It’s perhaps not as clear as you might like:
If you look closely at the screengrab from this episode (where Maggie is sent to a nursery for neoliberals) you will see, alongside the slogan, an equation: A = A. It’s a quote from that long speech in Atlas Shrugged where John Galt outlines the tenets of Rand’s proto-neoliberal philosophy, “Objectivism”.
But Trotsky’s passage — and the neoliberals’ constant demand for a definition — reminded me that maybe there is room to publish such work elsewhere, in the form some thoughts on systems theory. So I will probably do that somewhere.
Here for brevity, just bring it back to the methodological issue: much ideological thinking about capitalism is pre-scientific. It demands economic reality be broken down into static concepts that neither change nor mutate. Yet the method I’ve tried to follow in Postcapitalism — a version of complex systems analysis — says reality is a mixture of economic/non-economic, that its unstable, that it is complex (leaving aside the whole randomness issue), that it undergoes change processes where stability gives way suddenly to unpredictable and massive change.
As to neoliberalism — I’ve defined what the doctrine is. There is no point “defining” an entire era of capitalism at a given stage because — as I pointed out in the last post, even neo-liberal capitalism has gone through 4x stages of development (preparation, Reagan/Thatcher, Third Way, post-2008). But if you want the short summary:
The neoliberal project began in 1979/80 with the turn to pro-cyclical monetarist policies and the strategy of smashing organised labor in the USA and UK, based on a policy recipe imposed in Chile and other developing countries, which was to be summarised as the Washington Consensus. Its second phase began with the rapid globalisation of trade and capital flows, and the opening of the former Comecon countries, plus China after Deng’s southern tour, to the global market. The third phase is characterised by the rise of speculative finance and the concomitant financialisation of working class life. The fourth phase begins with the strategic collapse of the entire system in September 2008 and is ongoing. Though in each phase there’ve been differences, there are common traits.
In each phase more of the economy previously run by the state is privatised and more of the operating profit of the private sector becomes dependent on “corporate welfare” — ie specific favours, tax breaks and privatisation windfalls;
In each phase the strategic defeat of organised labour is reinforced by the individualisation of work and the suppression of wage bargaining power;
In each phase the possibility of a retreat to Keynesian capitalism recedes, as consumption patterns, ownership patterns and the move to reliance among the elite on asset wealth – not wealth earned through entrepreneurship or physical productivity — close off the possibility of expansionary fiscal policy, high-welfare states etc.
In each phase fiat money is used for overtly political ends: you could call neoliberalism at a policy level “monetary capitalism”. First money is tightened to induce the collapse of industries where the Keynesian model is embedded; then counter-inflationary policy is used to create a shortlived “Goldilocks Era” of imagined permanent stabiity. Then from 1997 onwards monetary expansion is used to offset the business cycle, creating a boom bust cycle. Then in 2008 the boom-bust cycle destroys the banking system, leaving the entire neoliberal system dependent on the state.
At the height of the system’s effectiveness real profit rates do recover — at the expense of the labour share — but as financial profits begin to dominate, the system’s vitality is destroyed.
I could go on, adding more and more phase-similarities, but all we’re going to do is create something the A = A crowd are never going to accept, namely: a description of matter in motion, of complexity, of historicity and the time-limited nature of all social systems. Not a definition.
Neoliberalism is Objectivism plus pro-cyclical monetary policy?
Interesting news for the ghost of Milton Friedman don’t you think? That pro-cyclical bit at least.
Targeting M3 (wrongly, as it turned out but still) with higher interest rates in a boom, lower in a slump, in order to have counter-cyclical monetary policy? And QE is rather counter-cyclical, isn’t it?
This man has a job as an economics editor?