The Coup of the Neo’s
The rise of what are called Neoliberal ideas brought in by a new generation of politicians in the late 70s took the whole world in a new direction, and a mirage of wealth and progress was quickly conjured.
Prime Minister Margaret Thatcher and President Ronald Reagan in 1981 (Credit: AP Photo/File)
This new paradigm demanded the selling off of public goods and cuts to public spending, the deregulation of the corporate sector, lower corporate taxation, and based on the private ownership of all economic resources, including land. Politics increasingly serving corporations rather than natural persons.
A broader perspective here from Susan George.
These neoliberal ideas were first let loose in Chile in 1973. Chile had, for decades, stood out as a stable democracy in a South American continent which had been dominated by oppressive and violent military regimes. In 1973, a military coup d’etat, generally accepted to have been with CIA assistance, overthrew the elected Socialist President Salvadore Allende and installed the usual vicious military dictatorship, under the loathsome Augusto Pinochet. And, as usual in the vividly brutal history of this continent, masses of people were tortured and disappeared.
A new economic direction was taken in Chile, driven by Chilean economists from the Chicago School of Economics, under the direction of Professor Milton Friedman, (who we’ve mentioned before.) The process began of the selling of all public services and removal of all financial and trade regulations.
In retrospect, the decade that followed encapsulates the whole period since then; fantastic wealth was created, and huge damage was done to the well-being of ordinary people, there was mass unemployment and exclusion from society. Precarious shanty towns started appearing, in a land where the Incas had built stout, earthquake-proof buildings from precision cut stone. Amidst the swirl of wealth, corruption set in, and huge problems of debt developed. In 1982, Pinochet was forced to nationalise some of the financial institutions that had been deregulated. This all happened within nine years.
In the early 80s, the new neoliberal ideas were enthusiastically implemented in the Anglo-Saxon West. In the UK, Harold Macmillan, the house-building Conservative prime minister from the bygone age of enlightened capitalism, who’d cheerfully told people in 1957 that they’d never had it so good, now described the wholesale privatisations that began as selling off the family silver. Conservative politicians of the 80s were now talking about the decadency of the 60s and a return to older values.
And as everything was quickly flogged off, the economy really took off, and money was everywhere. And everything started to become about money. And there was a time when music videos that had been made for £90 could win industry awards, then, suddenly, something had to have cost £100,000 to be considered worthy of any accolade.
So, after 70 years of a world which had been defined by Neoclassicalism, the further development that befell the world was termed Neoliberalism, which overthrew the post-war orthodoxies and started to pervade all thinking. It had stolen the language of freedom, setting people free from the strings and regulations that held them down, free enterprise, free trade, free market, based on the sanctity of the private ownership of property.
It’s as if the progress of plutocracy had been held up for the best part of a century and there had been a wonderful dream of a beautiful world glimpsed by many millions of people in the right part of the world at the right time; but now begun a drive to reinstitute an older order of distribution. New ideas were being expressed to set the stage for this. Certain interpretations of Darwinism and Neodarwinism started to gain currency.
As Stephanie Coontz noted:
What's been building since the 1980's is a new kind of social Darwinism that blames poverty and crime and the crisis of our youth on a breakdown of the family. That's what will last after this flurry on family values.
For us, Neo as a prefix seems to denote the taking of a philosophy and stripping the bit that you want from it and then distorting it into the shape that suits your interests, and then using its name as the claim to legitimacy. And it seems there are always academics ready to take on this challenge and afford it the respectability that academia brings to ideas. You should probably run a mile if you ever see something called Neogeorgism.
The emphasis of neoliberalism is on competition to sculpt the efficient market, and some recruited the insights of Darwinism in support, taking the phrase Darwin adopted about survival of the fittest, i.e., the best suited to prevailing conditions presented by nature; taking a description of how miniscule changes occur over vast periods of time, explaining how creatures and entire systems come to fit so precisely into the world they’re in, how the whole complexity of life knits together in an unfathomable subtlety of essentially collaborative interactions. This phrase was taken and formed into a view of economics where fittest means strongest, where the central virtue, even imperative, was in maximum competition. Maximum competition, in a game where one side writes all the rules and owns the ball.
The years of careful economic tendering were swept away for an era where the economic world was to be seen as a jungle, to be seen in terms of the wild natural world in which evolution is imagined taking place, where the only rule is winning. If you are a big beast in this jungle, it’s almost your duty to the world to act with ruthlessness and insatiable hunger, it somehow improves the world, a kind of fast-track evolution.
Academia buttressed the virtuous validity of this approach, that this was the natural way, the only way, the only viable model. All the other ways of looking at it were defeated and obsolete. Once again, serious money poured into think tanks and lobby groups, which took names suggesting academic authority. Once again, words and phrases seemed to be assiduously worked on, certain phrases were designed, others altered, repeated over and again in the media and made current. The successful academic coup of 70 or so years before, which had set the course into which history flowed, was repeated, the great lies that with endless iteration, gradually knit their way into the consciousness of society.
Mason Gaffney says, in Neo-classical Economics as a Strategem against Henry George
Few people realize to what degree the founders of Neo-classical economics changed the discipline for the express purpose of deflecting George and frustrating future students seeking to follow his arguments. The strategem was semantic: to destroy the very words in which he expressed himself. Simon Patten [influential economist of the time] expounded it succinctly. ‘Nothing pleases a ...single taxer better than ... to use the well-known economic theories ...[therefore] economic doctrine must be recast.
Keith Gardner said on his now sadly unavailable Liberty Revival site:
. . . the global banking cartel, European monarchs, and other aristocrats couldn’t take over our nation if the people had a solid understanding of economics. They couldn’t push forward the flawed systems of socialism, Keynesian economics, and Austrian economics if there was a theory which debunked all of them.
They couldn’t engineer problems and present solutions with Henry George in the pool of public knowledge.
They hid the concepts as a children’s game, preventing people from relating common sense to real economic theory. The American people could only relate to whatever the false left, false right, and false libertarian foundations pushed forward.
It’s so, none of what happens today could happen with Henry George in the pool of public knowledge.
David Harvey’s A Brief History of Neoliberalism describes how the process was repeated, of stealing language, reappropriating it, reframing it, setting up business schools and funding university courses. The project of restoring the power of the elite and presenting it as the liberation of humanity.
Building on the work of the earlier academics that perverted classical economics, the new academic mercenaries further refined these original deceits by twisting the considerations and intention of the moral philosopher, Adam Smith. From an interpretation of his works, the idea was distilled and propagated that greed and unrestrained consumption is virtuous, that the world marches on because of greed.
Economics itself, the study of how we all make a living, became very complex and opaque, the preserve of experts. Mark Braund says:
This new breed of economist made a single assumption which appears to have set the parameters of the discipline ever since, that an industrial economy driven by capital accumulation, the private ownership of all economic resources, including land, and the determining of prices and output by the market mechanism, was the only viable economic model. They developed a ‘scientific’ version of economics by introducing complex mathematical techniques which caused its practitioners to forget its origins as the worldly philosophy.
Obviously, whether or not this was the intention, (and it was) this scientific model of economics is intimidating for everyday people, faced with opposing an idea they were awed from even approaching. All trades, of course, like to weave a mystique around what they can do. A plumber who attends your home to fix something may well rub his chin doubtfully and frown deeply, and then heroically proceed to fix the problem.
Economics is very simple explained properly. There’s really no such thing as scientific socialism, nor a scientific model of economics, not in terms of what economics really actually is. We’re feeling confident enough to say that. Economics is simple, truly, and belongs to the people. But much more convoluted ideas were devised and they prevail instead, because there’s got to be some explanation for the fact that a few take nearly all of the wealth, and the best answer is one that no one can understand and will go anywhere near.
In this age of Neoliberalism and associated ideas, and to borrow Alfred Tennyson’s words, a red in tooth and claw business attitude around the world came to be celebrated. Not so much survival of the fittest, more the triumph of power, the right of might, as much as any military invasion has ever been, but now with a righteous philosophy, with academic endorsement and the backing of overwhelming financial resources.