Today’s crisis of the established political parties and the rise of far-right political projects are linked to the long-running capitalist crisis in which neoliberalism is immiserating the working class and small producers.
Neoliberalism has become dominant, not just within the centre-right but also the former parties of social democracy. This dominance, and the desire to break out of it, has led some to argue that the populist right-wing represent a break from neoliberal doctrine. This is far from the truth.
US President Donald Trump, Marine Le Pen and Nigel Farage represent an effort by capital to shift popular anger at the impact of neoliberalism on to the most marginalised sections of the community, in particular migrants and refugees. In the colonial settler states, this anger is also directed at indigenous people.
These right-wing populist forces generally support neoliberal policies because they support capital at the expense of the already marginalised and oppressed.
The problem of neoliberalism has recently become a talking point after ACTU secretary Sally McManus said at the National Press Club on March 29 that “neoliberalism had run its course”.
This was followed by former Labor Prime Minister Paul Keating who said he had supported neoliberalism because it had delivered wages growth, but that it had now “reached a dead end”.
Guardian Australia columnist Van Badham suggested that Labor, having previously helped promote neoliberalism, could now play a progressive role in leading the centre-left away from it.
While McManus’s comments are welcome, her criticisms of neoliberalism were primarily focused on the negative impact of privatisation. Although privatisation is a damaging component of neoliberal policy, it is only a part of it.
Keating’s support for neoliberalism exaggerated the supposed wage gains for workers in Australia and ignored its impact across the world, particularly in countries such as Indonesia and Chile. There, its application involved the murder of tens of thousands of people and, in the case of Indonesia, hundreds of thousands of people.
In Australia, neoliberalism has delivered casualisation and underemployment. The average earnings for all employees rose just 2.4% in real terms during the life of the Hawke-Keating governments.
It is important to understand what neoliberalism is because simply labelling things we don not like about capitalist society as “neoliberal” reinforces some of the mechanisms that neoliberal ideologues use to strengthen the domination of their ideas.
What is neoliberalism?
Defining neoliberalism in terms of a single aspect, such as “austerity” is inaccurate. Neoliberal advocates have no problem with government spending if it helps sustain capitalist profits or class power: indeed neoliberalism has been described, to borrow from Charles Abrams, “socialism for the rich and austerity for the poor”.
Marxist geographer David Harvey argues that neoliberalism is a political project aimed at the restoration of capitalist class power.
There are many examples of how neoliberalism does this. It reduces barriers to capital investment by making and removing barriers to capital investment and shattering trade barriers. It increases barriers to the free movement of people, specifically workers and marginalised, which results in fewer rights for migrant workers.
It pries open more aspects of social life for capital investment via formal or informal privatisation (such as public/private partnerships). It opens up government services to capitalist competition, often supplemented through voucher systems which enables the state to provide subsidies to capital but which also lays the ground for the total deregulation of these services.
It allows the commodification of a wider range of things (or services); a good example of this is the so-called “sharing economy”.
Weakening the strength and power of organised labour — through the deregulation of the labour market — is central to the neoliberal project. Also essential is the outsourcing of public services to private companies, opening the outsourced service to profit making and undermining collective bargaining.
Shifting the cost of the reproduction of labour further onto the working class, including through increasing taxes on workers and cuts to taxes on capital is also critical.
An example of this is superannuation, which was originally funded via smaller wage increases during the Bob Hawke Labor government in the 1980s, and has allowed for the age pension to be narrowed. It has led to Australia having one of the highest rates of poverty among retirees in the OECD.
Reducing spending on social services, either by total elimination of services or means testing services, is another key aspect of the neoliberalism.
Why did neoliberalism become so dominant?
Neoliberalism emerged as a current in the late 1930s, in response to the growth of social democratic and communist parties and to capitalist governments’ increasing acceptance of Keynsian economic policies.
In 1947, a small group of right-wing intellectuals formed the Mont Pelerin Society. This group began establishing similar think tanks at a domestic level to build what Philip Mirowski has described as a neoliberal thought collective, seeking to build networks of intellectuals, politicians and capitalists who promoted neoliberal doctrine and sought to undermine alternative approaches.
This network was able to take advantage of the social, economic and political crises that emerged. Indonesian and Chilean economists, trained in the University of Chicago’s School of Economics, were able to position themselves in Suharto’s New Order Regime and the Augusto Pinochet dictatorship to drive the neoliberal policy experiments in both countries.
These experiments were described as “economic miracles” internationally — miracles that ignored the repression deployed to implement the policies and also the problems caused by neoliberalism.
The economic crisis that swept the advanced capitalist countries in the 1970s allowed these conservative theorists to push neoliberal doctrines as the only solution to the problems facing advanced capitalist economies. Importantly, and this reflects the power of neoliberalism, there has been considerable success in transforming neoliberal assertions into common sense truths.
Examples of this include the notion that privately-run companies are more efficient and effective in providing services.
This defies not only our actual experience of privatised public services costing more but also basic logic. How can a for-profit company provide a service cheaper than a public service which does not have to make a profit, unless the quality of the service drops and workers are paid less?
Another major ruse is that “the market” is more efficient and should not be interfered with. This ignores the reality that neoliberals regularly promote interference in the market, such as interfering in the ability of workers to organise and the gagging of scientists from using their research to promote policies that run counter to the neoliberal agenda.
Part of this success comes from framing neoliberal policies as the only option. As former British Prime Minister Margaret Thatcher said, there is no alternative. It is done by creating national and international laws that enable governments and companies to deflect public opposition to their agenda by threatening legal action as in many multilateral and bilateral trade deals.
Neoliberal ideologues are adept at undermining social and political movements opposing neoliberalism. It is not unusual to see articles that, on the one hand, deny the impact of racism or sexism and then accuse communities of colour of racism and women of sexism. This is not simply a misunderstanding of the movement: it is a deliberate strategy of division and destabilisation.
Neoliberal ideologues also do their best to destroy social solidarity: they reject the notion that people have common interests and should stand together. Thatcher’s infamous remark — “There is no such thing as society” — helped justify enormous cuts to social services.
The real threat in this idea, however, is not that the conservatives are inhumane and indifferent to the murderous impact of their policies, but that the working class begins to believe that social solidarity is a thing of the past. We see this with the way means testing for social services undermines support for those services among those who are excluded from those services.
This assault on our ability to unite in struggle for our collective interests is the most devastating and despicable aspect of neoliberalism.
It is essential therefore to support those organising against every manifestation of tyranny and oppression, no matter where it appears, no matter what stratum or class of the people it affects. Only by adopting this approach can we begin to counter the assault on social solidarity, which has the most devastating impact on our class.