What is Neoliberalism?

The way things are is not a coincidence. The way things are is not inevitable.

By day 10, Occupy Wall Street (OWS), a broad-based movement of people calling on corporate America to clean house and start putting human and eco-rights before ceaseless greed, was starting to show signs of its potential. As noted by US journalist Chris Hedges in an interview circulated via YouTube (Greekcabanaboy, 2011), no matter the outcome, its impact was sure to be enormous. OWS has drawn inspiration from the mass demonstrations against totalitarianism in Egypt, Tunisia, Syria, and 15 neighbouring regions that began in December 2011,1 and built upon student uprisings in London (November 2010) and demonstrations in Wisconsin (February 2011 to present); a spark has been ignited, and the number of participants is growing steadily. By day 10, widely documented police violence—with the arrest of close to 100 peaceful OWS demonstrators, and the erection of barricades controlling all movement in the heart of New York City2—shocked citizens across the country and around the world who previously believed such things were not possible in the so-called land of the free. Solidarity occupations expanded into other US and international cities3 despite a mainstream/corporate media blackout that sought to deny widespread discussion about the social, political, and economic issues motivating the movement. By day 10, US President Barack Obama had yet to acknowledge the presence of those congregated in New York City, and a petition was circulated drawing attention to this fact.4

The civil disobedience that took place in the early days of OWS and continues in the present didn’t materialise out of thin air. It is a concerted response to the rate at which corporations have taken control of the public sphere, while simultaneously diminishing hope of sustainability and equality for people across the globe. Corporate control hasn’t manifested by accident, but rather as a direct result of substantial tax cuts5, deregulated financial transactions, and privatised infrastructure that have, since the late 1970s, reversed the basic social and economic gains established for citizens in North America and Europe after World War II. In a statement of support for those occupying Wall Street, US academic and activist Noam Chomsky summarised the situation at hand:

Anyone with eyes open knows that the gangsterism of Wall Street — financial institutions generally — has caused severe damage to the people of the United States (and the world). And should also know that it has been doing so increasingly for over 30 years, as their power in the economy has radically increased, and with it their political power. That has set in motion a vicious cycle that has concentrated immense wealth, and with it political power, in a tiny sector of the population, a fraction of 1%, while the rest increasingly become what is sometimes called “a precariat” — seeking to survive in a precarious existence. They also carry out these ugly activities with almost complete impunity — not only too big to fail, but also “too big to jail.” The courageous and honorable protests underway in Wall Street should serve to bring this calamity to public attention, and to lead to dedicated efforts to overcome it and set the society on a more healthy course.

(‘Chomsky Supports Occupy Wall Street Campaign’, 2011)

The implications of the greed-fuelled actions by those controlling Wall Street are far reaching and have adversely affected life throughout the world, especially in South America, Africa, and Asia. In order to maintain and grow their power, those benefiting from inequity seek to contain resistance through a variety of strategies, including ones that are economic, political, social, and cultural.

In an attempt to trace the significant factors over the last 70 years that have led us to this point, this chapter will briefly summarise the concept and growth of capitalism and neoliberalism, and the rise of capitalist globalisation; it will also highlight a few of the effects of neoliberalism insofar as it impacts daily life experience. It should be duly noted that this topic is quite complex and can only be introduced in a limited fashion within such a short document. That stated, I hope this brief chapter offers artists and other cultural producers useful context for diving into this e-resource, and I hope it encourages further exploration.


What is capitalism?

In an attempt to briefly summarize capitalism’s transformation from an economic concept to a means of structuring society, this chapter begins with the decline of European feudalism near the end of the 16th century. Feudalism was a land-based economy in which a monarchy owned everything and distributed parcels of land, (and thus power and wealth), to a clearly defined hierarchy of nobles, while other toiled as labourers or soldiers— the latter vocations designed to support the desires of kings and their empires.6 With the advent of the merchant class in the 14th century, (traders importing and selling goods from the colonies and other territories), and the emergence of industrialists who controlled the machinery and resources that propelled technology in the late 18th century, a new class of non-royal elites were formed whose potential to achieve equivalent wealth and power to dominate could only grow.

German philosopher Karl Marx wrote extensively about the transformation of class relationships by the Industrial Revolution: elites owned the financial and material resources (what Marx called ‘the means of production’) necessary to accumulate surplus wealth by exploiting people without any option but to sell their labour. The consolidation of power into the hands of the capitalists gave them increased ability to shape the extent to which society furthered their own interests, ensuring that the majority of people couldn’t access the means of production by which they might become economically independent. Irish sociologist John Holloway adds to our understanding of the skewed society that allows resources to be thus consolidated by describing capitalism as a “movement of enclosure” concerned with turning common, public property and resources into private property (Holloway, 2010). He points to the enclosure of land as the most obvious example, but includes any form of appropriation of something once available for common use or enjoyment into something separated and/or controlled.

Citing the German anti-political discussion collective Krisis Gruppe, Holloway notes that “[it] took several centuries of brute force and violence on a large scale to literally torture people into the unconditional service of the labour idol” (Gruppe Krisis, 1999). He continues by referring to the “closing of the commons, the abolition of traditional rights of hunting, fishing, and wood gathering, the series of laws against vagrancy, the poor law and the creation of the work houses, the armed suppression of one revolt after another [as] steps that created a society based on […] abstract labour”. He also connects with the enclosure of land with an “enclosure of bodies in the factories [and] the creation of a prison of labour” (Holloway, 2010, p. 102).

This sounds rather different than the dominant narrative about the Industrial Revolution that many of us learned in school, which maintained that labourers merely moved into the city because mechanised farming techniques rendered their skills unnecessary. Presenting this as a natural step into our current era gives the impression that this shift gave workers a new form of freedom. Holloway looks at this critically:

What liberal theory hails as the liberation of the serfs was a change in the nature of their servitude: from being serfs under the ominion of their lord, they became workers under the dominion of the capitalist. It is true that they could change from one capitalist to another, but it was (and is) difficult for most people to survive for long without selling their labour power. Historically, this meant the imposition – through centuries of capitalist struggle, the enactment of legislation regulating labour, the use of police violence, the support of religion and education, the use of ever more sophisticated management techniques – of a new discipline in the workplace, the creation of labour as a social habit. The former serfs learnt to labour. […] When I sell my labour power to the capitalist, my labour power becomes a commodity. But this carries in its wake a radical commodification of all aspects of social relations. I no longer have time (nor the means) to grow my own food or make my own clothes, so the only way I can acquire them is by buying them with money from someone who specialises in producing and selling food [or clothes]. It is when labour power becomes a commodity and capitalist production is borne that there is a general commodification of social relations. Everything in society tends to be transformed into a commodity and the connection between the different processes of work is a purely quantitative connection, measured in money. 
(2010)


The concept of capitalism has essentially become intertwined with our basic need for food, shelter, and clothing, as each has become a potential sources of profit for third-parties. In other words, wherever there is a need or desire, there is a dependency7. Wherever there is dependency, there is a chance for profit. Profit comes about through labour, and, in order to maximise profit, the cost of labour needs to be contained.

Profit is therefore derived when a desired good developed through labour (or a service, which is the embodiment of labour) is sold for more than the cost at which it is produced. Sweaters, to use a tangible object produced through physical labour8, are these days rarely ever produced by an end-user because she wants to stay warm. The person who wants the sweater is usually too busy working on other things to have the time required to make a sweater—let alone the time necessary to learn the skill. Sweaters are thus produced by someone else who wants to sell them in order to accumulate a profit that can be applied to other activities. The sellers who can supply sweaters the fastest and cheapest will profit the most by selling with limited effort or resources. Those who can do so while still selling the cheapest finished sweaters will be more likely to attract customers, and therefore more likely to sell the most sweaters. This downward spiral of fast and cheap is what leads those who oversee the production of sweaters to hire workers under conditions that compel them to produce quickly while paying as little for labour and raw materials as possible. The end result is that the people making the sweaters aren’t fairly compensated for their labour and are reduced to a means to the sweater seller’s ends.

When one sweater seller creates the circumstances to suppress labour prices and raw material costs to create a competitive advantage, other sweater sellers eventually do the same, making it impossible for sweater makers to find better-paying work.9 Virtually all sweater makers are thus treated as a means to an end by all sweater sellers. Simultaneously, the sweater sellers collude with the overseers of other types of production to create circumstances that force labourers of all kinds to continue working even when labour conditions and rates of pay become worse and worse. For example, the cost of housing and food increases such that more and more labour is required to cover basic costs, making all types of workers dependent on consistent employment for survival and less likely to complain about bad working conditions. Simultaneous mechanisms aimed at maintaining dependency within this system include academic debt, and consumer credit granted at a higher proportion than most workers can rationally repay given their incomes. The wide availability of credit normalises an over-extension of consumption that encourages people to use credit to acquire basics (as well as other desirables), causing many to enter a cycle of financial dependency that is increasingly difficult to escape, because it “creates a fictional world based on the expectation of future surplus values that creates an image of stability despite the fundamentally unstable fact that the expectation may never be realised” (Holloway, 2010, pp. 178–9, 184). According to a 2011 report, the average Canadian was carrying “almost $26,000 on his or her credit card, bank lines of credit and other borrowing vehicles―excluding mortgages―during the January-to-March period.” The report goes on to state that this represents an increase of over $1,200 compared to the same period the previous year. It also mentions that the for-profit credit company providing these statistics assures Canadians there is no need for concern or to curb spending (‘Canada’s personal debt rises’, 2011).

Low rates of pay and artificial dependencies aren’t the only ways capitalism contributes to the mistreatment of people. Holloway explains that capitalism treats people as abstract means to an end by labelling people by sex, race, and age, ultimately contributing to a sense of dehumanization (Holloway, 2010). It becomes hard for us to want to treat others with respect and dignity when we ourselves are treated as little more than interchangeable units in a category, but what is most disturbing is how frequently this system of mistreatment is internalized and reproduced by those affected, ultimately serving to normalise mistreatment and prevent imaginings of resistance. If we collectively refused to accept differences in gender and race as essentially divisive forces, we could escape isolation in categories often positioned as being at odds with one another10 and begin to recognise the ways in which capitalism harms us all.

Capitalism aims to expand our isolation from people in other parts of the world beyond the merely geographic. This happens, for example, through the transformation of our identity as labourers and/or makers, (once connected with manufacturing, a sector that has all but disappeared within Europe and North America), into consumers. Because the purveyors of goods are always chasing cheaper ways to produce in order to maximise profit, they no longer operate factories in the same places they will be eventually be selling their goods. Instead, we’re told we’re highly skilled end-users, and they outsource labour to countries with fewer restrictions on the ways in which labour is extracted and compensated (Klein, 1999). Labour in North America and Europe is now more commonly harnessed in the service sector (i.e. selling goods to one another) (Klein, 1999) and the increasingly-trendy creative industries (i.e. producing advertising and branding that supports the highest possible price for goods and services, a topic that will be discussed at greater length in Chapter 2) (Florida, 2003; Lovink & Rossiter, 2009).

Despite great distances, raw materials and finished products zip around the world at low cost through innovations in containerised shipping, ensuring that base prices remain remarkably depressed, and leaving ample room for product concept originators and retailers to mark up prices as they desire. Even though we’re often aware of the deeply psychological strategies involved in advertising and branding, cheap retail and expanded credit makes many of us succumb to irresponsible and unnecessary consumerism despite its many negative consequences (ranging from human rights abuses in sweatshops and the environmental impact of trendy, throw-away things). There reasons for this kind of consumerism are many, including a desire for fulfilment, and the sense that we deserve to treat ourselves in light of all we endure to sustain the increasingly frantic pace of our lives. We also justify our tacit support of the conditions within which these goods are produced with the flawed rationale that people who’d otherwise be unemployed at least have jobs of some sort (Global Exchange, 2011).

The work many of us in Europe and North America do on an average day is immaterial, which is to say we don’t produce tangible things and thus often have a hard time connecting our labour to improved working conditions achieved at the height of the labour movement. We don’t feel connected to workers in other places—let alone connected to workers in other fields—thus also making it difficult to connect the extraction of our own labour into a dizzying spiral of consumerism that was once based on needs, subsequently shifted to desire, and is now concerned primarily with manufacturing desire. We know there are things we need to survive (food, shelter and clothing), things we need to improve our quality of life (education, healthcare, and transportation), and a growing list of material comforts, including the desire to express ourselves… and we know we need to work in order to secure all of it.


Capitalism is about selfishly accumulating surplus and calling it growth

Holloway explains that capitalism, having initiated a system of turning everything into private property and profit, must preserve itself at all costs by demonstrating that there is:

[…] no alternative to value-producing, money making labour. There must be no escape from labour. In countries with a welfare-state system, it is crucial to tighten the rules to make sure that they do not provide havens for those who might want to do something else with their lives. The same in the universities: they must not be allowed to become places for relaxing or (worse) thinking: it is essential to tighten the education system, speed up the process of learning and above all to measure the productivity of both teachers and students all the time, so that their activity is contained within abstract labour. Neo-liberalism, post-Fordism […] are names given to different aspects of this struggle to subordinate human doing to the rule of money, to re-establish the idea that there is no alternative to labour, that all possible human activity is encompassed within the rule of labour.
(2010, p. 184)
 
 

By increasing dependency and reducing security, capitalism is re-establishing the kind of income disparities previously seen under feudalism, despite humanist efforts to reduce the class gap through the slow expansion of human rights since the mid-19th century (and more substantially in the mid-20th century following World War II).

In the period between World War II and the energy crisis of the 1970s, average incomes in many parts of the world (namely Europe and North America) started to rise, and the gap between classes was reduced through policies such as progressive taxation, estate taxes, and other programs aimed at levelling the playing field. As will be discussed in the next section of this chapter, these policy changes were not embraced by everyone: elites, having been taken down a notch, quickly began plotting to recapture what they presumed ought to be strictly theirs, a position supported by philosophical points of view that validate a hierarchical social order and the righteousness of greed. Their mobilization against economic justice for all has operated on many levels including: taking control of shared public resources and infrastructure; dismantling laws intended to protect citizens; creating and maintaining a consumer economy through various unjust strategies; and fabricating the illusion of social elevation while bolstering elite social structures through which they negotiate power amongst themselves.11 Their project, known as neoliberalism, is the mechanism through which these power elites seek to maintain social dominance.


What is neoliberalism and what does it promote?

Neoliberalism is the latest phase of capitalism. French sociologist, anthropologist, and philosopher Pierre Bourdieu and English social theorist David Harvey define neoliberalism as a political project designed to restore power to elites by concentrating it within fewer and fewer hands (Bourdieu, 2010; Harvey, 2007). John Holloway describes it as the acceleration of the process of capitalist enclosure (2010). Both definitions take into account the pervasiveness of multinational corporations, a phenomenon not unlike colonial imperialism, inasmuch as global assets, (including people and resources), are carved up between massive entities that are continually seeking to expand control over physical and conceptual sites for profitability. These corporations—run by global elites with overlapping interests through their involvement in multiple corporate boards—operate across national borders to derive massive benefits, primarily by engendering political and economic conditions favourable to their greed-motivated interests.12

The neoliberal model prizes a few basic principles:

  1. The economy is a separate and superior domain governed by natural and universal laws with which nothing should interfere
  2. The market is the only means for efficiently organizing that which society produces
  3. The global market is adversely affected when states direct resources to social welfare or anything else that could be perceived as interrupting the unimpeded flow of capital13

Neoliberalism is therefore an ideology that seeks to create ideal conditions for the market—a supposedly all powerful force of nature—by eliminating structures that prioritise and/or protect the interests of human beings, including workers, anyone culturally and/or economically dispossessed, women, marginalised ethnic groups, etc. Competitive individualism is favoured.

From a cultural studies point of view, neoliberalism is considered an all-encompassing ideology that influences the totality of our lives. This influence has accelerated given persistent and successful corporate pressure on governments to enact policies of deregulation and privatisation. These policies have in turn made it easier for corporations to influence and/or control education, healthcare, and broadcasting and other media through the relaxation of rules governing consolidated ownership that were established to promote the circulation of diverse ideas within the public realm.14

Spanish journalist and writer Ignacio Ramonet compares the all-encompassing nature of neoliberal ideology to the totalitarianism of the 1930s, as embodied by Fascism, Nazism, and Stalinism, all of which involved “single-party regimes where the party’s mandate was to rule over the totality of a society’s activities – political, economic, social, cultural” (Brouillette, 2008). We are said to be living in a democracy, though Ramonet points out that single parties have been replaced with a single way of thinking: that the market ought to direct all activities undertaken within society, including those that are social, cultural, athletic, related to our health and wellness, etc. He identifies neoliberalism as an economic technique, but one so pervasive that it has become more like a system of control, championing privatization, deregulation via less government, and capital over labour, allowing the market to operate uninhibited and deliver development, growth and profit.

Since neoliberalism upholds the market above anything else, capitalism’s expansion results in the shrinking of the public sphere to little more than a place for commercial transaction. But there’s more to it than that, because the greed motivating this transformation doesn’t end at the cash register. Not only does this greed want money coming in, it also wants to stop money from going out. We have seen this to be true in terms of wage suppression, but it also extends to pressure on governments to lower/eliminate taxes, and reduce regulations designed to ensure responsible business practices, (including safety standards for employees and consumers, and environmental protection measures concerning the use of resources and the disposal of waste). Given the scale of wealth they are capable of amassing, corporations have more money and networking power than most individuals (and even most communities); as such, they can hire the services of companies that specialise in pressuring politicians to act in their favour, sometimes in exchange for election campaign contributions (‘Is US democracy being bought and sold?’, 2012; The Story of Citizens United v. FEC, 2011).

Through this process of lobbying,corporations have managed to reduce the amount of taxes they pay, in turn causing governments to cut budgets for services established for citizens because they were considered essential for the betterment of society. Education and cultural activities are among the many social goods under threat of reduction or removal from the public funding agenda. To make up for the gap, schools and other public services like arts and cultural centres are being directed to find corporate sponsorship to replace what was previously redistributed from the tax base. In some places this transformation has felt sudden and unexpected, but understood in the context of capitalism and neoliberalism, it becomes clear that this process has actually developed steadily and intentionally over the past 35 years, moving from country to country—even affecting places like Sweden (Lundh, 2010), the Netherlands (Kennedy, 2011), and France (Chrisafis, 2011), previously revered for their modern commitment to the social well-being of citizens.

Bourdieu describes neoliberalism as a modern repackaging of the ideas elites have always used to exert their supremacy, this time incorporating notions of progress, reason, and science to justify the concentration of power in their hands; it contends that the market ought to be free, and efforts to contain it (i.e. assisting people) is archaic and backward. Neoliberalism therefore champions a radical, unrestrained capitalism “with no other law than that of maximum profit […] rationalized […] by the introduction of modern forms of domination such as ‘business administration’ and techniques of manipulation such as market research and advertising” (2010, p. 112).

Toward the end of his life, Bourdieu was largely preoccupied with the impact of neoliberalism on education and culture. He recognised neoliberalism as a conservative movement, which—through the distorted co-optation of progressive language—presented itself as both contemporary and self-evident. Most of all, he saw that the regressive policies of neoliberalism sought to undermine rights won by workers after decades of social struggle by using ideological constructs that must be dismantled with intellectual tools. Proponents of neoliberalism try to convince us that their worldview champions ‘liberated trade’ capable of freeing us from antiquated regulations and ushering in a new era of abundance (2010). None of this is true.

It is helpful to look at the history of the origins of neoliberalism to better understand the inherent contradictions between what it claims to do, and what it actually delivers.



What are the origins of neoliberal ideology?

Neoliberalism is based in Western European thought dating to 1900, before the age of social democracy made the importance of education and healthcare for all a mainstream idea. As noted in the previous section, the principles of neoliberalism are not community-friendly: they prioritise private enterprise without restraint, and place the activities of business before any other concern, arguing that the private sector is best suited to set the terms by which all other aspects of society function. Since the primary objective of business is to generate profit, anything that might compromise potential profit is considered a threat. Neoliberals situate profit within the relatively new concept of growth, (an objective they pursue at any cost, frequently at the expense of sustainability) (Michalos, 2011; Sachs, 1995, 2010).

As an ideology, neoliberalism emerged as an intellectual response by elites inconvenienced by the crisis of capitalism that took place between 1914 and 1945. Recognizing that the economic boom of the 1920s resulted from post-World War I reconstruction, this well-networked group organized to resist state intervention in response to the mass unemployment, bankruptcy, and political unrest that followed the stock market crash of 1929. Citizens were wary of liberal “laissez-faire” methods that offered them little or no protection, and wanted more economic planning. This led to the creation of various central plans around the world, the best known of which are the Soviet Union’s First Five-Year Plan (1928-1932), and the New Deal in the United States (1933-1936).

Over four days in August 1938, the Walter Lippmann Colloquium, (an event opposing socialism and other types of state intervention), was held at the now defunct Institut International de Coopération Intellectuel (a forerunner of UNESCO) in Paris. This event emboldened opponents of collectivism, and elevated the ideas of Austro-Hungarian economist Friedrich Hayek and Austro-American historian, philosopher, and economist Ludwig von Mises, which were eventually circulated by a French publishing house called Les Éditions de la Librairie de Médicis.

Representing what became known as the Austrian School of Economics, Hayek and Mises advocated an extreme form of liberalism that significantly reduced the role of the state. Beginning with the elitist premise that “the masses do not think” (Mises, 1932, p. 472)15 they purported that socialism was an idea concocted and imposed by intellectuals. They presented their ideas as the solution to growing collectivism, situating the intellectual as central to all social, political, and economic change, and set to founding groups to finesse and deliver their ideas to the world at large.

Hayek and Mises organised a subsequent meeting in 1947 at Hôtel du Parc, near Vevey, Switzerland, gathering together European and US liberal intellectuals, many of whom went on to be major global figures, (including US economist Milton Friedman, founder of the Chicago School of Economics). The meeting facilitated days of discussions which presumed Christianity, liberalism, and competition to be the basis for social order. Most significantly, it established the idea of a European economic federation—made up of invited members, with a flexible structure and no head office—that promoted their variety of liberalism worldwide. This organization became known as The Mont Pelerin Society.


Think tanks and revolving doors

With The Mont Pelerin Society in place as an ideological base, liberal academics, joined business and political leaders in setting up regional associations and think tanks, including Britain’s Institute of Economic Affairs (est. 1955) and the Heritage Foundation (est. 1973), (the latter linked to the U.S. Republican party). Through these organizations, the ideas promoted by Mises and Hayek became popular among US business leaders, who brought the economists to the United States. These business elites also shaped public opinion to match their views funding agencies to the write and circulate texts, legislative proposals, and material specifically for politicians and journalists. The Mont Pelerin Society society inspired the formation of hundreds of think tanks, all appearing to operate autonomously, but ultimately pushing the same agenda vociferously.16 In the 1970s, Keith Joseph’s Centre for Policy Studies promoted former British Prime Minister, Margaret Thatcher as their ideological champion. In the contemporary United States, it has become abundantly clear that the billionaire Koch Brothers17 are redefining democracy based on their personal and business interests, (among their declared ambitions is the dismantling communism) (Greenwald, 2011; Scaliger, 2011).

The documentary Encirclement Neo-Liberalism Ensnares Democracy, directed by Québéc-based filmmaker Richard Brouillette (2008), provides a detailed chronology of the historical moments that spawned what is now the dominant economic model around the world. The film identifies think tanks as tremendously privileged forces seeking to control public opinion:

Financed by corporations and vast private fortunes, neo-liberal think tanks often enjoy charitable organization status. Their generous donors thereby have the right to tax exemptions. However, the law says charitable organizations cannot engage in political acts. In 1989, Greenpeace was stripped of its charitable status by the Canadian government. The Canada Revenue Agency concluded that this NGO did not always act in the public’s interest. It contributed, for example, “to propelling people into poverty by demanding the closure of polluting  industries.” On the other hand, no neo-liberal think tank with charitable status has ever been interfered with. During their annual declaration to the Canadian government, these “non-partisan” research institutes solemnly state that they “do not try to influence public opinion or obtain the modification of a law or policy”.
 
(Brouillette, 2008, sec. 21:39 – 22:29)
 
 

Only when people stand so certainly to increase their existing wealth are they willing and able to spend so much to protect that increase. The stakes are high and the fight is dirty.

A particularly notorious example that demonstrates think tank elites’ revulsion to democracy is the 1975 publication The Crisis of Democracy released by The Trilateral Commission18, a supposedly non-partisan, non-governmental organization established by David Rockefeller in 1973 to foster closer cooperation among the United States, Europe, and Japan. This particular think tank has been criticised by members from both sides of the political spectrum: former US Republican Senator Barry Goldwater criticised the group for its “skilful, coordinated effort in seizing control of and consolidating the four centres of power: political, monetary, intellectual, and ecclesiastical…[in] the creation of a worldwide economic power superior to the political governments of the nation-states involved” (1979, p. 299).

Noam Chomsky also criticised The Trilateral Commission and other right-wing think tanks for their reaction to 1960s activism that saw people asserting their rights, often for the first time. The Crisis of Democracy called these people—women, young people, racially marginalised people, and people concerned about environmental protection—’special interests’. This term was essentially applied to anyone outside the corporate sector, the realm that neoliberals consider the only natural leader with the true national interest at heart. In short, this publication declared that too much democracy gave way to ungovernable citizens who, as a result of mass education, refused to be disciplined or mobilised against their own interests. This resulted in decreasing interest in traditional institutions like the church and military, a reduction in political apathy, and a desire to self-determine the course of one’s life. The report posits that these changes in turn put inappropriate pressure on the state to meet social demands. Most importantly, (and hypocritically), the publication called for less government intervention, but stricter control over educational institutions and the press in order to control both information and social desire.

It is the work of think tanks and their lobbyists that transformed the pro-citizen programs established by many states after World War II. Although think tank ‘research’ and policy concepts were not circulated in the mainstream until the late 1970s, they initially appeared in 1944 during the Bretton Woods conference that was responsible for forming the International Monetary Fund (IMF), World Bank, and World Trade Organization (WTO, formerly the General Agreement on Tariffs and Trade).

The IMF and World Bank were established with the stated goal of stabilizing exchange rates and supporting reconstruction after World War II, but have since been identified as global vehicles of free market ideology. US pressure shifted the mandate of these institutions over time, and by 1971 they focused on imposing economic liberalization on developing countries, enacted through a series of measures that included harsh, anti-social conditions for the granting loans (such as cutting or eliminating spending on education, health care, and assistance to independent farmers, etc) (Bourdieu, 2010; Brouillette, 2008; Harvey, 2007; Klein, 2007). Known as the ‘Washington Consensus’, these aggressive economic reforms have been wielded by the elite to restore their power on a massive, global scale. This process has been described as ’shock therapy’, even by its proponents.19 These policies undercut democracy by using crisis as the impetus to take resources out of public hands and sell them to private corporations for a fraction of their actual value; corporations then profit in perpetuity by selling these formerly public resources and services back to the public in perpetuity. This is made possible through corrupt relationships between private corporations and individual politicians, an all-too-common betrayal of the public good. This manifests not only through the aggressive tactics of lobbyists, but also via arrangements whereby politicians who can’t or won’t stand for re-election are promised upper management roles in major corporations. Political campaigns by individuals already allied with these corporations are also heavily financed, representing the opposite side of the same coin. The undemocratic tendency for people to move back and forth between corporations and government is so widely recognised that it is known as the revolving door.


Despite being elected on the promise that they will make life better for citizens, politicians are increasingly captivated by the interests of campaign financiers and lobbyists. Knowing their time in office will be short-lived, fewer consider it a conflict of interest to grant favours to corporate friends in exchange for high profile positions at the companies they’ve supported (Abramoff, 2011). Given this rampant corruption, it is not surprising that those temporarily entrusted to manage the state participate in the very activity that disempowers it. Bourdieu describes these ‘leaders’ as smokescreens who prevent citizens, and probably other politicians, from discovering what’s really at stake (2010).

Voters around the world are thus duped again and again, even by political entities that previously were (or at least claimed to be) on the side of working people. Encirclement cites examples ranging from Germany’s Democratic Party (Partei Deutschlands), to the Parti Québécois engaging in neoliberal activity under the guise of modernization, to Lionel Jospin’s socialist government in France which privatised 10 major national corporations from 1997 to 2002, (the same number as right-wing French governments before and since) (Brouillette, 2008). Other examples include the British Labour Party—rebranded as New Labour in advance of Tony Blair’s 1997 victory—that advocated for privatisation through public-private partnerships in a range of sectors, including arts and culture (Wu, 2002). Even as recently as October 2011, the newly-elected Social Democratic party in Denmark rescinded campaign promises to bring economic justice in the form of equitable taxation and control over banks (‘Den omvendte’, 2011).

At the end of the Cold War (1991) politicians—most notably Margaret Thatcher—proclaimed that capitalism was the only option, and that its terms must therefore be accepted (Brouillette, 2008; Klein, 2007). It was declared that maximum growth, competitiveness, and productivity were the natural and self-evident objectives of all human activity (Bourdieu, 2010; Klein, 2007). Think tank policy papers promoted these views behind the scenes where decisions are made, but they circulate in other forms, as well. The United States is a financially and militarily dominant power, but it also has substantial symbolic power through the exporting of mass culture, language, and the widely-recognised notion of the American Dream. This latter concept normalizes free market ’freedom’ and ’abundance’ by promoting American life and values as the ideal, readily disseminated worldwide through the imperialistic syndication of Hollywood film and television (Barker, 1997; Gripsrud, 1999). If people encounter these ideas with enough regularity, they’ll start to believe them. Or at least, they won’t be inclined to question them.


Neoliberalism is not what it pretends to be

Neoliberal ideology is fond of something it calls the ‘invisible hand’, a term coined by Scottish social philosopher and political economist Adam Smith in his irrationally influential text, The Wealth of Nations (1776). This concept describes an unchallengeable supernatural force from above that is capable of directing all market activity. Spurred by the supposedly natural trifecta of self-interest, competition, and supply and demand, the invisible hand desires equilibrium and moves wealth and other resources from place to place as it sees fit. Given their firm belief in this supernatural entity, it seems contradictory that neoliberal ideologues aggressively seek to remove tariffs and other mechanisms intended to promote and protect local economies. If the ’invisible hand’ were truly as powerful as they claim, such measures would fail to actually block the natural and superior flow of the market. Yet despite the free market policies already enacted, neoliberal elites declare the market has not yet been made free enough and—in their role as international oligarchs heading multinational corporations that use the World Bank, IMF, and WTO to promote their ideas—they push for dictatorial trade agreements, the empowerment of international governing agencies, and the right for corporations to seek restitution for presumed losses by taking states to court.20

Chomsky reflects on the way ceaseless greed further compromises the already questionable veracity of the ‘invisible hand’, noting that the neoliberal elites constantly cite the concept while conveniently ignore other aspects of Smith’s text (Brouillette, 2008). For example, Smith argues for unfettered free trade, but declares that, merchants and manufacturers would be unlikely to invest and import from abroad, (despite the potential for increased profitability), because it would be counter-productive to harm their homeland. But damage be damned: that is exactly what merchants and manufacturers do in their clamour for maximum profit, and the effect is extremely harmful.

Neoliberalism parades itself as a way of thinking and doing that is concerned with unfettered competition so that everyone can pursue her or his own self-interest; it is actually most concerned with the interests of multinational corporations, and colludes within a globalised market to achieve whatever is most advantageous for them, (and only them). Neoliberalism is thus a re-consolidation of the wealth and power of corporations, and nothing short of a conservative revolution.

Bourdieu explains that neoliberalism deceives people because it has been made to appear modern while convincing us that the economic and social world is structured by absolute equations. Arming itself with this idea, and equipped with control over the news and entertainment media to communicate its values, neoliberalism asserts itself a valid basis for all of society. Appropriating the discourse of science, neoliberals present their speculative theory as unquestionable. Through their use of language—and particularly in the way they phrase and frame notions of freedom, liberation, and reform—they present a conservative restoration as a revolution (2010, p. 125).

For those not persuaded by math, science, logical arguments, or evidence-based decision making, neoliberalism calls on faith. As pointed out by Canadian writer and social activist Naomi Klein (2007) and French economist and journalist Bernard Maris (Brouillette, 2008), the underlying principles of neoliberal ideology are so profoundly irrational that only delusional blind faith could explain a compulsive desire to control international exchange in support of something claimed to operate beyond control. Likewise, only a fundamentalist approach to political ideology could demand that all beings function autonomously—as absolute individuals unhindered by collective action or any other type of social relationships to ensure the supposedly natural order of things. This neoliberal insistence against state intervention is often framed in religious terms in tandem with the concept of self-help virtue—the idea that God helps people who help themselves—commonly known as the Protestant work ethic (Bourdieu, 2010; Weber & Parsons, 2003). It is thus unsurprising that particularly fervent neoliberals are prone to employing religious rhetoric to inspire growth in what is being called Biblical Capitalism (Ruff, 2011).

Neoliberalism is thus a movement founded by elites for elites as a way of reversing the modest expansion of human rights and economic justice achieved since World War II. It is from a sense of superiority and entitlement that its proponents aggressively seek to harm others through strategies that amount to nothing less than class warfare. With a sense of urgency, Bourdieu notes that neoliberal misinformation must be “fought with intellectual and cultural weapons” (2010, p. 128). Some understand Bourdieu’s statement as an appeal to academics and other supposedly elite thinkers21; however, it may also be read as a call for each of us, from whatever our point of experience or frame of reference, to embrace our collective capacity to harness arts and culture-inspired critical thinking as a way to reject capitalism as the singular vision through which to enact our lives. That is precisely what this e-resource is all about.



Quick notes concerning capitalist globalisation

Capitalist globalisation—which Bourdieu describes as a “myth that hides the unequal power relations between the richest countries and others [wherein] the unification of markets, especially the financial market, reinforces the domination of the former over the latter” (2010, p. xvi–xvii)—is deeply integrated into the concept of neoliberalism. London-based economist Leslie Sklair (2009) distinguishes capitalist globalisation from generic globalisation (the latter characterised by connectivity via electronics and transportation, postcolonialism, and other elements) as involving the unification of the world economy through the removal of trade barriers such as tariffs, export fees, and import quotas. Given that capitalism seeks to increase material wealth through the exploitation of labour and other resources, capitalist globalisation tends to deepen class divisions and cause ecological harm. Capitalist globalisation existed prior to neoliberalism through the movement of goods and services on a capitalist basis; neoliberalism has harnessed the mechanisms of capitalist globalisation to an ideological drive to consolidate wealth and power within the hands of the global elite.

The documentaries Life and Debt (Black, 2003) and Encirclement (Brouillette, 2008), and the book The Shock Doctrine (Klein, 2007) provide detailed and accessible information explaining how the primary facilitators of globalisation―the IMF and World Bank―are essentially tools of colonization that force smaller countries into spiralling debt and dependence by suppressing the price of their resources, forcing the sale of their infrastructure to private corporations, and controlling citizens through slave-like labour. Encirclement and The Shock Doctrine also draw attention to the means by which military occupation is used to control people when economic tactics fail. It is well beyond the scope of this e-resource to delve into these topics, but they are connected to discussions about the way social life in North America and Europe is conditioned to contain and dismiss critical thinking about foreign military presence in other countries as an impact of our consumer-driven lifestyles. Our lack of understanding and outrage is a matter of deliberate cultural desensitization. Bourdieu reminds us that capitalist globalisation is not a coincidental side effect of technological advances that have enabled greater worldwide connectivity but rather has been engineered through a set of policies established to eliminate state regulations restricting the activity of companies and their investments. The global market is therefore merely a human invention, just like the economic concepts that frame it (2010).22 Maris underscores the fact that international trade is never a ’neutral exchange’ as it is often portrayed: “The nice Natives trade with the charming conquistadors. It doesn’t work like that and it never did. The conquistadors kill everyone. […] International business follows the military, it follows predation. Then comes an inward pacification process” (Brouillette, 2008).

Bourdieu asserts that capitalist globalisation emerged in 1978 when steps were taken to raise interest rates, followed by measures to deregulate financial markets in large industrialised countries:

Its purpose was to stimulate the rates of profit on capital and restore the position of owners in relation to managers. This series of measures had the effect of favouring an even greater autonomy of the world financial field, the world of finance, which was put to functioning according to its own inherent logic, that of pure profit, and independently in every way from the development of industry. […] In order to produce this independent financial field, which in a certain sense spins around in thin air, its only recognized purpose being the constant increase of profit – in order to produce this world, it was necessary to invest and establish a whole series of financial institutions designed to promote free financial movement. And it is these institutions that have to be brought under control.
(2010, pp. 247–8)
 
 

Having been bombarded by “incessant propaganda action involving a whole series of social agents, from think tanks to journalists” (2010, p. 248), we’ve collectively come to see globalisation as a normal, inevitable development. It is an intentional strategy that discussion invariably emphasises the benefits of certain phenomena arising from globalisation (i.e. improved technology and communications), while excluding criticism of others (i.e the growth and speed of capitalism). Bourdieu declares that the first step to resisting the social and economic violence of global capitalism, and by extension neoliberalism, is very simple: never stop challenging the idea that it is natural or merely a coincidence.

What are the effects of neoliberalism and capitalist globalisation?

There has never been more wealth on earth than there is right now, this a direct result of the neoliberal invention of FIAT money23 and the ideological deregulation of currency trading among other forms of market speculation. The validity of this wealth is highly questionable, but given that it exists there is absolutely no logical reason for the rise of economic inequality around the world. The headline of the 2010 Merrill Lynch Global Wealth Management and Capgemini’s World Wealth Report reads: “Wealth recovery nearly compensates for 2008 losses as Global high net worth individual (HNWI) population grows 17.1% and HNWI wealth reaches $39 trillion” (2010). The next annual report offers the following headline: “Global HNWI population and wealth growth reached more stable levels in 2010, with the population of HNWIs increasing 8.3% to 10.9 million and HNWI financial wealth growing 9.7% to reach US$42.7 trillion. The global population of Ultra-HNWIs grew by 10.2% in 2010 and its wealth by 11.5%” (2011).

Other headlines offer a different picture. In December 2010, the Canadian Centre for Policy Alternatives reported that the richest 1% of Canadians captured 32% of all income growth (Yalnizyan, 2010). The Montreal Gazette recently reported that by the end of 2009, 3.8% of Canadian households controlled $1.78 trillion, or 67%, of national financial wealth. This income disparity is even greater than it was in the 1920s, when the wealthiest 1% controlled 17% of income growth. The Gazette also reported that income inequality in the US is even worse, with a 2009 study by French economist Emmanuel Saez finding that the richest 1% of Americans garnered 65% of total income growth between 2002 and 2007, up from 45% in the 1990s (Roslin, 2011). It has also been reported that in 2010 the US poverty rate hit its highest level since 1993, with a record 46 million people living below the American poverty line (‘US poverty numbers hit record high’, 2011).

Quite clearly, the effects of neoliberal ideology and capitalist globalisation are enormous, all encompassing, and having a very tangible impact whether it is widely acknowledged or not. Indeed, we can open any newspaper or watch any edition of the evening news on network television to witness this one-sided discussion; growing consumer and academic debt, people losing their homes, panic about national security, and companies posting record profits while simultaneously laying off workers are presented as if it they are a perfectly normal, inevitable state of affairs. When we consider the ways that this individualistic and greed-fuelled ideology serves as the root cause of the social, political and economic strife that creates and perpetuates inequity and hopelessness, it becomes easier to see how everything is connected.

The following list, offers only a preliminary summary of ways in which the dominance of neoliberal ideology impacts our lives:

  • Endless pursuit of profit through competition normalises a shallow, consumerist vision of social function.
  • Selfish individualism destroys the philosophical achievement of societies concerned with collective responsibility, whether it be toward workplace injury, sickness, poverty, or environmental protection. Emphasising the individual in these circumstances promotes a “blame the victim” mentality that absolves profit-chasing corporations of any responsibility.
  • Deregulation has led to insecurity in the form of rising unemployment and underpaid jobs as well as a growing income gap; privatization has led to the loss of collective gains and shared resources.
  • Dismantling public services—from libraries and education through to correctional facilities and the military—­by transferring control to private, for-profit corporations, means profits can be made every time society experiences crisis, thus encouraging crisis to be induced or, at the very least, not avoided.
  • Competition for work generates an all-versus-all mentality that destroys solidarity while increasing violence out of survival, xenophobic hatred, and/or fear.
  • Irrational fixation on competition promotes the theft of human and environmental resources, unfair distribution, an economy based on incarceration, and a predatory media obsessed with reporting on and generating fear.
  • Citizens are attacked from two directions. First, by an increase in physical illness arising from growing rates of poverty (this correlated to increased incidence of alcoholism, drug abuse, and delinquency), and the greater likelihood of injury, illness and/or death as a consequence of environmental mismanagement, and lower health and safety standards for the workplace/consumer goods. Second, by a lack of access to education and opportunity, and perhaps more importantly, a lack of healthcare and safe housing conditions.
  • The promotion of cheap consumer goods (affordable to low or meagre income earners by North American or European standards) promotes the expansion of free trade zones where unhealthy, repressive, and outright abusive labour conditions result in nothing short of legalised slavery.

As noted earlier, our best hope for understanding and improving our inter-connected context is through intellectual and cultural analysis and action. The proponents of neoliberalism know this, as well. Chapter 2 will begin to explore why neoliberal ideology has taken a deep and growing interest in culture and the arts.

—–Notes——

2 Peaceful female protestors penned in the street and maced! – #OccupyWallStreet, 2011.

3 Since the initial writing of this chapter, peaceful ‘Occupy’ demonstrators self-identifying as “the 99%” throughout North America and the world have been met with tremendous police violence, demonstrating the extent to which actions questioning or otherwise disrupting the sacred flow of capital or capitalist ideas are recognised as a serious threat. Examples of this violence include police brutality in Oakland, California, which led to a general strike that prompted further violence by police provocateurs (October 25, 2011); the violent eviction of demonstrators from Zuccotti Park in New York City (November 15, 2011); violence against demonstrators (including 84 year old Dorli Rainey) in Portland, Oregon (November 16), the violent pepper spraying of entirely peaceful, seated students at University of California Davis (November 18, 2011), among many others. Very few of the Occupy camps established in other cities and other countries are still standing due to factors including police violence or winter weather. Despite this, the movement continues to grow in other ways and will surely find new from by spring. Student led uprisings in Montréal serve as one case in point.

5 US Supreme Court Judge, Oliver Wendell Holmes, Jr. famously stated, “taxes are the price we pay for a civilized society” (1927). Section six of this e-resource, “The complexities of public funding,” will address the purpose and function of taxation including as they relate to the funding of arts and culture.

6 For further information about the distinctly hierarchical and directly personal experience of class power in feudal society, see French historian and cultural analyst, Michel Foucault’s (1926-1984) discussion of corporal punishment in Discipline and punish: The birth of the prison (1975/1977) and John Holloway’s Crack Capitalism (2010) especially pages 132 and 148, wherein he describes the extent to which serfs were forced, under pain of punishment, to serve their lord. Also of interest, see The Discourse on Voluntary Servitude by sixteenth-century French theorist, Étienne de La Boétie (1530-1563), available here: http://www.constitution.org/la_boetie/serv_vol.htm.

7 In various European nations and countries such as Canada, states were perceived as responsible for facilitating what is known as the reproduction of labour by meeting (to various degrees) basic needs such as healthcare, housing, and primary levels of education to ensure an adequate and capable workforce. Through the process of privatisation, as will be discussed in more detail later throughout this chapter, we are increasingly expected to fend for ourselves and generate profit to privately held corporations while simultaneously competing for fewer and fewer well paid jobs.

8 Examples of immaterial labour resulting to the production of ideas, concepts or strategies may not readily fit into the simplified summary of material production under capitalism. Service oriented labour can likewise differ in terms of how it is contained and controlled, both in terms of wages and worker rights. The chapter titled “What’s up with the neoliberalisation of culture?” will seek to address these subjects in relation to the so-called creative industry.

9 It is important to emphasize that a sweater maker is rarely in an adequate position to become a sweater merchant. The money required to invest in a competitive economy of scale is greater and greater all the time. Those who oversee the mass production of sweaters or sell them retail sometimes don’t know how to make them, nor may they have any desire to know. Instead, they know to control variables leading to profitability such as repressing costs associated with production (including workers and their wages); they may know how to control their competitive advantage against other sweater merchants.

10 Evidence of this can be found in the comment section of almost any article about gender based wage equity. Here’s the very first example I found online: http://www.dailymail.co.uk/femail/article-2031972/Gender-pay-gap-Equal-pay-98-YEARS-away-men-paid-10k-women.html.

11 Social organizations such as Bohemian Grove and Skull and Bones, as well as intellectual strategic planning organizations such as The Mont Pelerin Society and Davos World Economic Forum.

12 Visit http://www.theyrule.net for an in-depth depiction of the extent to which the board members of multinational corporations overlap in effort to ensure the concentration of power within as few hands as possible.

13 Interestingly, neoliberal ideology makes an exception for state spending on military and policing, which it deems essential for the protection of private property rights… the only rights it considers natural and inalienable.

14 http://en.wikipedia.org/wiki/Concentration_of_media_ownership and McChesney, Newman, & Scott, 2005.

15 This point of view was purportedly shared by Adolf Hitler… just sayin’.

16 Insights into the intricate network of think tanks, lobbyists, and public relations activity is documented at http://www.powerbase.info. A detailed list of right-wing think tanks in the US can be found at http://www.publiceye.org/research/directories/dem_grp_undermine.html.

17 Charles and David Koch head both Koch Industries (the second largest privately owned company in the United States) and the Koch Family Foundation (an inherited empire derived from oil refining technology created by their father, David). According to Wikipedia, the brothers have funded conservative and libertarian policy and advocacy groups in the United States and, since the 1980s, have given more than $100 million to such organizations, including the Heritage Foundation, the Cato Institute, and Americans for Prosperity. Americans for Prosperity and FreedomWorks are Koch-linked organizations affiliated with the right-wing Tea Party movement. See also: Mayer, 2010 and Greenwald, 2011.

18 The Trilateral Commission lists as its co-founders a number of people responsible for facilitating the neoliberal turn, most notably Alan Greenspan and Paul Volcker, both of whom later headed the US Federal Reserve.

19 Learn more about the establishment of the Washington Consensus and the various neoliberal economic policies it imposes in Naomi Klein’s The Shock Doctrine: The Rise of Disaster Capitalism (2007).

20 The largest example of this, the Multilateral Agreement on Investment (MAI) negotiated between members of the Organisation for Economic Co-operation and Development (OECD) in 1995 – 1998, in fact failed to materialize thanks to citizen intervention. Advocates of these types of trade agreements continue to promote them via regional free-trade agreements such as the North American Free Trade Agreement, and various examples of private businesses suing governments have ensued. For example, in 2001 UPS sued Canada for $230 million, arguing that Canada Post has an unfair advantage because it uses the public postal system to support its own courier business. Canada won after seven years in court (‘Canada Post claims victory at NAFTA over UPS’, 2007).

21 i.e. Algerian philosopher, Jacques Rancière (b. 1940), in The Philosopher and His Poor (2004).

22 See Chapter 2, “What’s up with the neoliberalisation of culture?” for more on the establishment of the global marketplace and consumer culture.

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