I have been publishing evaluations of various aspects of modern capitalism and neoliberalism over the last thirty years, starting in 1981 with a critique of one of Milton Friedman’s central ideas:
Milton Friedman had suggested that faster inflation and higher unemployment have been mutually reinforcing in advanced countries since 1973. But he admitted that the data were only suggestive and are not inconsistent with the stronger statement that, in all industrialised countries, higher rates of inflation have some effects that, at least for a time, make for higher unemployment.
Friedman presented a “tentative hypothesis that inflation will tend to be on average , higher and increasingly volatile, and that this will lead to increases in the recorded rate of unemployment (among other harmful effects).”
I commented that: The evidence supporting Friedman’s “tentative hypothesis is insufficiently convincing to justify policies of allowing unemployment to rise in order to contain inflation…..the barriers to containing unemployment are political , rather than economic in any absolute sense. The prospects, especially in Britain, are alarming. (1)
The prevailing ideology encourages us to believe that , if market forces are allowed unfettered scope, we shall arrive at the best of all possible worlds: the more society leaves to market forces, the better it will be for everyone…. The ideology embraces the belief that public bodies, whether central government, local authorities, nationalised industries, schools or universities, often fail to serve the public interest because they are insensitive to their customers’ needs and demands. …what I have to say challenges what is usually regarded as ‘common sense’. Unfortunately , what I am challenging is not common sense it is not even sensible, It is theory that is so well established that, although untested, it is generally accepted.
Traditional neoclassical economic analysis takes no account of relationships between firms’ strategies and policies and their demand for skills, Economists assume that businesses respond automatically to shifts in the relative costs of inputs , and to changes in the relative prices they can secure for their products. Businessmen are assumed to have perfect knowledge of market conditions, to know and use the best production techniques and materials, and to select and buy other inputs -…. To maximise profits. ,, In the name of market forces, the government is increasing the influence of businessmen in several aspects of national life, I have sought to show that the philosophy behind this owes its origin, at least in part to conventional neoclassical economics. An important assumption in this mode of analysis is that businesses are perfectly responsive to market forces –that they are entirely subject to the wishes of their customers. … industrialists do have important contributions to decisions in a modern economy. But it cannot be healthy for the economy or for democracy to extend the influence of one section of society too far. (2)
There has been too much transfer of assets from public ownership to private, and too little effort devoted to implementing appropriate regulation. Privatisation and education and training policy-making have been dominated by ideology and short term political motivations, rather than, as the Government would have us believe, by coherent attempts to stimulate economic growth and efficiency. (3). Government policies have been directed by the ideology of market forces and by considerations of political expediency… policies have lacked coherence. The ideology is economic rather than educational…British reform of education and training in the 1980s has been inadequate and incoherent, even when judged by the admittedly narrow criterion of contribution to economic growth (4)
Having criticised Thatcherism in Britain in the 1980s, in the 1990s I started to consider neoliberalism and capitalism in a worldwide context:
The dominant world economic system – ‘Capitalism Triumphant – is failing to provide the food, shelter clothing, education and healthcare which the poorer people of the world want and need but are not in a position to demand. Economic development is dominated, and seems likely to continue to be dominated for the foreseeable future, by the production and development of products, services and materials which meet the needs of the relatively affluent –which includes the majority of people living in advanced countries. (5)…
The conventional wisdom is that the benefits of economic development trickle down to benefit the whole of society. The best way to alleviate poverty is to provide the maximum freedom for individual entrepreneurs and corporations to create as much wealth as possible as quickly as possible. The poor and the poorest all benefit from wealth creation eventually because of the trickle-down of wealth and income from the rich and very rich to the poor and the very poor. Any measures which restrict entrepreneurs and corporations from pursuing competitive advantage are likely to reduce growth in wealth and income.(6)
This is the essence of neoliberalism, but I suggest that corporations mainly seek to create and satisfy large markets among the relatively affluent populations …because they offer the most profitable opportunities. (7) Massive advertising and promotion, especially by major corporations and now augmented by extensive use of social media, serve to increase demand substantially. This expansion of demand helps to sustain and stimulate the drive for further increases in the GDP in rich countries. The resulting continual increased sale of products to people who have no real need for them—especially sales of luxury products—results in ever-increasing unnecessary damage to the environment, resulting both from the processes of producing the products and also from disposing of them after use. In these circumstances, it is not surprising, in the context of powerfully entrenched consumer culture, as an eminent economist suggests, that “the current environmental policies of many countries are expensive, inefficient, inhumane and in many cases entirely useless” …It is clearly important to research the effects of massive advertising and promotion further as a first step in reducing them. Moreover, comprehensive analysis …would include at least consideration of manufacturing, transport, energy, the environment and also social care—an important area that is becoming even more important with the growing proportion of old people in the populations of many countries. (8)
In a few pages of his book, Mirowski (2013, 53-67) summarises the tenets of neoliberalism in the 1980s”in an abridged format of stark statements” . It is possible to characterise the essential nature of neoliberalism as an ideology, on the basis of just one of Mirowski’s sentences:
Corporations can do no wrong, or at least they are not to be blamed if they do. (2013::64).
Mirowski (9) gives an excellent account of the wide variations in neoliberal theory over time, and amongst a variegated assortment of its proponents. The central message I gained from his book is that neoliberals have provided strong support to capitalism and corporations, regardless of the reality of their behaviour and performance. Such an ideology –which can equally well be described as an assumption –lies at the heart of all neoliberal analyses, no matter how many variations of neoliberal analyses exist at any one time, and regardless of how those analyses change over time. So the inevitable conclusions that neoliberal analysts arrive at are directly related to the assumptions which form the foundations of all their analyses. Because of the unrealistic nature of many of the assumptions on which they are both based, neither neoclassical economics nor liberalism are worthy of being treated seriously as theories.
Accordingly when the whole world’s economic systems threatens to crash, and it is only by the deployment of massive amounts of state aid to corporations that the collapse of the system can be prevented, inevitably neoliberal analysts blame the collapse on states, not on corporations.
Mirowski has shown clearly and in immense detail that the essence of neoliberalism is that it will always provide powerful intellectual support for capitalism and for corporations whatever they do; and that in any conflict with the state, the corporations are always right, and the state is always wrong. Mirowski also points out that “the neoliberal worldview has become embedded in contemporary culture” (2013:328) Thus, it augments very considerably the huge damage that the present form of capitalism inflicts on the world’s population and environment.
1. Senker, P., 1981, Technical Change, Employment and International Competition.,Futures, June:159-170.
2. Senker, P., 1988, International Competition, Technical Change and Training, Papers in Science , Technology and Public Policy, Imperial College, London University and SPRU, University of Sussex.
3. Senker, P., 1989, Ten Years of Thatcherism: Triumph of Ideology over Economics, The Political Quarterly: Vol 60, No 2, 179-189
4. Senker, P., 1990, Some economic and ideological aspects of the reform of education and training in England and Wales in the last ten years, Journal of Education Policy, Vol 5, No2. 113-125
5. Senker, P., 1992, Technological Change and the Future of Work: An Approach to an analysis, Futures, May: 351-362
6. Senker, P., 2000, A Dynamic Perspective on Technology, Inequality and Development, in Wyatt,S., et al Editors, Technology and In/equality: Questioning the Information Society, London, Routledge: 197-217
7. Senker, P., 2003 The STI system –science technology and inequality
,Science and Public Policy Vol 30 number 1
8. Cudworth E., Senker, P, and Walker, K.,2013, Conclusions, New Horizons and Contested Futures, in Cudworth E., et al (Editors) Technology, Society and Inequality, New York, Peter Lang:178-179
9. Mirowski, P., 2013, Never Let A Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown, London and Brooklyn, New Jersey, USA, Verso,