One of the beneficial side-effects of the COVID-19 pandemic is that it might spur us to rethink the fundamental systems that constitute our society, and the deep values that underpin them. One of those systems is neoliberal economics, which has become the predominant, even orthodox, economic model since the Second World War.
This model — or to be more precise, as Guy Dauncey among others points out, this ideology — was championed by a small group of economists in the years immediately following the Second World War. Starting in 1947 this group, who called themselves the Mont Pelerin Society — Milton Friedman being one of them — developed and implemented a deliberate strategy to make neoliberalism the core of economic ideology and policy in the West, and ultimately globally.
Its mantras of privatisation, austerity, tax breaks for the wealthy and the corporations, deregulation and small governments have been great for the one per cent and large corporations and hugely problematic for the exploited bottom 50 per cent or more. Kate Raworth, author of Doughnut Economics, writes: “Its narrative about the efficiency of the market, the incompetence of the state, the domesticity of the household and the tragedy of the commons, has helped to push many societies toward social and ecological collapse.”
At the heart of neoliberalism, it seems to me, lies a fundamental meanness, an inherent nastiness, in the way it puts money and profit first and people, community and the environment last. It is in essence an ideology of individualism — “there is no such thing as society,” Maggie Thatcher famously said — and selfishness; “I’ve got mine, the heck with you.” It results in an erosion of society — which seems to be exactly what neoliberals ultimately seek. In that sense, it is, in essence, an anarchic view of the world.
Along the way, it turns engaged citizens into grumpy taxpayers and customers into consumers, leaving us all to focus on paying as little as possible in taxes or at the till, and damn the consequences.
It results in underfunded public services and underpaid workers. People who, we now realize, are essential to our well-being, are driven down by low wages and insecure employment, in order to enrich corporations.
So unsurprisingly, but sadly for millions of people, neoliberalism has left countries such as the United States, perhaps the poster child for neoliberalism, unable to respond effectively either to the short-term crisis of the COVID-19 pandemic or the longer, slower and more dangerous crisis of climate change and the other massive and rapid global ecological changes that we have come to call the Anthropocene.
A disturbing example of the moral vacuity of neoliberal economics is provided by William Rees, writing in The Tyee in May 2018. He quoted Lawrence Summers, writing in 1991 when he was the chief economist at the World Bank (he went on to become president of Harvard), that “a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable.”
This approach, which quite coldly and viciously attacks the health of both poor people and their ecosystems at the same time, is a disgraceful example of the fatal ethical flaw in standard neoliberal economics.
It drew this response from Jose Lutzenberger, then Secretary of the Environment for Brazil: “Your reasoning is perfectly logical, but totally insane. . . Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in.”
As George Monbiot — one of our most perceptive and powerful social critics — wrote in The Guardian on April 1: “You can watch neoliberalism collapsing in real time. Governments whose mission was to shrink the state, to cut taxes and borrowing and dismantle public services, are discovering that the market forces they fetishised cannot defend us from this crisis. The theory has been tested, and almost everywhere abandoned.”
It’s time we got rid of neoliberalism and created a new economics of social and ecological well-being, fit for purpose in the 21st century.