Tuesday, March 13, 2012

The Tao of Neoliberalism

OK, I don't really know what a Tao is. But hear me out.

The persistence of neoliberalism's 'Zombie ideas' (see Quiggin, Crouch, Krugman) despite abundant evidence of its failure is a source of frustration for those of us on the left who never liked it even when it seemed to be working. It's also an interesting intellectual puzzle: why do ideas change, and why isn't the obvious failure of ideas a source of change?

One think strikes me as I read through Crouch's book - a divergence between any informed assessment of the record of neoliberalism on the one hand (clearly negative) and the attractiveness of neoliberalism as an idea on the other. So Crouch defines neoliberalism's dominant idea thus:

'that free markets in which individuals maximize their material interests provide the best means for satisfying human aspirations, and that markets are in particular to be preferred over states and politics, which are at best inefficient and at worst threats to freedom'.

What's not to like? Especially since you can always come up with a reason why the problem might be down to state action of some kind, given the regulatory and fiscal role of the state in advanced democracies. I guess the point is that if the idea of individual aspiration and a poor opinion of politicians are part of your world view, than the collapse of the particular variant of financialized market economy witnessed over the past 5 years is probably not enough to shake you from that belief, especially since the alternatives are widely perceived to be discredited too.

The problem is that academic political economists know a lot more about the historical record than the average voter does, and there is no point in assuming that voters are going to come to the same judgement - they don't have time to read Quiggin, Crouch and Krugman (alright, a few read Krugman). Voters never understood Keynesianism, so why would they understand neoliberalism? To achieve change, we need a mythical story about social democracy that sounds as good as the mythical free market - a vehicle for aspiration of a better life. If nobody has ever explained to voters how a better life doesn't always come through a market, than we can't expect neoliberalism to die the death it deserves.