Chapter 2: What Is ‘Neo’ about Neoliberalism?
In the buildup to the 2015 General Election, Nigel Farage, leader of the UK Independence Party (UKIP), reiterated his support for an ‘Australian-style points system’ as a means of controlling immigration, the policy issue that his party had prioritised above all others. What was curious about Farage’s statement was not the policy commitment itself, which had been known for some time, but the liberal rhetoric that he used to justify it. Writing in The Daily Telegraph, Farage argued ‘what Ukip wants is not to do down migrants. It’s not to stigmatise, or discourage, or blame people for coming to this country and trying to make a better life for themselves’ and that the ‘points system’ is the only fair basis for managing immigration.1
At first sight, this is a simple case of rhetorical triangulation: the party that is known to be least favourable towards immigration can afford to speak in liberal tones, giving a compassionate veneer to anti-immigrant politics. But the priority attached to the ‘points system’ suggests that there was something more substantial at work here. UKIP’s liberal rhetoric is grounded firmly in the alleged fairness of the ‘points’ methodology itself. As the party’s website reported, the ‘Australian-style points system’ upholds a ‘principle of equal application to all people’.2 What could be more liberal than that?
At the core of this policy debate is the schism between ‘liberalism’ and ‘neoliberalism’ as two rival philosophies or ‘rationalities’ of politics.3 The notion of an immigration ‘points system’ assumes that the question of legitimate migration is ultimately an economic one of granting citizenship only to certain economic categories of migrant. And yet many economic liberals would argue that borders should simply be relaxed across the board, so as to promote greater labour market flexibility in general. Clearly, UKIP are not seeking that.
A ‘points system’ works through allocating different scores to each prospective citizen, based on their qualifications, linguistic ability, and work experience. A certain number of points are then required to gain entry. The purpose of such a system is therefore to discriminate between rival migrants, which is precisely how it resonates with the politics of UKIP. Where racial or cultural prejudices may focus on arbitrary signifiers, the promise of the ‘points system’ is to calculate different human capabilities according to the economistic metaphor of human capital, a concept that originated in the work of Chicago School economist Gary Becker in the 1960s.
For reasons that I will explore, the ‘points system’ can be seen as exemplary of neoliberal government in action, and highlights a number of critical distinctions between political liberalism, economic liberalism, and neoliberalism. These three philosophies or rationalities each has its own distinctive historical and intellectual genesis, and the three survive alongside each other today, sometimes complementing one another, sometimes clashing. But it is possible and helpful to make out some of the critical terms of their differentiation, so as to get a clearer sense of how liberalism and neoliberalism conflict.
Understood in a political sense, liberalism is a philosophy that treats individuals as the bearers of certain rights recognised within a system of sovereign law. Most crucially, they have the right to life and the necessities that go with that, which includes certain economic necessities. Property has long been recognised as a fundamental individual right within liberal frameworks, which partly accounts for the connection between political and economic liberalism. A crucial premise of all liberal thought and politics is that individuals all possess an equal status as legal subjects, regardless of other inequalities and differences that might divide them. Often (but not necessarily) this is complemented with a philosophy of equal democratic citizenship.
To a great extent, it is the liberal commitment to legality and equality before the law that provokes a party such as UKIP in the first place. The sense that judges are able to overrule democratically elected governments, upholding human rights charters that treat all cultures and nations equally, has been one of the key drivers of reactionary politics in the West since the 1960s. In the United States, the role of the Supreme Court in legalising abortion was one of the main catalysts for the ‘culture wars’ that revived conservatism and fundamentalism in the 1980s. In its dream of an overarching architecture for society and resort to metaphysical language of ‘rights’, it always runs the risk of seeming inflexible, unscientific, and ‘out of touch’.
Of course, a national polity can seek to withdraw from international agreements and laws, so as to reduce the scope of their political liberalism to national subjects only. Yet still this form of political liberalism upsets those communitarians who wish to see collective life governed by tradition and identity, rather than abstract legal codes. In the absence of dictators or oligarchies to mobilise against, the risk with political liberalism is that it becomes an increasingly niche type of special interest, a preoccupation for lawyers, human rights activists, and members of Liberty.
The fact that political liberals share an agenda with economic liberals is therefore one of the most crucial resources for the authority of the former. Economic liberals start from the utilitarian premise that unregulated market exchanges are welfare-enhancing, the claim at the heart of Adam Smith’s inauguration of economic science. This translates into the political programme known as ‘laissez-faire’, in which the state provides minimal forms of legal regulation and protection, such as property rights, contract law, and some collective goods such as national defence, but otherwise allows markets to regulate themselves. Historically speaking, the high point of this political programme was the British economy of circa 1820–1870.
What is crucial for laissez-faire to be realised is the idea that political and economic realms (corresponding broadly to state and market) exist virtually independently of one another. Someone can be a full citizen in a political sense, but impoverished in an economic sense. States can punish criminals or wage war, but they should not interfere with market relations between private actors. And so on. This ideal of separate political and economic realms has been widely criticised, not only by Marxists on the grounds that it provides a cover for class exploitation (liberating the proletariat merely to alienate themselves), but notably also by Karl Polanyi, who argued that it was only ever an illusion.4 From Polanyi’s perspective, the state is never entirely absent from the economic realm, but is constantly at work in manufacturing and enforcing the economic freedoms that proponents of laissez-faire treat as ‘natural’.
It is relatively easy to imagine a migration policy forged around the principles of economic liberalism, indeed Tony Blair’s government was briefly willing to defend rising migration levels on grounds of aggregate welfare-enhancement in the years preceding 9/11.5 But again, the sense that the market will all just sort it out, while the government stands back, is provocative to anyone who believes that markets need designing, constructing, and manipulating towards the greatest local advantage. This includes populists such as UKIP—but it also includes neoliberals.
The term ‘neoliberalism’ refers to various things, but is perhaps best understood with reference to an intellectual and political movement that sought to reinvent liberalism in a twentieth century capitalist context. This context differed from that of Victorian liberalism in various ways, but especially in terms of the scale of bureaucratic centralisation in both business and government. Intellectually it began in the 1930s,6 gathered momentum via think tanks and academic exchange in the post-war period,7 and then attained a grip on governments and multilateral institutions from the 1970s onwards.8 The contrast between this ‘neo’ liberalism and its political and economic forebears can best be understood in terms of three distinctions.
Firstly, neoliberalism has never pursued a weaker state; indeed it is a political philosophy and policy agenda that has always looked to the state to reshape society around its ideals. As Michel Foucault went to great lengths to stress, it is not another form of laissez-faire and, instead, grants the state a key role in shaping how economic freedom is to be defined and instantiated.9 So, in the case of immigration, the liberal notion that economic welfare will be maximised by simply throwing open the national labour market to all-comers would be resisted from a neoliberal perspective. It is entirely plausible, from a neoliberal perspective, that the state might seek to regulate something like labour flows, to serve certain strategic economic goals.
Belief in a strong state is not in itself a contradiction of older traditions of political liberalism. Thomas Hobbes’s foundation of liberal political philosophy made the state a precondition of freedom, requiring untold reserves of centralised power in order to sustain a civil society. Neoliberals typically work within this more pessimistic tradition of liberal philosophy, and share the same idea of the absolutist state as offering the a priori framework for freedom. The liberals they are most suspicious of are the more egalitarian, optimistic ones, who view markets and civil society as spaces of potential self-rule and self-regulation.
Secondly, neoliberalism abandons the liberal conceit of a separation between political and economic realms of life. Ultimately, everything can be treated in economic terms, including state, law, democracy, leadership, and civil society. Political ideals and values are treated as dangerous and liable to result in tyranny. It is far safer, from a neoliberal perspective, to view all spheres of human conduct as economic and to remodel political or cultural spaces around the example of the market.
This doesn’t necessarily equate to full privatisation of public goods. Quasi-privatisation can occur via the introduction of pseudo-markets: education, health, the arts, and so on become evaluated, ranked, and governed ‘as if’ they were operating in a fully-functioning market. This is viewed as preferable to judging and governing them on their own terms, which are deemed liable to lead to corruption and self-serving behaviour. Ultimately, political institutions of law, tradition, and sovereignty are viewed as nonsense from a neoliberal perspective.10 Questions of citizenship and justice (which shape questions of migration for political liberals) would be simply ignored within a neoliberal framework, and replaced with technocratic questions of productivity, incentives, risk, and return on investment. The ‘points system’ is a product of this technocratic sidestepping of sovereign concerns.
Thirdly, neoliberalism treats competition as the crucial and most valuable feature of capitalism.11 There is a simple reason for this: through processes of competition, it becomes possible to discern who and what is valuable. As Friedrich Hayek argued, competition is a ‘discovery process’.12 In the absence of well-organised competition, there is either a single myopic viewpoint imposed by intellectuals and planners (the problem of socialism); or there is a relativist cacophony of voices, all seeking to drown each other out (the problem of democracy). But this raises the urgency of competitions being well-planned and administered, hence the power of auditors, rankings, ratings, coaches, motivational techniques, and sporting metaphors in contemporary culture.
For economic and political liberals such as Smith, the great merit of the market was that it brought people together. It produced a new form of equality, whereby people would trade with each other as equals, and sympathise with the viewpoints of one another. Ultimately, exchange would produce social peace.13 For neoliberals, things are very different. Capitalism’s central property is not integration but discrimination: competition separates the leader from the follower; the winner from the loser; the striver from the skiver: the dynamic, productive, English-speaking migrant from the benefit scrounger. Anything that the state can do to support this sorting process (such as reform of the education system) is deemed welcome. At a macro scale, nations themselves must strive to distinguish themselves from one another, like corporations or brands pursuing divergent strategies towards ‘competitiveness’ in the ‘global race’.14
There is a political and economic logic to this, and not merely a reactionary impulse. Indeed, there is still some vestige of liberalism here, but it is deeply buried. The assumption underlying the neoliberal worldview is a sociological one, namely that we live under conditions of modernity, where the fabric of human existence is constantly being remade. The question is whether we want to privilege political and collective institutions in that dynamic, or economic and individualistic ones. The contention of neoliberals is that the latter is a safer basis for liberalism than the former, even if it means living in the shadow of corporate oligopolies and in a culture of constant entrepreneurship that tips eventually into depressive narcissism.
What, then, is left of ‘liberalism’ under ‘neoliberal’ conditions? Can the language of fairness really be seized so easily by UKIP? The notion that fairness now consists in an evaluative, discriminating methodology ‘applied equally to all people’ offers a reasonably accurate depiction of the weak normativity of neoliberalism. This is scarcely recognisable as liberalism.
One thing that the neoliberal pioneers possessed that contemporary liberals might take heed of, however, was an ethos of redesign and innovation. Rather than just look to the market or the law to uphold their ideals, as economic and political liberals respectively have done, neoliberals saw the need for active reinvention of both. New policy instruments would be needed to build a new liberalism for the twentieth century, some of which have now found their way into the hands of conservatives and reactionaries such as Farage. The question is whether another reinvention is possible today, based on a different liberal imagination from that which privileges only economics and competitiveness, extended to every walk of life.