One of the major responses of the Left to the current economic crisis has been to announce the death of neoliberalism as an economic theory. Either the crisis has been a direct result of neoliberal policies, or economic recovery is being hampered by a continued dogmatic attachment to those particular policies. In place of the latter, much of the Left has been content to re-issue age-old demands to increase public spending via progressive taxation and re-nationalise the most recently privatized enterprise or sector of the economy.
But what exactly are we supposed to understand by the term 'neoliberalism'? The precise bundle of policies involved may vary, but the term generally seems to encompass a low tax regime on high income brackets, low levels of government spending, an emphasis on export-led growth and a consequent promotion of 'free markets' in international trade, an emphasis on so-called macro- economic stability (tight control of inflation, tight control of the money supply, tight control of government deficits), and an emphasis on the 'financial sector'; perhaps most importantly, it is used to denote a preference for the 'private' over the 'public' sector.
The most important term in this litany is not inflation (i.e. forcing wages down) or even 'free markets' (i.e. 'deregulation' or 'privatisation'). The most important term is preference. This is because when the term is used on the Left, two fundamental points are being made: firstly, that neoliberal economic policies are the result of nothing more than a particular ideological preference in the minds of certain politicians or economists; secondly, that these economic policies do not work —either because there are certain things that the 'public sector' can do far more efficiently than the 'private sector', or because the 'private sector' is motivated simply by 'greed' rather than any interest in long-term economic prosperity, or the greater good of society.
Both these propositions are false, and the term which is used as a short-hand for mobilising them is thus nothing more than myth. It is a thoroughly “depoliticized speech”, so that on the one hand, we are offered a modern morality play with savers, producers, the 'public sector' on one side and reckless speculators, 'greedy bankers' and economic dogmatists cast in the role of villain; and on the other hand, the only standard against which it judges capitalism is...capitalism itself: in condemning 'neoliberalism', the Left is establishing its preference for post-war welfarism, with nary a thought for the historical circumstances that gave rise to it.
'Neoliberalism' is also myth inasmuch as it “deprives the object of which it speaks of all History.” In one fell swoop, the depth of reality is obliterated in favour of an instantaneous choice between purely metaphysical notions of 'the good' and 'the bad', repackaged in pseudo-economic terms as 'the public sector' and 'the private sector'. Neoliberalism is thus portrayed as a simple (and erroneous) choice made at the level of ideas; in the same way that some people 'decide' one morning that they want to live the rest of their life as a Western Buddhist, or a Druid, or a Wiccan. And, again quoting Roland Barthes, we can note that “this miraculous evaporation of history is another form of a concept common to most bourgeois myths: the irresponsibility of man.”
What is also missing in the term 'neoliberalism' is an understanding of how ideology actually works. The notion of some kind of marketplace of ideas from which independent individuals make a more or less informed choice as to which one or which ensemble suits them is an obvious reflection of how the bourgeois market is supposed to work. In this observation, we can glimpse the real process at work: ideas always follow material life; “ideology represents the imaginary relationship of individuals to their real conditions of existence”, in the words of Althusser.
It is bourgeois economics as such which is pure ideology, be it Keynesian, neoclassical, monetarist, or neoliberal economics; these 'theories' are all simply hypostasisations in thought of different phases of the capitalist economy. This truth is expressed almost perfectly in the phrase “We're all Keynesians now”, which by no small coincidence dates from the first acute phase of the latest capitalist crisis. Neither Nixon nor Milton Friedman (either of whom may have originated the phrase) were sudden converts to tax-and-spend; but when a faltering capitalist economy required 'stimulus' in the form of large injections of cash tribute, 'Keynesianism' was just sound economic theory, as it was in 1945, and as recently it has again become so; and when capital could operate just as well without the burdens of welfarism, sound economics went by names like monetarism and neoliberalism: “what is practice for the fundamental class becomes 'rationality' and speculation for its intellectuals,” in the words of Gramsci.
Thus it should be clear that in criticising 'neoliberalism' we are doing little more than pining for an age when capitalism 'worked', for 'capitalism with a human face'. We thus reproduce the bourgeoisie's own mode of thinking, unable to imagine that there is something beyond what we have today other than savagery and planetary catastrophe.
The present crisis of capitalism is not the result of a particular, 'unethical' choice by men and women who may or may not have attended an economics seminar in Chicago with Milton Friedman; nor is it the result of immoral and unthinking bankers spending more money than was available to them. We are in this crisis because of the nature of the capitalist economy, and the sooner we come to grips with this, the sooner we shall be able to develop demands that could begin to take us beyond the eternal present of bourgeois ideology.
It is as futile to 'critique' neoliberalism as it is to argue that the way out of this capitalist crisis is to expand that sector of the capitalist economy formally owned by the bourgeois state, which we happen to call the public sector. Neoliberalism is as much a myth as the notion that the post-war welfare state was a form of socialism. Writing in that same period, Roland Barthes said: “The bourgeoisie hides the fact that it is the bourgeoisie and thereby produces myth; revolution announces itself openly as revolution and thereby abolishes myth.” If we are to take the first steps on the path of revolutionary change, we must begin at the very least by talking of things as they actually are.