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Except in encouraging a sense of the need to compete internationally to provide the most business-friendly economic environment, neoliberalism in its pure form has little time for nationalism or racism. Nationalism, national identity, sentiment of any kind, is an incidental aspect of social relations that is meaningless in a market.
Under neoliberalism, each of us only has an economic identity. Our nationality — like our sexual orientation, or gender, or political views, or skin colour — is irrelevant to our value as a producer and consumer. An Australian worker has no more (or less) innate value than a South American or Southeast Asian or African worker by virtue of her Australianness; only the value she can bring to a business, only her skills, her talent, entrepreneurship and expertise, are relevant. Similarly, the “nationality” of an investment, the country of origin of capital, is irrelevant—whether an investor is Australian, American or Chinese doesn’t matter; what matters is the value they bring measured in dollars.
Accordingly, neoliberals favour open borders both for people and investment. When it comes to borders, neoliberals would find much in common with 19th and early 20th-century Marxists who decried nationalism as a capitalist distraction: they see borders as meaningless nationalist fictions that can only hamper the free flow of resources — financial, human, intellectual, material — to where the market will make most efficient use of them.
But as economics scholar Mary Wrenn argued in a 2014 paper, by emphasising the economic value of individuals, above and beyond community or other values, neoliberalism spurs the shift to other forms of identity. If we understand identity as a combination of what we ascribe as our personal identities, the identities society assigns to us and what relationships we choose to form socially, neoliberalism establishes the individual and their economic achievement as both a determining factor in how individuals see themselves, and the determining factor of socially assigned identity.
[In the death of neoliberalism, business has blood on its hands too]
As Wrenn argues, “If under neoliberalism the market mentality and economic sphere dominate all other spheres of living… that piece of an individual’s identity that is other-assigned should rightly be called neoliberal identity, instead of collective social identity since neoliberal, or more broadly, economic assessments of character will dominate that other-assigned identity of an individual.” This exposes individuals to a greater risk of alienation given the changing nature of modern economies. “As the division of labor intensifies and the individual becomes more removed from both process and product, the individual is less able to identify herself with any material contribution to society.”
But there’s a further problem beyond traditional economic alienation: under neoliberalism, even though “neoliberal identity is predicated on financial success,” as Wrenn explains, not everyone can be financially successful. That’s just maths — half the population will be below the average level of income, and even those on above-average incomes will feel as though they are not as economically successful as high-income earners.
Debt offers a mechanism to feel like an economic winner, even if you aren’t one, but that often ends up trapping households in poor decisions. And neoliberalism’s intrinsic tendency to inequality means that while even the poorest have become wealthier as a consequence of economic reforms, the wealthy have become a lot wealthier. The public benchmark for economic success has thus become harder to meet. As societies, we have told people their value relates only to their economic success, and that they are responsible as individuals for that success, but the rules of the game mean that half of them must be losers and most have to miss out on the ostentatious rewards of the winners.
Neoliberalism thus provides both an economic basis for a nationalist backlash against it due to its emphasis on open borders, and a motive to reject an imposed neoliberal economic identity. Wrenn argues: “As failure of the neoliberal identity intensifies, the individual — whether consciously or not — begins to seek a relational social identity that is non-economic in nature. The individual seeks empowerment via this extra-economic, social identity.” These other identities are more likely to be achievable for people than the status of economic winner — as members of a nationality, of a regional group, of a race, or other sexual, religious or political identities.
Sometimes the economic and identity-based drivers of nationalism can seamlessly fuse. The long-running issue of Catalan nationalism flared in Spain in 2017, all the way to a brief declaration of independence, prompting Madrid to reassert full sovereignty over the region. While Catalan nationalism is centuries old, what did Catalan nationalists shout so frequently that the slogan was claimed to be the motto of this renewed push for separatism? “Madrid nos roba” (“Madrid robs us”) — the cry of a wealthy province that believes it is paying too much to a central government and subsidising other, poorer regions. People in the economic powerhouses of Lombardy and Veneto in northern Italy also voted for greater autonomy in October 2017, a continuation of the broader Northern League nationalist movement of the 1990s, that aimed for greater economic control and capacity to halt flows of illegal immigrants from the poorly controlled borders in the south of the country.
In its dismissal of non-economic forms of identity (such as nationalism) as irrelevant, neoliberalism ends up fuelling them — especially once its primary benefit, that of increasing the wealth of citizens, vanishes.
This is an edited extract from The Mess We’re In by Bernard Keane, available now where all books are sold.
Borders don’t matter to neoliberals unless it concerns standard working conditions around the world… then it is each country for itself in a spiral down to the lowest working conditions possible.
Workers united will never be defeated. The neoliberals know this so are quite happy to have nation states all competeing with each other to screw the worker ever harder. Workers must be “competitive”, even when competitive means poor and unsafe working conditions.
Yeah… I’m skeptical of the whole premise that it’s an unintentional result of neoliberalism.
Without the artificial enemies racism/nationalism/sexism/whateverism creates (“them” vs “us”, grab your pitchfork!) workers would pretty quickly realise they’re being screwed and put a stop to exploitation and inequality and, by extension, neoliberalism.
Arguably, the poorest in the world haven’t become wealthier because of neoliberalism. They’ve become wealthier despite it. Global wealth has been increasing in the world basically since forever. That’s our jam as humans, we build stuff that lasts longer than the hours it took for us to build.
All that neoliberalism has really contributed is to accelerate the sapping away of surplus production into capital and the subsequent financialisation of our productive economy using that capital.
Frankly Bernie, your introduction to this topic (I have yet to read your book) is far too sloppy. On the one hand your “summary” of the imperatives of neolib assumptions (and requirements) do, in fact, model Milton Freedman at his best (or worst) in respect of an “all singing all dancing filly greased economic [global] system”. However, at this point the characteristics of globalisation also need to be mentioned. For all their apparent similarities (at a distance) there are some significant non-market characteristics too. What you have presented is far too glib to be technically useful. An audience of yr10 students would obtain some benefit from the perspective of social studies.
Now to some serious errors of judgement and fact (of the article).
“The public benchmark for economic success has thus become harder to meet.”
True : but we do have tools (which you have omitted to mention) such as Lorenz Curves, Gini coefficients, Human Development Indexes (the list goes on) and the “bias” towards the wealthy is all too apparent. The Gini for Oz is that of the USA now(!) to two decimal places. Spelling it out : the wealth disparity in Oz is virtually that of the USA.
Then there is this gem : the most idiotic in the entire article!
“As societies, we have told people their value relates only to their economic success, and that they are responsible as individuals for that success, but the rules of the game mean that half of them must be losers and most have to miss out on the ostentatious rewards of the winners.”
On the one hand (USA, OZ, NZ, the third world etc.) : yes. In countries experimenting with a UBI : no. The latter take the view, correctly, that the cake has already been baked and the next action is (only) that of distribution. On the other hand (and there seem to be only two interpretations)
Wrenn and your good self are erroneously assuming that the income profile for a country is either normally distributed (bell-shaped) or uniformally distributed (rectangular-shaped; vertical sides for the min and max frequencies). This assumption MUST be in existence otherwise your assertion (that half are losers) makes no sense.
However, considering the Gini (or just plot the profile from the GDP data using the “Income Approach” the income profile is skewed (humped) to hell. [goodle positive and negative skew for those interested]. The majority are losers; that is how the system works.
As to your examples of Catalan and Italy the analysis has to be undertaken point-by-point. The refo. in Scotland is also a case in point (and its rejection rather interesting). An analogy to health care in the USA (most taxpayers do NOT want pay for health care for other people) is a much more germane association – when flirting with (global) neo-national tendencies.
When you refer to “” Wrenn argues: “As failure of the neoliberal identity intensifies .. the individual begins to seek a relational social identity that is non-economic in nature ..”” you ought to have made the point that the phenomena is rather new; indeed novel. Considering some history the Great Plague of the 14th century, the Protestant Reformation and the Enclosures all provided opportunities for social reform and some political agitation occurred in this regard. However the ruling classes (and indeed the Reformers) had no desire to alter the social balance and alternative options were suppressed in short order albeit with some new social effects.
The identity politics “movement” is going nowhere, economically, so therefore the neolib enterprise is sanguine as to its (ill defined) objectives or social effects. People have to eat! However, the point reflects yet another dreadful failing of the article. Business practice in regard to management is changing in a number of modern companies.
The entire article that Bernie has jotted (apart from the noted omissions and errors) assumes a MBA managerial philosophy where there is strict JDFs and departmentalisation. Such an approach might work well enough for a “plod” company or the public service. The “traditional” approach is to rank all company (organisational) projects on their IRR and with this proxy allocate budget (for projects) against the cost of capital for the organisation; referenced as a datum.
This approach is 180 degrees to how modern companies, such as google, are managed. Eric Schmidt (CEO 2001-11) offers an example of the management style of Larry Page. The search engine wasn’t responding to the users needs or the advertiser’s needs. Did Page call departmental meeting of the Heads of Divisions? Fuck no! He scrawled a memo and put it on the notice board in the cafeteria. Over a weekend (yep – not in work time) the team that corrected the matter were NOT responsible for the initial coding in the first place. Of their own volition that team, who just happened to be sopping coffee on a Friday afternoon in the cafe, saw the memo and implemented a solution. [need I add that in a ‘traditionally-managed’ company the new solution would not (on demarcation alone) got to first base]
Now Bernie : an objective for you. Get your sensitive neck out of the 20th century and start writing about modern management techniques as THESE techniques effect and affect globalisation (and put it in a neolib context if you must – but it isn’t necessary), the influence of monopoly on government (vis a vis information control) and the projections for self (social or national or alt-Right) identity.
From what you have written I’d say that your book is no more then a supplementary adjunct to the VCE economics syllabus (at best) or light reading for a 1st year Econ. student. Its “real world” only at the margins so long as the reader is able to identify the non sequiturs – I’m VERY sorry to say.
the neo cons forget the basic economic rule so well understood by F.D.R and introduced in his new deal economic policy in the U.S during the great depression, which was caused by the unequal distribution of national wealth world wide , you give money to the people, they spend it and the economy grows, give it the rich who don`t need to spend it and the economy shrinks, low tax means low public services, high tax means good public services. its as simple as that, only the greed of the wealthy few stops its implication.
A classic case of impefect hindsight Brian.
FDR had no more of a clue as did Michael Savage (NZ PM at the time) as to the mechanism of Keynesian methods but both perceived the approach as an alternative to orthodoxy where “experts” from the Bank of England) traveled to Oz to lecture Treasury on the analogy between government revenues and household revenue.
In 1936-7 Congress deemed the methods excessive so FDR eased up – but would NOT have done so had he understood the mechanism. Its a matter of record that the USA slipped significantly into further depression in 1938. By this stage most of the first world was in recovery. As an aside Savage, without intending to, established NZ’s forestry industry.
As to your latter point – yes indeed : the northern Europe / Scandinavian approach. There has been, in Oz and NZ, a direct reversal of the incidence of tax between companies and PAYE within 80 years.