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October 12, 2011
Neoliberalism as political theory of strong government

In my reading this fall, I have read excerpts from an important book edited by\ Philip Mirowski and Dieter Plehwe, The Road from Mont Pèlerin: The Making of Neoliberal Thought Collective (Harvard University Press, 2009). Of course, the United States, despite which is officially in office, has underlying neoliberal commitments. The difference is largely rhetorical, with Republicans mastering a more "government is the problem" language, with Democrats pulling back from this use more in rhetoric than in action. Of course, such rhetoric is empty. There is no such thing as "government" per se, any more than there is anything like "free markets" per se. It is therefore important to get to empirical data to see what this language works to do in building various type of social collectives.

In Philip Mirowski's essay at the end of the book, he writes a "Postface: Defining Neoliberalism" -- a term that has usually worked to set its user away from what is seen as a bad thing -- a leftist term to say "bad, bad, bad!" Now I am no fan of neoliberalism yet I had not read a convincing description of the term except in its reference to the Chicago School of Economics. Mirowski and the book show how this becomes true in the 1960s as neoliberalism developed. Mirowski looks at how this language works as it pulls a distinct group of humans together. He argues that "First and foremost, neoliberalism masquerades as a radically populist philosophy, which begins with a set of philosophical theses about knowledge and its relationship to society. . . . In Hayekian language, it elevates a 'cosmos' - a supposed spontaneous order that no one has intentionally designed or structures - over a 'taxis' - rationally constructed orderd designed to achieve intentional ends. But the second, and linked lesson, is that neoliberals are simultaneously elitists: they do not in fact practice what they preach. When it comes to actually organizing something, almost anything . . .suddenly the cosmos collapses to a taxis" (p. 425-6). In other words, "The starting point of neoliberalism is the admission, contrary to classical liberal doctrine, that their vision of the good society will triumph only if it becomes reconciled to the fact that the conditions for its existence must be constructed and will not come about 'naturally' in the absence of concerted political effort and organization. . . . The injunction to act in the face of inadequate epistemic warrant is the very soul of 'constructivism,' an orientation shared (curiously enough) with the field of science studies" (p. 434). This means that markets must be made "free" by strong political power: "2. Perhaps the dominant version at MPS emanated from Hayek himself, wherein 'the market' is posited to be an information processor more powerful than any human brain, but essentially patterned on brain/computation metaphors. . . . prices in an efficient market 'contain all relevant information' and therefore cannot be predicted by mere mortals. In this version, the market always surpasses the state's ability to process information, and this constitutes the kernel of the argument for the necessary failure of socialism" (p. 435). Now, of course, it is fascinating that Mirowski only mentions state and market as the two "institutions" that are able to process information. Notice even here protests against neoliberalism, the reductionism removes any non-state or market actors like the church as able to process data for a common good. I would, of course, the only means of processing a common good requires non-state or non-market institutions, as in the church.

Neoliberalism, therefore, is primarily a politics of the nation-state, that uses an anti-government rhetoric to build a stronger state to reduce all human life to market conditions: "4. A primary ambition of the neoliberal project is to redefine the shape and functions of the state, not to destroy it. . . . democracy, ambivalently endorsed as the appropriate state framework for an ideal market, must in any case be kept relatively impotent, so that citizen initiatives rarely change much of anything. . . . Hence, the neoliberals seek to restructure the state with numerous audit devices (under the sign of 'accountability') or better yet, convert state services to be provided on a contractual basis" (p. 436).

No change from neoliberal commitments have been present in the United States, and none present themselves as options today. Yet the economic consequences are making themselves clear as the data comes out. Today I found the following chart at
http://streetlightblog.blogspot.com/2011/10/what-smaller-government-looks-like-in.html. In line with neoliberal theory, one does not have a shift to smaller government; instead, one has a shift to a militarization of government at the cost of education, that is sought to be placed into market dynamics. Take a look at the chart with prose:

But it's informative to take a look at exactly which sort of government jobs are being cut. The following table tells the story.

http://2.bp.blogspot.com/-SIuQtNgwHoc/TpRPTLLT_rI/AAAAAAAAAs4/CJCjODUO-Rg/s1600/govt%2Bemployment%2Bchange%2B2009-11.PNG

Over the past two years, government employment in the US at all levels (federal, state, and local) has fallen by a bit over half a million. Total federal employment has remained roughly constant (increased defense department jobs have made up for job losses elsewhere in the federal government), and employment by state governments has fallen by a bit. But local government employment has seen by far the largest change over the past two years, with local governments alone accounting for about 90% of all government job losses in the US. And of that, the majority of job losses are education jobs.

The US (along with many countries around the world right now) is currently going through a deeply unfortunate and harmful bout of fiscal contraction, right when it should be doing exactly the opposite. And by acheiving that fiscal contraction primarily by laying off teachers, it appears to have decided to do so on the backs of its schoolchildren. "

What the site does not highlight is that the military-related employment has grown while other areas have shrunken. This is exactly in line with neoliberal theory. It is not shrinkage of the state; it is the growth of the state in its economics of militarism in order to reduce the rest of government to market dynamics. Neoliberalism presents itself as "anti-government" while requiring the economy circulate around military needs that are necessary to enforce free markets.

This is why the church is needed as neither a governmental nor market institution to provide analysis to show options that the data indicates, but is not found within the imaginations of state or market officials.

Posted by johnwright at October 12, 2011 12:41 PM

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