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May 19, 2010
In Is That It For Neoliberalism? in New Matilda Jason Wilson, in the course of reviewing Robert Manne and David McKnight’s edited volume, Goodbye To All That?: On the Failure of Neoliberalism and the Urgency of Change, accepts an old dichotomy or duality. This is one between political abstraction (eg., the concept 'neo-liberalism') of the intellectuals and the practical or pragmatic politics based on reconciling the diverse interests of the governed of the politicians.
Wilson adds that one of the important:
truths about social democracy, especially in its Australian form [is] that it is more concerned with programs and principles than political theory; that, where intellectuals are concerned, it has most use for those engaged in specialised technical pursuits — economists, say, or lawyers — and that the boring activity of reconciling interests that is the central concern of social democratic governments is most likely to alienate intellectuals first.
He adds that what this actually means is that social democracy in practice often has an uncomfortable relationship to the intellectuals who seek to support it where powerful interests have to be contended with, although you may be guided by high principles, you might not get what you want, and you might not get it on time.
Isn't social democracy as much a political abstraction, or political theory, as neo-liberalism? An abstraction that refers to the middle way between socialism and capitalism in the form of the welfare state? Isn't neo-liberalism more concerned with programs and principles than political theory?
Didn't the economic crisis of the 1970s represented the expiry and collapse of the post-war welfare settlement, through pressure of its own contradictions? That resulted in the emergence of Thatcher in 1979, and Reagan in 1980, and the subsequent attack on working class institutions and the deregulation of the financial sector in 1980's-- ie., setting free the financial sector to operate on a global basis, and to establish itself as the dominant growth sector of the British economy.
Wouldn't it be more useful to shift to 'modes of governance' and see neoliberalism and social democracy as different modes of governing the country? This shift to governmentality allows us to think in terms of the organized practices (mentalities, rationalities, and techniques) through which subjects are governed and the ways that the conduct of subjects is shaped.
This enables us to look at the assemblage of governmentality: the process through which a form of government with specific ends (a happy and stable society),the means to these ends (“apparatuses of security” and a particular type of knowledge (“political economy”) to achieve these ends. It is a political rationality that involves thinking about the government and the practices of the government. So neo-liberalism and social democracy are different ways of thinking about government and its practices of governing.
We can then begin to explore this in terms of the economic crisis of 2009 caused by the instabilities of unregulated markets; a crisis that develops through the dysfunctions of unregulated markets (eg., climate change). Maybe we can think in terms of the breakdown of the neo-liberal regime or mode of governance. So we have the opposition by the Right (economic and political) in Australia to any reforms whatever and to a more active/interventionist role by governments in the regulation of capital flows and markets.
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Michael Stutchbury in Goodbye to the notion neo-liberalism caused the global financial crisis in The Australian is not impressed by McKnight's and Manne's Goodbye to All That? On the Failure of Neo-Liberalism and the Urgency of Change.
Interestingly enough Stutchbury makes some important concessions in his review:
However, he adds, this "credit market failure doesn't discredit the entire intellectual shift to pro-market economics since the 70s and herald a new epoch of government-directed growth, as Manne claims." :
The reason why the regulatory net around the US financial system was full of holes and poorly supervised was because of the deregulatory roll back by Wall Street. Deregulation was a core policy of neo-liberalism.