What is neoliberalism?

Many people think neoliberalism is a form of hyper-capitalism. In reality it is anti-capitalist (and anti-socialist too).

Neo-liberalism is a set of policies designed to promote parasitism, in which a handful of people own everything, and everyone else becomes their slaves and their hosts. That is not capitalism. It is more akin to feudalism.

Some examples of neoliberalism …

[1] Lies about money (e.g. the lie that the U.S. government runs on loans and on tax revenue, and therefore we must have austerity).

[2] Lies that Europe will crash without the euro.

[3] Lies that Social Security is “insolvent,” and should be privatized to “save it.”

[4] Lies that private ownership is “more efficient.”

These examples are neo-liberal because they promote the privatization of public assets.

The TPP, TTIP, and TiSA trade treaties promote the supremacy of privately owned corporations over public sovereignty.

Private owners of public assets are parasites. They set up toll booths. They charge exorbitant rent and interest and fees.

The great rivalry throughout history has not been between capitalism and socialism, but between private and public ownership. Or if you prefer, between oligarchy and democracy. Or hosts and parasites.

However people are distracted by terms such as “free market.” When rich people own everything, there is no “free market,” and no capitalism. There are only parasites (the rich) and hosts (the rest).

At the other extreme, when a dictator single-handedly controls a socialist society, there is no socialism, since dictatorial control is the same as ownership. A communist dictator can likewise become a parasite.

But as I said, many people have mistaken ideas about what neo-liberalism is.

One article gets it partly correct…

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

No. That’s capitalism, not neoliberalism. Neoliberalism claims to extol competition, when in fact it seeks to eliminate competition via monopolies, and via the controlled markets. Neoliberalism promotes ownership by the rich. It redefines citizens not as consumers, but as hosts and as debt slaves. When neoliberals extol “the free market,” they mean a controlled market. They mean ownership of the market by the rich. Neoliberals are not capitalists or free marketeers. They are parasites.

Neoliberalism sees attempts to limit competition as inimical to liberty. (Wrong again.) It seeks to minimize taxation and regulation. It seeks to privatize public services.

As I said, neoliberals seek to eliminate competition. Rich owners do not want to face competition. Parasites don’t want competition from their hosts. Hence neoliberals do not want “free markets.” They want host markets.

Neoliberals portray organized labor and collective bargaining as market distortions that impede the formation of a natural hierarchy of winners and losers. They recast inequality as virtuous, and as a reward for utility. They say that inequality is a generator of wealth, which trickles down to enrich everyone. It portrays efforts to create a more equal society as counter-productive and morally corrosive. It says the market ensures that everyone gets what they deserve.

But as I said, neoliberals do not want free markets. They want host markets. And the more they gain ownership, the more all wealth from the host trickles up, not down.

We internalize and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit. They ignore the advantages – such as education, inheritance and class – that may have helped to secure their wealth. The poor blame themselves for their failures, even when they can do little to change their circumstances.

True. As you can see, neoliberalism opposes “free markets” and capitalism. It is all about creating lords and peasants. Owners and slaves. Parasites and hosts.

Never mind structural unemployment. For neoliberals, if you don’t have a job it’s because you are lazy. Never mind the impossible costs of housing: if your credit card is maxed out, it means you are carless and profligate. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

Quite with the “competition” thing. Neoliberals do not want competition. They want slavery.

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as Nazism and Communism.

For neoliberals, “collectivism” means public ownership and control. It means no parasites. Admittedly, this can create problems when government bureaucrats are in charge. The world of socialist bureaucrats can become Kafka-esque. Bureaucrats can become parasites too. But the world of parasitic neo-liberalism is just as savage. It is a world of owners and disposable slaves; a world in which the purpose of your existence is to provide a “free lunch” for rich parasites.

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control.

That’s the leftist extreme. At the other extreme is neoliberalism, in which society’s owners are just as totalitarian.

Like Mises’s book Bureaucracy, “The Road to Serfdom” was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from taxes and regulation. When, in 1947, Hayek founded the first organization that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations. 

Average people who champion Hayek and von Mises (and Ayn Rand) fantasize that they are superior and unique, and that they deserve to be one of society’s owners. Their personalities are sociopathic, or quasi-sociopathic, meaning they lack empathy for others. They are parasites. This phenomenon also occurs among people at the opposite extreme (totalitarian communist).

With the help of the Mont Pelerin Society, Hayek began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal International”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of think tanks propaganda mills that would refine and promote the neoliberal ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies, and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

Correct. Today in most colleges you cannot be a professor of economics unless you are a neoliberal fanatic.

Meanwhile average people have become so brainwashed, so miserable, and so full of hate, that they regard “socialism” (i.e. public ownership) as evil. They regard anything other than slavery beneath their rich owners as evil. They regard parasites as “makers,” and hosts as “takers.”

As neoliberalism evolved, it became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way, among American apostles such as Milton Friedman, to the belief that monopoly power could be seen as a reward for efficiency.

bookMonopoly power means ownership of “free markets.” As for Milton Friedman, he was a liar and a sociopath. The only reason he got any attention was that he was a willing toady for the rich. His book There’s No Such Thing As A Free Lunch (1975) was meant to keep the slaves in line.

In the 1970s, neoliberal ideas began to enter the mainstream. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the United States and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, outsourcing, and privatization of public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organization, neoliberal policies were imposed on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example.

Yes, today’s Democrats in the USA, Social Democrats in Europe, and Labor Party people in the UK are far to the right of conservatives of the past. Everything has shifted toward masters and slaves; lords and peasants; parasites and hosts.

signsMeanwhile society’s owners use tricks to control their slaves, such as demanding that women allow men to use women’s restrooms. If you don’t want some filthy creep ogling your daughter up close as she uses a restroom, then you are “bigoted.” If you don’t want your male employees to walk around the store in nothing but women’s bikinis, then you are “intolerant.” If you are not into sexual deviance, then you are guilty of “discrimination.”

It’s all designed to keep the slaves divided — and therefore submissive to their owners. The parasite must keep its host confused.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest, and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

Whoops. That’s an error. For countries like the UK and USA, taxes do not pay for federal government spending. Thus, tax increases do not mean a redistribution of wealth. The author believes the Big Lie, which is part of neoliberalism. The lie says that money is physical and limited, and that all federal governments run on loans and on tax revenue. A few governments do (e.g. the euro-zone nations that have a trade deficit) but most federal governments do not.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup in Chile, or the Iraq war, or Hurricane Katrina, which Milton Friedman described as “an opportunity to radically reform the educational system” in New Orleans. 

In other words, the parasite sinks its claws into a host when the host is in trouble. Neoliberals use crises to impose private ownership by the rich, which entails slavery and parasitism.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and statistical comparison. The result is that workers, job-seekers and public services of every kind are subject to a stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that, Ludwig von Mises proposed, would free us from the bureaucratic nightmare of central planning has instead created one.

Yes, but neoliberalism does not want universal competition. Neoliberalism is against competition. Slave owners do not want competition from their slaves. Parasites don’t want competition from their hosts.

Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatization and deregulation.

The owners get richer. The slaves get poorer. The parasite sucks the life out of the host.

The privatization of public services – such as energy, water, trains, health, education, roads and prisons – has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest of the fare reflects the fact that they have you over a barrel.

Now you’ve grasped it. The essence of neoliberalism is parasitism. It is the quest by the rich for an ever-larger free lunch. To claim that “there’s no such thing as a free lunch” is to claim that there’s no such thing as private toll booths, rent extortion, or debt extortion.

Those who own and run the UK’s privatized or semi-privatized services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through fire sales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

They are all parasites who enjoy a free lunch.

Financialisation, as Andrew Sayer points out in Why We Can’t Afford the Rich, has had similar impacts. “Like rent,” he argues, “interest is … unearned income that accrues without any effort.” As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

For countries like the USA, the purpose of austerity is to remove government money from the economy, so that you must obtain loans from private parasites, and thereby become a debt slave, i.e. a host. There are parasites at all levels, from the “payday loan” creeps in your neighborhood to the big Wall Street thieves. When all levels have parasites, all wealth flows to the top parasites.

Sayer argues that the past four decades have been characterized by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.

Yes. Being a parasite is not a factor of how much money you have, but of how you get your money. If you get your money by rent or interest, then you are a parasite. If you champion this nightmare, then you are a neoliberal. If you are a toady for the parasites, then you are a politician.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Friedrich Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.

In other words the parasite eventually sucks the host dry, whereon the parasite dies with the host. That’s what happened with the Roman Empire, whose parasites were financiers.

If you like, you can regard the parasites as a cancer that eventually becomes malignant and terminal. Wall Street is a cancer on American. The City of London is a cancer on the U.K. Finance is a cancer on industrial capitalism.

The greater the failure of neoliberalism, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, (whoops) privatize remaining public services, rip holes in the social safety net, deregulate corporations, and re-regulate citizens. The state now sinks its teeth into every organ of the public sector.

As the parasite sucks the host dry, the parasite must suck harder and harder, and sink its claws deeper and deeper into the victim. And it must inject more and more chemicals into the host’s brain to keep it hypnotized to love the parasite that is killing the host.

Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.

It’s not anonymity. It’s the chemical that the parasite injects into the host’s brain to make the host think it does not have a parasite.

The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might treat equally, like gravity or atmospheric pressure. But “the market wants” tends to mean what corporations and their bosses want.

Exactly. They don’t want free markets. They want host markets. Rigged and controlled markets. Now you’re catching on.

Using the same word for different activities camouflages the sources of wealth, leading us to confuse wealth extraction with wealth creation.

We confuse “takers” with “makers.” We confuse the host (average people) with the parasite (rich financiers).

Then the article falls apart, because the author believes the lies about money. He believes that monetarily sovereign governments run on tax revenue. He believes that money is physical and limited.

Every invocation of Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st-century is to ignore three obvious problems. It is hard to mobilize people around old ideas; the flaws exposed in the 1970s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.

Wrong! Keynes was correct, and always will be. When the parasite sucks all the money out of the economy, it is up to monetarily sovereign federal governments to replace that money, and thereby end the recession.

What the money is spent on is a different topic. The nature of consumer demand is a different topic. The author thinks that to stimulate demand is to stimulate environmental destruction. That is not necessarily true. We can have economic growth without pollution growth. It’s a question of values and priorities.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labor, the Democrats and the wider left, the central task should be to develop an economic Apollo program, a conscious attempt to design a new system, tailored to the demands of the 21st Century.

Wrong! Keynesianism and neoliberalism cannot be compared. Keynesianism is a workable theory based on objective facts. (Government money, properly spent, stimulates aggregate demand.) Neoliberalism is an ideology based on lies. The problem is not with sound Keynesian theory, but with our bullshit ideologies.

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4 Responses to What is neoliberalism?

  1. Chunch says:

    You really weny out of your way on this one.

    Milton Friedman is one of the greatest economists of this century and quite honestly, i dont agree with alot of what he preached.

    You communists are a sorry bunch, Friedman talked about monopolies and like him – i will ask you to point out a monopoly that did not survive because of help from the government. Name just one. I bet you cant because monopolies can only survive with government support. You know that public ownersip thing?

    If you look at it from a pure libertarian perspective, Friedman was far from it. He did place blame where it belonged, the government, but he also thought the government should play an active role in banking.

    Sorry, you are wrong… Really wrong…


  2. Chunch says:

    On Keynes…

    You are so wrong about money that i’m crying here. Nobody can “suck” money out of the economy, not the way it currently works. Thanks to that moron Keynes. The man is the reason our financial system is a mess.

    Im not surprised that we are using Keynea theories to manage government finances – what did you expect when keynes thought that government spending is the solution to all our ills.

    The money anyone puts on an account is immediately re-lent and put to work. That money continuea to circulate the same way as if anyone owned it – the same as a dollar held by a poor person.

    Why do you think you get paid interest to make a deposit?

    Stop making up nonsense and you will sound a little more believable.


  3. Chunch says:

    One thing about the article you quote.

    The author posts to the rich earning interest without effort. Let me take a crack at what the author means.

    He means that if i had a million bucks, i could purchase a rental property with a number of apartments and rent them for a fee which will make me a profit.

    Of course the author doesnt have to go into any detail about where the million came from, for you Liz, just the income part is enough.

    How can you and the other communists live with yourselves? Is the fanatisism greater than the truth?


  4. Chunch says:

    About the sex thing.

    It is liberals that want male “gays” to be able to go into woman’s bathrooms. It is liberals that want to force their sexual diviances onto the rest. Try watching a movie with children. I’ve had to stop a few rated G movies.

    Thats the problem with liberals, they want equal treatment and after they get it, they want to enforce their will on the rest. In other words, freedom for me – none for you.


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