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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

thinking about neo-liberalism, badly « Previous | |Next »
November 3, 2007

Andrew Wear, writing in the Canberra Times, defines what he calls the 'essence of the neoliberal agenda, known in Australia as economic rationalism' as follows:

Economic rationalism dominated worldwide economic thought throughout the 1980s and 1990s. It was characterised by a faith in the power of markets and competition to deliver prosperity through the "trickle down" effect of economic growth. Implicit in this line of reasoning was that any form of cooperation, collaboration or government intervention is harmful as it inhibits competition.

Why agenda rather than mode of governance? We know that for the past 11 months, Rudd has been engaged in an act — announcing policies he doesn't believe in and has no plans to implement. Telling the public one thing while secretly planning to do another. Shouldn't we be concentrating on the governance of free subjects?

Wear says that though

some aspects of economic rationalism have clearly become normalised, such as budget surpluses and competitive exchange rates, for the most part, other pillars of economic rationalism such as free trade, privatisation, deregulation, union busting, an insistence on individual responsibility and cutting welfare, have been put on hold, abandoned or reversed.

That's odd. What about Workchoices and welfare to work? Welfare to work---designed to coerce single mothers, disability pensioners and others back into the workforce--- may have been forgotten, but Workchoices? Isn't it a core difference between the two major parties in a me-tooism election.

Wear goes to say that:

In contemporary Australia, the fundamental limit of economic rationalism is that because it is principally focused on the efficiency of markets and the minimisation of costs, it has very little to say on innovation or competitive advantage some of the core challenges facing the nation.In a global economy, competitive advantage increasingly derives not from low costs, but from the development of unique niches in the marketplace, often located in particular places. Thus, Silicon Valley specialises in computer technology and Hollywood specialises in movies. In this context, the things that matter are the education levels of its people, linkages between firms, and lifestyle.

I thought the neo-liberal mode of governance emphasized innovation and entrepreneurship--removing deregulation and government to create space for the market to enable innovation and entrepreneurship. If states are to compete successfully in the global economy of the information society, then they need to foster innovation and entrepreneurship. Isn't that the central narrative of our time?

| Posted by Gary Sauer-Thompson at 4:05 PM | | Comments (9)



The Australian version seems to favour innovation and entrepreneurship that doesn't disturb the status quo. Small scale good, big scale bad.

Economic rationalism hasn't been applied consistently. Think of the power industries. We haven't had the "cooperation, collaboration or government intervention is harmful as it inhibits competition" theory applied equally to various kinds of energy production.

The biggest problem with pure economic rationalism is that it doesn't take human nature into account. It assumes that you and your nearest and dearest would fight to the death over a dollar. Same as any other brand of rationalism. The theorists got us mixed up with some other species.

I think this a brilliant little thread!
I'd go further than Lyn; I'd call it a cognitive apparatus for imposition of a painful Pavlovian idiocy at a personal level and neo-feudalism societally.
Was neoliberalism what Foucault ultimately considering in his ideas of the Asylum and Panopticon? Or Marcuse with "Repressive Tolerance"?
"Sado economics", I remember some one calling it years ago.
Consider the inneficient billions wasted on enforcing "small government" through bodgy FTA's, micromanaging "governance" "efficiency" "policy", concerning every bogus issue mechanism from terrorism/ sedition to censorship of university curricula AQIS and CSIRO, to secondary boycotts legislation proposed by Costello ( once in a while, we have a win of the Richard Pratt variety ).
But Lyn is very, very right to start at economic ratonalism on economic rationalism's terms. The symptoms arise from the causes unrecognised in our neo-Aristotelian universe.
If you say pulp mills and woodchipping are dangerous for environemtal reasons, for example, you must show in cost benefit analysis terms why this "costs" rather than "benefits"- as Bob Brown did csome time ago.
Emotive pleas about little furry things won't wash and property rights are integral to the dominant neoliberalism. So it must be put to people's self-interest before any real challenge canbe made.
You know, I was just thinking today about Peter Garratt ( and Tasmania ); against the eco-rationalism of Wayne Swan. The odd thing is, the Swann way may have been working until Garratt drew attention away from Abbott etc, by his naive comments to a shock jock at an airport yesterday.
The ANZ bank, the emminence-gris of the Gunns pulpmill has been under seige apparently from many customers and shareholders for its pivotal role in the project. Enough pressure and the rotten thing could have yet been scotched through concerted pressure simultaneously on different fronts.
If Labor can't win government because of Garratt providing Howard with "traction" to escape defeat through the fear bogy of "change", we will be denied the chance of seeing if Garratt was right about "change" by quietness or discovering if Swann and co are in fact authentic Zombies also.

all that stuff about the commercialization of university research is a key part of the neo-liberal governing the economy. So has been the reshaping of CSIRO. This is the transfer of public sector funded research into the hands of private investors. Scientific policy and science can no longer hide the extent to which they are a part of the private sector.

We are overloaded with images of leading figures in business, politics and administration standing up against the onslaught of paralysis from routine and institutional sclerosis, to push innovation and embody the characteristics attributed to success. They are the ones who deal with risk, uncertainty and profit.

Andrew Wear does talk about networks as well as markets and highlights the importance of the former. It's a familar argument---Silicon Valley was successful because of the institutionalised networks not market competition. Concentration of market competition ands ignoring networks is a key limitation of Australia's neo-liberals or economic rationalists.

It's a good point.

The orginal debate was pretty crude. Growth and entrepreneurship and industriousness and optimism are better economic stratagems than are the command-and control decisions of even the most brilliant government planners. The market is a wonderful thing etc etc.

The next strand in the neo-liberal argument was that trying to compete in a global economy in which innovation and entrepreneurship, rather than low wages and high-volume commodity-based economies, holds the greatest opportunity for success.


It's been largely successful in universities, but not completely and I suspect that's partly due to Wear's observations about networks in both research projects and in the collegial sense. Collegiality happens in a sort of underground way these days, but it is still possible to find it. It doesn't hang around it the hallways or obvious places like cafeterias, but it does happen.

It's quite reasonable to expect publicly funded research to have some public relevance, but the sort of Darwinian approach we've been seeing goes too far. It can't be sustained for long because we're an irrational herd species and management kills creativity. I'm optimistic.

Optimistic most of the time anyway.

Paul, I'd go further than Lyn; I'd call it a cognitive apparatus for imposition of a painful Pavlovian idiocy at a personal level and neo-feudalism societally.

Liberalism is based on merit though the market often decides what is merit and that can coincide with what is in demand. Economic rationalism/liberalism has been particularly good in liberal democracy as an economic system. Governance will always have a role in modern system simply because our society is so complex and we tend to outsource to a central authority our desire to have our property protected and a non-arbitrary mechanism to air our grievances against others.

some neo-liberals hold that the Dawkins reforms were misplaced in a society that is increasingly being shaped by the global economy.

The effects of the Dawkins' reforms has been the creation of a mass, homogenous and mediocre university system. This is the base model and its out of place in a global world because an information society requires that information and knowledge be place at the centre of wealth creation.

What is required, it is argued,is a few universities of international standing, a much greater diversity of types of universities and greater connectivity between secondary and tertiary levels.