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Yes, we probably need to better define “neoliberalism”

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Well. Twitter seems to be in a bit of a state. That’s not new. But this week’s debate is over whether neoliberalism is really a thing.

In the perfect example of how to use academic blogging and social media, Colin Talbot has argued that the term has become meaningless – nothing more than a cry of pain from the left at those more right wing than themselves.1

I’ve moved away from the term “neoliberal” unless making specific points about governance and political trends. I’m a historian. I’m comfortable using terms to describe historical processes or periods even if the participants at the time may not have self-identified as such. Because as Talbot and others have pointed out, very few people ever call themselves neoliberal.2

I think this is a discussion worth having, because I agree with some of Talbot’s core arguments and they need to be addressed by historians and political scientists. Mainly:

  • “Neoliberalism” is an over-used term without any clear definition.
  • “Neoliberalism” is almost always used as a pejorative, not as a descriptive or analytical category.
  • Those accused of “neoliberalism” do not identify as “neoliberals”.
  • As a result of this, people have their own definitions of neoliberalism which often boil down to “not as left wing as I’d like”.

Here is the historical problem that I and many others have to grapple with. It is pretty clear that after 1979, British governments adopted forms of governance that originally came from economic liberals in the post-war era. The argument was that by returning to a more nineteenth-century liberal economic framework (updated for the twentieth century), people would be freer, economic growth would be larger, and states would become more efficient.

In practice, the most obvious effects were restrictions in government expenditure (monetarism); restricting the “generosity” of social security by making individual payments lower and eligibility criteria stricter; removing “regulation” from businesses; lowering taxes; privatisation of industry and, increasingly, services; the creation of internal markets within government (see: NHS); league tables and measurements of service outputs (see: Education); the rhetoric of competition and choice as drivers of both demand and quality of service; and so on.

Private industry was more efficient than the public sector. The state’s role, therefore, was as the manager and regulator of the market. To create the best conditions for capital to flourish. By doing this, people could lead freer and more fulfilling lives than if their activities and paypacket were restricted by an overbearing state.

Most if not all of these elements were shared by both Conservative and Labour governments from 1979 onwards, and still hold weight amongst the centre and right of the Labour Party today.

Clearly they manifested in different ways. For example, New Labour used competition, measurement, internal markets, public-private finance, deregulation and privatisation as a means to provide more services and at a higher standard than the previous Conservative governments. Their definitions of which services government and the state ought to provide were different, with New Labour more willing and able to invest money into the system to combat problems associated with wealth inequality. Yet monetarism remained, taxes were still (by 1970s standards) kept down and social security (although less overtly punitive) was still based on the principle of low payments and strict eligibility criteria (again, by 1970s standards).

Margaret Thatcher in 1975 - the poster child of British "neoliberalism" in government. (Source)

Margaret Thatcher in 1975 – the poster child of British “neoliberalism” in government.
(Source)

The political left has taken issue with these processes for a long time. Tax breaks, deregulation and attempts to restrict individual entitlements to services have obviously been most highlighted. This is – I would argue – the source of much of the “oversimplification” of the term neoliberalism. Anyone attempting to negotiate with and encourage large corporations to do business in Britain whilst not increasing high-income tax brackets and social security payments can be painted as neoliberal. But it’s so much more than that. As someone who has worked most intensely on social security and health, the measurement and commodification of “quality” is a key aspect of the political shift from the 1970s. The idea of competition and greater levels of information to allow citizens to choose how they consumed services are all part of a significant change in governance. States look to provide of the most basic level of service at the smallest possible cost.

The Conservatives and Labour were not the same. They used a group of tools – let’s call this “X” for shorthand – to manage the economy and services. They were based on the shared idea that the state had limited responsibility for services, and that, for the most part, private industry and competition were better ways of managing the country than “public sector” management. Labour may have opted for a higher baseline of what constituted the “minimum” the state should provide, but the underlying forms of governance were still “X”.

So what do we call “X”?

Hugh Gaitskell - half of the poster children of "Butskellism". (Source)

Hugh Gaitskell – half of the poster children of “Butskellism”.
(Source)

We’ve had this debate before. The so-called “consensus politics” from c. 1945 to 1979 was supposedly an age in which Conservative and Labour governments broadly agreed on the need for wage controls, price controls, nationalised industries, high taxation (by 1990s standards) and ever-expanding welfare services to protect the poorest.

Of course “Butskellism” and this consensus was not total.3 Harold Macmillan was not a socialist any more than Harold Wilson was a Tory. But there were core principles in the corporatist post-war welfare state that governments of both hues followed and took as guiding principles for managing the British state. Macmillan could build thousands of council houses, just as Wilson could take on the unions.

I’m more than happy to concede that “neoliberalism” may not be the term we should use to describe these processes. It has been overused. It’s usually just employed to say “governments who want to cut expenses”. This doesn’t work for Thatcher, who spend much more on welfare by the end of the 1980s than she had at the start. If Blair was neoliberal, it disintegrates completely.

So what term should we use? Because regardless of what some try to claim, there is clearly something going on here. And as historians – even for the good of political discourse in this current time – it’s vital that we get to grips with it.

  1. Colin Talbot, ‘The Myth of Neoliberalism’ (August 31 2016). < https://colinrtalbot.wordpress.com/2016/08/31/the-myth-of-neoliberalism/ > (accessed 31 August 2016).
  2. Taylor C. Boas, ‘Neoliberalism: From new liberal philosophy to anti-liberal slogan’, Studies in Comparative International Development 44(2) (June 2009), 137-61.
  3. Richard Toye, “From ‘Consensus’ to ‘Common Ground’: The Rhetoric of the Postwar Settlement and its Collapse”, Journal of Contemporary History 48(1) (2013).
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