In a recent interview Matt Stoller confirmed something that I long suspected. Stoller, the author of Goliath: The 100 Year war between Monopoly Power and Democracy, describes economics as the language of the aristocracy, or oligarchy, if you will. He says that economics is a language for how to understand the world, but also a language that precludes discussing power. “The point of economics as a discipline is to create a language and methodology for governing that hides political assumptions from the public.”
Economics does it by creating a mathematized language that hides political assumptions, while inserting this mathematized language into every important governing structure. The point of the mathematized language is to hide important governing decisions from the public, and to make sure that only the best people (read–the wealthy) are allowed to control the levers of power.
Ever since my first Econ 101 lecture I have suspected as much. Going further, it’s become obvious that the discipline of economics has become a means to justify the savage inequality created by 40 plus years of neoliberal ideology.
We live in an age of precarity, epitomized by a gig economy where employers have the whip hand. According to research by the Bank of England, the labour share of income has fallen significantly in the USA and in other advanced economies as well. The decline in power of labor has led to new precarious forms of employment: mostly flexible, low-payed, unstable jobs that are underregulated by labour legislation and offer few if any benefits.
Individuals are considered contractors or “entrepreneurs” maximizing their “human capital”, which consists of knowledge, skills and abilities of an individual, to be managed just like any other form of capital. This logic turns citizens into another actor in the so-called “free market”, with its “natural” and “objective” laws. If the market-actor succeeds, they increase their human capital. If they fail and fall into poverty, it’s nobody’s fault but theirs because the market is savage but fair (just like nature).
Following this pernicious logic, any social support and protection (like labors unions) is considered a violation of free will and a burden to the “job creators”.
Thus, precarity driven by the ideology of neoliberalism becomes the default setting for the modern “liberal” technocratic governments. Think the New Democrats and the Third Way, the administrations of Bill Clinton and Barak Obama.
Or, as Margaret Thatcher proclaimed–There is no alternative.
Neoliberal economic ideology is ready as a powerful weapon in this class war. Media, internet, books and experts strive to persuade workers that this state of insecurity is necessary, normal or even desirable. And the defenders of flexible and unstable jobs claim that this is the objective logic of economy which has nothing to do with political decision-making or power relations.
Neoliberal economics also presents itself as the key social science that can solve problems in any other social field: law, culture, education, social care etc. Indeed, it’s been amazingly successful at colonizing every facet of our lives.
Neoliberalism has ordained the “free market” to be the best method for organizing our society therefore other issues are no longer considered to be a matter of politics, which means they are no longer subject to democratic choice. In this manner are power relations erased. The decisions instead are technocratic and seem to be not a matter of voluntary acts of power, but a ‘forced’ solution, based on the impersonal necessity of the global free market. This is what famous political theorist Wendy Brown called neoliberal rationality.
However, precarity really is a political problem rather than some kind of temporary technical mistake of capitalism. Precarity is the theory of surplus value of labor taken to its logical endpoint, a constructed system of neo-exploitation.
Right now the leaders of such a constructed system are meeting in Davos, for the World Economic Forum. For these sociopathic masters of the universe precarity is not a bug but a feature of late stage capitalism.
It is ironic that the theme of this year’s Davos conclave is “stakeholder capitalism” – the idea that corporations have a responsibility to their workers, communities and the environment as well as to their shareholders.
Besides the dark humor associated with the replacement of shareholder with stakeholder, the pledge should be viewed as a PR exercise. The assembled CEOs know they can increase their wealth much faster by boosting equity values in the short term by buying back their shares of stock, suppressing wages, opposing unions, ignoring environmental regulations and lobbying politicians for tax cuts and subsidies.
In other words, despite all the pious proclamations at Davos it will be business as usual. So expect more downward pressure on wages, more payoffs to politicians for tax cuts and subsidies and further rollbacks of environmental regulations. All of which will worsen the prevailing precarity.
In tandem we can expect neoliberal economists to continue to insist that there really is no alternative.