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Re/Defining Neoliberalism

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THE DEBATE which Matthew Hooton kicked off in earnest on Radio New Zealand this week is hotting-up. In dispute is that much-used, but imperfectly understood, political term: “Neoliberalism”.

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THE DEBATE which Matthew Hooton kicked off in earnest on Radio New Zealand this week is hotting-up. In dispute is that much-used, but imperfectly understood, political term: “Neoliberalism”.

Some, including economist, Brian Easton; former Finance Minister, Sir Michael Cullen; and Wellington blogger, Danyl McLauchlan; have claimed that John Key, and the government he leads, no longer fits the neoliberal description. They have not, however, moved as far down the revisionist road as Mr Hooton. His claim is that the Key Government has not only moved on from neoliberalism, but also crossed over the line into the full-blown leftism of that arch-socialist, Rob Muldoon.

Wellington-based academic, Jack Vowles, joined the fray a couple of days ago – posing the question: “Neoliberalism: Half-Full or Half Empty?”

As Professor of Comparative Politics at Victoria, Jack’s purpose in entering this debate appears to be the rather dubious one of muddying the waters about what Neoliberalism is – and is not. In its turn, this obfuscation seemed to be aimed at keeping open the political space currently occupied by what he calls “market pragmatists” – that particularly pusillanimous variety of neoliberal, otherwise known as the Blairite.

Vowles’s case: that Neoliberalism is a species of economic religion, adhered to by a tiny number of extreme Hayekian economists, and only ever imperfectly applied in New Zealand, is, like most erroneous conclusions, based upon an erroneous premise.

Neoliberalism as never been, and is not, a coherent set of economic principles, the presence or absence of which in any given policy prescription determines the strength or weakness of its ideological credentials. Indeed, Neoliberalism, far from being some sort of neo-classical economic crusade, remains what it has always been: the fearsomely coherent political project of global capitalism’s ruling elites.

Its anti-state/free market propaganda notwithstanding, Neoliberalism’s purpose has always been to use the coercive power of the state to thwart and/or reverse any and all attempts to empower the many at the expense of the few.

As Professor David Harvey notes in his A Brief History of Neoliberalism:

“Redistributive effects and increasing social inequality have in fact been such a persistent feature of neoliberalisation as to be regarded as structural to the whole project. Gérard Duménil and Dominique Lévy, after careful reconstruction of the data, have concluded that neoliberalisation was from the very beginning a project to achieve the restoration of class power.”

It is no accident, therefore, that neoliberalism’s origins may be traced to the economic, social and political upheavals of the 1970s. This was, after all, the decade in which the power of the capitalist ruling classes came under maximum pressure: the decade in which both individual capitalists and the principal organs of capitalist power (especially in the USA and the UK) commenced the still-advancing counter-offensive against the unnerving encroachments of social-democratic redistribution and reform.

It also explains why, in practical terms, neoliberalism has always been a more-or-less constant set of political and economic objectives rather than a coherent philosophy. The whole point of neoliberalism is to have the coercive powers of the state deployed to the exclusive advantage of the elites. This may be seen not only in the largely successful campaigns to reduce the influence of organised labour, but also in the ongoing efforts of neoliberal regimes to decouple the regulatory and administrative powers of the state from those sectors of the economy that the forces of social-democracy had once been powerful enough to wrench from private hands.

Vowles’s plaintiff cry that not all of the defining features of a neoliberal regime are in and of themselves bad misses the point entirely. Of course trade liberalisation can be seen “a good thing” – but not when it’s used to gut the domestic manufacturing sector and eliminate the social milieu out of which strong social-democratic values grow. Relieving the pressure on income tax to meet all of the state’s fiscal needs may, similarly, be a good thing, but not when a deeply regressive goods and services tax is imposed on the working-class to fill the fiscal hole created by easing the “burden” of progressive taxation on the wealthy.

Why is Vowles unable to see this? Primarily, because he is desperate to avoid acknowledging both the Neoliberal Revolution, and Neoliberal Settlement which it enabled, as the central political (and, increasingly, cultural) reality of our time. Were he ever to accept that Neoliberalism will manoeuvre swiftly and decisively (principally through its control of the news media) to thwart “the alternatives that do exist to promote [a] more inclusive and egalitarian society”, then all his talk of “responsible economic management” and of not taxing and spending “without any apparent constraints” would stand revealed for the mealy-mouthed Blairite blather that it is.

It is, however, in the midst of all his apologetics that Vowles let’s slip the very insight he’s trying so hard to pretend he has not had. It’s when he declares: “The implicit alternative to neoliberalism implied by many on the left is simply not feasible in the 21st century.”

This is the crucial admission, and the crucial explanation for why Vowles and his Blairite comrades are so keen to reduce neoliberalism to something only a handful of Act supporters take seriously. What Vowles is really saying is that the Left’s alternatives are not feasible while the Neoliberal Settlement endures. And if that is true, then the only possible programme for a genuine left-wing party is the one committed to challenging that settlement head-on and reclaiming the coercive powers of the state for the many, from the few. (The sort of coercive powers that John Key’s indisputably neoliberal National Party refuses to deploy even in the name of ensuring that working people are not seriously injured or killed on the job!)

There was a time – interestingly, it was in 1979, the very year neoliberalism rode to power on Margaret Thatcher’s back – when a much younger Jack Vowles would turn up at my Hyde Street flat, in the notorious student quarter of Dunedin, to attend the weekly Marxist study group conducted in the flat’s tiny sitting-room by some of my more revolutionary comrades.

Such heady ideological brews were not for me, who, even then, was happy to call himself a left-wing social-democrat, but I often recalled those clandestine Hyde Street gatherings as Jack Volwes’s highly successful career in political science unfolded. His scholarship in dissecting the crucial general elections of the 1990s – not to mention the arrival of MMP – always possessed the reassuring feel of being produced by a man comfortable in his own radical skin.

What happened, I wonder, to the Jack Vowles who seemed to see in the epic struggle between Labour and the Alliance the acting out of the urgent mission to make left-wing policies “feasible in the 21st century”? When did it become okay for the Professor to put down the opponents of neoliberalism as inhabitants of a political ghetto, communicators of despair, weakeners of their own cause?

Was it about the same time, Jack, that you decided that if neoliberalism could not be beaten, then it could, God forgive you, be joined?

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  1. Strypey says:

    Another great column from Chris challenging the myth that neo-liberalism is anti-state. Thanks for the reference to David Harvey, I’ll definitely keep an eye out for his work. There is only one thing I disagree with in this column. The sentence where despite his dismissal of marxism, Chris is giving us a classic state-socialist prescription:
    “only possible programme for a genuine left-wing party is the one committed to challenging that settlement head-on and reclaiming the coercive powers of the state for the many, from the few.”

    It was in countries where the state had gathered indiscriminate powers in the name of “the many” (both state-socialist and social-democratic) that the neo-liberal ambush of those states, and their powers, was most effective. Continuing to massively increase the powers of the state (see the doco Taking Liberties), while claiming to be re-purposing it to serve “the many”, is precisely the failed Blairite programme.

    There is another possible programme. One based on dissolving the coercive powers of the state, and redistributing that power *back to* the many in the form of deep democracy: participatory budgeting, collaborative policy-making, re-empowering communities to be self-governing etc. IMHO it is this a more appropriate programme for a 21st century party offering alternatives to neo-liberalism.

    • dave brown says:

      The problem of ‘reclaiming the powers of the state for the many’ is that the existing state is capitalist.
      It can not be used to reform capitalism.
      All attempts to do this have failed.
      Marx in the Civil War in France on the fate of the Paris Commune shows that the working class has to smash the existing state and build its own to express its class power.
      There can be no short-cut around smashing the state and replacing it with a worker state.
      That is the fallacy of the anarchists who attribute the source of all social ills to some generic state.
      Yet the state is nothing other than the ‘management committee for the ruling class’ at any point in history.
      The workers state is unavoidable as long as the proletariat needs it to rule over the defeated capitalist class.
      Beyond that point classes will cease to exist and with it the need for a state to impose class rule.
      The picture of a future society of ‘deep democracy’ is precisely what Marx depicts in a future communist society.
      However before that can happen a new society based upon the the production of ‘plenty’ to overcome formation of new classes is needed, in the first instance the historical destruction of the capitalist class.
      In the age of ecological collapse and short term human extinction, no other alternative is possible.
      This is the message of Marx that, unlike Vowles and Trotter, I took from reading Marx in the ’70s.
      As for Hooten, I doubt he ever read Marx.

  2. John W says:

    Increasingly academics are responding to the pressure of supporting the regime or even promoting beliefs of its legitimacy.

    Funding is one issue but the darker influences I suggest run deeper that the purse, although never separated from survival of the positions held within these institution.

    Our Universities are no longer able to hold a bright and independent outlook as selective research and reductionism are becoming more widely employed to support the vampire ideology.

  3. Murray Simmonds says:

    A very useful summary Chis – thank you.

    Whereas you see the birth of neoliberalism (however defined) as having taken place in the 1970’s I’m still left wondering – along “conspiracy theory” lines perhaps, whether it was born earlier than that.

    What I have in mind is the role of secretive associations like the Bilderberg Group, which I understand to have been born out of Nazism at the end of World War 2. To quote from you, “It also explains why, in practical terms, neoliberalism has always been a more-or-less constant set of political and economic objectives rather than a coherent philosophy. ” I agree 100% with this statement. But this is, as I see it, exactly the set of “principles” that ‘seems to have been’ advocated and promote by the Bilderberg group.

    And I say ‘seems to have been’ – because we will never know of course, given the fortress-like secrecy and security that surrounds the Bilderberg meetings. (But, as noted by one of the coomentators on this blogsite, John Key apparently attended at least one of their meetings.)

    • DouglasRenwick says:

      if you read David Harveys book he traces neoliberalism back to the Mont Pelerin Society (started in 1947), a club of academics, and political thinkers, many of whom got awarded a string of nobel prizes for their service to power.

    • Snoopman says:

      Great piece by Chris Trotter. I agree with him that ‘the left’ (I dislike this term) need to confront neoliberalism head-on.

      Yes, ‘neoliberalism’ was always a class project to financially discipline the world. I’ve come to see it as one side of the same NeoColonial coin, with the NeoCons on the other side of it.

      To answer Murray Simmonds wondering along ‘conspiracy theory’ about the beginnings of neoliberalism, see Naomi Klein’s book “the Shock Doctrine” and see the doco. As Klein points out there was field-testing stage for free market shock therapies between 1964-1976. But, elite planners representing the North Atlantic capitalist realised they would need a sophisticated ideology, buy-in from the major media outlets, covert economic coercion and new think-tanks to sell it. This blueprint was called the 1980s Project, as Shoup and Minter described in The Imperial Brain Trust (a study of the Council on Foreign Relations).

      The covert economic coercion was discussed by the Bilderberg Group in May 1973 5 months before the Yom Kippur War spark of their planned oil price shocks, thanks to the evil genius of Henry Kissinger (among others), as William Engdahl revealed in A Century of War and Gods of Money. (Engdahl found a the Bilderbergers report of their 1973 meeting in a second hand bookshop in Paris). This economic warfare was ‘necessary’ to gain the submission of various governments with socialist programs, disobedient citizenries and ‘third world’ countries demanding Western technology to develop for all the materials and labour they had supplied to rebuild Japan and Europe following WWII.

      For more on these and other aspects of how and why the world has been steered along a callous trajectory by the US-UK-NATO Deep State, I recommend reading a fully-referenced article, “Missing in News-action: Confronting Deep State Power Crimes” at: snoopman.net.nz/2014/05/17/when-black-things-propel-us/

  4. Jo Planet says:

    Googling ‘neo-liberalism gives us : ‘An approach to economics and social studies in which control of economic factors is shifted from the public sector to the private sector.’
    Successful Neo-liberalism vs the Unsuccessful Left is the status quo. You could call it a ‘narrative’. A ‘dialogue.’
    A review of Naomi Klein’s ‘This Changes Everything’ has it that: ‘either we embrace radical change ourselves or radical changes will be visited upon our physical world. The status quo is no longer an option.’
    Do we need to change the dialogue? To change the narrative?

  5. Mike in Auckland says:

    “It also explains why, in practical terms, neoliberalism has always been a more-or-less constant set of political and economic objectives rather than a coherent philosophy. The whole point of neoliberalism is to have the coercive powers of the state deployed to the exclusive advantage of the elites.”

    This is all well written, Chris, and I like the term “Blairite blather”.

    The steady drop (of water) hollows out the rock, as nature shows.

    That is the very reason, why we have so many now resign to the status quo, which is still a form of neoliberalist reality, and fail to see it as such, as it has been successfully put into place, few now know any other socio-economic “order”.

    It was the Key and National Party led government that did cut income taxes a few years ago, to a maximum of only 33 percent (an ACT supporter’s wet dream, apart from a wetter one that would represent a flat tax or no tax at all). At the same time GST was substantially increased (despite of all earlier promises to not do so), by the same government. And those most affected by it are the ordinary workers, the ones without jobs and dependent on benefits, who spend almost all their incomes on GST generating consumption goods and services.

    There were the asset sales, the partial ones, of the energy companies, and let us remember, most shares went to only a few thousand of already well off and wealthy or well earning “citizens”, who could expand their wealth yet further. We have a housing market in Auckland (where a third of the population lives), where people with real estate assets now earn more per week in added value, than many would earn working.

    The hands off market allows those already having investment properties expand and buy more, while 40 percent of buyers on the residential market are investors.

    I see more large, gas guzzling, shiny new SUVs and European, Japanese and US American luxury cars drive around the leafy suburbs in Auckland than ever before, while other parts of the metro area are home to the ones driving around in old cars, some of which nearly fall to bits.

    We have only had annual inflation adjustments of minimum wages for years, have many more part time and precarious jobs for the low earners, while the professionals, small and medium size businesses, and especially some big businesses, are doing relatively well, moving ahead of the reast. Yes, some struggle too, but the divide between those better off middle class, and the lower middle class and the bottom in society has grown, I observe.

    National looked after their voters, and potential swinging voters, and has shafted the rest at the bottom.

    Only because the statistics have become so damned obvious, and because there is danger of some more serious harm or even resurging crime and so to increase again, has the government decided to give a few more dollars to parents on benefits and on low incomes. But in doing so, they give with one hand and take with the other.

    A symbolic action, to increase base benefits for parents on benefits, to pay a bit more family tax credits and so, but cut other benefits, that now seems to give some the impression, this is the end of neoliberalism.

    They are either deluded or simply very cunning, evil mischief makers, who say this.

    At the same time we also get told thousands of state homes will be sold, to developers working with NGOs, and that state land will be sold for middle income earners, while other “social housing” tenants will be stacked on top of each other in more condensed blocks of units. We get more selling off, more shifting of wealth and control to the upper levels of society, nothing else.

    And social services are also on the block, more outsourcing, more contracting out, more of the government shedding responsibilities, and forcing others to compete, to bid as low as possible, so the state saves money in the long term.

    Hooton is one of the smartest operators and manipulators, he is at it again, sowing the seeds of dishonesty, of lies and half truth, trying to make the public believe, that John Key and Nats are “leftist” now, all to facilitate the move further to the right later on. That is the agenda, an attempt to blind people, to make them feel, hey, we are too liberal and left, time to take action, and move to a Judith Collins or Simon Bridges led Nat-ACT government after 2017.

    • Wensleydale says:

      Simon Bridges couldn’t find his way in the dark with a halogen floodlight, let alone lead a government. Just saying.

      • Mike in Auckland says:

        Maybe at present, given his young, arrogant, smart-arsed, boisterous character and manner, but I fear that some people once thought the same of one John Key, when he entered politics.

        Simon Bridges is being groomed to become leader or at least a senior minister one day, and I would not rule out his ambitions to become PM further down the line.

        The Nats love men in women with elitarian views and business attire. They also provide them with enormous training and resources to get there. They have the wealthy elite as their sponsors, and even if they may lack some attributes, all they need to do is what Key does, talk smartly, make one liner comments, schmooze with key media persons and just present a perfectly designed facade, so mums with kids vote for them.

    • CLEANGREEN says:

      100% Mike in Auckland,

      This is a smoke & mirrors job again, probably strategised by Hooton and with help from John Keys “club” membership at The “Bilderberg Group”.

      Bilderberg doctrine closely follows the policies that we are facing here as we are becoming dependant on foreign money and a weekly drip feed of $300 Million each week still.

      Key’s club are involved in this “dependency” model as their method of taking the (OWG) One World Government forward.

      Bilderberg do this by using the “Dark Op’s” system of elaborate characters enlisted in an “army” of operatives, that are now spread out all around the Globe to “kindle their doctrine” of subtle change from left wing politics to their model of authoritarian doctrine.

      As in the case of the NZ Government, it seems they have succeeded well and which they have done with consistency here.

      Their goal is to use the Pyramid (Illuminati) principal developed in May 1st in 1776 in the Freemason Adam Wies Havpt from Southern Germany at Elgelstart University..

      This operative system is so simple as it begins with a small group of three planners and is feed down the chain with limited passing of carefully placed instructions to those below in 8 levels so the majority of operatives don’t know what the master plan is but only what they need to carry out from the Preist (Presbyter).

      This was used by Gestapo and is designed to gradually change the most venerable of countries to become totally sub-servant.

      I believe they are trying this on Greece at this time also.

      Our PM is found to be involved in secretive, Bilderberg/Illluminati type covert planning meetings abroad, to kindle events for his own benefit and destabilise our country’s democracy and undermining all opposition parties to his policies as reported when he attended The Bilderberg 2011-12 secret meetings.

      List of Bilderberg participants 4 New Zealand • John Key (2011-2012), Prime Minister of New Zealand


      • elle says:

        So right Cleangreen.
        Today a meeting is being held in London to stop currency in money form and just have electronic money ie
        eftpos credit cards. Banks in Uk are being told to report anyone drawing out more than $5000 at a time.
        These bankers and economists wanting only electronic money controlled by the governments and banks expect to control us all .
        The money men can refuse to allow people who upset them the right to use their own finances to live ,.if this system comes into being we are totally and absolutely controlled by the Cabals who are behind this money control meeting.

        Read Wake up New Zealand, none of the worlds MSM are reporting on this meeting . We would probably be told when its all set in place .Without the ability to spend our own money freely ,we are imprisoned nothing is ours anymore.
        The bankswould be able to clean out our finances without any repercussions at all,no need to rescue failing banks ,they could just help themselves.There are so many ramifications if this evil system takes control.

        • elle says:

          Re previous comment. Correction the meeting is the end of month(June)didn’t realise today was June (whoops)

  6. wild katipo says:

    A jolly good read and good to see some of the motives by the who and by the how – and the what for. I’ll be having a second read and a recap later on .

    Some interesting perspectives regarding Vowles insights that he tried hard not to acknowledge he had… implying there were indeed alternatives but a think tank planned that out beforehand to head those alternatives off before they gained any traction…

    I recall so many instances of doublespeak – usually couched in the terms ‘govt waste’ to induce a manipulative guilt trip on the population to justify selling off SOE’s and privatizing state assets….yet the real motive- and people could clearly see it at the time was the redistribution of not only wealth….but power…

    In this case that power emanating from the state which was viewed to be ‘restructured ‘ as it were , to advantage the ruling class, the elite…

    And yet the colossal ‘ waste ‘ in govt terms has so often been simply govt rort – thinly protected by legislative loopholes – that more often that not having been a very unpopular move – are rammed through despite widespread opposition and a definite ignoring of the democratic process..

    But as I say , well worth a second read and a little more rumination .

  7. Dennis Dorney says:

    I always read Chris’s blogs but too often find his position in regard to social ideals ambiguous and liable to shift from day to day. Today’s blog is very good and strikes me as being totally consistent. If Chris can hold that focus and expand on it from time to time, I would be very pleased.

  8. DouglasRenwick says:

    I would like to write for thedailyblog on the subject of neoliberalism and globalization some day soon, when i get the time. But the way you check if a country is ‘neoliberal’, you look at the definition given by Milton Friedman and Hayek, and you check if those principles are applied. It’s that simple. I would doubt that neoliberalism has ever existed in New Zealand because there were bailouts of BNZ, electricorp during the so called neoliberal revolution. We also have government intervention that stops child wage slavery, like 5 year olds that cannot get jobs in sweatshops. That violates market principles, so it violates the principles of neoliberals (although most of them don’t seem to realize this). If you take a look at the world, most of the countries that fit neoliberal principles are the 3rd world countries.

    like all political words neoliberalism suffers from being used in rhetoric, so the definition is misused and the term seems to mean something different now when people talk about it. I wouldnt be suprised if the so called ‘centre-left’ parties use the word a lot in the future elections to try to defame the rightwing parties, since the word is becoming universally hated

    • Aaron says:

      Oh for God’s sake, who really cares if it’s called neoliberalism, it’s plain to see that whats been going on for the last 30 years is a take back of power by the elites of the western world. Hell, you can call it New Centrist Policy by Good Guys with Slight Socialist Leanings if you like it doesn’t change the reality of what’s going on.

      • wild katipo says:

        Yes……and as money is their God ,….perhaps they could also be called :

        ‘ The Church of the Orthodox Angry Knights , Barons and Moneylenders of Extended Feudalism ‘ .

        Or perhaps ‘ The Unholy Order of Complete Greedy Bastards and Sociopaths of the Most High Priesthood ‘.

        Or even ….’ The Western Alliance of the House of High Finance and Most Irreverent Unecclesiastical Globalist Pricks ‘ .

        • CLEANGREEN says:

          1000% brilliant WK & Chris,

          WK you had me truly giggling there.with your;

          “Most Irreverent Un ecclesiastical Globalist Pricks ”

          Keep it up mate.

        • e-clectic says:

          Power is their God.

          Money as currently constructed (as debt) is their chosen instrument of power: it masquerades as a means of exchange.

          NZ’s acquisition of $65bn+ of debt is ostensibly a financial position: it is really a transfer of power.

      • DouglasRenwick says:

        Actually this is very important. If we want to change the world first we have to understand it. Totalitarian society’s couldn’t change to a socialist society if they already thought they were living in one for example. So we need to understand whats going on, and decode rhetoric and lies.

        • Aaron says:

          That’s easy then. The term neo liberal had too many negative connotations so they’re trying to muddy the waters around its definition and keep the public confused.
          The last thing we should do is get involved in long discussions trying to make an exact definition because that will just aid their cause. We just need to remind people of the results of their actions. After all that’s what they’re trying distract people from.

    • Richard Christie says:

      Douglas, your examples BNZ, Electrocorp bailouts etc were years ago, a lot has happened in the interim.

      Of course a complete neoliberal society hasn’t yet fully materialised. That’s part of Chris’s point. It’s a continuum. A creeping process. But we’ve got to a point where much of the principles, those essential for the completion of the power shift, have become the new and unchallenged normal.

    • Douglas, I agree that NZ is not a Hayekian or Randian utopia yet (thank goodness), but it’s not for lack of trying. What your comment seems to miss is that neoliberalism has consistently been the ideology driving policy *direction* since the 1980s.

      Two things have slowed the “progress” of neoliberalism. One, determined resistance by various coalitions of ordinary kiwis, working as part of global networks of anti-capitalist resistance. Two, the fact that various governments (both red and blue) have had to occasionally face the mismatch between the reality and neo-liberal ideology (and the neo-classical dogma that underpins it), resulting in the bailouts etc that you mention.

  9. dangerousdave says:

    Excellent summary. Neo-liberalism is as dangerous as it’s cousin, communism, both in their own way exploiting the “coercive power of the state”, the former suppressing the economic freedom of the masses, the latter the political, religious and cultural.

  10. Michael says:

    Too much ad hominem, Chris. Surely, even you changed some of your views since your early 20’s? I know I have, although I moved left as I got older. I think the real argument over the Key government’s neoliberal credentials must be seen in the context of Crusher Collins’s latest power play which, allegedly, means that the government’s health and safety legislation looks like being watered down. If this is correct, the issue becomes one of the pace, or trajectory, of neoliberalism in the current parliamentary term, rather than whether or not neoliberalism is dead and buried within the government’s ranks.

    • wild katipo says:

      To assume one instance of proof in no way does justice to Mr Trotters article. One only has to look at the track record of the last 35 years collectively to see the pattern of destruction / deconstruction by successive neo liberal govts.

      A good place to start in viewing one example of the deviousness of neo liberal thinking – and relevant to this current PM is to google :

      Hackpad : Honest John

      Its all there to see. All factual.

  11. Jay says:

    Conclusions on Neoliberalism. They apply to NZ as well.


    ” This is not the result of chance. The rise in the fortunes of the super-rich is the direct result of policies. Here are a few: the reduction of tax rates and tax enforcement; governments’ refusal to recoup a decent share of revenues from minerals and land; the privatisation of public assets and the creation of a toll-booth economy; wage liberalisation and the destruction of collective bargaining. ”

    ” The policies which made the global monarchs so rich are the policies squeezing everyone else. This is not what the theory predicted. Friedrich Hayek, Milton Friedman and their disciples – in a thousand business schools, the IMF, the World Bank, the OECD and just about every modern government – have argued that the less governments tax the rich, defend workers and redistribute wealth, the more prosperous everyone will be. Any attempt to reduce inequality would damage the efficiency of the market, impeding the rising tide that lifts all boats(2). The apostles have conducted a 30-year global experiment and the results are now in. Total failure.”

    ” The remarkable growth in the rich nations during the 1950s, 60s and 70s was made possible by the destruction of the wealth and power of the elite, as a result of the Depression and the second world war. Their embarrassment gave the other 99% an unprecedented chance to demand redistribution, state spending and social security, all of which stimulated demand.

    Neoliberalism was an attempt to turn back these reforms. Lavishly funded by millionaires, its advocates were amazingly successful: politically. Economically they flopped. ”


    ” If neoliberalism were anything other than a self-serving con, whose gurus and think tanks were financed from the beginning by some of the richest people on earth (the American tycoons Coors, Olin, Scaife, Pew and others), its apostles would have demanded, as a precondition for a society based on merit, that no one should start life with the unfair advantage of inherited wealth or economically-determined education. But they never believed in their own doctrine. Enterprise, as a result, quickly gave way to rent.”

    ” Even when outcomes are based on talent and hard work, they don’t stay that way for long. Once the first generation of liberated entrepreneurs has made its money, the initial meritocracy is replaced by a new elite, which insulates its children from competition by inheritance and the best education money can buy. Where market fundamentalism has been most fiercely applied – in countries like the US and UK – social mobility has greatly declined.

    • Jay says:

      ” The neoliberal hypothesis has been disproved spectacularly. Far from regulating themselves, untrammelled markets were saved from collapse only by government intervention and massive injections of public money. Far from delivering universal prosperity, government cuts have pushed us further into crisis. Yet this very crisis is now being used as an excuse to apply the doctrine more fiercely than before.

      So where is the economic elite? Counting the money it has stashed in unregulated tax havens. Thirty years of neoliberalism have allowed the super-rich to detach themselves from the lives of others to such an extent that economic crises scarcely touch them. You could see this as yet another market failure. Even if they are affected, the very wealthy are doubtless prepared to pay an economic price for the political benefits – freedom from democratic restraint – that the doctrine offers.

      A programme that promised freedom and choice has instead produced something resembling a totalitarian capitalism, in which no one may dissent from the will of the market and in which the market has become a euphemism for big business. It offers freedom all right, but only to those at the top. ”


      ” To understand this conundrum we should first understand that what is presented as an economic programme is in fact a political programme. It is the implementation of a doctrine: a doctrine called neoliberalism. Like all such creeds, it exists in its pure form only in the heavens; when brought down to earth it turns into something different.

      Neoliberals claim that we are best served by maximising market freedom and minimising the role of the state. The free market, left to its own devices, will deliver efficiency, choice and prosperity. The role of government should be confined to defence, protecting property, preventing monopolies and removing barriers to business. All other tasks would be better discharged by private enterprise. The quest for Year Zero market purity was dangerous enough in theory; distorted by the grubby realities of life on earth it is devastating to the welfare of both people and planet. “

      • Jay says:

        ” This, at any rate, is the theory. But as David Harvey proposes in his book A Brief History of Neoliberalism, wherever the neoliberal programme has been implemented, it has caused a massive shift of wealth not just to the top one percent, but to the top tenth of the top one per cent(4). In the United States, for example, the upper 0.1% has already regained the position it held at the beginning of the 1920s(5). The conditions that neoliberalism demands in order to free human beings from the slavery of the state – minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions – just happen to be the conditions required to make the elite even richer, while leaving everyone else to sink or swim.”


        ” But there is another means of testing the neoliberals’ hypothesis, which is to compare the performance of nations which have taken different routes to development. The neoliberals dismiss the problems faced by developing countries as “growing pains”, so let’s look at the closest thing we have to a final result. Let’s take two countries which have gone all the way through the development process and arrived in the promised land of prosperity. Let’s compare the United Kingdom – a pioneer of neoliberalism – and Sweden: one of the last outposts of distributionism. And let’s make use of a set of statistics the Economist is unlikely to dispute: those contained within its own publication, the 2005 World in Figures.(6) ”


  12. wild katipo says:

    I would say that neo liberalism IS an ideology of thought .

    Inasmuch as though there may not be a coherent economic ‘ principle ‘ it has as its basic tenets that of takeover by using as its base foundation the economic theory of Hyek , which progressively went on to be developed into the Lasse Faire of the 1920’s…

    It is an opportunistic ‘cult ‘ with its own organised advocates …..such as the most overt example of the Mont Pelerin Society.

    There are many more lobby groups all with their own take on advancing the general cause , perhaps loosely linked with differing aspects but the essential core and end goal remains the same.

    There are many ideology’s and as an example , Communism.

    Communism , among other things traditionally viewed the Church – or any religion as a tool to suppress and hold down the masses with superstitions and archaic power structures….and that meant persecution of – in particular – the western Judiac/Christian church , along with many other beliefs.

    And yet this flys in the face of the so – called democratic west precisely because it inhibits peoples right to choose what they believe – in theory. It would appear there is a lot of truth about what the communist’s believe about power structures within the larger denominations.

    Yet there are many variants of , and common ground , among communist’s – as well as sharp differences of interpretation. To the point where hostility’s were a very real threat among individual nations.

    China and Russia for an example.

    In the same way , Western democracy has a sliding scale of thinking…from Social Democracy through to neo liberalism. Different interpretations of what democracy constitutes.

    In the same way , neo liberalism has its basic end goals , as do the other ideology’s – and really only differ in that the form it takes is tailored to the type of people who populate any given country.

    The ‘ State ‘ …could be defined as a body of people bound together by common agreement who inhabit a designated region..in the ideal world.

    The reality is more often than not that a State is bound together by an individual or group that have become progressively distanced from the body of people of that State …be it under a democracy , theocracy or communism…and the further it goes down that path it starts to take on the form of totalitarianism.

    So what we have here with neo liberalism is a loosely arranged set of amoral (some would say immoral ) techniques designed to achieve one overriding goal : transferal of power through finance and power structure to a minority group of individuals.

    This ideology is not dissimilar to any other radical activist group be it religious or secular in the extreme methods it uses to reach its ends save for using the legitimately recognized ‘State ‘ as a tool to reach those goals. And uses non violent means initially but which lead often to the transferal of its violent practice’s often to people of other States.

    It wages war and uses State finances and its brand of’ ‘ legality’ to do so. IE : USA and England unilaterally and illegally invading Iraq on the false premise’s of ‘weapons of mass destruction ‘ .

    It passes laws which are unpopular with the people of that State in order to entrench itself and its will regardless if it is a majority or a minority opinion. IE sell off of SOE’s , welfare ,health education cuts.

    It will utilize media and catchphrases to modify public thinking . IE : ‘ govt waste ‘ , ‘rampant unions ‘ and ‘personal choice’ …which have led to inadequate wages and a poverty working class – the working poor – as this was introduced to dismantle unions through such mechanisms as the the Employment Contracts Act.

    It practice’s subversion towards other States it deems as detrimental to advancement of its own interests and ideology’s. IE : Bric nations. Five Eyes Spy network , and overt economic sanctions against those who could potentially thwart their goals – sanctions against Putins Russia for example.

    It uses methods- and the States own laws – to annex what was publicly owned by that State to transfer and redistribute that wealth into private hands – often without the people of that States consent or mandate.

    And if it was given a mandate……is often a mandate that is irrelevant to the issue at hand , and through justification of a legitimate election victory automatically assumes it now has that right to do whatever it pleases.

    And the overriding goal all this is built on is assuming power over the people of that State. Yet even then goes further to ensure its ability to hold that power and to do that means to introduce economic measures that dis-empower the people of that State…in short…to create a poverty environment which is used as a blunt weapon to goad popular thinking and to create a ‘ them and us’ fracturing of society.

    And reaching its ultimate end game ,…by creation of such things as ‘ Free Trade Agreements’ – among other things – seeks to create a border-less global community whereby national sovereign borders are relegated to an abstract division of regions and populaces ….

    And that central control ceases to be in the hands of the people of any State but is instead regulated by individuals heading organisations who possess no notion of the rationale of the sovereign State but rather that of control globally.

    So yes ..it is an ideology.

    And uses many methods and ploys to enact that ideology. Be it economic, and economic theory , war and aggression , repression of a populace , subversion , sanction , pseudo legality , propaganda , encouragement of popular thinking built on assumed truths ,……very much an ideology,

    And all about utilizing all these things for power and control.

    And to which – could realistically be argued that it is a form of legalized passive totalitarianism.

  13. XRAY says:

    Think about it, if a left of centre (LOC) government did elected look at the media landscape today, dominated almost totally by the right. Mediaworks, The Radio Network, NZME (Herald etc) Fairfax and increasingly Radio NZ. While we have near unquestioning adherence to National at the moment the exact opposite awaits a LOC government.

    We are also burdened with 30+ year contracts with Jail privatisation, SkyCity, and probably others like Private Public Partnerships that always see the taxpayer come out the loser, etc, as well as sold off government assets.

    The die is cast and it will take a huge amount of determined pre planned direction and no small amount of media control that the government still has to reverse the tide. And it can’t come a moment too soon!

  14. Jay says:

    Short doco excerpt from ” mind the gap” about the self serving neoliberalism evil fantasy. Only 9 minutes.A part from it Douglas and his rat pack ( sorry rats you’re actually better beings than these scum ) flogged off our, our assets because of 9 billion in debt!!! an excuse. How much do we owe now for squeaks sake? is 60, 70, or 80 billion have lost count. Foreign bankers have us by the interest rate balls not to mention the principal must be paid back. Oh well there’s a way out: make the poor pay! flog off the rest of their patrimony and cut back on social provision short of when the screaming starts.


    • Jay says:

      Correction it was 16 billion in foreign debt not 9 billion! owed when Roger New Zealand was at the helm! Wish we owed only 16 bill now! Back then young kiwis could buy there own homes easily and there was virtually full employment, paradise compared with now.
      Also tertiary education was virtually free.
      Now our wealth and income distribution is outrageously top heavy those at the bottom have to be harassed off benefits to take low paid futureless insecure work.

  15. Jay says:

    That goes for lucrative buy your principles off Radio Live when he shares with Rodney Hyde and doesn’t challenge that idiot’s prognostications. Trotter is part of the establishment weakly protesting did we go wrong? or why isn’t it different? Crocodile tears flowing as he picks up his pay off. He’s a glorified fence sitter.

  16. Andrea says:

    Is it time we explored what we mean by the term ‘class’ here in NZ?

    Or do we need a different term now?

    The likes of our PM and so many of his party fall quite neatly into the British category – spiv. They have no ‘class’, as such.

    The term ‘honorable’ sits quaintly upon those droopy, padded shoulders.

    The seriously terrifying thing is that so many take the current social ecology and framework as ‘normal’. Whatever the cult of neo-liberalism can’t do – they are relentless as propagandists in every sphere they can access. And the general populace uses the terms to ‘fit in’, match with those ‘higher up’. Thus the plague is propagated.

    Those who make the rules get the gold thrust upon them.

  17. John W says:

    Entrenched power welded into place with laws and courts supporting surveillance as well as fear and control, soon to be widened with “Trade” deals formalising the structures very much abided by at present.

    But ahead we have more events conflicting with continuation of the economic growth that capitalism depends on.

    Industrial output cannot continue to expand for much longer and peak output will be reached within the next decade. Already the output growth is faltering and failing to follow the predicted data.

    Peak food is upon us now and yet population is still climbing. Peak grain per capita was in 1987. Soil fertility is in decline and food productivity is lessening aggravated by industrial scale mono cropping. The damage accumulating through recent decades of fertiliser, biocides and other short term practises now entrenched with corporate investment, leave little room for the possibility of recovery. Food will continue to decline regardless of all the myths of factory production.
    The use of animal products for food in the Western diet increases depletion of more sustainable cropping. Water consumption has peaked some time ago with many large area dendent on drawing from ancient aquifers which are consequently shrinking. Deforestation for animal harvesting is accelerating CO2 build up in the atmosphere. The last IPCC report warns that we must move away from animal based food production.
    Metropolitan populations all need their food to be transported. An unsustainable system.

    Accelerating sea rise now over 3mm per year, and while prediction of acceleration rates are wide ranging, even at the most modest rates likely. we have a problem that resources are insufficient to allow any effective measures to deal with the consequences ahead in economic terms.

    Pollution continues to rise coupled with use of non renewable resources and energy consumption. Double the rate of use of non renewable resources and you quadruple the rate of pollution. Energy consumption largely links with non renewable resource consumption and hence also pollution.

    Non renewable resources are being consumed faster than ever before and we have used approximately two thirds of what such resources are accessible, The easy stuff has gone.
    By 2030 the rate of harvesting and exploiting non renewables will have tapered off with less than one sixth left.
    By 2050 less than one fifteenth of the accessible renewable resources will be remaining, and the rate of consumption having been reduced to approximately a quarter of peak.
    By the fabled 2100 less than one twenty fifth remains, with non renewable resource harvesting having all but ceased 25 years earlier. Most mineral recycling demands high enrgy input and further mineral resources consumed during he recycling.

    Climate changes will only aggravate these situations but neoliberal world rulers are disinterested possibly at best hoping wealth will insulate them from any consequences.

    By 2030 human lifespan will have eroded significantly enough to counter birthrate and population will begin to fall. On present figures that would put us at 7.5 billion maximum at the peak.

    Economist do not take wide data into account as Business. Finance, Politicians, planners and govts do not want to know.

    If planning ahead is taken seriously by the 0.1% who control wealth and Govts, then what they have in store in their plans for the rest should be of vital concern. Trust in them we cannot except to trust that their malevolence is pervasive.

    At the moment they control all the hands being played except the finite nature of the planet they are abusing.

    There are solutions but not while the MSM propaganda programme is in place. Our time for effecting any solution is shrinking and the biggest problem is control of our destiny.

    Our Governments lie to us consistently, just some parties more than others. Most or the people are trained to be stupid and ignore the obvious vehemently.

    The economy is not the problem yet we allow beliefs surrounding the economic model presented to keep us disciplined and on the track to nowhere.

  18. Jay says:

    ” Klein reminds us that neoliberalism was once an upstart counterrevolution. Through an epic case of bad timing, the Reagan-Thatcher revolution, the rise of the anti-regulatory World Trade Organization, and the cult of privatizing and globalizing everything ”

    ‘ George Monbiot, a columnist for The Guardian, recently lamented that even though “the claims of market fundamentalism have been disproven as dramatically as those of state communism, somehow this zombie ideology staggers on.” ‘

    ‘ That philosophy — ­neoliberalism — promotes a high-consumption, ­carbon-hungry system. Neoliberalism has encouraged mega-mergers, trade agreements hostile to environmental and labor regulations, and global hypermobility, enabling a corporation like Exxon to make, as McKibben has noted, “more money last year than any company in the history of money.” Their outsize power mangles the democratic process. Yet the carbon giants continue to reap $600 billion in annual subsidies from public coffers, not to speak of a greater subsidy: the right, in Klein’s words, to treat the atmosphere as a “waste dump.” ‘

    ‘ local governments are forging ahead. Hundreds of German cities and towns have voted to buy back their energy grids from corporations. About two-thirds of Britons favor renationalizing energy and rail. ‘

    ‘ What she does, brilliantly, is provide a historically refined exposé of “capitalism’s drift toward monopoly,” of “corporate interests intent on capturing and radically shrinking the public sphere,” and of “the disaster capitalists who use crises to end-run around democracy.” ‘


  19. […] be curious to see how this ties in with the changes seen in NZ society since the late seventies. Chris Trotter’s piece on neo-liberalism in The Daily Blog looks like a good place to […]

  20. Jay says:

    neoliberalim “…free enterprise, [is] a term that refers, in practice, to a system of public subsidy and private profit, with massive government intervention in the economy to maintain a welfare state for the rich.” : Noam Chomsky

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