism to socio-economic development … This is the response of a revived capitalism to “the crisis of Keynesian welfarism” in the 70s’. (Capitalism’s other response, incidentally, was to evade state intervention by ‘going global’.)
According to the neoliberal narrative, the welfare state (propelled by workingclass reaction to the Depression of the 1930s and the popular mobilisation of World War Two) mistakenly saw its task as intervening in the economy, redistributing wealth, universalising life-chances, attacking unemployment, protecting the socially vulnerable, ameliorating the condition of oppressed or marginalised groups and addressing social injustice. It tried to break the ‘natural’(sic) link between social needs and the individual’s capacity to pay. But its dogooding, utopian sentimentality enervated the nation’s moral fibre, and eroded personal responsibility and the over-riding duty of the poor to work. It imposed
social purposes on an economy rooted in individual greed and self interest.
State intervention must never compromise the right of private capital to ‘grow the business’, improve share value, pay dividends and reward its agents with enormous salaries, benefits and bonuses. The function of the liberal state should be limited to safeguarding the conditions in which profitable competition can be pursued without engendering Hobbes’s ‘war of all against all’.
Margaret Thatcher, well instructed by Keith Joseph, grasped intuitively Hayek’s argument that the ‘common good’ either did not exist or could not be calculated: ‘There is no such thing as society. There is only the individual and his (sic) family’. She also grasped Milton Friedman’s lesson that ‘only a crisis - actual or perceived - produces real change. When that crisis occurs the actions that are taken depend on the ideas that are around … our basic function [is] to develop alternatives to existing policies … until the politically impossible becomes politically inevitable’. As the free-market think-tank, the Institute of Economic Affairs, observed during the rise of Thatcherism, ‘the market is an idea whose time has come’. This could well be a Coalition vision-statement.
The welfare state had made deep inroads into private capital’s territory. To roll back that post-war ‘settlement’ and restore the prerogatives of capital had been the ambition of its opponents ever since Churchill dreamt in the 1950s of starting ‘a bonfire of controls’. The crisis of the late 1960s-1970s was neoliberalism’s opportunity, and the Thatcher and Reagan regimes grabbed it with both hands.
Neoliberalism is also critical to contemporary geopolitics. Structural
adjustment programmes have forced the ‘developing world’ to set market forces free, and open their economies to free trade and foreign investment, while promoting the ‘liberal’ virtues of elections, multi-party politics, the rule of law and ‘good governance’. This was the prescription to bring about the ‘liberal-democracy’ that Francis Fukayama saw as marking the end of ideology and the fulfilment of the struggle for the good life. Western super-powers have consistently intervened globally to defend this model in recent decades.
It should be noted, of course, that neoliberalism has many variants. There
are critical differences, for example, between American, British and European ‘social market’ versions; South East Asian state-supported growth and Chinese ‘state capitalism’; Russia’s oligarchic/kleptomanic state and the monetarist ‘experiments’ in Latin America. Neoliberalism is not one thing. It evolves and diversifies. Nevertheless, geopolitically, neoliberal ideas, policies and strategies are incrementally gaining ground, re-defining the political, social and economic model, governing the strategies and setting the pace.
To Read the Entire Essay