Neoliberalism: dangerous myths and/or frightening realities? Part 2

A blog in four parts by Paul Kennedy: MMU Visiting Research Fellow and formally Reader in Sociology – with Kevin Albertson

Part 2: On markets and motivations

In last week’s blog we argued that a consideration of markets, without regard to extra-market motivations is so limited as to be worthless. Here we consider the topic of motivations and their role in social institutions, including the market.

The missing motivation

Neoliberal economists suggest all rational individuals seek to maximise their own self-interest with as little cost as possible. Similarly businesses have the responsibility to make profits for their shareholders (though hopefully in line with certain wider ethical and political principles). As Klein (2014)[1] argues, along with this goes the need for capitalism to discover and exploit all kinds of resources wherever it can.

The market in which individuals and business operate is supposed to play a coordinating role, by which it is suggested the sum total of a large number of self-interested decisions will serve the common good. However, it cannot be the primary duty or purpose of individuals, a private business or of capitalism as a system to attain national economic development, overcome local or world poverty, improve social justice, save the planet from ecological destruction or lengthen the healthy lifespan of individuals. Where businesses contribute to these goals, as they often do, this is largely fortuitous and only partly intended. Indeed, businesses which concentrated solely or even mainly on social goals would be liable to fail because they would be less likely to compete successfully against their more ruthless counterparts. They would be vulnerable to falling profits and share prices and exposed to the likelihood of rival companies manoeuvring to take advantage of their shrinking asset base – rivals with less scruples concerning ethical goals.

Coordinating coordination

Suppose our nation were at war with another. No one would suggest we leave it to the individual self-interest of every soldier to do what they thought was best for them and that this would somehow coordinate together to overwhelm the enemy. Of course, military forces exist, but they require coordination to achieve a worthwhile result. Once the parameters of the military have been set, we might leave it up to individual initiative – but not before. Similarly, market forces exist, and are very necessary for a nation. However, we would be better to attempt to use them to further the purposes of our nation than to rely on the theoretical happenstance that, through neglect, the greatest good can be achieved.

The great and the good

Many of the most profoundly important actions and decisions in recent history have been, and continue to be, taken by and on behalf of societal or humanitarian needs and goals, but not because they were likely to make the actor involved rich or powerful. In fact many of humanity’s greatest gains – from the arts, science, medicine, technological advance, political leadership and democratic gains, wartime defence, national security and economic development, philosophy and law – derive from the individual and/or combined cooperative actions undertaken by people whose primary motivations were intellectual curiosity, the pleasures and challenges of overcoming obstacles, a sense of public spiritedness, the urge to creativity, religious belief and so on. Interestingly, none of the following died as super-rich or powerful individuals: Isaac Newton, Abraham Lincoln, Florence Nightingale, Ludwig Van Beethoven, Shakespeare, Charlotte Bronte, James Joyce, Louis Pasteur, Robert Watson-Watt and his team (the 1930s inventors of RADAR) &c. The list is endless (and of course also includes many leading entrepreneurs, mostly from an earlier capitalist era, who combined public benefaction with business success).

The inefficiency of unprofessionalism

Neoliberals often denigrate and even despise actions, and those who undertake them, which are not exclusively driven by profit or private economic gain but rather by a sense of obligation to some entity larger than the actor him/her self. Professionalism is a case in point. The mutual respect that professionals once felt towards others who had acquired the same technical expertise – who belonged to the same occupational culture and who had been similarly socialized into the ethos of service to clients – has also been under attack from Neoliberals; possibly because they cannot understand it. Those who have no ethics cannot understand – and therefore cannot trust – people who claim to operate at least partly according to ethical or even altruistic motives.

If we assume that all people are untrustworthy, then any person’s appeal for trust has to be an attempt to cover-up their corruption and incompetence. In this view only self-interest can be trusted because at least self-interest is “honest” (in the sense that it cannot be hypocritical). It follows only greed can produce genuinely beneficial results.

Accordingly, professionals have increasingly lost the trust of those they serve and must be incentivised through surveillance and monitoring; their skills sometimes down-graded as only simple tasks can effectively be monitored in this way. The complex and worthwhile are regulated and controlled by a tick-box and targets culture which the administrators, appointed to manage these former professionals, are capable of checking on. (It is ironic that an ideology dedicated to reducing bureaucracy and regulation has actually spawned a vast increase it its activity through private and public-sector managerialism).

To see how sterile is any attempt to get professionals to produce good work through a tick-box culture, one only needs consider the threat of unions effectively to paralyse the NHS through working to rule. If professionalism did not exist, working to rule would not be a threat, it would be the most efficient way to work.

Valuing the worthwhile

Paradoxically, the very institutions neoliberals tend either to ignore, despise or hope to replace – namely societies, governments/states and forms of collective rather than purely individual action – are indispensible both to our social existence but also to the possibility of efficient capitalist markets as well.

We live in a complex, technologically advanced, interdependent global socio-economic system which has moved far beyond a condition where most people and localities are capable of being largely self sufficient subsistence producers. Thus, where decisions are needed over questions of value preferences, ethics, social justice and the future direction or survival of entire populations and the infrastructures on which they jointly depend, neither capitalism nor the market are capable of making these alone.

Billions of tiny, separate and uninformed choices about whether to purchase product X rather than Y or to invest in this interest bearing security rather than another are hopelessly insufficient to coordinate sustainable nations, societies and, as the ongoing Global Financial Crisis has shown, markets. Of course, governments and technical experts may get the big decisions wrong but left to itself the market is unable to even register what the key questions might be and how they might be prioritized.

Individual speculations/gambles on future prices or agonizing about profit maximization prospects cannot in themselves solve issues of national or global importance on which entire generations depend. Market forces – like military forces – will not serve the nation if left to their own devices.

To be continued …

We pick up the question of the cause of the Global Financial Crisis in next week’s blog.
1  Klein, N. (2014) This Changes Everything: Capitalism V the Climate, Simon and Shuster.

Please note that blog posts do not necessarily represent the views of other authors on the blog or of the Manchester Metropolitan University

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