Unpacking neoliberalism – A Marxist lesson to the moderate left

Tom Bird writes on the importance of Marxism in examining contemporary capitalism

Since the start of the neoliberal economic project in the early 1980s, Britain has seen a rapid resurgence in free-market economic policies, namely privatisation, deregulation, competition, globalisation and austerity measures. Long gone are the empire-funded days of the post-war Keynesian Consensus that guaranteed albeit meagre protections for workers, including stronger trade unions, the nationalisation of key industries and higher taxation on the wealthy. Britain’s direct control over the colonies it pillaged and robbed since the start of the empire was rapidly declining to make way for the modern imperialism of the United States, but still, domestic finance capital was itching burst out of Britain’s borders and continue to dominate the markets of those only recently freed from the shackles of direct colonial occupation. In the eyes of Britain’s ruling class, government policy needed to change to support the insatiable demand for economic growth. 

This shift in the economic base of Britain led to an intentional change in national consciousness pushed by the billionaire-owned press and right-wing think tanks such as the Adam Smith Institute. Margaret Thatcher famously declared in 1987 that there was “No such thing as society”, summing up perfectly the new age of hyper-individualism we find ourselves in today, where human beings are not seen in the context of their broader society and culture, rather as atomised entities only looking out for ourselves. 

40 years on we’ve seen not only the devastating human impact of neoliberalism for the vast majority of people, but there’s evidence all around us that its ahistorical and skewed view of human behaviour has seeped deep into the mindset of not just the right, but the reformist left also. In British politics, this is mainly in reference to those on the right of the Labour Party who follow the centrist line, but tendencies of this are certainly present in the Corbyn project and on the party’s left as well as in other reformist movements and groups. This worldview is a mistake. It distorts our analysis of how our society actually functions and what we can do to improve things. The Marxist method is often misunderstood by those even on the left, so I will use this as an opportunity to outline these mistakes, and then demonstrate how Marxism paints a much clearer picture of the world around us.

Unpacking and Applying Base/Superstructure

To critique neoliberalism (or anything else) as Marxists, we must analyse its material and historical context, as well as dissect its ideological assumptions and conclusions. For those new to Marxism, Marxists understand that society’s ideas cannot be separated from the material world in which they exist and have their origins in the concrete material economic world that exists outside of our minds. We believe the material world exists objectively, whether humans recognise it or not. There are many ways in which humans come into contact with the material world, including our geographical environment, how goods and services are produced and distributed, where raw materials are coming from, who does the work, who benefits from the buying and selling of goods etc… These and countless other interactions with the objective world give rise to our ideas and feelings. In short, our ideas about society and other people come from and are a reflection of that material world. As Marx put it: “It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness”

Does this mean that Marxists view the ideas human beings have as unimportant? Not at all. We hold that the objective economic world in which we live in (the economic base) has a back-and-forth (or dialectical) relationship with the ideas and ideologies of societies and individuals. However, due to the fact that the economic base forms and is the origin of consciousness, Marxists hold the material world to be generally primary in this relationship, and it makes sense to look to measurable material reality to understand the world, society and each other. Think of it like this:

The Economic Base of Neoliberalism

Now we’ve established our method of analysis, we must now apply it to neoliberalism and contextualise it. Marxists posit that it’s impossible to truly understand any phenomena without understanding it in the context of history, and this is equally true of economic and ideological systems as it is for anything else. Understanding neoliberalism as one stage of a constantly changing and developing economic landscape is far more useful than looking at it as a fixed and static development that arrived out of thin air or as a result of vague ideological principles. It allows us to analyse capitalism as a system more broadly and map how it actually functions.

Before neoliberalism, we saw industrial disputes and union membership rising in the UK consistently from the mid-1930s onwards (see below), which were cutting into the profits of the most wealthy as wages continued to climb. While far from being explicitly anti-capitalistic in nature (although some elements certainly flirted with revolutionary ideas), by the late 1970s strong union membership posed a threat to the material interests of the ruling class that held (and still hold) power over the state apparatus in Britain. As capitalism is a system that relies on endless growth year-on-year, the neoliberal project spearheaded by the Thatcher and Reagan administrations took action to ensure this growth would continue to enrich those who exploit while not producing value. By using the state apparatus and placing legal restrictions on union activity (such as the Employment Act of 1980 which made solidarity striking illegal and legal striking much more difficult), the power of unions were curtailed often violently by the state, paving the way for heavier exploitation of workers domestically. This can be seen clearly in the gig economy, insecure work and zero-hour contracts that are commonplace today. Markets were deregulated internationally through institutions like the IMF and World Bank so capital could flow freely and expand into the markets once controlled by direct colonial occupation. This led to the continued heavy exploitation of the global south’s people and resources as manufacturing moved into areas where labour was intimidated and unorganised, therefore cheaper. Looking at the graph below we can see that the New Labour governments did very little to reverse these trends, and the tide of capital accumulation has co-opted a party once committed to achieving social ownership of enterprise. The reality is that both the Labour party and Conservative parties (along with all other major bourgeois political parties) are there to maintain the interests of the people that fund them.

Neoliberal Ideology

So how are those in power getting away with all of this? Why don’t working people see what’s happening to the economy and resist the erosion of their basic social safety net? Here is where we must talk about the importance of ideology, the manufacturing of consent and the economic base’s impact on consciousness. 

When looking at people’s ideas, we must remember that they too do not exist outside the material world, and are greatly informed by the prevailing economic system. Crucially, sources of information play a key role in sustaining the economic base and prevailing economic structures. Most of the news sources that are presented to working people are controlled by those who benefit from the status quo, and they will use that power to manipulate public opinion through rhetoric, scapegoating and outright fabrication of the truth to their advantage. As capitalism is a system that must expand year on year to survive, this is the ultimate material aim of neoliberal ideology pushed by sources of information. Even the publicly-owned BBC and its illusion of ‘neutrality’ is shattered once you realise the current chair of the BBC is a former banker, Conservative Party donor and ally of Boris Johnson. He even worked closely with Rishi Sunak while they were both employed at the international banking firm Goldman Sachs. These capital-dominated media outlets push an agenda that seeks to isolate people from one another and remain divided, which is why classism, racism, xenophobia, sexism, homophobia and transphobia still hold so much power in contemporary Britain despite their irrationality. They’re all used as effective tools to keep working class people blaming each other for capitalism’s shortcomings, thus preventing them from realising their own common class interests and uniting. 

Neoliberal rhetoric, like its ideological predecessor found in 19th-century classical liberalism, puts its focus on vague ideals such as ‘freedom’, ‘choice’ and ‘openness’, yet it rarely speifices how these ideas yield actual material benefits for the majority of people (workers) living in these societies. The reality is that a commitment to ‘freedom’ generally translates to the free flow of capital and capitalism, which has always been a staple of liberal and neoliberal thought. The theory behind neoliberalism posits that unregulated markets ultimately lead to freer individuals in the long run due to a so-called ‘trickle-down’ effect, but as we’ve seen this is anything but the case, especially when our systems of government are so heavily tied to capital. What good is having the right to vote when the power of your vote is determined largely by what’s in your wallet? Many argue that neoliberalism and its emphasis on ‘individual liberties’, such as the freedom to buy/sell land and commodities for profit, accumulate wealth without restriction etc… is the best way to provide the vast majority with a better quality of life. However, what is often left out is how people are largely forced into doing things against their will because their existence relies on it as a result of capitalistic economic conditions. Can people truly be free if they’re always worrying about where their next meal comes from? Or if they have to go without basic healthcare if they can’t afford treatment? Individual rights and the freedoms to do something only go as far as people’s access to them and are inextricably tied to economic relations, which is why challenging broader economic structures and viewing people in context of their relationships to others must be considered. A neoliberal analysis fundamentally fails to do this as it views people as fundamentally separate and isolated, with there being “No such things as society”.

This is why recognising and avoiding the pitfalls of individualist neoliberal ideology is so important, because if individuals are divorced from this material environment and viewed as fully independent, free, selfish and isolated then the blame is put entirely on them for not understanding the conditions that keep them downtrodden. If we fail to look at the structures that largely dictate the narrative to the benefit of capital it will only lead to hyper-individualism and the blaming of those who are at the bottom of the pile. This leads to often classist stereotypes that write-off large groups of often scared and lied-to people as inherently ignorant and unsalvageable, thus deserving of the poverty and instability they face. It places the blame of capitalism as a system at the feet of the individual people doing the exploitation, not the system itself, which then positits that we need to replace one set of CEOs with another, kinder set as opposed to actually questioning it systematically. It also leads to the victims of the system getting the violence and blame that should be directed at those who actually own, control and benefit from the exploitation and miseducation of working people. 

Does this mean that everyone who is ignorant is exempt from criticism and self-improvement? Of course not. Everyone has a duty to inform themselves as best they can, but we must acknowledge the material conditions of our time and realise that most people are ignorant through calculated miseducation and manipulation, creating false consciousness. Working people are told to believe that they too have a vested interest in keeping the status quo alive, and the hoarding of wealth and material goods is the ultimate goal. Many people believe they’re always on the cusp of making it as a millionaire or becoming the next tycoon, whereas in reality homelessness is far closer than prosperity for many. People have also been told to fear alternatives, even if they’re relatively moderate and not explicitly anti-capitalist. The conditions of capitalism mean that most people are largely focussed on getting by and preserving what little they have, creating a rational fear of imminent poverty and destitution. A fear of the ‘other’ is easy to install when people feel failed or alienated by the system. Reactionary ideas are rightly pointed out as irrational by those on the moderate left, but the material origins of ignorance, racism and bigotry are generally ignored. By failing to critique capitalism in its entirety, we fail to see the actual origins of these ideas and the fact those at the top benefit enormously from them, thus stopping us challenging them properly.

Conclusion – A Reality Check

But isn’t all this just an irrational application of an ultimately well-intentioned system? To be blunt, no. Looking at our economic history we can see that the function of a state isn’t to create a system that works rationally for all people. In reality it’s a set of tools that have developed over time by the ruling economic class with the aim of sustaining its own rule and material interests over another conflicting class in line with current material conditions. In its current form, the state is there to serve the wealthy few by managing and expanding capital while attempting to also quell the inevitable conflicts between the masses who produce everything as a social organism and see scraps in return, against those who produce nothing of value yet accumulate vast wealth privately. The present state of things works very well and is very rational, calculated and effective if you’re at the top benefitting from it. It doesn’t care for the interests of working people because it’s not designed to do that.
By falling victim to the individualistic nature of neoliberalism and internalising its rhetoric, divorcing societies and systems from their historical and material context, our friends on the reformist left fail to understand that they’re fighting a losing battle when they try to reform a system that was never designed to meet the needs of working class people in the first place. We must ditch the nice-sounding platitudes of “deregulation” and “individual freedom” as we now understand that they’re ultimately redundant in an economic system that keeps most people poor and exploited so a minority can grow ever richer off the back of their labour. A Marxist analysis helps us realise this. As Rosa Luxemburg put it over 120 years ago in her pioneering work ‘Social Reform or Revolution’; “People who pronounce themselves in favor of the method of legislative reform in place of and in contradistinction to the conquest of political power and social revolution, do not really choose a more tranquil, calmer and slower road to the same goal, but a different goal. Instead of taking a stand for the establishment of a new society they take a stand for surface modifications of the old society. . .“

Tom Bird, is a member of the YCL’s East Midlands branch

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