France’s new president, sworn in on Sunday, is playing a delicate game of balancing between centre-left and centre-right. Beholden to neither of the major parties, his aim is to build the maximum support base in the centre for his program.
Macron’s first announcement last week of a slate of parliamentary candidates seemed to lean to the left; one analysis found that 153 of them came from the Socialist Party and its allies, against only 40 from the centre-right parties. Now he has countered that by appointing a Prime Minister, Edouard Philippe, who hails from the centre-right and is expected to bring more converts with him.
But what is Macron’s program? In what direction does he plan to take his country? One word that keeps cropping up in descriptions of him is “neoliberal”, and his election represents a further stage in the evolution of that curious term — with lessons that extend well beyond France.
The modern usage of “neoliberal” derives from two different sources in the 1970s that later converged. One came from Latin America, where the term was used pejoratively to describe free-market policies implemented by authoritarian regimes, especially in Chile. The other came from the United States, where it was used in a positive sense by centre-left intellectuals to indicate their break from socialism and their openness to market solutions.
As the term acquired greater currency from the 1990s on, it lost whatever precision it might have had. It came to cover indiscriminately two different things — support for the free market, and support for policies that distorted the market in favour of business interests — and its use was often a sign that the writer lacked the conceptual equipment to distinguish between the two.
On either story, “neoliberalism” was a doctrine about economic policy. But because it was mostly being used by those on the left, their targets tended to be right wing in a more general sense, embracing authoritarian social and international policies. So, “neoliberal” became available as a general term of abuse, directed at the likes of John Howard and Tony Abbott.
One result was the strain of thought that Europeans usually just called “liberal”– pro-market, individualist and anti-authoritarian– tended to just drop out of the picture.
But in the last couple of years there’s been some push-back. Our own Bernard Keane, for example, has defended neoliberalism by contrasting it with “crony capitalism”, which is more the preference of the business lobby and right-wing politicians. And last year Sam Bowman, the director of Britain’s Adam Smith Institute, endorsed the term, saying: “A neoliberal is someone who believes that markets are astonishingly good at creating wealth, but not always good at distributing wealth.”
And now comes Macron, who carries none of the right’s baggage on social issues. Of the leading candidates, he was clearly the most supportive of refugees and multiculturalism. He also shows no particular sympathy for cronyism, although his background as an investment banker gives ammunition to those who see the finance industry as the bogey lurking behind all pro-market policies.
But nor is he, by any reasonable standard, a market “fundamentalist”; he just holds the entirely reasonable view that the French economy suffers from over-regulation and over-bureaucratisation rather than the reverse. If this sort of traditional European liberal-centrist position is now our archetype of “neoliberal”, then clearly the meaning of the word has shifted.
Most of the big issues that Macron faces (like many other world leaders) are not narrowly economic. The problems of immigration, national identity and European integration raise deep cultural issues.
Call it “neo” if you want, but the approach the world needs to these issues is liberal: democratic, egalitarian, respectful of the rights of individuals, sceptical of traditional authority and dogma, enthusiastic about the benefits of cosmopolitanism. Recognising the strengths (and limitations) of free markets can help, but it is only part of the picture.
Perhaps the lesson of “neoliberalism” is that it’s easy for economic liberalisation to get co-opted and distorted as part of a repressive agenda. Macron seems to understand that danger and is working to avoid it. Let’s hope he succeeds.
Charles Richardson assumes, like Emmanuel Macron, that France’s economic problems are chiefly caused by excessive regulation to protect workers. The real cause of France’s weak economy and declining societal wellbeing is lack of aggregate demand, which is the result of a series of policy changes during the past forty years that redistributed national income away from wages and towards profits, and placed voluntary constraints on the national government’s fiscal policy options. I can understand why someone who considers neoliberal assumptions to be natural, fixed, and inevitable would have difficulty understanding the history of economic policy. I think it is misguided to claim that the dominance of an economic framework means that it cannot be labelled, critiqued, or contrasted with alternatives. There is nothing natural or inevitable about the neoliberal economic policy settings of France, the EU, Australia, or anywhere else. Charles Richardson is like someone during the Cold War claiming that because the term “communist” of often used pejoratively, it has no semantic content or analytic utility.
Thanks Nicolas. I certainly don’t think liberal economic policies are “fixed and inevitable” or that they should be beyond being “labelled, critiqued, or contrasted with alternatives” – I hope I didn’t say that. You’ve offered just such a critique in relation to France, and while I disagree with it I think it’s an important debate to have. I do think that “neoliberal” is generally an unhelpful term in that debate, because its meaning seems so variable. “Communist” was probably a bit more predictable, altho it too was (and is) unhelpful in some contexts.
Neoliberalism does not describe an economic theory, or policy, but an ideology of government. This is the use of the term derived from the work of a range of sociologists and political theorists since at least the 1990’s. The term is of analytical use because it focuses on the ideological prescription of market relations as the most efficient means for distributing and administering value leading to all the kind of policy impositions we are now too familiar with (to wit, privatisation, roll backs of the welfare state, depletion of the language of the common good, the prioritisation of transactional models of citizenship, etc). There is nothing inherent in any of this that means that neoliberalism favours capitalist efficiency (surely a shibboleth as deserving as any of being regarded as myth). Neoliberalism is perfectly consistent with rent seeking and monopolisation – which, let’s face it, is how markets work, free or otherwise. Neoliberalism, like liberalism itself, is also perfectly consistent with curtailments of libertyand resort to forms of arbitrary power – hence the rise of the ever more intrusive and abusive security state under neoliberal governments. Liberalism has always endorsed the use of force and compulsion where people are deemed too immature, too savage, too irrational, or just too black to be accorded full market ‘freedom’. Neoliberalism preserves that liberal predilection. Whereas an earlier iteration of liberalism preserved a commitment to a mixed economy, with markets buttressed by powerful public institutions, neoliberals propose the elimination of those institutions, or their complete corporatisation, in favour of markets and the interests that dominate them. The pursuit of vested interest through the extension of markets alongside the pervasive influence of corporate managerialism may be said to be a defining characteristic of neoliberalism as an ideology of government.
Thanks Balex. I don’t see how that can be right: if neoliberalism prescribes “market relations as the most efficient means for distributing and administering value,” surely it can’t also be “perfectly consistent with rent seeking and monopolisation,” since those are market-distorting practices. Ditto for “curtailments of liberty and resort to forms of arbitrary power.” I agree that liberals in the past have often had a bad record of treatment of those “deemed too immature, too savage, too irrational, or just too black,” but they were hardly alone in that; there’s nothing to suggest that was peculiar to liberalism.
I think “The pursuit of vested interest through the extension of markets alongside the pervasive influence of corporate managerialism” is a very good encapsulation of what many people mean by “neoliberalism”. The reason I think it’s an unhelpful term is that it doesn’t say what happens when markets and vested interests clash. Now, you might say that that won’t happen, that markets always serve vested interests, but it seems to me that using “neoliberalism” is trying to write that opinion into the language. The position of someone (like me) who supports markets precisely because they think they will break down vested interests (and managerialism) gets defined out of existence.
Hello Charles. I think it is perfectly consistent simp,y because neoliberalism operates as an ideology of government. This is part of the reason for its ubiquity. It operates as a way to rationalise the operation of rents and monopolies, inequities and rorts under the discourse of market fairness and efficiency. Liberalism operated the same way vis-a-vis uses of arbitrary power under the guise of extending freedom, rationality, self-government, rights, civilisation – all that tripe. Certainly liberals were not alone in this kind of ideological duplicity, and perhaps they were en masse, rather less sinister than others, but the rationalisations are all there in black and white in Locke, in Bentham, in Mill, et.al. In other words, my point is that neoliberalism, and its market talk, must not be taken at face value (and nor should liberal talk of rights and liberties), because to do so tells us very little of how they have operated, and still operate, as languages of government. Now it might be that markets, if allowed to operate freely, will be efficient and fair, will remove rents and end monopolies, etc, but that is another question. for a man who says that he learned all that knows about economics from his time as a merchant banker, I think Macron’s neoliberalism will be more of the same as we have seen elsewhere. More market talk used to mediate the erosion of the public sphere, to extend transactional models of citizenship, to attack labour conditions, while facilitating rents and other inequities through privatisation, and so on. Ad nauseam.
OK, I see what you’re saying. That removes the inconsistency — the free market stuff becomes basically a rhetorical cover for rent-seeking — but it still leaves the problem that in practice the term also gets applied to those who are quite genuine in their opposition to rent-seeking, and I don’t know that they’re as scarce as you seem to think. And I also think there are a lot of people who are somewhere in between: who would like to free up markets and send the monopolists bankrupt, but who know they have to make compromises and are doing their best in an imperfect world. I suspect that’s roughly where Macron sits, but time will tell.
The prefix “neo” is appropriate and analytically useful because the late 19th and early 20th century iteration of liberalism did not involve extending market mechanisms and rent-seeking opportunities to almost all areas of social and cultural life. That has been a distinctive characteristic of neoliberaleconomic policy from the 1970s to today: it has been far more extensive in its reach than what was attempted the first time.