some thoughts on neo-liberalism …


Or why if I sometimes wince when my friends rant about its evils.

Neo-liberalism is such a pejorative term that covers such a broad school of political thought that I feel I should expand on my particular version of neo-liberalism.

The essential core behind my political beliefs is that individual liberty is of primary importance and a good in itself. Unlike anarchists and this is why I call myself a neo-liberal is that I believe that a State is required to protect individuals or groups of individuals from each other, that in certain cases the State is required to regulate the private affairs of individuals for the “greater good” and that the State has a responsibility to protect, care for and empower the weakest and most vulnerable of its citizens.

I would and have also considered my views to be centrist or left-of-centre. However I think that my suspicion of the State in general and my general preference for market solutions probably places me far more in the neo-liberal camp than in the centrist / left of centre camp.

In many of my social circles, many especially those on the far or fringe Left find it difficult to understand why I am so opposed to State solutions and why I generally prefer market solutions.

The following is an attempt to expand on my reasons.

In my view, any State imposed limitation on individual liberty has to be seriously considered in a very critical fashion because the State is not and can not, by the nature of its construction and the nature of humans, be assumed to be a benevolent or even a very competent entity at governing. This is because:

· The State will first tend to protect its own interests. The emergent behaviour of the State in general through the machinations of its various departments and agencies for funding is that it will first further its own interests before it favours that of the people it supposedly represents. This is true of course of other organisations of people as well such as corporations, religious organisations, lobby groups, unions, etc. But the State is more dangerous because it is the only one of those groups which has the authority to use violence (see next point). Democracy, transparency in the way the State works and a free press is probably the only solution to this problem. From my point of view, it is at best a weak solution as the free press is not so free, the State always finds ways of limiting exposing its machinations to the people and the voting patterns of the public, much as I respect the results of every election, generally tend to favour the lowest common denominator.

· The State has a monopoly on violence. This is necessary but it makes the State even more dangerous especially if it becomes a pathological and corrupt State. There are liberals (and conservatives) who believe that the only counterbalance to this is for the populace to be armed. The increase in violent death is not necessarily a consequence (Canada being an often cited example). I remain undecided on the best counter for this although I do generally view every attempt to limit gun ownership with suspicion but with understanding.

· The State is always removed from the affairs of the people it governs. The State by its nature is always a third party and receives its information after it has passed through various layers of self-interested parties that will distort or exaggerate what needs to be done (often in the form of legislation). Thus its judgements cannot be considered to be correct. If the State is a neutral third party with nothing to gain, its judgements could be considered trustworthy but for the first reason, the State, especially the democratic state, is never neutral. The best solution for this problem is to completely minimise the level of intervention the State has in the daily affairs of its citizens unless it is called in to make a judgement by the parties involved. This means that contracts between individuals should be respected instead of dictated from by the State (even if this has problems because of bargaining and information access differentials) and the market should be left to function as freely as possible (even if the market can and does fail).

· Legislation as the primary instrument of the State is blunt and the consequences are difficult to predict. First, the process of creating new laws in democratic States is one of compromise involving the consideration of multiple special interest groups. When taking into further account human error, the judicial system in interpreting legislation, the bueurocracy in implementing policy, I am often surprised that the State can even function. I am not surprised at the cost of the State however. The competing pull and push of thousands of individuals employed by the State lurches the whole edifice first in one direction and then the next. The solution for this is to minimize the scope of the State’s authority – ie to limit its legislative powers.

· Services provided by the State are not directly accountable to its service receivers but to the State first and then through various reporting layers back down again. If the populace is lucky, it hears about it and the State may then make some attempts to adjust its policy or legislation to poorly rectify the problem (see above point). This is because State services are State monopolies and have all the attendant ills of monopolies. The solution to this is to privatise as many State services as possible, to expose services to market discipline – which basically means that if you provide me with a crap service I will just go to another service provider and you will know right there and then what is happening. This is not an ideal solution due to market failure, the suitability of privatisation where natural monopolies exist and the possibilities of private monopolies emerging in small markets but to my mind the increase in efficiency and productivity in many privatised ex-state services (though not all) has shown it to be a valid one so long as it is not blindly applied.

· Power corrupts and the centralisation of power into the hands of the very few that make up the State is a thing of proper concern in and of itself. This can be argued about corporations as well and of strong connections between the State and corporations. But the only alternatives I’ve seen generally involve the State running all corporations which only centralises power all the more or for corporations to run everything which in turn centralises power as I believe also that monopolies inevitably emerge in all free market scenarios. The best solution is to have a small State that decentralises as much of its power as possible to the market and which then acts as a referee to the market and where absolutely necessary, a regulator to break up monopolies. My view on this extends to international trade and hence qualified and critical support of the Bretton Woods institutions on which I’ve written about earlier.

· The State is often used to push the cultural and religious values of the majority onto the minority even where these values have no impact whatsoever on the majority. A good case in point is homosexual marriage and recreational drug use. This is perhaps the main point of liberalism in general. That the State should minimize its intervention only where conflict between individuals emerge. This also leads directly to the next point which is about the “Greater Good”.

· Finally, I believe that there is no such thing as a knowable “Greater Good”. The “Greater Good” is always defined by special interest groups. Even in what should be evidently a clear cut case such as the environment, the vision of the “Greater Good” is influenced by the beliefs and ideological slants of its supporters. To my mind, the strong association of the Left, especially the Fringe Left, with the environmental movement has done more damage to its credibility than any amount of industry backed “denial” scientists have. Also, I generally tend to get very suspicious of anyone who speaks for the “Greater Good” and also for those who claim to speak and act for victims in the name of “Social Justice”. How do these people know what is the “Greater Good” and what constitutes “Social Justice”? What gives them the right to speak on behalf of the victims and the ability to formulate correct solutions? Conversely, how can those who are marginalised and dispossessed speak for themselves when often enough it is because they lack the ability to speak that they are in their position in the first place? While I don’t believe that the State or the Market has a solution for this, nonetheless, I still get irritated by the self-righteousness of self-appointed representatives.

Given that those are my criticisms of the State, what then do I believe should the State do?

· The State should have a monopoly on violence. This extends to internal law and order that is necessary to protect citizens from on another and also to protect citizens from foreign violence. Hence, the State needs to maintain control and responsibility over its police force and military.

· The State through its independent judiciary is the final escalation point of judgment in cases of disagreement between its citizens especially with regard to contractual disagreements.

· The State and its instruments such as the Central Bank is the final regulator of the market and is charged with preventing market failure where outcomes may threaten the stability of the economy and society as a whole. This includes the prevention of bubbles, inflation, deflation, monopolies, etc.

· The State has final duty of care for those of its citizens who are unable to take care of themselves and who have no one competent representing their interests. This does not mean that the State has to operate the services required for these citizens but the State is ultimately accountable for the health and safety of these citizens. The problems of disempowering policies inducing self-perpetuating welfare reliance, an overgenerous welfare system encouraging free-riders, monitoring service provider agencies to ensure level of care is high enough and many others is part and parcel of the challenges facing the State in this arena.

BTW, none of the points I’ve made in this post are at all radical or new. It really is pretty much the understood position albeit with some differences amongst neo-liberals and centrists at this time.

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