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Mainstream “neoliberal” business and market ideology

from Peter Soderbaum

We have argued that there are many kinds of ideological orientation, and that identifying such ideological orientations and making them more visible and conscious to actors in society is a meaningful activity. When reference is made to neoliberalism as ideological orientation there is more than one way to describe this ideology now dominant in Western society. And a person like me, who regards the dominance of neoliberal ideology as part of the problems faced, will describe it differently from a person who embraces neoliberalism. But the fact that subjective judgments and preferences are present does not make the argument less interesting and relevant. We live in a democratic society where a dialogue between advocates of different ideological orientations is believed to lead to a better society in the sense that those who make decisions will know a bit better what they are doing. Dialogue, hopefully, also leads to a consciousness of the existence of different ideological tensions and options in front of us. Analysis of ideological options is not less important than analysis of impacts of given alternatives in a decision situation. We need to learn about the kind of futures various groups in society advocate and about ideas of how to get there.

Neoliberalism is an ideology where individuals are expected to emphasize self-interest and firms or corporations maximize monetary profits. Firms compete with each other in markets to lower the cost (and prices for the consumer) and improve quality, sometimes also supply new commodities as a result of innovation. In addition to efficient corporations the market mechanism is at the heart of the neoliberal belief system. And progress is very much connected with increase in income which implies increased freedom to buy additional commodities and consume. Neoliberal progress is also about attempts to increase the role of business by privatizing previously municipal or state-controlled activities and property, i.e. transferring them to corporations. These corporations may be national or transnational. Increased power of transnational corporations is not regarded as a problem. Progress for a nation is measured in terms of GDP growth, an aggregated indicator of the market transactions taking place in a nation during a year.

Belief in the extraordinary functioning of business and markets is such that advocates of neoliberal ideology are reluctant to accept state intervention of various kinds. There is a kind of belief in the wisdom of the market. It is admitted that market transactions may have negative impacts on third persons, so called “external impacts” but such impacts are systematically downplayed or disregarded. Still, such externalities often reduce the freedom of other actors to consume or meet their aspirations of other kinds.

Neoliberal ideology as described above is largely made legitimate by mainstream neoclassical economics. It can be argued that the conceptual framework and ideology of neoliberalism is close to the conceptual framework and ideology of neoclassical economics. And neoclassical economics, together with neoliberalism, works in the direction of strengthening the present political economic system and make it legitimate. This argument claims to be valid not only for the national economy but also the global economy.

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  1. deshoebox
    May 10, 2021 at 5:34 pm

    From the seminal “What Happened to the Earth?”, by interim professor Hudak J’Notz, published in 2056 in a hand-written edition of 12 copies: Up until the very end – September 2032 – people known as ‘economists’ still argued that the purely financial interests of the eleven corporations that owned virually all productive capacity on the planet would somehow redound to the benefit of the rest of the world’s 6.7 billion inhabitants. The absurdity, the genocidal ridiculsness, of this premise clearly indicates a criminal indifference to the well-being of the vast majority of the people on the part of corporate decision makers. It seems reasonable to guess that not one of the Earth’s estimated 150 million remaining inhabitants still holds this preposterous view. This necessarily means that the argument is over, since it is a foolish waste of time to harangue the long-dead. The demanding exigencies of our lives these days would fortunately make it all but impossible for anyone to spare the time to think such thoughts, much less to write them down or try to persuade others of their validity. The limited resources available to us with which to manage serious mental health problems all but preclude devoting time and attention to self-deluded psychopaths, so this is fortunate. The option of ostracization in the ‘wilderness’ – the vast man-made expanses of uninhabitable wasteland – would almost certainly provide an efficient solution for anyone showing even the slightest indications of what is called ‘economist thinking’.”

  2. Craig
    May 10, 2021 at 8:12 pm

    The trick is not so much to merely criticize what is admittedly worthy of criticism, but rather to find a way to integrate the interests of both self and the other in economics and the money system. My assertion is that this is best and only accomplished by the natural philosophical concept of grace i.e. love in individual action/systemic policy via the implementation of a universal monthly dividend, 50% discount/rebate policies at both retail sale and the point of note signing for big ticket and green items and a tax and regulatory regime to encourage compliance and punish destabilizing and unethical self dealing.

    Innovative and integrative thinking and acting is the process and and essence of wisdom.

  3. Ken Zimmerman
    May 10, 2021 at 11:37 pm

    “Neoliberalism is an ideology where individuals are expected to emphasize self-interest and firms or corporations maximize monetary profits. Firms compete with each other in markets to lower the cost (and prices for the consumer) and improve quality, sometimes also supply new commodities as a result of innovation. In addition to efficient corporations the market mechanism is at the heart of the neoliberal belief system. And progress is very much connected with increase in income which implies increased freedom to buy additional commodities and consume. Neoliberal progress is also about attempts to increase the role of business by privatizing previously municipal or state-controlled activities and property, i.e. transferring them to corporations. These corporations may be national or transnational. Increased power of transnational corporations is not regarded as a problem. Progress for a nation is measured in terms of GDP growth, an aggregated indicator of the market transactions taking place in a nation during a year.”

    The history of cultural socialization shows that people can be socialized (educated) into forming their lives around any set of notions and actions that can be performed by most any human. Problem being that this description of neoliberal socialization is only one version of socialization and by my estimate not the dominant one for the last 40 years. Rather this seems the dominant socialization. Firms or corporations work not to compete in markets but to control markets. With the help of compliant politicians and most economists a core group of firms and corporations have been mostly successful in this effort. Most of these are not efficient or even good at making products since most of this is now handled by subcontractors. Advertising substitutes for improvements in quality or technology. Just how much difference is there between version 1 and version ‘n’ of an iPhone? Little. But they have proven themselves effective at continually increasing profits and penetrating ever more deeply into privatizing public services and property. With the stated goal of making all such services and properties organized in line with for profit markets. Thereby removing the opportunity for citizens to have any voice in such choices. Eventually shutting down democracy entirely.

  4. Ikonoclast
    May 11, 2021 at 12:46 am

    The Monthly Review has an eye-opening article about the plutocratic pedigree of the Biden administration:

    https://monthlyreview.org/2021/05/01/the-council-on-foreign-relations-the-biden-team-and-key-policy-outcomes/

    It also has an interesting, albeit very Marxist-Leninist, article criticizing the USA and its entire system.

    https://monthlyreview.org/2021/05/01/five-characteristics-of-neoimperialism/

    I’d like to riff briefly on some of the issues raised while also making reference to climate change and great power rivalries. All of this goes to the point that economics, at least as it is posited by capitalist ideology itself, does not exist. In a very real sense, there is no such thing as economics. There is only physics, biology, sociology and ideology, to pick the main arenas of necessary study. What do I mean by this? I mean that those subjects, physics, biology, sociology and (comparative) ideology are the only subjects which will shed any light on our near and further future trajectory. I could also add in geostrategics. Our trajectory will not be primarily determined by economics per se. It will be determined by the physics of climate change, the biology and ecology of the sixth mass extinction, the sociology of class and power (see the Biden team analysis), the ideologies legitimizing power and privilege according to the ruling elites and the great power struggles.

    One thing the Biden team article illustrates (which is not one of its intended explicit themes) is that sociological analysis is the key to understanding economic decisions in any given system. The social structure of the system (as class, power and influence structures) determines the economic rules of the system, at least at least while the system remains top-down and run by the elites (whatever kind of elites they are).

    The neoimperialism article brilliantly skewers the USA and its system. Yet, because of its Marxist-Leninist bias, it gives the Chinese system a free pass. The Chinese system shows the same progression to elite privilege as does the US system, albeit under the aegis of a different ideological justification. China sports its autocrats, oligarchs, billionaires and princelings just as does the US system with its Boston Brahmin class, scions of “great” families and the nouveau riche billionaires of the tech sector.

    Whatever political economy system is designed under human civilization, a ruling class emerges, and the ruling class shows characteristics consistent across all these systems, the central characteristics being the concentration of power and wealth and the application of violence, oppression and cruelty to others for the purposes of elite or national privilege.

    We are headed for catastrophic collapse. Basically all order and predictability will go out the window. Nobody has a clue what comes next.

  5. May 11, 2021 at 2:03 am

    Thanks for your passion and light!
    Let everyone be vaccinated and put an end to the lockdown!

    The Ethics & Language of Lockdown.
    How the intended solution became the problem.
    by Alberto Giubilini, May 4, 2021
    https://collateralglobal.org/article/the-ethics-language-of-lockdown/

    Long term restrictions like lockdowns are self-defeating… It was inevitable that issues of intergenerational justice would be raised.

    • Ken Zimmerman
      May 12, 2021 at 12:14 am

      Won’t waste my time by saying too much about this ridiculous position. First, Alberto is wrong. Putting it in the vernacular he has it ‘ass backwards. “Humans are social by nature, and meaningful life is an essential component of health. Depriving humans of natural social connections for too long inhibits the ability to live meaningfully and, thus, denies people the capacity for normal functioning and wellbeing. When we render life less meaningful by limiting social interaction, we compromise the very same health that tight restrictions allegedly protect.” Humans invented sociality 30,000-40,000 years ago as a survival aid. It was this that allowed humans to survive 10,000 years of near full isolation in small groups during the last ice age. If isolation and lock down test human mental faculties and health the ice age was a much more severe test than the current pandemic’s need for restrictions. The first didn’t destroy humans. Why should we conclude that the second would. Both ‘lock downs’ have the same intent-to aid human survival. Second, in the history of modern stressful events of humans the lock downs of COVID 19 do not stand out as greatly threatening. By comparison to say the Spanish Flu of 1918 or WWII. A species that survived the ice age should not be overcome by the restrictions necessitated by COVID 19.

  6. Edward Ross
    May 12, 2021 at 1:27 pm

    Peter Soderbaum’s blog certainly resulted in some very good comments in particular Ken Zimmerman . Because instead of doom and gloom he gives hope that in spite of the very real problems that face humanity some will survive . Therefore it is up to us to increase that number by positive action , and i think the first step has to be eliminating neoliberalism. The second step has to be reforming the concept of democracy in a way that allows citizens to limit the power of those who have been elected to govern them . As “Jean -Jacques Rousseau(1712-78 one of the great theorists of democracy , claimed that a truly democratic society ideally required full participation by citizens in all aspects of public life .” The question is how to do this. Some commenters in the past have commented that democracy is not being taught in the education system, rectifying this would be a good start.ted

    • May 17, 2021 at 11:42 am

      Ted, your fellow Aussie Ikonoclast, on Blair Fix’s blog on the need for “radically progressive degrowth”, put your educational argument very well: “The well-educated but non-rich intelligentsia must become (once again) the vanguard of revolution: perhaps as students or ex-students with student debt who cannot get a living income”. I see the revolution required being in what they are taught, not “(once again)” who is going to win in our anti-democratic “winner takes all” supposedly representative democracy.

      Aristotle argued against democracy as being a euphemism for demagoguery, and your Jean Jacques Rousseau was surely a loud voice rather than a great theorist. Democrats tend to portray anarchy (.e. without government) as leading to chaos, but what look like chaotic signals on the internet are in fact anything but if you know how to decode them. So I see social science students needing to study communication and bottom up self-control and coordination rather than top-down “rubbish in, rubbish out” government, and de-powering the rubbish we are allowing to govern us with a revolution in ideas: seeing their money not as unearned income derived from other people’s repayment of debts but as credit given to enable them and even students to earn it. The rich have us dancing like puppets on their strings, so let us cut the strings and help each other do what needs doing (including learning how to do it).

  7. Gerald Holtham
    May 12, 2021 at 4:42 pm

    “a truly democratic society ideally required full participation by citizens in all aspects of public life “. Perhaps but it was impractical when JJR said that and it is utterly impractical now. Representative democracy evolved for practical reasons. As for limiting the power of government, that is dependent on the situation. When citizens don’t want the state to do much it doesn’t need much power. Come a war or a pandemic when they need it to do a lot its power increases with popular consent – as experience shows. But, yes, more and better civic education would be a good thing – all can agree on that.

    • Ken Zimmerman
      May 13, 2021 at 12:02 am

      Gerald, the anathema of authoritarian groups is “…more and better civic education would be a good thing – all can agree on that.” So, not everyone agrees on that.

  8. Gerald Holtham
    May 13, 2021 at 11:35 am

    Point taken. Trump said he loved uneducated people. I meant contributors to this blog can agree on it.

    • Ken Zimmerman
      May 14, 2021 at 5:16 am

      Gerald, as revised, I agree all contributions to this should agree.

  9. Edward Ross
    May 16, 2021 at 12:55 am

    Obviously many agree that a better education is needed to encourage people to think. And some agree that neoliberalism does not want people to think, because it may put an end to their skulduggery of treating the people like surfs. Here I grant that there is always some people who appear be satisfied with their present situation and uninterested in an education on how to think. But as i understand it a great many mature age people in both the UK and Australia do external studies But the question is if they are studying economics are they being indoctrinated into believing neoliberalism, with out balancing it against other economic models and are they able to relate what they are told to their experiences in the real world .

    The reason bring this up is if we are going to be able to overcome the neoliberal monopoly then every effort has to be made to motivate and involve as many people as possible. on the subject of motivation from my perspective the answer is to listen to their concerns. If i remember correctly it was Iconoclast who wrote that women could play an important part in working for a better world and I think it was Dave Taylor that explained that women were more emotionally inclined. I was amused one day when my lady specialist said i know why you like lady doctors, (this made me think what have I done) then she said because they listen to your problems before making a diagnosis . Again as I see it from experience in the real world the way to motive them is to begin by listening to them. Ted

    • Ken Zimmerman
      May 16, 2021 at 1:35 am

      Ted, socialization is the process of bringing people into a culture which by definition reduces their options for conceptualizing the world and thus for taking action. Since many neoliberal notions are built into current American and UK culture, socialization in those cultures includes these notions. The re-socialization process is thus not as simple as it seems if we want to rid ourselves of neoliberalism. A good place to begin in my view is returning government as the best source of help for everyday problems and needs rather than private markets.

  10. May 17, 2021 at 10:20 am

    Ted, I’m always likely to see the reality different from Ken, but as an American I don’t suppose he saw the BBC/Open University programme on how the planet Mercury ended up completely uninhabitable. If there is nothing we can do about global warming he is probably right to encourage wishful thinking, but while logically it is still possible to avert complete disaster, I think that is what we should be concerned enough to be trying to do.

    It may of course not feel likely in Australia, but the evidence does paradoxically support the theory that the ice age was brought about by global warming: a sudden melting of the arctic ice into the St Lawrence sea-way disrupting the Gulf Dream thermocycling which warms the North Atlantic countries. So which way things will go we don’t actually know, but that doesn’t mean we should do nothing. At the very least we can try and help each other through the crisis. Against Ken’s “Government as the best source of help”, I don’t think those suffering from the Covid epidemic in caste-ridden India would agree. This surely depends on the government: whether its philosophy is “the brotherhood of all men” or that of “Animal Farm”. Hopefully I’m agreeing with him when I say that aid should be given, not marketed by privatised neoliberal governments.

    Incidentally, I don’t remember saying women were more “emotionally inclined”, but if I did it would have talking about emotions chemically switching on neural action logic (input – listening – as well as output), rather than Hume/Adam Smith’s unsentimental consciousness of feelings. In their biological role as mothers, women need to watch out for their kids.

    • Ken Zimmerman
      May 17, 2021 at 11:52 am

      Dave, the point is that in the USA and UK neoliberalism is built into our lives, both conceptually and institutionally. It is no longer avoidable. And ignoring it does nothing to remove it or fix the problems it creates. To achieve these ends we need to begin at the root; our culture that neoliberals have completely reconstructed over the last 45 years. In the culture before 1970 in both the USA and UK, for most ordinary people government was where they turned first for assistance. For education, health help, work, conflicts, etc. Because they knew from experience that government could and would help. Neoliberals and neoconservatives took a machete to that cultural norm beginning in the 1970s and by 2000 had completely obliterated it. Government in 2000 was seen as inept, uncaring, and wasteful. That new cultural norm had been forced into our lives through incessant and well financed societal socialization. Financed and supported by groups that wanted.government as a force for societal well being removed. As we stand today, it’s been removed. My suggestion is we begin ASAP to return government to what it was before 1970. We do that in two ways. By helping governments become focused on societal well being again and showing citizens government once again can and will help them. Where neoliberalism and neoconservativism hold sway, governments are programmed to fail. Thus, the governments of India, the USA, and UK fail. Soon failure becomes a self fulfilling prophecy. With no one any longer even considering that this norm could be changed. We need to blunt the prophecy and radically change expectations.

      • May 17, 2021 at 10:45 pm

        See my 11.42 a.m. response to Ted further up the screen. I might agree with you about returning to pre-1970 conditions had the “growth” imperative and lack of understanding of control theory not led to such overshoot that the world has become critically endangered. I like the idea of governments exposing themselves as failures, but in India the British raj and neoliberalism are merely a reversion to ancient Brahminism, the US inheriting our old Norman illusions of white supremacy.

      • Ken Zimmerman
        May 18, 2021 at 12:09 am

        Dave, I agree with your statement, “The rich have us dancing like puppets on their strings, so let us cut the strings and help each other do what needs doing (including learning how to do it).” I also of agree that the ‘intelligentsia’ to speak informally has a big part to play in defeating neoliberalism. But neoliberalism and neoconservativism are sprawling octopuses that cannot be defeated one on one. Of the institutions that could be successful in working with all parts of society to roll back both neoliberalism and neoconservatives, government is the most obvious and available. Let’s use it.

        As for India, if Modi has not been captured by neoliberalism, he certainly gives a good imitation of such. And he’s been a neoconservative authoritarian for decades. In the Indian sense of course.

      • May 18, 2021 at 10:53 am

        Ken, I don’t believe we have time to convert governments one by one, and again, these are the tentacles of your Hayekian octopus: if you dethrone a Thatcher, a Netanyahu will continue to encourage the rich to carry on attacking those already weakened by dispossession. So I agree with Ikonoclast: don’t take on governments but enable their student intelligentsia to see the truth: that we are puppets dancing globally to the tune of Capital as Power. But they have no need to fight CasP: they can cut off its power supply by merely giving each other local credit so we don’t need to borrow their global money.

        So Henry George realised we are using “Monopoly Money” as long ago as the 1860’s. The “Modern Monetary Theory” of credit having replaced physical gold as the measure of capital dates back to about 1900, but it is “modern” in the sense that it has become demonstrably true in our age of digital information.

  11. Ken Zimmerman
    May 18, 2021 at 10:06 pm

    Dave, we really don’t have any other options. The plague of neo-liberals is institutional not individual. It requires an institutional response. I believe government is the most appropriate and most likely to succeed institution for that response. Our young intelligentsia can help in this work by supporting government changes that help push it.

    • May 19, 2021 at 8:01 am

      Ken, to deprive the institutions of their power over money IS an institutional response. The credit interpretation doesn’t deprive those who currently have no power.

      • Ken Zimmerman
        May 19, 2021 at 11:11 am

        Dave, how do you plan to carry out this deprivation? In western nations government administrators are in charge of the rules that control who and what has the legitimate right to hold and move money. Particularly, large amounts and money not used by ordinary citizens for everyday expenses. So, we’re back to government as the institution controlling the overthrow of neoliberals.

      • May 19, 2021 at 1:01 pm

        Ken, ‘plan’ is a word that asks too much. What I can say is that the appeal is to those who will form the next generation of government (if we last that long), thinking of a reversion to local finance such as we have seen here in Bristol and seen recommended in the concluding notes on Gesell in Keynes’s “General Theory”. Of course Governments run by the engrossing rich won’t like it, but we don’t have to like such Governments. We do need to stop denying, as Thatcher did, that there is an alternative, and become aware of what it is.

        Ted (below), thanks for the support, but may I suggest you think of the PEOPLE of the country having sovereign control of their OWN money, which they create for themselves whenever they use a credit card. They use it to credit suppliers, renewing their own credit by studying, caring, working and developing.

  12. Edward Ross
    May 19, 2021 at 11:55 am

    So far it has been a great conversation and back to Ken Zimmerman’s “So we are back to government as the institution controlling the overthrow of neoliberals”. But it has repeatedly been said that the problem is that capital has power government. Therefore in my simple logic the power that capital has over government has to be eliminated. My view is similar to to Dave Taylor In that if a country has sovereign control over its finances it can create funny money to stimulate its economy and look after its citizens without becoming indebted to global finance. Then for international trading something like the fixed rate of gold as a commodity would facilitate that trade. In this way a reform of government to a true democratic system that insured the elected representatives kept in touch with their constants. Thus in my view government and all its people need to be involved in making sure that everybody observes and applies the principles of an agreed democratic system take government out of the clutches of the capitalist power TED

    • Ken Zimmerman
      May 20, 2021 at 1:36 am

      Ted, neoliberals and neoconservatives have after a nearly 50 year struggle captured not just most of USA and UK government but most parts of their cultures . Today there are fewer and fewer Americans who remember free colleges and universities, safe and abundant public drinking water, pro-union government offices, government regulators who held public officials and businesses large and small accountable, an economy that for thirty years after WWII improved life for near everyone, class and racial relations improving (still too slowly), etc. But it was so. Neoconservatives and neoliberals sabotage all of it. With aristocratic pride.

  13. Ken Zimmerman
    May 20, 2021 at 1:02 am

    Dave, so your ‘plan’ is to reverse 50 years of very effective socialization with a smile and a hope. As for appealing to those who will form the next generation of government, most have been converted to the full or some lite version of neoliberalism. A process over which they had little control. I agree with the need to teach them and others in our societies the several alternatives to neoliberalism that exist. But this requires more than just wishful thinking. And it’s a long-term project.

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