Is neoliberalism sinful or our salvation?

Reading Time: 5 minutes

Allan BonnerAs the Buffalo Springfield sang in 1966, “There’s something happening here. What it is ain’t exactly clear. …” They were referring to civil unrest but could have been predicting the current debate about neoliberalism.

Neoliberalism is the ill-defined trend to less government, rolling back social programs, downward pressure on wages, fewer union jobs and careers featuring strings of contracts, rather than lifelong job security.

Most economists use the term but don’t offer a concrete definition. They also list a series of ills going on at the same time but don’t make a clear connection to neoliberalism. This is a bit like a physician describing someone who limps in great detail but fails to note the patient has a broken leg.

Academics and researchers do note the manifestation of neoliberalism, mainly as a focus on the responsibility of the individual for employment and benefits, rather than it being the purview of employers or the state.

A university textbook has helped me grapple with neoliberalism. The Austerity State (U of T Press) edited by Stephen McBride and Bryan Evans, tackles a range of current trends, with one chapter of particular interest. McBride and Sorin Mitrea examine both neoliberalism and austerity, which seem to go hand in hand.

They note the end of the Keynesian “Golden Age” between 1975 and 1995. John Maynard Keynes was the British economist who advocated government stimulus to smooth out the wrinkles.

Current neoliberal thinking is that “intervention in the economy obstructs the efficiency of the market and should therefore be reduced to a minimum.” There’s “less security for workers and more flexibility for employers.”

There’s more consumer credit and investments in risky financial products to try to maintain lifestyles and obligations. This economic pressure results in “psychological and physical trauma.”

McBride and Mitrea say the disadvantaged are put in categories – those deserving and those who aren’t. Benefits are capped, unskilled workers can’t find jobs, alcohol use abounds and mortality rates go up.

The authors are on firm ground here, as the nightly news offers stories of opioid and heroin use. Readers get the impression that the authors are blaming neoliberalism, but others might blame over-prescription by physicians and zealous pharmaceutical companies. The use of the term neoliberalism seems to get the authors off the hook from discussing other causes and villains.

In this climate, the state invades personal space with career counselling and advice to work hard, avoid binge drinking or overeating, and manage lifestyles to promote health. Citizens are also counselled to invest in skills, training, education, mobility, flexibility and such. The unnamed suits in the neoliberal states stigmatize benefits and emphasize employability rather than employment. Workfare programs seem to offend as well.

Governments use private contractors. Governments devolve responsibilities but not always budgets to lower levels of government, and they privatize. Assistance caps are lowered, percentages of those covered decline, and all income must be declared.

We read of the “anxiety, blame, shame, and guilt.” We read of the notion that benefits discourage work, that work is out there to be found, and it’s the individual not the system that’s at fault. We even hear that people should move to find work and reduce consumption if they’re making less. Surely many readers would think this is obvious advice, so why do the authors seem to find this noteworthy or even negative?

Like too many academics, the authors bend the language out of shape.

The neoliberal approach is defined as “involving the idea that state intervention in the economy obstructs the efficiency of the market and should therefore be reduced to a minimum.” No doubt all political and economic approaches involve several or many ideas, so how far ahead does this take a reader?

It’s true that if the state intervenes, there’s an effect on the market. Actions have consequences. The state has finite resources.

Do the authors really mean there’s an “umbilical linkage” between workers and employers? Perhaps under the tripartite system in Germany there was a joining at the hip, but not a parental relationship. Canadian industrialists did not spawn workers.

Perhaps they mean a symbiotic relationship.

Moreover, when were workers’ benefits and employment the responsibility of the state or employers?

The authors don’t note the historical challenge to workers to find jobs, or the current low unemployment rate. Back in the 1960s, Canadian Prime Minister John Diefenbaker stated that one unemployed Canadian was one too many. Guess what? Reporters found one to challenge him. More confrontational, Pierre Trudeau was asked as prime minister what he was going to do about unemployment. He pulled out a copy of the local newspaper’s want ads and noted several columns of jobs available.

It’s not always the disadvantaged who suffer. At the height of the booming economy in Fort McMurray, one of the hottest commodities was clean urine, free from traces of drugs. Rapid wealth can also harm.

Something is happening here. But I’m not sure it’s a monster called “capital,” which is anthropomorphized as an agent that has restructured labour relations, according to McBride and Mitrea.

But Robert J. Gordon has a simpler analysis in The Rise and Fall of American Growth. He studied the durability of goods, entry date into the market, life-expectancy and so on. Between 1870 and 1970, both the economy and human health received multiple jolts in the arm that can never be repeated. These included: electric lights, indoor plumbing, home appliances, air travel, the automobile, air conditioning, automation, television and the department store.

There has been nothing since about 1970 and there’s nothing on the horizon that will cause such growth. High-tech, Gordon says, only provided a jolt lasting a few years, whereas the internal combustion engine provided decades of growth.

He also notes the headwinds of rising inequality, stagnating education, an aging population, student debt and national debt. It’s hard to draw a connection between these realities, and the imagined or supposed connection between slow growth and neoliberalism. Is neoliberalism a cause or an effect?

Nonetheless, others find the early 1970s to be a watershed. In popular culture, it was the end of the idealism of the 1960s, dying at Altamont at the hands of “an angel born in Hell” as Don McLean noted in his song, American Pie.

For others, it was the 1973 blowing up of the Pruitt-Igoe housing complex in St. Louis, which they say signalled the end of modernity.

It’s hard to tie neoliberalism in with these events either.

I’m critical of the term “neoliberalism” because the use of any technical jargon tends to let the user off the hook in the discussion. If you don’t have to define what it is, but just note that it’s dastardly and occurs at the same time as other dastardly things, you don’t need a careful analysis.

In fact, without definitions and causal relationships, you can’t construct a careful analysis.

Dr. Allan Bonner, MSc, DBA, is a crisis manager based in Toronto.

Allan is a Troy Media Thought Leader. Why aren’t you?

© Troy Media


The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.