March 11, 2008
Neo-liberalism's orientation is the nemesis of traditional social democracy. In his essay ‘The Principles of a Liberal Social Order’, Theodore von Hayek provides a working definition of neo-liberalism:
The central concept of liberalism is that under the enforcement of universal rules of just conduct, protecting a recognisable private domain of individuals, a spontaneous order of human activities of much greater complexity will form itself than could ever be produced by deliberate arrangement, and that in consequence the coercive activities of government should be limited to the enforcement of such rules, whatever other services government may at the same time render by administering those particular resources which have been placed at its disposal for those purposes.
Hayek’s ‘spontaneous order’ is a law-governed as opposed to a purpose-governed society, ordered by the ‘regularity of the conduct of its members’ and continuously evolving through a complex network of interaction amongst agents.
Neo-liberalism fails to take into account the operations of organised capital and the vested interests of the powerful; ignores that T markets in capitalism do not tend toward equilibrium, nor do they operate under conditions of perfect competition; markets did not arise spontaneously. They required a huge increase in political control, regulation and intervention.
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