For the last four decades, political discourse has been dominated by the ideas of neoliberalism. This ideology has been promoted by elites to direct public policy not only in the US, but worldwide. Neoliberalism offers a simple story of our times by which people can make sense of the world in which they find themselves. British journalist George Monbiot has pointed to the importance of such stories in his recent bookOut of the Wreckage: A New Politics for an Age of Crisis. His aim is to construct a new story to mobilize people into political action and create social change. To make way for a new politics, he deconstructs the neoliberal story as well as its opposing predecessor, the social democratic story. Both follow the same narrative pattern.
Here is his summary of neoliberalism:
The neoliberal story explains that the world fell into disorder as a result of the collectivizing tendencies of the over-mighty state, exemplified by the monstrosities of Stalinism and Nazism, but evident in all attempts to engineer social outcomes. Collectivism crushes freedom, individualism and opportunity. Heroic entrepreneurs, mobilizing the redeeming power of the market, would fight this enforced conformity, freeing society from the enslavement of the state. Order would be restored in the form of free markets, delivering wealth and opportunity, guaranteeing a prosperous future for everyone. The ordinary people of the land, released by the heroes of the story (the freedom-seeking entrepreneurs) would triumph over those who has oppressed them.
While this story encapsulates the worldview implicit in much of our public discussion, he fails to explain why it has taken hold of the public mind. We need to understand where this neoliberal story came from and the material conditions that gave this story purchase on the public consciousness.
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Why Did Neoliberalism Take Hold of the Public Mind?
The neoliberal story did not just drop out of the sky. Its ideas have a material base that makes them the currency of elite discourse and popular opinion. Once they become the common sense at a particular historical moment, they become a political force informing public policy. What are the conditions that made the neoliberal story resonate in the sensibilities of so many for several decades?
The answer is found in understanding that neoliberalism is the default logic of governance in a capitalist society in the absence of social movements pressing for support of the interests of the popular classes. Social democracy rested on the power of such social movements. On the other hand, neoliberal policies are the natural posture of capitalist states, i.e. states in capitalist economic systems where all are caught in what Cynthia Kaufman inGetting Past Capitalism: History, Vision, Hope calls “the economic dependency trap of capitalism.” In unbridled capitalism, workers, consumers and citizens depend on the continued functioning of the capitalist economy for their livelihood. Capitalists are the ruling class because their interests rule over everyone else. They rule not just from positions of power within the state, but from their control of the commanding heights of the economy upon which we all depend.
What is the daily experience of people living under such rule? It is the powerlessness of atomized individuals, or what Sartre called “seriality.” The terms Monbiot deploys — alienation, loneliness, anxiety, isolation — describe the experience well. But this is not because people have bought into the neoliberal story. It is the human consequence of the structural dominance of capital. Workers’ productive activities are under the control of corporate managers. Consumers are manipulated by those same corporations that create a demand for the products through their sales effort. And citizens are governed by a state in service to capital. Ordinary people can limit that powerlessness only when they band together and act in solidarity through unions, campaigns and social movements. It is such democratic collectivities that neoliberalism seeks to dissolve.
Neoliberalism aims to reduce all human relationships to market relations. As Monbiot writes, “Defined by the market, defined as a market, human society should be run in every respect as if it were a business, its social relations reimagined as commercial transactions, people redesignated as human capital.” This market supremacy is often thought to mean that government has no role in the direction of society. In fact, the state is necessary to establish and enforce the rules by which markets operate, a key point made by Robert Reich in his bookSaving Capitalism: For the Many, Not the Few. Capital needs state power for this purpose. What neoliberalism seeks to eliminate is democratically responsive state action that limits the operation of capital. The market is to be structured in the interest of capital, not people.
Rise and Fall of the Social Democratic Story
The social democratic story Monbiot formulates embodies an opposing worldview:
The social-democratic story explains that the world fell into disorder — characterized by the Great Depression — because of the self-seeking behavior of an unrestrained elite. The elite’s capture of both the world’s wealth and the political system resulted in the impoverishment and insecurity of working people. By uniting to defend their common interests, the world’s people could throw down the power of this elite, strip it of its ill-gotten gains and pool the resulting wealth for the good of all. Order and security would be restored in the form of a protective, paternalistic state, investing in the public good, generating the wealth that would guarantee a prosperous future for everyone. The ordinary people of the land — the heroes of the story — would triumph over those who had oppressed them.
Where did the social democratic story come from? It also did not fall out of the sky. Nor was it created by thinkers, although there have been many writers who have advocated its ideas. But what gave this story popular currency was the struggle of people against the harsh conditions imposed on them by capital and finally the collapse of capitalism in the Great Depression. This was the historical conjuncture in which individual action could not bring relief. Only collective action could create what Erik Olin Wright, in his bookEnvisioning Real Utopias, called the “associational power” that could countervail the power of capital weakened by its crisis. Capitalism was no longer able to meet the needs of the people it had made dependent, and so people struggled against it in order to survive. It was in that struggle that they discovered their power to overcome alienation, loneliness, anxiety and isolation. In those struggles, they overcame their individualism, discovering themselves as a “we.” In this, they discovered their social being.