Neoliberals want a strong oppressive state to keep the masses controlled as cheap labor and consumers, not to mention as submissive imperial subjects that are occasionally useful as cannon fodder. But they more importantly want a hidden form of international neo-imperialism that controls nation-states like puppets on a string. This allows the capitalist class full freedom to do what they want by disallowing anyone else to have enough freedom to conflict with or challenge their interests.
The plutocracy have dual citizenships with bank accounts, real estate, factories, investments, etc in numerous countries. They can move about as they wish. They evade taxes and put their money in offshore accounts. And they move their business dealings wherever it is convenient at the moment with no sense of loyalty and patriotism, duty and pride, responsibility and prudence. But the average worker and middle class professional remains trapped within restrictive laws, regulations, and certifications. The unrestrained flow of the neoliberal market only applies to the filthy rich who do as they please.
This isn’t a new phenomenon exactly. Those in power have always sought freedom for themselves, including the freedom to deny the freedom of others. The only difference is that the corporation and its related institutional forms (lobbyist organizations, think tanks, corporatist trade organizations, along with various nefarious shadowy groups) operate as a new form of government that pretends it isn’t a government. Power in the past never had to remain hidden in this way. This indicates the fundamental weakness and instability of neoliberalism — the neoliberals like to play this off as a dynamic system, since they don’t care about foreboding collapse as long as they have an escape route and a well-stocked bunker.
Interestingly, even the neoliberal attempt to silence economic debate is nothing new. What made the Enlightenment so shocking, specifically during the revolutionary era, was that economic debate became mainstream. Before that, economics was privately dealt with in closed rooms and wasn’t a topic of politics and public debate. As such, neoliberalism is just another reactionary form longing to rebuild a rigid hierarchy like the ancien regime, not exactly the same for it needs to be improved to stop another revolutionary era from ever happening again.
This is why the godfather of neoliberalism, Friedrich Hayek, would defend the military dictatorship of General Augusto Pinochet. As with many others, fascism specifically and authoritarianism in general was seen as useful, despite it contradicting everything that neoliberals claimed to believe. Neoliberalism is another one of those non-ideological ideologies, which is to say the true ideology is kept obscure, the Achilles’ Heel of the precarious social order (protected by symbolic conflation). The trick is to force this out into the open. Neoliberalism has no defense against the transparency and scrutiny of democracy, the reason that democracy is always the first target of neoliberal schemes.
As a concluding note, this is what makes the Democratic establishment so dangerous in its offering cover for the neoliberal attack on democracy (e.g., the pay-to-play of the Clinton Foundation) — this is made clear in Paul Krugman’s defense of the greatness of American Imperialism against the threat of President Trump’s undermining of neoliberal hegemony (see Liberalism and Empire by Nathan J. Robonson). The pseudo-liberal reactionaries of the liberal class are the useful idiots who take their marching orders from the corporatocratic party bosses and the corporatist media oligopoly. There would be no neoliberal order without them.
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Neoliberalism’s World Order
by Adam Tooze
Faced with this shocking transformation, neoliberals set out not to demolish the state but to create an international order strong enough to contain the dangerous forces of democracy and encase the private economy in its own autonomous sphere. Before they gathered at Mont Pèlerin, von Mises hosted the original meetings of the neoliberals in the Vienna Chamber of Commerce, where he and his colleagues called for the rolling back of Austrian socialism. They did not think that fascism offered a long-term solution, but, given the threat of revolution, they welcomed Mussolini and the Blackshirts. As von Mises remarked in 1927, fascism “has, for the moment, saved European civilization.” Even in the late 1930s, Wilhelm Röpke, another leading neoliberal, would unabashedly declare that his desire for a strong state made him more “fascist” than many of his readers understood. We should not take this as a light-hearted quip.
The neoliberals were lobbyists for capital. But they were never only that. Working alongside von Mises, the young Friedrich Hayek and Gottfried Haberler were employed in empirical economic research. And it was the networks of interwar business-cycle research that drew key figures from Vienna to Geneva, then home to the League of Nations. The Swiss idyll is the site for much of the rest of Slobodian’s narrative, giving its name to the brand of globalist neoliberalism he labels the “Geneva school.” In the 1930s the League of Nations was a gathering place for economic expertise from across the world. But as Slobodian shows, what marked the Geneva school of neoliberalism was a collective intellectual crisis. In the face of the Great Depression, they not only came to doubt the predictive power of business-cycle research, they came to see the very act of enumerating and counting “the economy” as itself a threat to the order of private property. It was when you conceived of the economy as an object, whether for purposes of scientific investigation or policy intervention, that you opened the door to redistributive, democratic economic policy. Following their own edicts, after crushing the labor movement, the next line of defense of private property was therefore to declare the economy unknowable. For the Austrian neoliberals, this called for reinvention. They stopped doing economics and remade themselves as theorists of law and society. […]
It was in the 1980s that the neoliberals’ long march through the institutions of global economic governance finally carried the day. In this Slobodian agrees with the more familiar narrative. But rather than concentrating on national programs of monetarism, privatization, and union-busting, Slobodian focuses on the transnational dimension: the EU and the WTO. The protagonists of his story are people you have never heard of, second-generation students of the original Austro-German founders, trained as lawyers, not economists—men like Ernst-Joachim Mestmäker and Ernst-Ulrich Petersmann, who shaped the agenda in Brussels and helped to steer global trade policy.
It is a measure of the success of this fascinating, innovative history that it forces the question: after Slobodian’s reinterpretation, where does the critique of neoliberalism stand?
First and foremost, Slobodian has underlined the profound conservatism of the first generation of neoliberals and their fundamental hostility to democracy. What he has exposed, furthermore, is their deep commitment to empire as a restraint on the nation state. Notably, in the case of Wilhelm Röpke, this was reinforced by deep-seated anti-black racism. Throughout the 1960s Röpke was active on behalf of South Africa and Rhodesia in defense of what he saw as the last bastions of white civilization in the developing world. As late as the 1980s, members of the Mont Pèlerin Society argued that the white minority in South Africa could best be defended by weighting the voting system by the proportion of taxes paid. If this was liberalism it was not so much neo- as paleo-.
If racial hierarchy was one of the foundations of neoliberalism’s imagined global order, the other key constraint on the nation-state was the free flow of the factors of production. This is what made the restoration of capital mobility in the 1980s such a triumph. Following in the footsteps of the legal scholar and historian Samuel Moyn, one might remark that it was not by accident that the advent of radical capital mobility coincided with the advent of universal human rights. Both curtailed the sovereignty of nation states. Slobodian traces that intellectual and political association back to the 1940s, when Geneva school economists formulated the argument that an essential pillar of liberal freedom was the right of the wealthy to move their money across borders unimpeded by national government regulation. What they demanded, Slobodian quips, was the human right to capital flight. […]
The overwhelming stress on the priority of “the economy” and its imperatives leads many on the left to adopt a position that mirrors Hayek’s. Following thinkers like Karl Polanyi, they criticize the way that “the economy” has assumed an almost godlike authority. Nor is it by accident that the libertarian left shares Hayek’s distaste for top-down economic policy, what the political scientist James Scott has dubbed “seeing like a state.” As the neoliberals realized in the 1930s, the nation-state and the national economy are twins. If this remains somewhat veiled in the histories of countries like France and the United Kingdom, the conjoined emergence of state power and the developmental imperative was stamped on the face of the postcolonial world.
Such critiques can be radically illuminating by exposing the foundations of key concepts of modernity. But where do they lead? For Hayek this was not a question. The entire point was to silence policy debate. By focusing on broad questions of the economic constitution, rather than the details of economic processes, neoliberals sought to outlaw prying questions about how things actually worked. It was when you started asking for statistics and assembling spreadsheets that you took the first dangerous step toward politicizing “the economy.” In its critique of neoliberalism, the left has challenged this depoliticization. But by failing to enquire into the actual workings of the system, the left has accepted Hayek’s injunction that economic policy debate confine itself to the most abstract and general level. Indeed, the intellectual preoccupation with the critique of neoliberalism is itself symptomatic. We concentrate on elucidating the intellectual logic and history of ideologies and modes of government, rather than investigating processes of accumulation, production, and distribution. We are thus playing the neoliberals at their own game.