I’m fascinated by neoliberalism and the worship of the market. I’m especially interested in the intellectual underpinnings of this ideology and how it became our de facto religion.
In his new book: Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Meltdown, Philip Mirowski finds an apt comparison to this situation in classic studies of cognitive dissonance. He concludes that “neoliberal thought has become so pervasive that any countervailing evidence serves only to further convince disciples of its ultimate truth. Once neoliberalism became a Theory of Everything, providing a revolutionary account of self, knowledge, information, markets, and government, it could no longer be falsified by anything as trifling as data from the “real” economy.”
Mirowski says that neoliberalism differs from classical economics in that its insistence on the use of markets for everything actually requires “strong uses of state intervention.”
Gee, where have I seen the government setting up markets and forcing citizens to purchase from said markets under penalty?
Give yourself a cookie if you answered the Affordable Care Act.
In attempting to understand neo-liberalism, it’s useful to go back to the beginning and make some inquiries about the foundation of this ideology. Is neoliberalism, where private enterprise requires vigorous state intervention, a modern phenomenon, or is this just a feature of capitalism?
That’s a question Michael Perelman attempts to answer in, The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation.
Perelman shows how economic writers such as Adam Smith attempted to portray early capitalism as “a natural system of voluntary market relations, which are devoid of conflict, and benefitted all of mankind.”
But what really happened was the violent seizure of other people’s means of production– primitive accumulation.
Early capitalists needed desperate people willing to work as wage slaves in the horribly dangerous factories.
But why should peasants leave the farm and their self-sufficient lifestyle and go to work for wages in a factory?
As Perelman makes clear, the peasants did not go willingly. They were “forced into the factories with the active support of the same economists who were making theoretical claims for capitalism as a self-correcting mechanism that thrived without needing government intervention.”
The peasants were forced off their land by the British government who attacked the economic independence of the rural peasantry through a series of Enclosure Acts.
“Some enclosures had to be carried out by force and many sparked resistance from users of the common land, including the tearing down of fences used to enclose the land. As a historically significant process of land privatization, the Enclosure Acts are sometimes seen as one or both of building blocks of capitalism and theft by major landowners from the peasantry.”
I think I’m starting to get the hang of this neoliberalism thing: Government intervention on behest of wealthy business owners is the magic of the free market. Government intervention on behalf of the poor and middle class is the worst kind of tyranny.
Update: I’m not the only one taking neoliberalism to task. This guy is way above my pay grade.
Update Part 2: Of course you just knew that any criticism of the sacred would make their heads explode.