Capitalism, but at what Cost?
This short reflection will examine the different ways that neoliberalism can be critiqued and studied. First, I will define and unpack neoliberalism on its own terms in order to give context to the rest of the paper, referring to the likes of Friedrich Hayek and Milton Freidman to help inform this section. Then, this essay will turn to understand the two primary theories deployed by political scientists to understand and critique neoliberalism; political economy approaches and post-structural approaches. Political economy theorists are neo-Marxists who build off of Marxist materialistic foundations, and introduce other aspects of society, namely culture, to understand how class dynamics produce and reproduce themselves within society. Post-structuralism, on the other hand, views neoliberalism as a system of meaning that is socially constructed, which shapes individuals understanding of reality through language and social discourse, inevitably creating subjects who have internalised neoliberal logics which then produce and reproduce its intended consequences; the commodification of human existence. For the post-structuralist, neoliberalism is a form of social control; governmentality. Although both perspectives are useful, I will specifically argue that political economy approaches offer a more productive analysis of neoliberalism due to its ability to identify the class dynamics which arise from capitalist modes of production. Post-structuralism, on the other hand, struggles to give a substantial account of neoliberalism and its macro issues due to post-structuralism’s emphasis on the contingent nature of political phenomena.
First, let's examine neoliberalism on its own terms, as neoliberal theorists would have it understood, before examining how political economists and post-structuralists conceptualise it. To begin with, neoliberal thinkers would hardly ever refer to their theories as neoliberal. Instead, their prescriptions are viewed as a natural extension of and return to classic liberal prescriptions. That being the case, neoliberalism is predicated on the liberal assumptions that each individual ought to be free from coercion by another to use their own rational faculties to decide what would be best for themselves within society. Neoliberal theorists, like Milton Friedman, see society as a sum of individuals. In essence, neoliberal thinkers base their prescription of how societies should function on a liberal conceptualization of human nature and human relations: that individuals who make up a society should be free from coercion from others in order to use their free will and rational faculties to act in their own self-interest. Extended to economic functions, neoliberals, like their liberal predecessors, prescribe capitalism; free markets where prices are naturally set by functions of supply and demand amongst the individuals involved. Not only this, but neoliberals emphasise the idea that governments should take a laissez-faire approach to all socio-economic and political concerns of their respective nation-states. Historically, this has led to the deregulation of markets and the dismantling of the liberal Keynesian welfare systems in various nations which had been set up in the 1940s to combat the excesses of capitalism in the decades prior. Through the turn towards neoliberal policies since the end of the Cold War, the world has enjoyed an unprecedented age of globalisation. Neoliberal policies have facilitated free-trade agreements, foreign direct investment, and complex international supply chains which have optimised specialisation and arguably generated massive amounts of wealth. At least, this is the way that neoliberal theorists would like to conceptualise the consequences of their doctrine.
However, neoliberalism is not without its staunch critics. Critics have challenged neoliberalism on its fundamental assumptions about human nature and how society unfolds from that foundation. The first critical approach we should unpack and consider is political economy approaches. Political economy approaches are theoretical frameworks that bridge the gap between the social, political, and economic/material substructures that make up a political community. These approaches can be broadly categorised as neo-Marxist approaches for analysing politics, since they not only build on the class-based analysis of Karl Marx, but they go further and supplement that analysis, historically through the work of Antonio Gramsci and the Frankfurt School, to incorporate other aspects of political life such as culture, race, sex, gender, and other sociological-political categories. Despite incorporating cultural elements into their frameworks, political economists still take class dynamics and their source within the economic means of production to be the basis of political structures. For political economists, as with other Marxist’s, society is seen as the sum of relations within the society, not as the sum of individuals themselves. The most fundamental relations within societies is their material base, which instantiates the political order, filled with its institutions, political culture, governing structures, etc. (superstructure). For political economists, politics directly unfolds due to the relations within the economic means of production. From this neo-Marxist perspective, race, gender, and sexuality also intersect with the economic modes of production in important ways to instantiate a superstructure of not only class dynamics of wealth, but also reinforces inequality amongst race, gender, and sexual orientation (to name a few). Political economy frameworks attempt to build an overarching, intersectional approach to politics which attempts to understand, critique, and transform the ways in which various forms of wealth and power inequalities play out in society.
Applying this neo-Marxist framework for understanding politics to the phenomenon of neoliberalism, theorists like David Harvey argue that due to the reality of private ownership over the means of production in liberal societies, class dynamics are created which also reinforce other cultural disparities between the bourgeois and proletariat classes. Neoliberalism is seen as a form of capitalism which serves the interests of those who own the means of production, which alienates and subjugates the workers who participate in its political order. These critiques are generally the same as those from Karl Marx, however, political economists also incorporate culture, and how class dynamics intersect with other inequities in race, gender, sex, etc. Therefore, political economists affirm that neoliberalism not only functions to secure the economic interests of the bourgeoisie, but also its own cultural narratives. Historically, since the formation of the Keynesian welfare state in the middle of the 20th century, political economists argue that the bourgeois class has been seeking to overturn the welfare-state reforms since it had threatened their classes' interests. From this neo-Marxist framework for understanding political order, the upper classes always seek to not only preserve, but accumulate more wealth and power to secure their own self-interest. Political economists explain that it was the success of the bourgeois classes in various nations and contexts throughout the latter half of the 20th century to reinstate laissez-faire economic and political principles, which fundamentally explains the current superstructure of neoliberalism today. Of course, this superstructure, in Gramscian fashion, maintains itself through not only coercion, but in fact primarily through consent of the population by creating neo-liberal subjects who inhabit and enact the neoliberal order. However, the source of the order itself still lies within the material relations of production within the economic base — the indoctrination of neoliberal subjects is merely a consequence of these relations, which reproduce the economic relations in turn.
Post-structuralist, however, analyse and critique neoliberalism in a very different way than the political economists do. They resist framing politics objectively, or even within state dynamics. Post-structuralists problematize metanarratives which presume objective truth, and instead seek to expose how power dynamics unfold in society through ideas, concepts, language, and discourse. As with political economists, these power dynamics serve particular interests, but for the post-structuralist, they are not as easily located within the material relations of production and its ensuing class dynamics. Post-structuralism draws on the work of Michel Foucault, who argued that instead of taking phenomena, like politics and economics to be stable and objective structures which can be understood via the deconstruction of its component parts, and accounted for through deterministic metanarratives, we should see these phenomena as socially and discursively constructed. They are brought into being literally through the ways we conceptualise ourselves and the world that we inhabit, and the stories that we tell ourselves about reality. From this viewpoint, neoliberalism is seen to be a mode of subjectivity, where through the ways that we understand social relations, and ourselves as subjects within those relations, we end up producing, reproducing, and enacting the neoliberal order.
From this Foucauldian perspective, neoliberalism is a practice of discourse which shapes our identities, relationships, institutions, and governing structures. Neoliberalism is argued to be “a system of meaning that constitutes institutions, practices and identities.” It is a system of meaning which is socially constructed, produced and reproduced discursively, which creates the conditions for controlling the direction of societies; governance. Although neoliberalism means less government oversight, it does not necessarily mean less governance over society. Neoliberalism is a form of governmentality. It encourages individuals and institutions alike to conform to market principles. As a form of governmentality, neoliberalism is argued to not merely be an ideology which is either accepted or rejected by subjects, nor a framework which is instantiated hegemonically through economic and political structures, but instead as a mode of understanding human relations in the first place. From neoliberal systems of meaning arise the consequences of market values being placed above all other aspects of human existence. Individualism, rational choice, and market evaluations are presumed to be descriptions of human nature, which we innately enact. Neoliberalism is the ‘marketization’ of our individual and social cognition, if you will, that sets in motion economic and political relations.
However, I argue that this focus on discourse and the contingent, relativistic, and socially constructed nature of reality which post-structuralism identifies lacks the stable ability to construct counter narratives to neoliberalism which can themselves serve as productive new systems of meaning. Post-structural analysis is internally prone to succumbing to its own deconstruction. Due to post-structuralism’s deeply entrenched scepticism about any objectively verifiable truth, it is unable to productively diagnose the shortcomings of neoliberalism. Namely, the creation of wealth inequality and competing class dynamics. It does not give a robust account of human nature or human relations, but rather, it deconstructs human nature and human relations to discursive systems of meaning which are ultimately socially constructed, and lack any verifiable principle. Post-structuralism emphasises the contingent and contextual ways that power constitutes itself, and shuns any metanarratives which seek to explain neoliberalism more generally. Due to these reasons, it lacks the ability to directly contend with neoliberalism as a metanarrative in its own right.
This does not mean that post-structuralism is a bad theory, but I would argue that it is a supplementary theory to neo-Marxist analysis of neoliberalism. Post-structuralism informs how the superstructure is maintained as a system of meaning via neoliberal subjects who have internalised its specific logics. In the neoliberal case, post-structuralism can help neo-Marxist account for how cultural hegemony is maintained via neoliberal governmentality; subjects internalise and reproduce the logics of class dynamics and consent to the marketization of the human condition via the focus on individualism.
But, since neo-Marxism has the ability to identify the shortcomings of neoliberalism — the cultural inequality and economic class dynamics that it produces, which should be taken as objectively real phenomena that need to be addressed — it provides a more useful framework for understanding and critiquing neoliberalism. The political economy approach enables political scientists and policy makers alike to identify the macro features of neoliberalism, despite its emergence in different contexts, and allows them to suggest ways to ameliorate its shortcomings without getting lost in the minutia of contingent features of the phenomenon.
Neo-Marxist arguments which inform the foundations of the political economy approach directly challenge liberal conceptions of human nature. Neoliberalism views human nature as the sum of individuals, overlooking the social and relational aspect of human existence. Neoliberalism also overly emphasizes the role of independent free will and rationality, without giving credence to the sociological nature of human discourse, and undermines the material-economic features that shape human cognition. In general, liberalism overlooks the social and material aspects of human existence, instead focusing on the individuals’ rational capacities and their independent will power. Instead of viewing society as the sum of individuals, political economists recognize that society is the sum of relations between individuals. Political economists recognize the sociological and materialistic conditions that shape human existence. These insights directly challenge neoliberal notions of human nature and how it constitutes society. Taken all together, political economy approaches I argue are a counterbalance to neoliberalism's views on human existence.
In conclusion, on its own terms, neoliberalism is conceptualised as a return to classical liberal tenets, which identify societies as the sum of individuals within it, whom should be politically organised so as to facilitate freedom from coercion by others to enable their free use of reason to act in their own self-interest. This conception of human nature necessitates democratic and capitalistic policy making, emphasising a limited form of government to let free market principles orient society. However, from a post-structural perspective, this conception of human nature is abandoned, as with other objective proclamations of ‘truth.’ Instead, society is seen to be constituted by a discursive system of meaning making that is socially constructed through power dynamics which serves the interests of those who wield power. Neoliberalism, on these terms, is instead seen to be a form of governmentality; a system of meaning which maintains governance and control over a society. It emphasises the contingent and contextual ways that power constitutes itself, and shuns any metanarratives which seek to explain neoliberalism generally. Due to these reasons, it lacks the ability to directly contend with neoliberalism as a metanarrative in its own right. Political economy approaches, on the other hand, drawing from Marxist insights, enable political scientists and policy makers to identify class dynamics that occur due to capitalist means of production. Furthermore, since political economy perspectives focus on aspects of human nature and society that are explicitly left out of the neoliberal paradigm, political economy approaches afford a robust critique of neoliberalism, counterbalancing and even directly questioning the fundamental assumptions that underpin it as a political prescription. Therefore, this paper, while unpacking the various theories, has argued that political economy is superior to post-structural theories for understanding and critiquing neoliberalism.
References
Friedman, Milton. Capitalism and Freedom. Chicago, US: The University of Chicago Press, 2002.
Harvey, David. “Neoliberalism as Creative Destruction.” The ANNALS of the American Academy of Political and Social Science, 2007, 23–44.
Hayek, Friedrich. “Chapter 1: Liberty and Liberties.” Chapter in The Constitution of Liberty, 57–72, 1944.
Larner, Wendy. “Neo-Liberalism: Policy, Ideology, Governmentality.” Studies in Political Economy 63, no. 1 (January 2000): 5–25. https://doi.org/10.1080/19187033.2000.11675231.
Leifso, Justin. “Week 6 Lecture.” Lecture in Neoliberal Canada, 2024. University of Victoria.
Marx, Karl, and Friedrich Engels. The Marx-Engels Reader. Edited by Robert C. Tucker. New York: Norton, 1978.
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