Neoliberalism as "respectable" behavior

Because of where I live, I was exposed many years ago to an old argument in economics. The history of a local liberal arts college has an interesting story.  When the school was just starting out, it had a young president named John Bates Clark.  (Yes, the very same John Bates Clark in whose name they award a prize to the up-and-coming economist most likely to not rock the boat.  Sometimes they mistakenly award their prize to someone who decides to become a bit more progressive in their old age—Stiglitz and Krugman are two of the more well-known examples.)   One of Clark's first students was the genius named Thorstein Veblen.  Even though Clark and Veblen would form a lifelong friendship, their views on economics were could hardly be more opposed.  While Clark would spend most of his life teaching, promoting, and trying to find wider applications for the Theory of Marginal Utility, Veblen would spend a significant fraction of his energy debunking marginal utility in all its forms.

The local college honors this intellectual spat by sponsoring its Veblen-Clark lecture series on economics.  But it's all window dressing—there are NO Veblenians in the economics department.  This is an expensive high-class school with a reputation to uphold.  Hence the department is devoutly neoliberal.  The spirit of Clark—the man who thought that the driving mechanism of the market could be applied to all human endeavors—smiles down on the economics department of his school.

So why are there neoliberal Democrats—even though this set of beliefs runs counter to the economic interests of most who call themselves Democrats?  That answer is pretty easy—MOST people under the age of about 65 have never been exposed to anything BUT neoliberalism in any academic setting.  And the more prestigious the school, the more rigorous the indoctrination.

Voting For Neoliberal Democrats As The Lesser Of Two Evils

masaccio March 30, 2014

Adolph Reed’s essay in Harpers, Nothing Left; the long slow surrender of American liberals led to much discussion. Among others, there is Michele Goldberg in The Nation, Robert Eskow of The Campaign for America’s Future, Harold Meyerson at The American Prospect, and Armando at Daily Kos, Mike Konczal in The New Republic, and Joan Walsh in Salon. I addressed a different version of Reed’s ideas in August 2012.

Recently we heard from the Democratic Strategist (h/t Phoenix Woman). James Vega writes in a similar vein. He says that Reed’s argument has two parts: first, that the Democratic party is committed to neoliberalism, and therefore there is no meaningful difference between the parties; second, that the left is hooked on the election cycle to the exclusion of other efforts at grass-roots change. Vega and the others cited argue that you should vote for the neoliberal Democrat as the lesser of two evils.

Reading Vega’s article helped me clarify my massive problem with the Democratic Party: it doesn’t recognize the danger of what Michel Foucault called anarcho-capitalism, the US version of neoliberalism, and its relentless efforts to destroy the New Deal and the intellectual and spiritual basis for the New Deal. As a result, the left, or whatever’s left of it, spends all its energy fighting to maintain the remnants of the safety net and the regulatory fences constructed by the New Deal, and has no energy or time or space to reflect on a vision of the future that isn’t based on neoliberal principles. And, of course, the institutional Democratic Party hasn’t supported an actual lefty since forever.

Most of the articles I cite agree generally that the Democrats are tied to neoliberalism without any discussion. Vega is a more accurate reader; he recognizes that the concept of neoliberalism requires some attention:

In left discussion the term “neo-liberalism” is often used to refer to a particular pro-free market economic perspective and set of policies that conservatives developed in the 1970’s and 1980’s as an alternative to the New Deal and European social democracy. As Reed uses the term, however, it is generally synonymous with any perspective or policy that supports capitalism in general.

Vega and the other commenters think neoliberalism is nothing more than a set of policies designed to be a conservative alternative to the New Deal. I don’t think so. I think it’s much more than a set of policies. It’s an entire attitude towards the way our society should function. In Chicago School neoliberalism, there is only the individual fighting in the market place for a decent life. It’s a zero-sum game: my win is your loss. I take all the risks, reap whatever rewards are on offer, and if I fail, I am ruined. There is no room for ancient ideas, social justice, fairness, cooperation, community, social bonding or love.

Everything is understood in terms of markets. Here’s the neoliberal judge Richard Posner explaining why rape is an economic crime in a 1985 article in the Columbia Law Review:

The dichotomy between acquisitive crimes and crimes of passion is overstated. Acquisitive crimes bypass explicit markets; crimes of passion often bypass implicit markets – for example, in friendship, love, respect – that are the subject of a growing economic literature illustrated by Becker’s work on the family. Less obviously, crimes of passion often bypass explicit markets too. Id. at 1197

According to Posner, there are markets in “friendship, love and respect”, but these are supplemented by other markets, such as the market for marriage and sex. That’s right, rape is a crime because it bypasses the admittedly illegal market for prostitution. Id. at 1199. Posner must be horrified that the rapist didn’t sign up with eHarmony.com or ashleymadison.com, and legal and illegal markets for pretty much everything. He adds this:

As with my earlier discussion of crimes of passion, it is important not to take too narrow a view of market alternatives. Supposing it to be true that some rapists would not get as much pleasure from consensual sex, it does not follow that there are no other avenues of satisfaction open to them. It may be that instead of furtively stalking women they can obtain satisfactions from productive activities, that is, activities in which other people are compensated and thus derive benefits. This is an additional reason to think that the total wealth of society would be increased if rape could be completely repressed at a reasonable cost.

It’s all about the money. Posner isn’t alone. Tyler Cowan imagines a future world dominated by robots in this article.

The rise of intelligent machines will spawn new ideologies along with the new economy it is creating. Think of it as a kind of digital social Darwinism, with clear winners and losers: Those with the talent and skills to work seamlessly with technology and compete in the global marketplace are increasingly rewarded, while those whose jobs can just as easily be done by foreigners, robots or a few thousand lines of code suffer accordingly.
…
We will move from a society based on the pretense that everyone is given a decent standard of living to one in which people are expected to fend for themselves. I imagine a world in which, say, 10 to 15 percent of the citizenry (or more, in due time) is extremely wealthy and has fantastically comfortable and stimulating lives, equivalent to those of current-day millionaires, albeit with better health care.

Much of the rest of the country will have stagnant or maybe even falling wages in dollar terms, but they will also have a lot more opportunities for cheap fun and cheap education. Many of these people will live quite well—especially those who have the discipline to benefit from all the free or nearly free services that modern technology makes available. Others will fall by the wayside.

The 10 or 15% of the lucky winners will do just fine and the rest of us will eat dirt. The Hunger Games comes to real life. That is the future that neoliberal Democrats support, and it is falling neatly into place. Why exactly should anyone support them?

The defenders of the Democratic party cited above tout the recent successes of the sane in temporarily rejecting pieces of the neoliberal agenda. They ignore the many successes of neoliberalism, and its growing future prospects. But none of them discusses the massive amount of political effort that goes into the few temporary successes. Just stopping President Obama’s plan to make sure old people have skin in the game by cutting Social Security and Medicare was a five year effort of organizing phone calls, emails, congressional contacts, demonstrations and constant publicity. The same is true of the effort to derail the Keystone Pipeline and the Trans-Pacific Partnership. We couldn’t even scrape together the energy to insist on extension of long-term unemployment benefits, and were unable to stop cuts to food stamps, among many other failures.

These exhausting campaigns eat time and energy that could be used for positive purposes, if the Democrats had any positive purposes. But they don’t. On every issue, from climate change to judicial appointments to financial regulation to health care reform, the first choices of solutions are neoliberal, and each time we have to start over from ground zero.

There are no Democratic voices for a decent future. Other than the empty platitudes mouthed by Obama and belied by his actions, there is no discussion of a path towards a future in which democracy controls the rich and their corporations. There is only the dead hand of Friedrich Hayek and the bullhorns in the hands of the filthy rich bellowing that markets are god-like and that we proles must serve them to survive. There is only the demand that we support whatever Democrat gets past the money primary and gratefully lick one or two crumbs off the floor. more