The ideology that dare not speak its name


The set of ideas that has dominated public policy for the last thirty years has been given a variety of names – neoliberalism[1], economic rationalism, the Washington Consensus and Thatcherism being the most prominent. Broadly speaking, this set of ideas combines support for free market (or freer market) economic policies with agnosticism[2] about both political liberalism and the relative merits of democracy and autocracy. In response to some demands for definition, I’ll point to mine here.

A striking feature of all of these terms is that they are currently used almost exclusively by opponents of the viewpoint being described, to the point where any use of such terms invariably provokes protests about unfair labelling (this is true even of the most neutral term I can find, “economic liberalism”). Even more striking is the fact that these terms were originally used in a broadly positive sense by supporters of the ideas concerned. I’ve done the story on economic rationalism, Don Arthur covers neoliberalism and you can check Wikipedia for the others.

Why is it that neoliberalism seems to be subject to a political version of the euphemism treadmill? A look at the history will help a bit.

For each of the sets of ideas in question, two things happened. First, the ideas described by the terms evolved in the direction of a more tightly defined and hardline free-market ideology – this happened both because (positive) users of the term became more consistent in their ideology over time and because some with more moderate views ceased to identify with the term.

Second, advocates of neoliberalism gained political power without, in general, convincing the majority of the public. In Australia and New Zealand, there was a bipartisan elite consensus in support of economic rationalism during the 1980s and early 1990s. In the UK, Thatcher won a series of elections with minority support thanks to a weak and divided Opposition. In Latin America, neoliberal policies were implemented by dictators like Pinochet, and quasi-dictatorial strongment like Fujimori.

Finally, as this process took place, the term was taken up by critics, who needed a descriptive label for the set of ideas they were criticising, and, soon afterwards, abandoned by its original advocates. In the case of economic rationalism, the crucial event was Michael Pusey’s book Economic Rationalism in Canberra. While, in my view, Pusey misunderstood some key aspects of economic rationalism, confusing it with simple pro-business conservatism, he correctly identified, and communicated to the general public, the emergence of a dominant ideological framework.

This analysis gives two reasons for the euphemism treadmill. First, there is the obvious one. Unpopular ideas require euphemisms, and these euphemisms wear out over time.

The second is more subtle. From the inside, ideology usually looks like common sense. It Hence, politically dominant elites don’t see themselves as acting ideologically and react with hostility when ideological labels are pinned on them. Ideology is only useful for an insurgent group of outsiders, seeking a coherent basis for a claim to displace the existing elite. Because neoliberalism typically enjoyed rapid triumphs, it never needed to express itself as a formal ideology.

fn1. Confusingly, and reflecting the different meaning of “liberal”, in the US, “neoliberal” there has a different history and application, referring initially to Clinton-era DLC-oriented Democrats. The US neoliberals share some views, such as support for free trade, with neoliberals in the (originally) Latin American sense, but the global term is more applicable to the free-market right, represented by the business wing of the Republican party than to these centrist Democrats.

fn2. That is, the neoliberal ideology itself has little to say about these questions. Neoliberals may regard democracy and ordinary notions of political liberalism with outright hostility (Lee Kuan Yew, the Mises Institute). Or, they may like Hayek, regard democracy and free speech as second-order goals, desirable only if they don’t get in the way of free markets. Mises (unlike the institute that bears his name) offers a more appealing view, arguing that, in the long run, democracy is more favorable to free markets than autocracy, whatever the initial position of the autocrat. Finally, many neoliberals are, in political terms, orthodox liberal democrats, who advocate neoliberal policy while accepting that they need to convince the majority of voters of the validity of their position. Even among the last of these groups, most are willing to make political alliances with anti-democratic neoliberals, in much the same way as many (but not all) democratic socialists felt the need to work with the communist left in the trade union movement and elsewhere.

86 thoughts on “The ideology that dare not speak its name

  1. Gerard – lovely imagery in the conclusion of that Potts paper and I do admit to much admiration for those who work at improvements, even though I have criticsed what I see as excess emphasis on empiricism in economics (and this has been criticsed by others – there are some grand histories and philosophies neglected in our communication with students). It should be remembered that not all of us as individuals are so inclined and nor are all economists, but it helps when the reader can actually interpret the ideas and that comes down to how well the paper a written.

  2. What I really would like to see and I think students would greatly benefit from (and I am certain we would get a lot more willing economics majors) is a revival of the history of economic thought (HET) or Economic History as a subject for first year students with the thoughts or writings (in their own words) of many greats included.

    And this definitely as an introductory subject for first years and later in HET II or III extensions into areas of interest. Its only a small request.

    To think under Howard, the ABS attempted to delete these two fields as “legitimate” fields of research (that would have meant no funding) in this country (the history of our own economic development as a country. Insane – and totally bizarre). Fortunately overturned by national and international objection from economic societies.

  3. well now that you mention it Alice, this brings me to another question that I wanted to ask our host Professor Quiggin.

    The University of Queensland economics school used to have had a first-year course listed on its course list called ‘ECON1600’ (and a corresponding level 7 post-graduate course) named “Economic History”. But for the past (at least) ten years, the course hasn’t been taught! Year after year, looking at the course profile, we get the message that “this course is not being offered this year”, and now finally the course has been removed from the course list (although the non-offered 7600 is still on it)

    What’s going on here, Professor Q? Is there such a critical shortage of staff that there is nobody able to teach such an important subject at UQ? Or has there been a decision that, in fact, “Economic History” is not an important enough subject to be taught at all? Or is it just a casualty of the Rodent’s medieval approach to higher education?

  4. 78# Gerard
    Howard thought al economic historians were left or the majority were left (I dont think there is any truth to this but it is in politician’s interests sometimes to create “enemies within”.)

    The disappearance of “economic history” and thus economic historian positions in Australian universities constitutes a witchhunt going back to the 1960s (McCarthyism outpost in Australia with funding from obscure US organisations and no Im not paranoid or delusional – the history is there) and as a result economic historians disappeared from universities (tenure refused, employment refused etc) along with their subjects to be replaced by the dry mic and mac only for first years. Why do we need history when we have a perfectly good “market model” (dare I link this to neoclassicism / neoliberal agendas).

    Studying the economic history of our own development..oh no, cant do that. Might uncover some scandals or some poor economic management along the way or encourage the left view. (irony alert)

    Economic historians were just one of Howard’s little pet “enemies”… (along with the entire arts industry, the public broadcaster, university academics in general unless they did research on counter terrorism or biosecurity which was acceptable, the national museum, the public service and public servants….hmm is that all? have I forgotten any group? Oh of course, students as well.).

    I shudder at the divisiveness of it all and I cringe with embarrassment at the curtailment of freedom of ideas, expression and freedom of speech in this country. It happened under a succession of mostly liberal governments. Liberal? Hardly. Dogmatically oppressive? Absolutely.

    Im ashamed of our history on this subject.

  5. Right down to its attempted erasure as a legitimate field of research merely a few years ago (that and the “history of economic thought” – one of the most interesting subjects). Another area that used to be taught was in the area of welfare economics ie social policy subjects like inequality and poverty. I think most people know what the Coalition thought about welfare initiatives so I wont go into that one – except to say a few major social policy research centres in universities had their funding more than halved in the past ten years after contributing hugely to this field for decades. Ill stop now – I can feel an injustice induced migraine coming on.

  6. Once again, thanks Alice.
    A couple of years ago I got pushed in an economic history direction and found thereafter that courses seemed very thin on the ground indeed, at least in history depts, as to what one might have thought an essential subject.
    Later found there one buried away in Ad Uni economics dept, but always found their refusal to associate with rest of arts/humanities stuffy and have not moved further.
    Like wise pol economy; got into an accessible course just before it “disappeared”.
    As for the migraine, a quiet, dark place away from screens and berks.

  7. Another thought experiment – compare Sydney’s food supply with its water supply.

    Hmm. Okay let’s see. Sydney’s food supply: food comes in a huge variety of substitutable forms, which can be produced in a range of different ways, in many different parts of the world, and many of which are readily transportable.

    Sydney’s water supply: a specific substance, without any substitutes, expensive to transport, local supply subject to limitation by rainfall and geography.

    Sorry, that thought experiment doesn’t yield any useful conclusions regarding political economy. The items being compared are too different.

  8. Alice, you tell a horrible tale, but it is quite believable, considering the petty little Torquemadas that ruled over higher-ed under Howard’s reign of terror. But is there any sign of change now? Economics without history is like chemistry without labs: useless. The fact that so many economists would tolerate the marginalisation of economic history just proves that their craft is closer to religion than science.

  9. 84#
    Gerard – No not yet. Im waiting for a change. I did tell a horrible tale. Its a tale that disgusts me. You could start with “the history wars.”

  10. this set of ideas combines support for free market (or freer market) economic policies with agnosticism[2] about both political liberalism and the relative merits of democracy and autocracy.
    John I think this is an excellent description of the ethos of technocrats since at least 1980. But I don’t think it describes neoliberalism precisely.

    It does describe agents of neoliberalism to various degrees. Reagan for example was an advocate of neoliberalism. But he also had to advocate principles not held by those called libertarians. For example the Religious Right.

    When he was governator of California he quashed a move to fire gay teachers. By the time he was president he was regularly talking about the perverts and the radicals to various assemblies of the religiously political.

    This was part of the alliance between the economic liberals and the religious right whereby the Republicans were able to get blue collar people to vote for economic policies that were not in their interests. There was a tie between traditionalism and free markets even tho’ in reality there’s actually tension between the two.

    So to various aspects of geopolitical coercion. In Chile for example a dictator who usurped a democratically elected leftist was supported by advocates of liberty like Reagan and Thatcher because economically he was the first to adopt Friedman’s notions. Ever since there has been a split between liberty in the political sense and that in the economic sense. The Pinochet regime is a thorn in the side of neoliberals. Hence various attempts to portray him as a necessary evil or even not too bad.

    That all said neoliberalism was a economic philosophy. It should be regarded as such or it becomes meaningless. There’s no link inherently between respect for democracy amongst technocrats and economic philosophy. Socialists of various brands can and do regularly impede on social liberty.

    From the inside, ideology usually looks like common sense.

    Yeah you too.

    As Jane’s Addiction like to sing: Everybody, everybody, everybody, everybody, everybody,everybody,everybody,everybody, everybody…

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s