No one knows what neo-liberalism is, but it seems to be everywhere. Find a government policy you don’t like, and ‘its neo-liberalism’ in action. But is it? Some of us have had doubts for a long time. Many years ago I interviewed a leading figure in the study of UK business and mentioned neo-liberalism. ‘There’s a floating signifier for you’, he said. Crudely a floating signifier is a term that can mean anything you like. And the light suddenly came on – he is right I thought.
I had read David Harvey’s a Brief History of Neoliberalism, even reviewed his book but something did not seem to fit. My interviewee’s challenge did not immediately lead me to drop the term, but it soon more or less disappeared from my own work. I became ever more critical of those who use neo-liberalism as a catch all. When I wrote my last book on Productivity I just tried to avoid the use of the term.
Who can define Neo-liberalism?
No one has an authoritative definition of neo-liberalism. You can finesse your definition but it would likely involve something like the preference for reducing the size of the state, pressure on welfare spending and the extension of markets.
But what is the evidence that any of this has really been going on?
Critics on the left
One of the earliest attempts at pushback which is still worth a deep read was by the late Chris Harman in a discussion which also went into his book on Zombie Capitalism. A decade or so later Bill Dunn published a well-argued paper in Capital and Class where he said ‘Neoliberalism is a slippery concept, neither intellectually precise nor political useful’. He also summarised his arguments in more accessible places like this piece on “down with neoliberalism – as a concept’. Many others have picked up more detailed critiques. I share their view that the concept has become ‘ so baggy and unclear that it means almost nothing’.
But the avalanche of writing on the left that still upholds the idea rolls on. So here are ten critical points drawn from these LEFT critiques of the left’s obsession with neo-liberalism.
The 10 Points
1. There are no self-declared neo-liberals of any significance. It is an ideological attribution that the left, and only the left, makes. It is an ideology defined by and analysed by its opponents not its alleged proponents.
2. It implies that the problem with capitalism is a specific form – to be distinguished from earlier and ‘better’ forms. It obscures rather than clarifies the question of what the problem is.
3. It sees history as being driven by an ideology rather than messy material forces.
4. It gives to that ideology (all the stuff going back to the semi-secretive meetings of the Mont Pelerin Society after 1945 and later think tanks) an importance that it never had and a theoretical coherence between people and over time that it never and does not have.
5. During the supposed neo-liberal era the role of the state in the day to day running of capitalism has become MORE important, not less, and especially decisive in crises like that of 2008-2009 or 2020-2021.
This chart shows the high levels of state expenditure and how they have risen in crises
6. Welfare spending continues to play a key role in capitalism – we might like more of but that is a different question. More – in the neo-liberal market-oriented era many countries have even introduced minimum wages.
7. Some new aspects of welfare spending contradict the old liberal paradigm even more. Polanyi famously argued that the great transformation was about the removal of wage supports in favour of pushing workers into a market where wages would be set by supply and demand. But in the alleged ‘neo-liberal’ era we have seen welfare in some countries (including the UK) increased by in work benefits and a concern for a minimum income – the exact opposite. Some have even mischievously labelled this extension of in-work benefits – the new Speenhamland system.
8. What contraction of the state there has been usually has only involved a very partial shift to the private and the market. Much state activity has been outsourced to a grey sector between the state and the market. Here companies, whose activity is too important to be allowed to fail, take no real risks, operate to state imposed standards and squeeze ‘rents’ from the state for managing what the state formally did directly.
9. In as much as something more significant is said to lie behind neoliberalism it is financialization. But the meaning and nature and scale of this too is contested as is the idea that capitalism has been suffering from a continued crisis of profitability for the last half century – the problem to which neo-liberalism is said to be the answer.
10. The whole focus on neo-liberalism is a massive distraction from a focus on the role of the state. It is a theoretical distraction. It is an empirical distraction. And it is a political distraction. Instead of seeing both the market and the state as problems the market is counter-posed to the state and for many the state becomes the solution. “Nationalisation” and state takeover is now as an uncritical response of the left as it has ever been.
‘Guardian speak worry‘
Historians know how dangerous it is to define ages. The age of neo-liberalism is no different. They also know how dangerous it is to think that ages can be defined in terms of some compelling zeitgeist and then to make that ‘spirit of the age’ the moving force.
We have to start looking at what is happening in really existing capitalism and neo-liberalism will not help us. Too much of left thinking has been outsourced to the Guardian and its writers. ‘Neo-liberalism’ is, as Bill Dunn said, ‘Guardian speak worry’ – it is not serious analysis.
Your point 8 is where the battle lies for me. From PFI to PPE to potholes, the private sector leaching of public goods is a huge issue. As we look to decarbonisation projects we have to resist this happening all over again. Imagine everyone’s heat pump actually being an asset belonging to centrica!
[…] word “neoliberalism” is much misused. We might, however, attach that label to the valorization of the goods of effectiveness over those […]
It is not that difficult to come up with a reasonable definition of “neoliberalism”, though it is fairly long if fully spelled out. See: https://massline.org/Dictionary/NE.htm#neoliberalism
Other related entries there include: “Neoliberalism versus Laissez-faire”, “Neoliberalism versus Keynesianism”, and “Neoliberalism–Reformist Opposition To”. This last entry agrees with your comments against all those who focus on criticizing “neoliberalism”, and favors instead the direct criticism of capitalism in general.