Journal Entry #3

NORFOLK, Conn.—A reader wrote in the comment thread attached to a column now running on Salon and to be posted here today, “What is neoliberalism, anyway?” It’s a good question. Said column used the term… liberally à propos the Greek crisis, the argument being that the European Union now advances the ideology as an instrument against the primacy of the democratic process—Greece’s, of course.

All such terms—conceptual in nature, often broad and open to interpretation and misunderstanding—must be explained, of course. It is important, especially in journalism, that readers grasp what one’s writing about if the topic’s an idea, a set of beliefs, an intellectual construct or any similar thing. In the far-off 1960s, I recall how lightweight people made themselves appear when they flung around terms such as “the establishment” without saying what that was because everyone was supposed to know. It suggested un-seriousness, sloppy thinking, a lazy intellect. In the context of journalism, an absence of professionalism.

I didn’t dawdle over the definition of “neoliberalism” in the just-published column, all this said. I reasoned that I had done that work in a previous piece. I had, but hacks too often assume that readers see everything they put out as if it’s all of a piece. It may be so by way of a continuing thread of analysis, but only in the writer’s mind can this count.

I went back to the column wherein I devoted some space to a definition—of neoliberal orthodoxy as we have it now, as I’ve seen it on the ground, and as it evolved from its origin in the classical liberalism of 18th century England. That column’s here, should any reader be interested, and as it happens the piece addresses the Greek and Ukraine crises as they were back in February. Here is the whack of it in which the definition is given. It holds, I think:

Neoliberalism is our Frankenstein. The thought holds for two reasons. At its core it is profoundly undemocratic, never mind that the English and American variants of democracy are the mulch from which it arises. It is also unrelentingly absolutist: Because it is intimately related to the myth of America’s providential exception, neoliberalism can tolerate no alternative. Were another idea of political economy to flourish it would expose premodern myth as premodern myth.

Yes, O.K., definition. Neoliberalism denotes the revival since the 1970s, plus or minus, of English liberalism as expounded by Locke in the 17th century and numerous others in the 18th—Adam Smith and his “invisible hand,” most famously. John Stuart Mill and Jeremy Bentham, the utilitarian, are notable among 19th century apostles.

Without getting tedious, there are a couple of points that need to be understood about this background. Context is all in this case.

The early English liberals stood for liberty, laissez-faire government and free trade—familiar themes today. But when they argued for the primacy of individuals and their right to autonomous economic activity they argued against divine right, the nobility’s inherited privilege, the collusion of the clerics and all else that comprised the ancien régime. Of course, these are no longer the Western world’s problems.

Point One. The 18th century liberals were pre-industrial. Their idea of the market as an expression of “the Natural Order” assumed artisanal production and the craftsman’s right to make and sell what he made freely. Classical liberalism was hugely progressive in this respect. Modern industry, to say nothing of the grotesque power and profits of modern corporations, did not figure in the thinking.

Point Two. Smith’s invisible hand has got to be one of the most misunderstood ideas in all of economics, for the simple reason most people spouting the famous Scot have never read him. They rely on social cues and Wall Street Journal editorials. Not ever did Smith and other liberals lose sight of the commonweal. The famous hand guided the pre-industrial craftsman to serve the greater community as he prospered as best he could on his own behalf. Bettering the polity was the point.

The Cold War decades, my very favorite period in American history, made a hash of all this, as with so much else. Classical liberalism in its neo phase denotes not thought but belief, ideological conviction. It is the ideology of radical deregulation, radical corporatization, radical privatization—prisons? water? kindergartens? human health?—maximal profit without regard to consequences, and the radical devaluation of any serious consciousness of the communities in which all individuals are suspended.

Reagan and Margaret “There Is No Society” Thatcher, two of the most impoverished minds to hold prominent office in the last century, gave this version of neoliberalism its global ambition. In the triumphalist 1990s, Francis Fukuyama (who still survives in the think tank set, remarkably) gave it a charlatan-scholar’s gloss: Free markets won the long war, there is no further to go in history, what we have is it.

It is very awful to watch neoliberalism spread. I say this for five reasons, if you can bear with me:

Up close, it is ugly as it disrupts lives, dims expectations and concentrates wealth.

So far as I have seen it unfold, not least but not only in America, it requires either that democracy is steadily diminished until it remains in form only or an elite variant of democracy is entrenched. In the best outcomes it is Hamiltonian as against Jeffersonian, fair to say.

Ever-worsening income inequality is baked into the cake, chiefly because neoliberalism perverts ideas intended to take society in the opposite direction. This is why Thomas Piketty’s celebrated Capital in the Twenty-First Century comes in for so much argument, all of it flaccid: A scholar ruins the story when he demonstrates that deprivation does not turn out to be good for people at some distant time. Deprivation is what it looks like. The rest is mystification.

Given all of the above, the neoliberal regime never arrives anywhere new without one or more of these: force, intimidation (the IMF’s function) or exponential increases in corruption. I can think of no exception to this.

Last, I was astonished many times as a correspondent to see how readily foreign leaders and their finance ministries drank the Anglo-American Kool-Aid. Here I single out Continental Europe as especially disappointing. A long social-democratic tradition notwithstanding, almost all European leaders—and every last technocrat in Brussels—went down like sticks of butter when neoliberals at State, Treasury and in the think tanks launched the post-Berlin Wall campaign.

This is the framework within which I view the crisis over Greece’s debt and the crisis over Ukraine’s political and economic future.

Having read it over to prepare it for reproduction here, the passage goes straight to what we witness this week. And so I offer it to anyone wondering about what the column that prompted the question is all about.