Neo-Liberalism As adapted from Professor Christian Stark

Neoliberalism the term neoliberalism was coined by the

economists Friedrich A. von Hayek, Wilhelm Röpke, Walter Eucken etc. at a conference in Paris 1938

economic policy concept counter-concept to Keynesianism “a capitalism which is liberated from all

democratic and social inhibitions and scruples

Formation of the neoliberal project 1947 Mont-Pelerin-Society. Establishment of an international network of:

foundations, institutes (Institute of Economic Affairs 1971, London), research centers, journals, public relations-agencies

to support and spread neoliberal thinking. Scientific breakthrough:

series of awards of the Nobel Prize for Economic Sciences (1st 1969) for neoliberal economists (e.g. Friedrich A. v. Hayek 1974 and M. Friedman 1976).

Political implementation of NL First experimental field for neoliberal

economic policy was Chile. Since 1975 the representatives of the

Chicago School have subjected Chile to a neoliberal restructuring with the support of the military regime of Pinochet

Also see Jacobo Arbenz (Guatemala)

From the Periphery to the Center 1979: Margret Thatcher: Prime Minister of the U.K. 1980: Ronald Reagan: President of the U.S.A. Reaganomics and Thatcherism implemented

throughout the 1980s 1989: dismantling of the Iron Curtain, end of

communism in the Soviet Union Neoliberalism then became the predominant

economic doctrine. Thatcher: T.I.N.A.-Syndrome (there is no

alternative)

Neoliberalism: viewed as a religious structure

One God Profit

Primary requirement: sacrifice “save!” “tighten one‘s belt!”

Who Makes Sacrifices? the majority of the poor (who provide an enriched

lifestyle for the rich minority)

Divine Laws of Neoliberalism the invisible hand of the market

A. Smith, J. Bentham force of circumstance

Similar to the circumstances people were born into in the middle ages of Europe

Invisible Hand, Hidden Fist The invisible hand of the market cannot

work without the hidden fist. McDonalds cannot prosper without McDonnell-Douglas (US-armaments group). The invisible fist, which creates security over the world for the prospering of the technology of Silicon Valley is called US Army, Air-Force and Marine-Corps.“ (T. Friedman; a journalist close to the US-ministry of Foreign Affairs)

Universal Statement “Who is not with me, is against me”

"Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists." (George Bush, Address to a Joint Session of Congress and the American People, September 20, 2001)

Relate to those who oppose neoliberal policies alternative solutions to those who oppose

neoliberalism: Denied Ridiculed Stigmatized finally criminalized

Neoliberalism as a religious structure (continued) Saints

Adam Smith John Locke David Ricardo

Head theologians Friedrich von Hayek Milton Friedman

Bishops, High Priests of NL Ben Bernanke (since 1.2.2006):

chairman of the Federal Reserve Board

Robert Zoellick1.7. 2007: president of the world bank group

Dominique Strauss-Kahn: 04.2007: IMF managing director

Pascal Lamy (1.9.2005): Director General WTO

Vatican and Holy War of NL Neo-Liberalism’s “Vatican”

The World Bank WTO IMF

N-L’s Holy War in the name of democracy human rights prosperity for everybody

NL as a religion (continued) Blasphemies:

property tax value added tax

Heretics: Critics of globalization Trade unions NGO‘s

Myths of Neo-Liberalism “We cannot afford the welfare state

any longer“ “the fat years are over!“ “performance must be

worthwhile!“ less state more private! If the economy is doing well,

everybody is doing well

NL and distribution of wealth NL: We can‘t afford the welfare state any longer

We don‘t want to afford the welfare state any longer!

What we can afford depends on what politicians want to afford

Alternate experiences/explanations There is enough money but it is distributed

unequally There is enough for everybody's needs but not

enough for the greed of some people

NL: “Performance must be worthwhile”

Huge wage gap between (normal) employees and managers 1:250 to 1:550

Can a person really do 250 (550) times more than someone else?

Elements of Neo-Liberal Thought economization of all areas of life privatization economic globalization deregulation

Economization of all areas of life the market as an universal model of

organization all areas of life are subjected to the logic

of the market, the logic of economic optimization.

Individuals become human capital

Privatization: Less state, more private privatization of state owned enterprises

and state monopolies e.g. traffic, provision of energy and water.

The state as an instrument of private economic interests guarantees the necessary conditions for a

free market. As an instrument of repression the state

is rearmed instead of disarmed

Less state, more private (or, what can be owned in the NL system) What belongs to everybody (public goods)

suddenly becomes the property of a few Traffic water health Social affairs Justice

NL and ownership: a quote “The first human being who fenced in a piece of

land and had the idea to say ‘this is my property‘, and who found people naive enough to believe him, was the real founder of the civil society. How many crimes, wars and murders would have been prevented by the man who knocked down the fence posts and called to his fellow human beings: Don‘t listen to this swindler! You are lost if you forget that the fruit belongs to everybody and the earth belongs to nobody.”Jean Jacques Rousseau

Economic Globalization Opening of borders for global transfer of

goods, services, capital and investments Reduction of rules and laws which

impede free trade Globalization is regarded as a natural

process which forces the industrial states to reduce social and environmental standards in order to remain competitive on the world market

Deregulation No renouncement of state interventions focus on the support of economic competitiveness

and profitable capital utilization. Increase of the scope of enterprises to support

investments reduction of taxes for enterprises

rules to protect the employee and the environment are regarded as: obstacles for investments restriction of freedom for entrepreneurs

The Liberty part of Neoliberal Freedom for entrepreneurs? How is freedom defined here????

Freedom to exploit workers? The freedom of wolves to poach in a free

chicken coop among free chickens?

Neoliberalism and social policy “Every man is the architect of his own fortune!“ poverty as a crisis of one‘s own making

just penalty for non-performance unemployment is reinterpreted as a problem of individuals and

their weakness of character and lack of willingness to perform Worker is unable to sell himself or his work successfully on the

market. the pressure to work is intensified in a crisis situation where there

are not enough jobs but enough people willing to work victims become offenders:

The unemployed, the homeless and welfare recipients are responsible for empty public purses, not the tax-evading multinational concerns and multi-billionaires.

Social Responsibility The state and enterprises have no social

responsibility Therefore, the welfare state is a bad idea Welfare leads to non-performance, which is

intolerable in the scope of free market capitalism Welfare unnecessarily drains money away from

the development of productive enterprises mass-unemployment, starvation are accepted

as acceptable side effects of free market capitalism

Claims for social justice restrict the right to unlimited private property.

Social Responsibility (continued) The only social responsibility of

entrepreneurs is the responsibility for the profit of the shareholders “There are few developments which can

undermine the fundaments of our society as basically as the opinion that entrepreneurs have any other social responsibility than to gain as much profit for their share-holders as possible“ (Friedman 1976, S.176.)

Establishment of neoliberal thinking (ideology) Fabrication of Consent The ruling morals are the morals of the rulers

The ruling ideas are the ideas of the rulers “And when all others believed the lies which were

spread by the party –when all records told the same tale –then the lie went down in history and became the truth.“ (Orwell, 1984)