The greatest success of neoliberalism has been to stereotype socialists as ‘flat-earthers’. It at once stigmatises them not only as ‘loonies’, but as hopelessly out-of-date loonies, running after a misapprehension discredited centuries ago.
To that extent, the message is that we must all be neoliberals now, if we are to be ‘credible’.
Even the Socialist Workers Party, enjoying unaccustomed coverage as they protested against workfare, felt it necessary to repeat frequently that they were ‘proud of being socialist’ … as though they, too, appreciated that ‘socialist’ has become a dirty word.
But is it really so altogether mad to be a socialist?
And is neoliberalism really the sensible, infallible corpus we are assured it is?
The Supremacy of Neoliberalism
The neoliberal propaganda machine is at full volume at the moment.
We are told that:
• Capitalism has made us rich, so there is no other way to be prosperous.
• If the rich prosper, wealth will ‘trickle down’ to the rest of society.
• Sovereign debt is ruining the economy, so austerity cuts are unavoidable.
• This is the worst depression since the 1930s.
• The answer to all our problems is GROWTH.
• The state is too ‘big’ and must be reduced.
• The welfare state has created a lazy ‘benefits culture’, and we have an unsustainably large number of (workless, disabled and old) people on benefits.
• An excess of ‘red tape’ is stifling industry.
The statements are, and have been, trotted out so regularly and with such authority by the leaders of both parties to the point where they are almost above contradiction.
Neoliberalism struts about as though it has a monopoly of empirical credibility.
But its tenets are demonstrably nonsense – either internally contradictory, or incompatible with each other.
And it is time we laid the myths to rest.
The Lunacy of Neoliberalism
There is a lovely science fiction story about a man who finds himself in hell – a hell which so perfectly fits in every detail his accepted image of hell that eventually he cries out: ‘I don’t BELIEVE it' … whereupon the illusion shatters and hell crumbles and the man find himself back in the ‘real’ world.
He looks around for a while and then, as the ground begins to shake under him, cries once again: ‘I don’t believe it’.
The worlds in which he lived only existed because he was giving mental assent to them.
In a similar way, the hell which the neoliberals have created for us to live in has no more absolute reality than the story-hero’s hell. It is a myth – a conceptual construct – and it is so wide of reality that is it unsurprising that our policy-makers are finding it increasingly difficult to hold the structure together.
Capitalism – per se – has NOT made the West rich. What made the West rich in the last half-century was massive technological advantage coupled to favourable terms of trade. So that immediately calls into question the rider that 'there is no other way’ to restore prosperity – in fact, now that the Asian tiger has surpassed us economically, there is every likelihood that, from now on, capitalism will steadily make the West POORER.
It is statistically (and empirically) demonstrable that allowing the rich to prosper does NOT ‘trickle down’ wealth to the rest of us. Having reached a high in the 1930s, but then having been reduced by the socialist post-war reforms, the gap between rich and poor has been again growing steadily since Thatcher.
Here is a news flash: allowing the rich to prosper … allows the rich to prosper.
(And you thought the socialists were flat-earthers.)
Similarly, one has to guffaw at the confidence with which the neoliberals tell us that austerity cuts are the only way to avoid ruin – when any fool with half a brain can look at Greece and SEE for himself that austerity does not avoid ruin … it CAUSES ruin.
Neither will anyone with even the slightest knowledge of the world economy be impressed by the attempts to compare the current recession to the depression of the 1930s. Nothing could be further from the truth.
The 1930s depression was a structural readjustment in which the ‘old industries’ collapsed and the ‘new industries’ prospered; the adjustment was worldwide, and it caused suffering world-wide.
The current recession is a European phenomenon. China is so exposed to Europe that our troubles have slowed (though not halted) China’s growth … but meanwhile the rest of the world (Indonesia, India, Brazil, Africa) is booming.
THERE IS NO WORLD DEPRESSION … there is merely European capitalism collapsing in the face of foreign competition.
And this gives the lie, of course, to the neoliberals’ solution – that the answer to all our problems is GROWTH.
We cannot sustain – the earth cannot sustain – ALL the nations of the world endlessly increasingly all their living standards, endlessly consuming resources, endlessly growing economically at 3% per annum.
Neoliberalism … I DON’T BELIEVE IT!
What Neoliberalism is REALLY about
At it heart, the capitalist system is a competitive system, in which there must be winners and losers.
Our problem is that, having been for centuries the winners, we are staring into a future in which there is a good chance that we will be amongst the losers.
And it is only in the realisation that European capitalism is succumbing to the BRICTIM countries that the apparently contradictory claims about the welfare state can be understood.
In any other terms, they are nonsensical.
• How can sacking public sector workers and reducing benefits and pensions help the economy – they merely reduce demand!
• How does giving employers the freedom to sack workers stimulate employment?
• Surely making older people work longer will simply exacerbate youth unemployment?
However, viewed through the lens of a capitalism which has realised that it is losing ground to the East, they are ENTIRELY comprehensible:
• The assault on workers’ rights and welfare benefits is transparently merely an attempt to increase profitability by shedding obligations.
• The privatisation of the state sector is clearly merely an attempt to secure lucrative, protected markets.
Capitalism in the West is not stuttering; it is doing what the ‘hidden hand’ always said it would – readjusting to meet the new economic reality … at our expense.
(All you need to do is to think: ‘hand-loom weavers’.)
Towards a Neosocialism
Historically, socialism was a system – the ‘command economy’ – which attempted to control the means of production for the benefit of … well, properly, it was supposed to be ‘the people’, but all too often it ended up being ‘the state’ (and the two were NOT commensurate).
But now, as western capitalism bends before the chill wind of economic superiority, we need more than ever to control the means of production for the protection of the people.
If we do not, our great-grandchildren will be sewing trainers for teenagers in other countries.
We need a 'neosocialism' which will take account of the reality of our current economic situation. There is no future in propagating old dogmas – they are as unconnected to the current economic reality as is neoliberalism.
Cleverer philosophers than I must formulate the tenets of this new 'neosocialism', but if you asked me, I would suggest that it would include at least the following:
1. a ruthless marshalling of the energies of the whole people for the benefit of the whole people, particularly by eliminating unemployment.
2. nationalisation of essential industries – e.g. electricity, gas, water, transport, banking … or at least setting up state firms to offer an alternative to the international cartels – not for ideological reasons, but for the protection of the British consumer.
3. autarky in the industries essential to providing a basic standard of life – e.g. agriculture, power, water, construction – to safeguard supplies.
4. reducing taxes for resident capitalist firms, whilst increasing taxes for wealthy individuals; insisting on an ethos of individual duty.
5. a system of pre- and re-distribution which will assure for all a basic standard of living and access to essential services free at the point of need.
6. Bread for all before jam for any.
I realise that the things I am saying are the kind of things that the existing establishment regards as ridiculous, ‘flat-earth’ ideas.
What we need to establish, however, is that we are living in a rapidly changing world, in which it is increasingly their ideas which are irrelevant and inapplicable, and that increasingly the scene is set for a corpus of 'neosocialist' ideas which – crazy at it might seem – are increasingly going to make sense.
You heard it first here.