Neo-Liberalism

As adapted from Professor Christian Stark

Neoliberalism
the

term neoliberalism was coined by the economists Friedrich A. von Hayek, Wilhelm Rpke, Walter Eucken etc. at a conference in Paris 1938 economic policy concept counter-concept to Keynesianism a capitalism which is liberated from all democratic and social inhibitions and scruples

Formation of the neoliberal project

1947 Mont-Pelerin-Society. Establishment of an international network of:

foundations, institutes (Institute of Economic Affairs 1971, London), research centers, journals, public relations-agencies to support and spread neoliberal thinking. series of awards of the Nobel Prize for Economic Sciences (1st 1969) for neoliberal economists (e.g. Friedrich A. v. Hayek 1974 and M. Friedman 1976).

Scientific breakthrough:

Political implementation of NL
First

experimental field for neoliberal economic policy was Chile. Since 1975 the representatives of the Chicago School have subjected Chile to a neoliberal restructuring with the support of the military regime of Pinochet Also see Jacobo Arbenz (Guatemala)

From the Periphery to the Center

1979: Margret Thatcher: Prime Minister of the U.K. 1980: Ronald Reagan: President of the U.S.A. Reaganomics and Thatcherism implemented throughout the 1980s 1989: dismantling of the Iron Curtain, end of communism in the Soviet Union

Neoliberalism then became the predominant economic doctrine.

Thatcher: T.I.N.A.-Syndrome (there is no alternative)

Neoliberalism: viewed as a religious structure

One

God requirement: sacrifice

Profit save! tighten ones belt!

Primary

Who

Makes Sacrifices?

the majority of the poor (who provide an enriched lifestyle for the rich minority)

Divine Laws of Neoliberalism

the

invisible hand of the market of circumstance

A. Smith, J. Bentham
Similar to the circumstances people were born into in the middle ages of Europe

force

Invisible Hand, Hidden Fist

The

invisible hand of the market cannot work without the hidden fist. McDonalds cannot prosper without McDonnellDouglas (US-armaments group). The invisible fist, which creates security over the world for the prospering of the technology of Silicon Valley is called US Army, Air-Force and Marine-Corps. (T. Friedman; a journalist close to the USministry of Foreign Affairs)

Universal Statement

Who is not with me, is against me

alternative solutions to those who oppose neoliberalism:

"Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists." (George Bush, Address to a Joint Session of Congress and the American People, September 20, 2001) Relate to those who oppose neoliberal policies Denied Ridiculed Stigmatized finally criminalized

Neoliberalism as a religious structure (continued)

Saints

Adam Smith John Locke David Ricardo

Head

theologians

Friedrich von Hayek Milton Friedman

Bishops, High Priests of NL

Ben Bernanke (since 1.2.2006): chairman of the Federal Reserve Board Robert Zoellick1.7. 2007: president of the world bank group Dominique Strauss-Kahn: 04.2007: IMF managing director Pascal Lamy (1.9.2005): Director General WTO

Vatican and Holy War of NL

Neo-Liberalisms

Vatican

The World Bank WTO IMF

N-Ls

Holy War in the name of

democracy human rights prosperity for everybody

NL as a religion (continued)
Blasphemies:

property tax value added tax

Heretics:

Critics of globalization Trade unions NGOs

Myths of Neo-Liberalism
We

cannot afford the welfare state any longer the fat years are over! performance must be worthwhile! less state more private! If the economy is doing well, everybody is doing well

NL and distribution of wealth

NL: We cant afford the welfare state any longer

We dont want to afford the welfare state any longer! What we can afford depends on what politicians want to afford There is enough money but it is distributed unequally There is enough for everybody's needs but not enough for the greed of some people

Alternate experiences/explanations

NL: Performance must be worthwhile

Huge

wage gap between (normal) employees and managers

1:250 to 1:550

Can

a person really do 250 (550) times more than someone else?

Elements of Neo-Liberal Thought

economization

of all areas of life

privatization
economic

globalization deregulation

Economization of all areas of life

the

market as an universal model of organization all areas of life are subjected to the logic of the market, the logic of economic optimization. Individuals become human capital

Privatization: Less state, more private

privatization

of state owned enterprises and state monopolies

e.g. traffic, provision of energy and water.

The

state as an instrument of private economic interests

guarantees the necessary conditions for a free market.

As

an instrument of repression the state is rearmed instead of disarmed

Less state, more private

What

(or, what can be owned in the NL system)

belongs to everybody (public goods) suddenly becomes the property of a few
Traffic water health Social affairs Justice

NL and ownership: a quote

The

first human being who fenced in a piece of land and had the idea to say this is my property, and who found people naive enough to believe him, was the real founder of the civil society. How many crimes, wars and murders would have been prevented by the man who knocked down the fence posts and called to his fellow human beings: Dont listen to this swindler! You are lost if you forget that the fruit belongs to everybody and the earth belongs to nobody.Jean Jacques Rousseau

Economic Globalization
Opening

of borders for global transfer of goods, services, capital and investments Reduction of rules and laws which impede free trade Globalization is regarded as a natural process which forces the industrial states to reduce social and environmental standards in order to remain competitive on the world market

Deregulation

No renouncement of state interventions focus on the support of economic competitiveness and profitable capital utilization. Increase of the scope of enterprises to support investments

rules to protect the employee and the environment are regarded as:

reduction of taxes for enterprises

obstacles for investments restriction of freedom for entrepreneurs

The Liberty part of Neoliberal

Freedom

for entrepreneurs? How is freedom defined here????

Freedom to exploit workers? The freedom of wolves to poach in a free chicken coop among free chickens?

Neoliberalism and social policy

Every man is the architect of his own fortune! poverty as a crisis of ones own making

unemployment is reinterpreted as a problem of individuals and their weakness of character and lack of willingness to perform Worker is unable to sell himself or his work successfully on the market.

just penalty for non-performance

victims become offenders:

the pressure to work is intensified in a crisis situation where there are not enough jobs but enough people willing to work
The unemployed, the homeless and welfare recipients are responsible for empty public purses, not the tax-evading multinational concerns and multi-billionaires.

Social Responsibility

The state and enterprises have no social responsibility

Therefore, the welfare state is a bad idea Welfare leads to non-performance, which is intolerable in the scope of free market capitalism Welfare unnecessarily drains money away from the development of productive enterprises

mass-unemployment, starvation are accepted as acceptable side effects of free market capitalism Claims for social justice restrict the right to unlimited private property.

Social Responsibility (continued)

The

only social responsibility of entrepreneurs is the responsibility for the profit of the shareholders

There are few developments which can undermine the fundaments of our society as basically as the opinion that entrepreneurs have any other social responsibility than to gain as much profit for their share-holders as possible (Friedman 1976, S.176.)

Establishment of neoliberal thinking (ideology)

Fabrication

of Consent The ruling morals are the morals of the rulers

The ruling ideas are the ideas of the rulers

And

when all others believed the lies which were spread by the party when all records told the same tale then the lie went down in history and became the truth. (Orwell, 1984)