Friedrich Hayek

Encounters With The Neoliberal Marketing Machine (Gerald J. Beyer)

The Problem of Wealth

The following is the third of a symposium, or series of articles, on the problem of wealth within the global economic system.  The first can be found here, the second here.

It is one thing to read about neoliberalism.  It is another to realize you are seeing it up close.  In what follows, I describe two “close encounters” with neoliberalism.  Those encounters have prompted me to study neoliberalism.  In between the two accounts of my “rendezvous” with neoliberalism, I refer to some of the literature that has enhanced my understanding of neoliberalism and its pernicious effects.

 While living in the enchanting city of Kraków from 1995 to 1997, I intently watched Poland undergo its transformation from communism to democracy and capitalism.  Although the upheaval began in 1989, Polish society was still experiencing the “birth pangs” of its new social, political, and economic order.  Sharply rising unemployment and poverty had wreaked havoc on the lives of many Poles.  Many of those disenchanted with capitalism yearned for a return to socialism.

Yet, sociological data also revealed that many Poles accepted that dziki kapitalizm (“wild capitalism,” as it was often called) brought prosperity to some while others endured marginalization and saw a bleak future.  I wondered how the country that bequeathed the world the 10 million strong Solidarność movement could morph from the hopeful solidarity of those days to hyperindividualism.  Much more profound than reading the literature during my graduate studies on the subject, I was witnessing neoliberalism work its “magic” on the streets and in the countryside of Poland.

The Polish historian Dariusz Gawin thus encapsulated neoliberalism’s eclipse of Solidarność and solidarity:

The new order brought new values with it.  The basis of the free market is the principle of competition.  In the process of competition egoism functions as a basic virtue.  Those who can eliminate their competitors can best fulfill their own needs.  Concepts such as competition, egoism, interest, which are fundamental to the new order, clearly stand in opposition to the concept of solidarity. (186)          

While globe-trotters such as Naomi Klein and William Greider assiduously chronicled the ascendancy of neoliberalism on every continent, I remained fixated on Poland for over a decade.  Following Gawin and others, I analyzed solidarity’s demise—and argued for its rehabilitation—in Recovering Solidarity: Lessons from Poland’s Unfinished Revolution.

From my vantage point, “the clash between the newly-embraced ideals of neoliberalism, particularly its understanding of freedom, and the ethic of solidarity was the locus of a decisive battle for the “soul” of Polish society” (for a short summary of my argument, see this article).  You don’t have to take my word for it.   If you want a real insider’s perspective, read esteemed Polish economist and former Solidarność member Tadeusz Kowalik’s book From Solidarity to Sellout: The Restoration of Capitalism in Poland.  Kowalik’s book is one of the few monographs translated from Polish that confront Poland’s “neoliberal about-face,” as Kowalik calls it.

Many Poles, including new leaders in the Polish government, unequivocally embraced neoliberalism.  They were no doubt influenced by “Western” economists and capitalist apologists such as Michael Novak.  However, already in the 1980’s a group of individuals within Solidarność became disciples of Friedrich von Hayek, whose works were translated in the Polish underground.  This explains why it is possible, as Kowalik contends, that capitalism in Poland “was shaped by the theories of F.A. Hayek and M. Freidman, and on the policies of Ronald Reagan and Margaret Thatcher.”

 Neoliberalism: Origins and Definitions

 The term “neoliberalism” originated at a gathering in Paris in 1938.  Hayek and fellow Austrian economist Ludwig von Mises, who are often cited as the founders of neoliberalism, attended the meeting.  These two “Austrian school” thinkers and cohorts such as Milton Friedman later formed the Mont Pèlerin Society, which has attempted to defeat the “threat” of socialism and collectivism everywhere since their first gathering in Switzerland in 1947.

The influence of “MPS” should not be underestimated.  Members have won seven Nobel prizes (e.g. Hayek, Stiglitz, Friedman, Becker) and significantly shaped the modern study of economics.   As George Monbiot indicates in his perspicacious essay “Neoliberalism – The Ideology at the Root of All Our Problems,” neoliberals successfully proliferated their ideas through their myriad think tanks (e.g. The Cato Institute, American Enterprise Institute) and staffed departments at several accommodating universities.  Cash infusions by financial titans enabled them to pull off this ideological coup.  “MPS” has also counted heads of state among its ranks, such as Italian president Luigi Einaudi, West German chancellor Ludwig Erhard and Czech Prime Minister Vaclav Klaus.

Today there are more than 500 members spread throughout the world.  All of them are chosen by current members, thus ensuring adherence to neoliberal orthodoxy (even if, as Monbiot mentions, they eschewed the term neoliberalism because of its negative connotation).  According to one admirer, thanks to “MPS” socialism “has been more or less discredited…excepting the sheltered enclaves of academia.”  In addition, policy makers now dare to promote privatization and deregulation (though not often enough in his view).

Although Pinochet’s dictatorship breathed life into neoliberal ideas already in the early 1970’s, Margaret Thatcher and Ronald Reagan remain the revered paragons of neoliberalism.  They adopted many of its signature policies: slashing taxes on the wealthy, eviscerating unions, privatization of public services and assets, deregulation of trade, banking, and labor policies.  Politicians from Europe, Latin America, Asia and North America have all promoted similar agendas since the 1980’s—sometimes willingly, sometimes straightjacketed by the World Bank, IMF and WTO.   As I write, the United States Congress is about to enact perhaps the quintessential neoliberal policy, a radical tax cut for corporations and the very wealthy that will simultaneously harm the poor in significant ways.

As Jeremy Gilbert and Keri Day point out, some analysts have argued that no unified school of thought or program embodies neoliberalism.  However, I agree with those that maintain neoliberalism is unfortunately real, and it is devastating.  Again, I saw it with my own eyes in Poland!.

According to Polish sociologist Jerzy Szacki, neoliberalism assumes three things about the economic sphere.  First, economic growth (measured as GDP) ineluctably promotes human and ecological well-being. Second, the state should relinquish its responsibilities to the private sector.   Third, the unbridled market (free from government interference) always generates the best outcome(137-38).

On the philosophical level, neoliberalism views human freedom, its most cherished value, as freedom from constraints, particularly in the economic sphere.   In the practical realm, this rejection of freedom understood as freedom realized in solidarity with others leads to a “sink or swim” attitude in socioeconomic policy.  The neoliberal conception of freedom was one reason for apathy towards the poor in Poland after 1989.

Neoliberalism continues to erode solidarity across the globe.  Moreover, as Monbiot persuasively argues, neoliberalism generates, to a large degree, many of the contemporary world’s problems: “the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump.”

The dominance of neoliberalism in the United States explains why the U.N. is currently investigating how the wealthiest country in the world can have 41 million people living in poverty—and 9 million people with no income at all!   Even though extreme poverty globally has abated in recent years, 767 million people still endure penury.  While some of the “have nots” have benefitted to a degree from the neoliberal economic order, the richest have gained exponentially more, as the 2018 World Inequality Report illustrates.

Echoing Pope Francis in Evangelii Gaudium, Bishop Robert McElroy has contended that the status quo is unacceptable: neoliberal economics justifies vast inequalities, which enables poverty to persist in spite of unimaginable wealth in the hands of a small fraction of the world’s population.  Contrary to the neoliberal imagination, inequality matters.  Epidemiologists Richard Wilkinson and Kate Pickett have produced a plethora of evidence showing that greater economic equality correlates with greater health and happiness.  On the other hand, homicide and other social pathologies rise with more inequality.

The Neoliberal Subject and its Weltanschauung

It is important to realize that neoliberalism entails but exceeds laissez-faire economics, as Gilbert indicates.  Neoliberalism is an economic program, but it also entails a cultural and political project.  It is a Weltanschauung, or worldview.  Henry Giroux puts it this way: “neoliberalism as a form of economic Darwinism attempts to undermine all forms of solidarity capable of challenging market-driven values and social relations, promoting the virtues of an unbridled individualism, almost pathological disdain for community, social responsibility, public values and the public good.”(2)

Gilbert writes that neoliberalism sees economic “self-interest to be the only motive force in life and competition to be the most efficient and socially beneficial way for that forced to express itself.” Unlike classical liberalism and laissez-faire economics, however, neoliberals believe that government must actively foster the desired “acquisitive” and “entrepreneurial behavior” in order to dampen an innate, albeit less primal human tendency toward “corporate selfishness.”(8-9)

Day also provides a thick description of “the neoliberal subject” in her tour de force work Religious Resistance to Neoliberalism. According to Day, “neoliberalism is a market rationale that orders people to live by the generalized principle of competition in all social spheres of life, making the individual herself or himself an enterprise (and reducing social relations to monetary relations).”(4)

However, she rightly maintains that it would be a mistake to see neoliberalism solely in terms of economic policies. Day observes that neoliberalism provides a “normative rationality of hyper-competition” and represents a “cultural project in that it distorts what it means to be responsible moral agents in our globalizing world today.”  Day’s characterization is haunting: neoliberalism attempts to “create a different community of persons” in which “persons are nothing more than material means toward the ends of another person’s goals.”

As I argued in Recovering Solidarity, the refusal to recognize duties to others, particularly the poor and vulnerable, is rooted in the neoliberal emphasis on negative freedom.  Monbiot spells this out: “Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments.  Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.”  Neoliberalism does not care about the freedom of the poor, only those whose interests it serves.

Virtually no arena of life remains devoid of neoliberalism’s influence, as this broad spectrum of essays on “neoliberal culture” in the journal New Formations elucidates.  Pope John Paul II, Pope Benedict, and Pope Francis all recognized the dangerous tendency of market economies to commodify everything. As Day avers, neoliberalism especially turns women into commodities, particularly those black and brown women who toil in sweatshops, serve as exploited caregivers, and are ensnared by sex tourism.

In What Money Can’t Buy Michael Sandel gives myriad examples of how market values and mechanisms have infiltrated almost every aspect of modern life.  Just about everything can be bought and sold: driving in carpool lanes for a fee, being paid to advertise on one’s forehead, paying women halfway around the world to carry surrogate pregnancies and buying admission to American universities. Sandel argues the United States no longer simply has a market economy, but has become “a market society.”

As Gilbert maintains, we encounter the ubiquitous neoliberal ideology of meritocracy, individualism and hyper-competition in fiction, television, movies, and music.  Yet, we do not even realize, as Monbiot and others point out, the vast extent to which neoliberalism shapes our lives.

The Rise of the Neoliberal University

Years after my foray in neoliberalism in Poland, I began pondering why universities sometimes (often?) operate like inhumane, ruthless corporations.   For example, how can the academy justify the fact that more than 20% of faculty members in the U.S. earn poverty wages and rank among the precariat, with no job security and benefits?  For all the talk about diversity, why do universities still disproportionately relegate minorities and women to precarious academic positions?

I discovered that the answer has a lot in common with my inquiry into the demise of Solidarność.  In his stinging critique of U.S. business education, Rakesh Khurana decries the “neoliberal utopianism” served up by the curriculum. But neoliberalism runs deeper than just business education.  It has transformed higher education altogether.

Reminiscent of Naomi Klein’s argument in The Shock Doctrine, Tarak Barkawi maintains the “neoliberal assault on universities” subjects faculty (and staff) to a constant barrage of “crises,” austerity measures and so-called reforms in order to “soften the resistance of faculty to change.” In Neoliberalism’s War on Higher Education Henry Giroux argues “many universities and colleges have become unapologetic accomplices to corporate values and power (10).”

The neoliberal university retreats from ethical considerations and social problems, as critical education threatens rather than buttresses the neoliberal order.  The university is under pressure to become “a marketing machine essential to the production of neoliberal subjects.”(56)  The casualization of the academic workforce has served this end by eroding the ability of faculty to resist the corporatization of the university.   In this vein, Jan Clausen and Eva-Maria Swidler discuss how The World Bank, IMF and other global institutions advocated for “restructuring” the academic workforce in order to pave the way for neoliberal higher education, friendly to the aims of technocrats and corporations.

Because competition is one of its salient features, neoliberalism subjects workers to “a stifling regime of assessments and monitoring, in order to identify the winners and punish the losers,” as Monbiot aptly states.  Anyone who works at a college or university today will likely recognize this facet of her or his existence, which has been described as the “panopticon of control and accountability.”

Berg and Seeberg’s The Slow Professor reviews research indicating the emphasis on productivity and the feeling of being “under the microscope” at the corporatized university has caused many academics to feel overworked, stressed out, and hopeless (13).  Minoritized faculty and staff face additional pressures, as they endure what scholars have dubbed “racial battle fatigue” in the neoliberal university.

Another study reveals that the neoliberal university’s “powerful forms of competition” engendered by “ranking systems” and job insecurity has led to an increase of anxiety and suicides among professors.  As the authors rightly contend, this state of affairs mirrors life in society more broadly under neoliberalism, which is psychologically debilitating.

 A Future Beyond Neoliberalism?

As this brief tour of neoliberalism ends, I can only offer a few signposts towards the way forward.  For starters, we need to harness compelling evidence from various disciplines to rewrite the “story” about human nature.  The stories we tell about ourselves often become self-fulfilling prophecies; narratives help determine whether we act on our inherent empathic or selfish tendencies.

In addition to the research I mentioned above, the work of scientists like Frans de Waal, Sarah Brosnan and David Sloan Wilson can help debunk the myth that we are “hard wired” to embody the cutthroat, competitive self of neoliberalism.   With Monbiot, I also affirm the need for political parties to offer a “coherent alternative.”  This alternative must, among other things, cogently address the intersection of racism and class in the neoliberal order.

Educators and religious institutions need to more fervently decry and contest neoliberalism.  Some religious bodies and leaders, such as the World Council of Churches and Pope John Paul II have produced important statements unequivocally naming the evils of neoliberalism.  Yet, as  Day contends, religious sources (and well as “black feminist womanist religio-cultural perspectives”) must be utilized more creatively and credibly to offer a compelling alternative vision of human existence.  Thus far, religions have exhibited a “Janus-faced nature” in relation to neoliberalism.   As she opines, “religious ideas and practices both fuel neoliberal logics and subvert these logics.”(12)

Finally, academics can no longer be content to produce works in their discipline while ignoring their complicity in the neoliberal university.   Giroux rightly criticizes “gated intellectuals” who legitimize the neoliberal global order by giving it intellectual “cover.”  The relatively few of us fortunate enough to enjoy the academic freedom associated with tenure should not idly watch as neoliberalism erodes both the quality of university education and our solidarity with our colleagues who struggle to make ends meet.

Thus far, contingent faculty have confronted neoliberalism in higher education more earnestly.  The authors of the recent “Academic Manifesto” offer some possibilities for resisting the neoliberal university.  Regardless of what one thinks of these solutions, the basic conclusion seems incontrovertible: workers must “unite” in the face of neoliberalism.

Gerald J. Beyer is Associate Professor of Christian Ethics at Villanova University.  His forthcoming book is tentatively titled Solidarity or Status Quo? Catholic Social Teaching and Higher Education in the Age of the Corporatized University.  

3 thoughts on “Encounters With The Neoliberal Marketing Machine (Gerald J. Beyer)

  1. “Regardless of what one thinks of these solutions, the basic conclusion seems incontrovertible: workers must “unite” in the face of neoliberalism.”
    How about solidarity with the poor in Catholic Education?

    Recent popes have declared that the “rich are getting richer and the poor are getting poorer”. This same criticism could be applied to catholic education: catholic schools and colleges are serving more the rich; and less the middle class and poor.
    When my grandparents immigrated from Ireland in the early 1900s, the Catholic Church in the United States already had in place a parochial school system designed primarily for immigrants. However, these schools are now too expensive for today’s immigrants.
    St. Ignatius of Loyola, when he established Jesuit schools and colleges in the sixteenth century, insisted that no tuition fees be charged to the students in order that the poor might participate with the rich. Today, student fees in some of our Catholic Colleges are exceeding $60,000 a year.
    Should Catholic Education include, as part of its mission, the goal of reducing the gap between the rich and poor? Can Catholic Education encourage what Cardinal Claudio Hummes calls “solidarity with the poor”?
    “A servant church must have as its priority solidarity with the poor,” he said. “The faith must express itself in charity and in solidarity, which is the civil form of charity,” Hummes said.
    “Today more than ever, the church faces this challenge. In fact, effective solidarity with the poor, both individual persons and entire nations, is indispensable for the construction of peace. Solidarity corrects injustices, reestablishes the fundamental rights of persons and of nations, overcomes poverty and even resists the revolt that injustice provokes, eliminating the violence that is born with revolt and constructing peace.”
    My thesis deals with the question: Can the poor be included as participants in Catholic Education in order to encourage “Solidarity”?
    First, I consider the thesis of Mary Perkins Ryan in her book: Are Parochial Schools the Answer?
    “In trying to provide a total Catholic Education for as many of our young people as possible, we have been neglecting to provide anything like an adequate religious formation for all those not in Catholic Schools, and we have been neglecting the religious formation of adults.” Mrs. Ryan suggests that the resources of the Church could be better used where the public schools provide for general education.
    I then modify Mrs. Ryan’s thesis to establish my own which I summarize as follows:
    “A preferential option for the poor” should be maintained in our Catholic Schools. If we find that we cannot afford to keep our schools open to the poor, the Church should be ready to use its resources for something else which can be kept open to the poor. We cannot allow our Church to become a church primarily for the middle-class and rich while throwing a bone to the poor. The priority should be given to the poor even if we have to let the middle-class and rich fend for themselves.
    Practically speaking, the Catholic Schools must give up general education in those countries where the State is providing it. The resources of the Church could then be focused on “Confraternity of Christian Doctrine” and other programs which can be kept open to the poor. These resources could then be used to help society become more human in solidarity with the poor. Remember, the Church managed without Catholic Schools for centuries. It can get along without them today. The essential factor from the Christian point of view is to cultivate enough Faith to act in the Gospel Tradition, namely, THE POOR GET PRIORITY. The rich and middle-class are welcome too. But the poor come first.

  2. I am afraid that using unanalytical journalistic material to justify an unanalytical journalistic thesis does not add to the sum total of knowledge. Furthermore, the sources you cite in relation to inequality look at the problem in such a partial way as to make them totally meaningless. If you look at the world as a whole (and that is what should matter to Catholics) there has been a rapid fall in inequality in recent years and there will continue to be so until 2035 at least. It is better to look at the picture as a whole than individual countries, or areas, or the top 1% or 0.1% of the distribution otherwise one can just cherry pick figures to make your own case. Wealth distribution figures in this context are also well known to be meaningless – it is income or (better still) consumption figures that matter. To describe by far the most rapid fall in extreme poverty in the economic history of the planet as has taken place in the last 30 years as an “abatement” is ludicrous.

    Also, to argue that we somehow live in uniquely neo-liberal times when most Western governments are spending as big a proportion of national income than at any other time in history (excluding war time) does not make sense (not to mention the huge growth in regulation).

    To argue that markets have a tendency to commodify everything is to misunderstand both markets and commodification. Indeed, education is a good example. As the state has become more and more involved in education, it has become more utilitarian in its outlook (certainly in the UK). States can commodify things and they can pursue purely utilitarian values. People acting within free societies within market economies can live as communities where they commodify nothing and own everything in common (as communities of monks do). To try to overturn by political means the failure of the Church to effectively engage people in setting a correct hierarchy of moral values (not just in relation to material things, but in relation to other things such as sexual morality) is a monumental error and, once again, misses out the civil society institutions that restrain behaviour and create moral norms beloved by Hayek, De Tocqueville, Burke, Novak and the Church.

    Let me give you one reflection from Poland. You give no account at all of how Hayekians believe in sophisticated civil society institutions to regulate economic life. I was involved in the reconstruction of the actuarial profession in Poland after 1990 (indeed, I am an honorary member of the Polish profession and was given an award by the Polish Chamber of insurance). The profession was nationalised (in 1995 I think) by the returning democatically elected communist government (though not communist in the same sense as its predecessors, of course). If civil society institutions are repressed by social democratic governments, then, of course, the market will not operate as it should – you should know that much from both Catholic social teaching and Novak (not to mention Hayek or De Tocqueville). I will leave the last word to Hayek because you would do much better to study him than simply study commentators: “This fact should by itself be sufficient to refute the silliest of the common misunderstandings: the belief that individualism postulates (or bases its arguments on the assumption of) the existence of isolated or self-contained individuals, instead of starting from men whose whole nature and character is determined by their existence in society. If that were true, it would indeed have nothing to contribute to our understanding of society.”

    By the way, I think you mean Stigler and not Stiglitz.

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