Spotlight on Geopolitics

Neoliberalism’s Ugly Legacy

30 years have passed since the launching of the Thatcherite revolution in Britain. From its very inception I was in a position to witness firsthand, in Australia, how the neoliberal agenda was sold to an unsuspecting Western public. It is high time today, when neoliberalism’s basic theoretical tenets have led the world onto a blind alley, to assess its effectiveness and especially its legacy.

The mass-media of the eighties was full of propaganda-type ads, such as one aired in Australia that ended with a bizarre prodding to “lie, cheat, steal your way to the top“. This, to be sure, resumes in a nutshell the neoliberal moral philosophy. It is still kept in high regard in the United States, Britain, Australia and the countries of the “new” Europe.

The corrosive effects of this credo can be felt all around the Western world, in politics, in corporate life, permeating courts of law, schools and even among civil servants. Lying has become an acceptable social practice. Cheating – whether on your taxes, on your business partners or on your wife – separates these days the “winners” from the “losers”. And stealing, especially the white-collar, madoffian version, has sadly become the norm, not the exception.

The theoretical roots of neoliberalism could be traced back to the Austrian neoliberal scool, mainly represented by Hayek and Ludwig von Mises. Through his books and the Mises Foundation, the latter had helped transform classic liberals into pathological haters of social democracies, much in the same way as Soviet communists under Stalin had developed into pathological haters of capitalism.

The neoliberals and the latter-day supply-side saints proposed low taxation, minimal government and the removal of all obstacles hindering, even if legitimately, the (mindless) expansion of global corporations. During the nineties, economists like Paul Craig Roberts preached in Business Week the virtues of being greedy, as the supreme justification of economic growth. Putting profits above people and obtaining profits from speculative activities became the hallmarks of neoliberals worldwide. The Catholic Church, no less, decided at the wrong time in the history of liberalism (!), to join the cause of free markets and democracy. (These days, its leadership has a hard time explaining to their flock what went wrong and why they were in it in the first place…)

Even the Left became the New Left. In Britain, the US and elsewhere, its members ended up as protectors of the new breed of capitalists who were bent on putting the shackles on the authority of states and on destroying the incomes of the West’s middle class, one that had taken several decades to improve after WWII. Moderate protesters have been long subdued, making way for the violent demonstrations staged by anarchists and other radicals.

In the wake of the Asian crisis, the dot com bubble, the recent global financial crisis and the current sovereign debt crisis, it has become obvious that neoliberalism has a deeply flawed moral and economic philosophy. It is one which generates serious social inequalities, impoverishing many for the benefit of a few. By continuing down the road opened by neoliberals in the eighties, we run the risk of ending up with a minority living in palaces, whilst the largest majority of employees and pensioners would live in substandard conditions, at bread level. The tendency is still highly visible in countries like Romania and Bulgaria, which the European Union finds very hard to deal with or to assist because of the very deep influence American conservatives have there.

The negative consequences of fully adopting the neoliberal agenda are there for all to see. Britain is again beset by stagflation, which had affected the country’s economy in the seventies. France enjoys only moderate economic growth and has recently commited to further reducing the incomes of its inhabitants, even if the main engine of growth there is internal consumption. The United States has a staggering debt of some 324 percent of its GDP (source:IHT), which some American economists consider unserviceable in the long run. Southern Europe is ravaged by the current fiscal crisis.

For the first time in centuries, mercenaries have become more numerous than regular soldiers, and private security firms more important than state police. Our students, both at secondary and tertiary levels are less educated than ever and teachers are at a loss about how to prevent exam fraud and cheating. Our hospitals are delivering less care and becoming more expensive by the day, and so are many pharmaceutical products that were affordable not so long ago. Doesn’t it sound like a return to the dark ages ?

In short, this is the ugly legacy neoliberalism leaves us with. Our most urgent task in the years and decades ahead is to find our way back from the brink. For now, our chances of doing so are not too rosy.

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