Can Liberal Democracy Survive Neoliberalism?

Externalities,  where would we be without them? In the Ponzi scheme we know as neoclassical economics, the sort still taught to our young in universities, externalities are impacts from economic activity that are borne by third parties and, hence, kept off the company's books. A common externality is pollution. Smokestacks, for example, can release all manner of toxic substances that can be bad for people living downwind but are rarely charged back to the emitter.  Fossil fuel giants have been playing the externality game forever.

But what about the externalities of neoliberalism?  Stephen Metcalf's brilliant essay, "Neoliberalism, the idea that swallowed the world," explores neoliberalism not just from its economic and political dynamics but also in its human dimension, the impacts it exacts from us on an individual level.

As I've mulled over Metcalf's essay, I've come to realize that, to both the corporate and political caste, the human impacts of neoliberalism are an externality, something best left unmentioned and very easily ignored. That's because you've been dealt out of the game.

The neoliberal order is, at its foundation, a pact between two powers, political and corporate. It is an accommodation based on the surrender of sovereign powers to the new, collaborative regime. The populace doesn't get to play. We're not in the game.

It's become standard these days for government to recognize "stakeholders" as having a seat at deliberations and policy-making. We, you and me, well we're not stakeholders. We're plebs. We're just along for the ride, that is provided we behave ourselves.  The government agenda and the public interest are not necessarily coterminous.

Metcalf alerts us to the human cost of neoliberalism.


the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But “neoliberalism” indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals.
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In short, “neoliberalism” is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity.
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It isn’t only that the free market produces a tiny cadre of winners and an enormous army of losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; between the market as unique discloser of value and guardian of liberty, and our current descent into post-truth and illiberalism.
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What any person acquainted with history sees as the necessary bulwarks against tyranny and exploitation – a thriving middle class and civil sphere; free institutions; universal suffrage; freedom of conscience, congregation, religion and press; a basic recognition that the individual is a bearer of dignity – held no special place in Hayek’s thought.

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the application of Hayek’s Big Idea to every aspect of our lives negates what is most distinctive about us. That is, it assigns what is most human about human beings – our minds and our volition – to algorithms and markets, leaving us to mimic, zombie-like, the shrunken idealisations of economic models. Supersizing Hayek’s idea and radically upgrading the price system into a kind of social omniscience means radically downgrading the importance of our individual capacity to reason – our ability to provide and evaluate justifications for our actions and beliefs.

As a result, the public sphere – the space where we offer up reasons, and contest the reasons of others – ceases to be a space for deliberation, and becomes a market in clicks, likes and retweets.
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We fashion ourselves and identities on the basis of our capacity for reflection. The use of one’s individual reflective powers is reason; the collective use of these reflective powers is public reason; the use of public reason to make law and policy is democracy. When we provide reasons for our actions and beliefs, we bring ourselves into being: individually and collectively, we decide who and what we are.

According to the logic of Hayek’s Big Idea, these expressions of human subjectivity are meaningless without ratification by the market – as Friedman said, they are nothing but relativism, each as good as any other. When the only objective truth is determined by the market, all other values have the status of mere opinions; everything else is relativist hot air. But Friedman’s “relativism” is a charge that can be thrown at any claim based on human reason. It is a nonsense insult, as all humanistic pursuits are “relative” in a way the sciences are not. They are relative to the (private) condition of having a mind, and the (public) need to reason and understand even when we can’t expect scientific proof. When our debates are no longer resolved by deliberation over reasons, then the whimsies of power will determine the outcome.
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Every day we ourselves – no one has to tell us to anymore! – strive to become more perfectly like scattered, discrete, anonymous buyers and sellers; and every day we treat the residual desire to be something more than a consumer as nostalgia, or elitism.

I find much that's familiar in Metcalf's observations. For some time I've written about how many societies, especially America's, seem to have been groomed or conditioned, evident in such things as a rejection of knowledge, logic and critical thinking and the ready acceptance of faith and belief as substitutes.  This is certainly manifest in the die-hard supporters of the current president, a group I often call the "gullibillies." It's this grooming, this conditioning that makes that group so susceptible to manipulation by those playing on their fears, insecurities and prejudices. To even such a grotesquely flawed charismatic as Trump they're putty in his hands.

But what of us, our society? Have we been similarly conditioned? I believe we have although not to the same extent as our southern cousins, not yet at least. Part of this is pre-ordained in the emergence of our corporate media cartel that served Harper so well and  which Trudeau ignores at our peril, not his own.

Our capacity for reflection is tamed or otherwise subdued, by any name suppressed. Modern politicians eschew vision lest it rekindle our appetite for reflection and reasoning and intrude on their whimsies of power. As Metcalf put it so well: "We fashion ourselves and identities on the basis of our capacity for reflection. The use of one’s individual reflective powers is reason; the collective use of these reflective powers is public reason; the use of public reason to make law and policy is democracy."

What we lose - our individual powers arising out of reflection, reason, knowledge, logic and critical thinking - all of these thing so fundamental to the continuation of a healthy liberal democracy are either undermined or heavily discounted in this neoliberal order. These are but quaint notions, relevant to a time before neoliberalism but now an impediment to market-driven politics and corporate interests. Stripped of these individual powers, we must eventually slip into a post-truth world populated by misinformation, distraction, delusion, conspiracy theories creating the societal chaos from which deeply flawed individuals such as today's American president can, like all scum, float to the top of the cauldron.

Enough.