The state is as large and active as it has ever been, yet millions of us sincerely believe that we live in a Thatcherite/Reaganite dystopia
Pick up any bestselling left wing political book or listen to any prominent left wing commentator on television or radio today, and chances are that you will almost immediately be confronted with the N-word.
No, not that one. The fashionable N-word of today is “neoliberalism”. You’ve probably heard or seen it blaring from Guardian editorials, phlegm-lobbing anti-Tory activists and Owen Jones’ YouTube channel.
The basic argument goes something like this (I paraphrase):
We live in a neoliberal age now where the Corporations and the Bad people and the Profit do bad things to the Society and the Good People and the Community. Rich people take money from the pockets of poor people because neoliberalism.
Neoliberalism is destroying Our NHS with the profits and the privatisation and the One Per Cent. Local shops and artisan bread makers and steel manufacturers are put out of business because neoliberalism and the giant supermarkets and the GM food. George Osborne gives your money to millionaires and billionaires because neoliberalism, and wants to socially cleanse London because neoliberalism and the housing crisis. Heartless Iain Duncan Smith kills disabled people in his spare time because neoliberalism. Save Our NHS from neoliberalism, Saint Bevan [genuflect].
Britain only re-elected this hateful neoliberal Tory government with an increased majority and share of the vote because the neoliberal media confused the minds of the people with their neoliberal propaganda and made them forget just what a star-spangled awesome prime minister Ed Miliband would have been.
Words to this effect are poured forth on Twitter and Facebook by the second, tapped out by young, moralising left-wingers who are utterly oblivious to the irony of using the creations and commodities made available to us by capitalism in order to protest against…capitalism. We saw these words made flesh on the streets of London last night, when Anonymous held their risible anti-capitalist Million Mask March.
And until now, it has been difficult to fight back – partly because it is difficult to have a rational discussion when the other person is screaming and spitting in your face or swearing in BLOCK CAPITALS and then blocking you on Twitter before you can respond.
But countering these cries of “neoliberalism” has also been hard because the current usage of the word “neoliberal” is a relatively recent interpretation, plucked from a part of the left wing anatomy where the sun don’t shine, and so has no real fixed definition. Literally meaning “new liberal”, it is instead used by virtue-signalling leftists and preening social justice warriors as a catch-all insult against people who believe in small government, conservative or libertarian ideas, in all their rich diversity.
But now those of us on the libertarian right who are used to silently seething with rage every time Owen Jones or some other left-wing commentator blithely talks about the evils of “neoliberalism” while going shamefully unchallenged by their interviewer have a new champion – Dr. Kristian Niemietz from the IEA.
Niemietz took to the Independent (where his article inevitably went down like a lead balloon with that paper’s readership, scoring only thirteen comments and barely a thousand shares) to patiently explain to the wobbly-lipped Left that actually, if it is Big Government and a paternalistic state that they really want, they have never had it so good.
It has often been pointed out that resistance to immigration is inversely related to the number of actual immigrants, and strongest in places where there are hardly any of them. Something similar is true for resistance to neoliberalism. It is strongest in France, where, with government spending approaching 60 per cent of GDP, there is actually not much of a market economy left. It is also ludicrously strong in Britain, where the state has never been larger in size, never been more encompassing in scope, and never been more intrusive.
Forget the waffle about “austerity”: The long-term trend has been one of almost continuous government expansionism. When A.J.P. Taylor said that “Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state”, he was exaggerating, but not grotesquely so. Up until the First World War, government spending used to account for less than 15 per cent of GDP. It then rose to around 30 per cent in the interwar period, and still did not cross the 40 per cent mark until the mid-1960s. Today, despite five years of so-called “cuts”, it still stands above that level. At the outbreak of WWI, only about one in twenty people worked for the public sector, today, the figure is closer to one in five.
I’m not entirely comfortable with the rose-tinted comparison back to 1914, since huge numbers of British working class people (particularly women) at that time were in domestic service, with little remuneration and almost no prospects for real economic or social advancement. But the 1960s comparison and the bulwark of 40 per cent seems very reasonable as a high-water mark for the growth of government that should not be exceeded.
Niemietz continues with this withering critique of the vast over-centralisation of British government:
There was once a time when “government” usually meant “local government”. Today, it is almost synonymous with “Whitehall”. Ninety-five per cent of all tax revenue accrues to the national level, which makes the UK one the most centralised countries in the world. The tradition of local autonomy, of voting with one’s feet, and of tax competition between local authorities, has been almost completely wiped out. Local governments are now so devoid of any real autonomy that we might as well abolish them, and replace them with Whitehall branch offices.
This criticism is absolutely valid, as the over-centralisation of government in the UK is one of the chief drivers of political disengagement, never mind the lack of competitiveness in the regions and cities beyond London. When county and local councillors exist for little reason other than to implement directives from the national government, with no tax raising powers of their own, their ability to drive competition and innovation in their local areas is almost completely stripped away, making a vote in your local elections about as democratically useful as a vote in the X Factor.
The one mitigating factor here would be that some of this centralisation (the emasculation of local government in particular) came about under the Thatcher government, which felt compelled to take decisions out of the hands of local authorities which were in thrall to the far left.
You can argue the rights and wrongs of this, but it is difficult to see how the Thatcherite turnaround of Britain could have succeeded in the face of daily filibustering from socialist councils. Conversely, one wonders if local councils had possessed greater power to make decisions for their local electorate, the negative consequences of the Thatcher economic reforms might have been better mitigated, and the Tory brand might not still be toxic in Northern urban areas. You can probably argue these points to a draw.
Regardless: the state remains nearly as large as it has ever historically been, and takes far too many decisions at a national level, undermining our democracy and increasing voter apathy. One need look only at the SNP’s record in devolved Scottish government to see the same authoritarian instinct at work, with the abolition of regional Scottish police forces and their amalgamation into the centralised, inept Police Scotland.
This is not a neoliberal age. This is an age of hyper-statism, where the state has far more control over our lives than it should do. Think that by buying yet another anti-capitalist tome means you’re somehow “thinking outside the box”? You’re wrong. Anti-capitalism is the box.
Absolutely. One of the most amusing things about listening to contemporary lefties speak and campaign is the endearing way that they honestly seem to believe that their ideas are original, bold and visionary. Their political philosophy can basically be summed up as “lots more wealth redistribution, please, and to hell with wealth creation”, as though that had never been tried and found wanting before, yet they successfully portray themselves as radical insurgents who want to see their new ideas implemented for the good of mankind.
Niemietz’s article shows that this is pure nonsense. Big government, statist ideas have never been more widely embraced in our society, from the compulsory worship of Our NHS and government-provided healthcare, the perks showered on wealthy pensioners, to government backtracking on welfare reform in the face of social media outrage.
Our present Coke Zero Conservative government even campaigned for re-election by promising a dystopian “plan for every stage of your life” while promoting the sickening idea that economic growth is only good when it funds our insatiable public services.
But this is how the Left plan to win the argument. In truth, it’s the only option they have. Owen Jones loves to talk about the Overton Window, the theory that there is a relatively narrow range of political ideas that people will accept. But while the perpetually victimised Left believe that their ideas are cruelly cast outside this window, the opposite is true.
Socialised healthcare. Cradle-to-grave non contributory welfare. A whopping 45 per cent top rate of income tax, 20 per cent VAT and sin taxes on absolutely anything fun and pleasurable. These are not the ideas of small government fundamentalists like me. These are the foot-stomping demands of the anti-neoliberal left, etched in stone and made into law.
The current over-use of the word “neoliberal” as a form of insult shows that deep down, the Left know this to be true, and that they now plan to move the boundaries of the Overton Window in British politics even further, shutting out small government and libertarian-leaning ideas from the debate entirely by rendering them “unacceptable” or “problematic”.
Unable to bolster their case with examples of centralised, paternalistic, statist countries that reliably deliver innovation and increasing living standards every year, all the anti-capitalist protesters can do is work to toxify the idea of “neoliberalism” as much as possible before flinging it at anyone who believes in freedom, economic liberty or personal responsibility. It’s all the Left have.
But it’s not an argument. And for the sake of enlightening our political discourse instead of casting more false shadows, it is time to finally put the N word to bed.
No, this is not a new “neoliberal age”. If only it were.
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I agree with your premise and think the dominance of this buzzword has stifled a great deal of interesting debate. It adds nothing to contemporary theoretical critiques and only distracts from the much more complicated empirical reality. That is not to say that neoliberalism does not exist as an ideology, perhaps even the dominant ideology in our times (although I doubt this), however, if everyone is overly focused on ideology (and probably too late in the game as pointed out in this article) then we learn very little about the contingent realities of the social world and theory suffers as a result. I have seen this happen in disciplines such as Anthropology and Sociology; disciplines that are close to my heart, yet increasingly fail to capture my brain.
An interesting attempt to understand and articulate the complexities of modern regulatory arrangements that I read recently was a book called “Regulatory Capitalism” by Professor John Braithwaite. Unsurprisingly, this book starts off with a critique of the myth of neoliberalism, at least in so far as it has been institutionally delivered.
I must admit that the book mentioned above was published in 2007, and a re-appraisal is certainly necessary, however, it is still a good start towards grappling with thinking about the evolution of regulation, law, politics and economics.
Too often is the reality of neoliberalism simply presumed and little more is said on the topic. Perhaps it has just become an ideological platform from which to launch equally ideological agendas.
Bob Gigon you make some interesting points, however, to associate all extensions of government, and indeed non-government forms of regulation, over the previous couple of decades with purely market based rationale is a little basic. It is probably the most correct assumption, however, if you had to pick merely one factor.
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Very true, I never get why people use ‘neo-liberalism’ as such a dirty word. Freedom to do what you want as long as it doesn’t directly harm someone else, less tax, more jobs for the economy and less government messing up every area of our life… sounds pretty good to be tbh
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My favourite statistic that defines a big government is as follows:
UK government tax receipts peaked in real terms in 2007/08. That means by putting the nominal receipts figures into an inflation calculator 07/08 is the all time record. Despite five years of supposed cuts the UK government is still spending now a lot more than it received in its best ever year for receipts.
To a lot of people, actually a majority I would say, that’s not a problem. Spending more than you’ve ever had in your best ever year for a record 11th year in a row ( ‘cos spending exceeded the best receipts number of two years later in 05/06 ) doesn’t really bother them. It’s actually austerity.
So you win.
We’ve also got a record land area under special conservation controls. If you add up the land area of National Parks, Green Belt, AONBs, SSSIs, NNRs, Heritage Coasts, and World Heritage Sites ( did I miss any out? scheduled monuments, protected battlefields . . ) it’s a new record
So you win again.
We’ve also got a record number of listed buildings.
So young Samuel you win again.
Just three examples of record Statism and almost nobody is bothered.
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You raise some interesting examples. On the green belt, heritage coasts, listed buildings and other issues, I would devolve these to local government as part of a wider empowerment of local government to raise taxes and decide local affairs. Central government has no business meddling in many of these things.
You’re absolutely right about tax receipts and the fact that we talk about “austerity” when real terms spending has never been higher. One of George Osborne’s greatest tricks is to portray himself as a sober balancer of budgets when he as done no such thing – I call him out on it from time to time, though it gets tiring and serves little purpose.
I’m not for abolishing the state, but I am for a smarter state. I’m interested in basic income as an alternative to the seemingly unfixable welfare state we have at the moment. I’m open to bold new ideas, and I recognise that there will always be an important role for national government.
But look at the last election campaign – Ed Miliband and David Cameron were running for election not on a platform of who would make the best world leader, but who would be the best middle manager, the best Comptroller of Public Services. When so much economic activity and public service delivery is in the hands of the state, people turn to politicians and the Prime Minister expecting them to fix every leaking pipe or every late bus. Politicians then never really get to think strategically about long term issues.
I believe if the state does less stuff better, and devolves much more power to local government, both our politics and our public services would be so much better.
(Context: I’m a left leaning Lib Dem). I agree that people using words as shortcuts can confuse discussion, and in fact I think the biggest problem in political discourse is people arguing before they’ve even agreed upon a premise. I think when people start talking about Neoliberalism, what they really mean is that the Government isn’t spending where it should be spent. Instead of being invested in public services (Like it was in the late 40s/50s after world war 2) and infrastructure, cuts are being made here in order to give tax breaks to large companies, which feels backwards. Also people generally decry Neoliberalism alongside globalisation, and feel that trade tarriffs should be kept high in order to stimulate the domestic market, and it’s a supposed “neoliberal” policy to have low taxes to increase competition etc. So I agree that political shorthand is a tad irritating, (The only thing that annoys me more than people with other opinions that me, are people with the same opinions as me but argue them badly) there’s nothing entirely contradictory about the use of that word. Also criticising people for criticising capitalism whilst partaking in a capitalist system. Um what? So you think that people who overthrow the communist regime had no part in the system? People will ultimately rebel against a system that they actively partake in because they have no alternative, and it’s this dilemma that provokes them to be so antagonised over it.
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Thanks for reading and for the comment, I agree with some of what you say.
On the focus being too much on how much government spends rather than what the money is spent on, I am very much in agreement. While I still do not see why a lean, efficient state should make up much more than (say) 35% of GDP, I believe it is counterintuitive and rather obscene to suggest that the bank bailouts were necessary in their entirety, but some form of tax rebate or direct cash stimulus to consumers at the depths of the Great Recession would have somehow been a reckless move.
I would much rather the government act as an intermediary rather than the direct provider of so many services though. Even the Nordic models held up by many on the Left as the answer to Britain’s ills actually have a lot of private or third sector provision of many government services. When the state tries to act as monopoly provider, things generally don’t go well – witness the gradual unravelling of the NHS model.
As for criticising people for criticising capitalism while benefiting from capitalism – I take your point, but these young protesters screaming about inequality overlook the fact that free markets have pulled more people out of absolute poverty than any other system, not to mention the fact that free markets spurred the invention and widespread adoption of so many of the goods and services which raise living standards for nearly all of us. I’m certainly not saying that they are hypocritical for railing against capitalism – you shouldn’t have to become a hermit and live in a communist collective to earn the right to critique the status quo. But I am saying that most of them are 1) ungrateful, and 2) completely lacking in an alternative system which would generate nearly so much innovation or wealth as a capitalist system.
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Yes, “the state” has a great presence in economic life. Unfortunately it’s not OUR state, it’s the states of France, Saudi Arabia, and most notably China, as a result of the criminal stupidity of the government in handing over energy policy to a foreign state.
You lot are all about “sovereignty” this and “patriotism” that, but have nothing to say about the Chinese, Arab and Russian bureaucrats and state capitalists you’ve enabled to buy us out.
You should have had the intelligence to see in the 80s that flogging off public assets wouldn’t usher in a “free” market utopia of “competition” and “choice” but would allow a few to profit at our expense: the right to buy, for instance, entirely failed to achieve its intended goal, if that even was its intended goal. “Popular capitalism” indeed.
Yes, the state is almost as big as it was in the 70s. But instead of doing useful, productive things it does things like pay housing benefit to the “investors” who now control the housing stock (not the tenants, right-wing scare stories notwithstanding) and pays welfare to the people you lot threw out of work, most recently when you allowed the steel plants to go to the wall out of “free” market dogma.
“Libertarianism” in the Ayn Rand sense is never going to happen outside of Waziristan or Somalia. You’re going to have to decide whether you want a state that works or a state that mops up after the failings of right-wing “policy”.
But why the outcry about it now? Why the angry shouts of “neoliberalism” now, when there was a deafening silence so long as the 1997-2010 New Labour government were there to spread the wealth around? Why the totally hyperbolic freakout at this very moderately centre-right government – one which spends half the time apologising for its conservatism – as though it were Thatcherism on steroids?
I agree with some of what you say about housing, public assets and utilities. But if the strict definition of “neoliberalism” is some form of crony capitalism / corporatism (which I frequently oppose on this blog), why is the supposed solution always more socialism and protectionism – which have been proven not to work – rather than a more intelligent form of capitalism?
Don’t worry, I was slagging off Blair and Brown at the time. I didn’t do it on your blog, for the excellent reason that I’ve only just discovered your blog! They were fundamentally no different and merely tinkered around the edges of the Thatcherite (Blatcherite) settlement.
The fact is there are some things only governments can do and if not done by our government that we do essentially control they’ll be done by organised forces outside our country who are more arrogant and uncontrollable than “bueaucrats” can ever be.
Yes, we don’t have ideologically pure “libertarianism” but isn’t that rather the point? Right-wing politicians are taking you for a ride, using some of your ideas and dumping others, and what did you really expect but this? When you talk about “freedom”and “competition and “choice”, what do you think the end of that will be?
I do think actually the 70s weren’t half as bad as people say, especially since the stumbles of the late 70s could have been overcome if North Sea Oil had come on tap under a Labour government, it could have been invested Norway-style. But as I say Thatcher “needed” that money to mitigate thee consequences of her misrule.
Fair play! I know that some (but I don’t think many) were vocally critical of New Labour from the left during this time, but you clearly have consistency of principle which I commend.
I totally agree that some things only governments should do. I would include prisons (the most solemn duty of the state after going to war is depriving one of its citizens of their liberty and keeping them in safe custody while they serve their sentence) in this list, as well as critical national infrastructure.
However, I would also argue that privatisation can (or rather could, at this too-late stage) have been carried out in a way that dispersed ownership and created more competition, rather than simply enriching a few investors and service providers. It’s all in how the deal is structured. The state may have received less cash as an upfront payment, but the structure of the privatised industries could then have worked better for the people. I greatly admire Thatcher, but the Thatcher / Major governments were not exactly a walking advertisement for how to do privatisation, and we on the Right should be honest and admit that.
Interesting and witty article that you shared – I enjoyed reading it. As for being “taken for a ride” by right-wing politicians, I would disagree because I am aware of their deception and recognise that I am making the “least worst” choice when casting my vote. As someone of a far more libertarian and small government bent than Cameron or Osborne, short of running for office myself all I can do is campaign and agitate to prompt, coerce or embarrass the government into doing things more my way, against their will. That’s what I try to do through my activism and this blog. We will never live in my perfect state, but hopefully by working with others I can help bring about a few meaningful course corrections here and there in favour of liberty.
My suggestion to you is that you go and study some political-economy – make sure that you understand, can analyse and evaluate the dominant and key trends in the subject – especially on the political right. This is just ideologically driven drivel – if you wish to be taken seriously – learn the basics first and then work up.
Try again, and next time come back with more than “I disagree with you, therefore you must be uneducated”, it doesn’t reflect very well on you.
I’m just going to take ONE phrase that indicates you’re entirely on the wrong track from the first sentence – and incidentally the reason why I wrote earlier.
“The state is as large and active as it has ever been, yet millions of us sincerely believe that we live in a Thatcherite/Reaganite dystopia”
If you had bothered to understand that which lies beneath what is often called Thatcherism – and actually read the work of the right-wing political economists who inspired it – then you would realise why such an opening sentence is nonsense. There is a body of work that goes back to the early 1950s – which sought to deny the emerging Keynesian (note – an economic philosophy that seeks to preserve not replace capitalism) consensus of the post-war period – and reassert the primacy of the market. What one calls is immaterial – neo-liberalism, economic liberalism, supply-side, monetarism, free-market, laissez-faire – the market is the essential point. Those rightists who so inspired Thatcher considered that a centralised, powerful and authoritarian state was an essential component of such a market renaissance – that is the trend of New Right thought that has shaped governments in the 1980s. You seem to accept the idea that government has become ever larger – few would disagree – its been an increasing reality now for several centuries – and there are many of the Right (such as yourself) and the left (believe it or not) who decry that trend. It’s at this point that your personal ideology and politics gets in the way of analysis – and you therefore do not address the why, the how and the precise nature of increasing authoritarianism – the state is to retreat in some areas and advance in others – all in order to better aid ‘the market’. The result is an ever increasing tax burden, greater political and social control (to name a few aspects of life) – a paradox – but one that Adam Smith recognised even if he could not quite forsee how the New Right would interpret his ideas. Your article, in brief, is a piece of spinning journalese with little real scholarship – for you mix up your politics, economics and personal ideological beliefs.
“neoliberalism” well it would have to be an “ism” word as its another example of complete twaddle being dressed up as an insult to all that believe in the subject matter it pretends to refer to…….
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Well said – I couldn’t agree more. In terms of mainstream use in British politics, the term came from nowhere in recent months and is now being bandied around by virtue-signalling lefties while almost nobody pushes back and questions the premise in the first place.
Of course, we can’t expect the Conservative Party leadership to make a full throated defence of conservatism, or to rebut the allegation that we are living in some “neoliberal” dystopia. So it is left to the rest of us to push back.
go careful, according to political compass I am “lefty” leaning Libertarian, Just to the right of Gandhi – LOL!!!!!
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That’s an interesting categorisation! I should go on to say that many on the Left are honourable, well intentioned and interested in making a positive difference rather than just virtue-signalling. I’m sure that applies to you!
But as you say, taking something you don’t like and sticking “ism” on the end in an attempt to weaponise it isn’t the height of political argument. Far better to debate real issues rather than straw men. Railing against “neoliberalism” conveniently allows the speaker to skip over the positive aspects of free markets and low trade barriers, and focus exclusively on what they see as a pathology on the Right.