Towards a sociological concept of neo-liberalism I

reagan_thatcherWho’s afraid of neo-liberalism?

Writing last year, Terry Flew inveighs against neo-liberalism as a shibboleth in academic discourse, signalling a distaste for markets but vague in meaning. Flew appears particularly exercised about its use in cultural studies, arguing that it is a lazy term of art used to project vague distaste onto such objects as reality television.

I don’t read a lot of cultural studies literature, so I can’t comment on that, but there is some force in the critique. That there is was evident in comments on my post on Margaret Thatcher and neo-liberal sovereignty. In retrospect, I may have taken too much for granted, and should have defined the concept more rigorously.

Can we define neo-liberalism rigorously?

The critique of neo-liberalism as a catchword for critique is not uncommon.

For instance, Neil Brenner, Jamie Peck and Nik Theodore, in a paper in Global Networks in 2010, say:

Across the broad field of heterodox political economy, ‘neoliberalism’ appears to have become a rascal concept – promiscuously pervasive, yet inconsistently defined, empirically imprecise and frequently contested.

In his keynote at the 2012 TASA (The Australian Sociological Association) Conference, French sociologist Loïc Wacquant said:

This kind of plenary address provides an opportunity to tackle the ‘big picture’ and venture beyond the boundaries of established knowledge. This is what I propose to do before you, under the title ‘Desperately seeking neoliberalism – a sociological catch’: I’m going to try to construct a specifically sociological concept of that woolly, shifty, difficult-to-catch entity called neoliberalism. This is a notion that is presently used mostly as a rhetorical device or a  term of polemic, being that it is uneasily suspended between political dispute and scientific debate, partaking at once of the idiom of radical activism – especially anti-capitalist and anti-globalisation mobilisation – and of the technical language of the social sciences. I want to turn it into a robust analytic construct that can be deployed to characterise and probe the epochal sociohistorical transformation that we are both undergoing and witnessing. Essentially, I will argue that neoliberalism is not the coming of King Market, as the ideology of neoliberalism would have us believe, but the building of a particular kind of state. Following Max Weber, neoliberalism is best defined not by its end but by its means. For it is not primarily an economic venture, as classical liberalism was: it is a political project of market-conforming state-crafting.

The analysis outlined in this address (the excerpt from which repays reading) is not a new theme for Wacquant.

Ideology and forms of governing – not the same thing

Before outlining Wacquant’s specification of the concept, it’s important to make a distinction between ideology and forms of government or governing.

In my view, a lot of the confusion around the concept of neo-liberalism comes from a failure to grasp this distinction, and an incorrect understanding of what ideology is for.

Ideology fulfills two purposes for political parties and movements:

(a) It provides a vision of a desirable form of relationship between state and citizens and a framework for policy;

(b) It unifies adherents and divides them from their political adversaries.

Any political project is always simply that – it cannot cover the field (even in the most totalitarian of state formations). The political can never completely govern the social, cultural and natural. It’s probably better to think of ideologies processually, of socialisation rather than socialism and following Jamie Peck, of neo-liberalisation rather than neo-liberalism.

We need also to remember that the institutions of the state – the permanent bureaucracy, the military, judiciary and so on – have their own ideology or ideologies. If you think back to events of the 1970s – for instance the dismissal of the Whitlam Government or the coup against Salvador Allende in Chile – the potential dissonance between political and institutional ideology appears starkly. But the difficulty (and it’s a real one) Ministers in any Australian government have in fully bending the governmental machine to their will (or even deciding if they have a political will – a lot don’t) shows it in its routine form.

A form of governing – for example, liberal democracy, has its own meta-ideology which provides a field for contestation and manoeuvre by various political forces and institutional actors. Consider the different strategies Communist or neo-Fascist parties have needed to take within liberal democratic polities and ones where democracy lacks solid legitimacy.

At the same time, in any polity, the force of institutional, professional and social norms has enormous inertia built into it, as do the desires of citizens. Threshold expectations cannot be disregarded over night. Hence, Margaret Thatcher, the inspiration for our discussion, did not “take on” the National Health Service with the alacrity with which she took on the miners.

Neo-liberalism is not about shrinking the state

Those who say neo-liberalism does not exist often point to the dissonance between the continued growth in or relative stability of the size of the state and the precepts of proponents of neo-liberalism such as Friedrich Von Hayek. But there are two errors here, which should be evident from the above analysis. The first is the confusion between ideological thought and actual governing. The second is that practical neo-liberalism requires a strong state in some ways, particularly the apparatus of prisons, police and defence. That is costly.

This is where Wacquant’s analysis comes into its own.

Pierre Bourdieu thought of the modern state as having two arms – the right hand and left hand of the state. Jamie Peck explains in “Zombie neoliberalism and the ambidextrous state“:

If neoliberalization, for Bourdieu, entailed the contradictory translation of an austere utopian vision into a political program, steered and consolidated by the machine-like rationality of the market, the social workers, school-teachers, and street-level bureaucrats of the ‘left arm’ of the state were, at the time, among its least cooperative functionaries. In fact, he speculated that this lumpen class of social-state bureaucrats might even be driven to insurrection against its economically rationalist superiors, the new mandarins of market rationality and their technocratic aides, since ‘the left hand of the state has the sense that the right hand no longer knows, or worse, no longer really wants to know what the left hand does’ (Bourdieu, 1998 [1992]: 2).

Wacquant, who was a participant in Bourdieu’s major research studies during the 1980s, updates this analysis by suggesting that the last few decades have seen the right hand of the state colonise the left hand: “…residual, left arm (or social state) functions have been profoundly transformed through the workfarist logics of behavioural modification and market subordination”.

So, what is neo-liberalism?

I’ll now try to specify what I mean by neo-liberalism, as a form of government:

(a) Neo-liberalism as a political project of governing takes for granted neo-liberal economics; it seeks to reverse decommodification and reinstate the money form as sole arbiter of value through the construction and governance of markets;

(b) Neo-liberalism divides the social field into subjects who can assume responsibility for their own self-management and those who cannot; the latter are separated out through forms of imprisonment and behavioural modification, which increasingly takes the place of ‘welfare’; similarly the form of political and social engagement (including by non-state actors) increasingly is through an individualised market form of choice.

(c) Neo-liberalism seeks to capture the totality of the field of government institutions and state functions;

(d) Neo-liberalism restricts the possibility of the articulation of alternatives to a narrow field.

This conceptualisation builds on Wacquant’s work, but is not the same as his conceptualisation. It is empirically testable, and all four points have been empirically tested.

I don’t offer all this as a polemic – I am not saying this is ‘all bad’, but rather as an exercise in the scientific description and analysis of what is, which is a necessary prolegomenon to any critique. The first step for the left is to understand, not to decry.

Point (d) seems in the previous comments thread to have attracted most dissent, so I’m happy to expand on it and defend it in another post. I don’t want to make this one any longer than it already is, but if anyone would like to have me talk further about any of what I’ve written in this one, I’ll definitely take that on board.


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22 responses to “Towards a sociological concept of neo-liberalism I”

  1. Lefty E

    Good post Mark.

    What is neo about it? I tend to see that in the role of the state in not just “enforcing contracts” as classical libs would have it, but deconstructing the Keynesian/ social democratic state.

    Its also no much about ‘markets’ so much as about a broad defence of large business interests in service provision. A neoliberal may not be happy about a private monopoly, but they prefer it to a public one, despite the fact that the former is obviously a far worse outcome, even just for markets, which have always relied on public monopolies

    Fundamentally its about the use of state power to restrict alternatives economic models of provision of services. I was once involved in a super fund that sought to run ethical invesments including social housing, and it became abundantly clear over time that prudential regualtion was defined to prevent any community owned and run models emerging that werent a straighforward private or industry fund. they werent prepared to actually leave it to the market – it was ‘economically incorrect’ to allow an alernative model.

    Other exampes are PPPs. A clear reconfiguration of state power rather than a retreat from it. The state’s job is to provide business opportunities for entrepreneurs were none previously existed.

    Which is only a rambling way of broadly agreeing with your points.

    Id also throw in a pretty clear indiffference to small business. The average neoliberal couldnt give a toss if a supermarket duopoly completely demolished every small shop in the country.

  2. Lefty E

    despite the fact that the former is obviously a far worse outcome, even just for markets, which have always relied on public monopolies

    Oh I meant to write more there. …relied on public monopolies for essential infrastructure which allows for capital accumulation: roads, basic literacy education, law and order etc.

  3. Dave Bath

    practical neo-liberalism requires a strong state in some ways, particularly the apparatus of prisons, police and defence. That is costly.

    Well, of course prisons are needed. The economic approach (and it is not pure-Hayek, but Hayek with his bits about polluters and dirty industries paying for cleanup, either within their own countries, or with tariffs imposed on imports), with “trickle-down” and the “rising tide raises all boats” analogies, admits to increasing income inequality, but considers that necessary to creating wealth for all (even though we know it doesn’t) … and a raised GINI coefficient, with all other things like political system, correlates more with violent crime than measures of absolute poverty, except in extreme cases. (for statisticians, homicide in Chicago suburbs, so most things controlled that would not be controlled when comparing countries, has a bivariate correlation of r=0.75, which is pretty damn strong). Neoliberalism almost demands, philosophically, a rising GINI, violent crime will increase naturally, and so more prisons are “needed”, and run privately, so there is no incentive for rehabilitiation, recidivism is desired by shareholders of private prisons.

    If I could summarize the way I think neoliberalism works, it would be that it uses slogans of liberals, selectively chosen, to give more inalieable rights and freedoms to dollars than it grants to people.

  4. Richard Barlow

    I think I have been to long away from this stuff!

    Is neoliberalism the product of classical liberals conceding the reality of a ‘permanently’ enlarged state ? They retain services such as hospitals, schools and the like but commodify them to meet spurious efficiency objectives.

  5. Sam

    There’s very little that’s neo, and not much that’s liberal (in the Edmund Burke sense) on Mark’s definition.

    But it is a handy catch all for “right wing values I don’t like”, though not all that useful in some contexts. Is Tony Abbott a neo-liberal? On the definitional criteria (a)-(d): (a) no (b) in spades (c) yes (d) not really, because he’s very open to alternatives such as GeorgePellism.

    How about Malcolm Turnbull? (a) yes (b) no (c) no (d) no. Of course if you give the markets stuff a lot of weight, then Malcolm Turnbull is the most neo-liberal politician in the land.

  6. Golly Gosh

    Mark, my following critique is harsh but please don’t take it personally. My problem is really with what I see as the intractable limitations inherent in the sociological project, not you. 🙂

    I’m afraid I’m far less convinced by your Grand Theory now than I was before you wrote this post. I think you’ve produced a theory of “neoliberalism” that will sit on the shelf with the hundreds of others that have been written and the many thousands that are bound to written in the future. These will in turn sit alongside the millions of grand theories of capitalism. Let’s face it, sociology (and political science), is in one sense of a vast metastasizing cancer of theory that never actually reaches any conclusion. The theories of today are in no measurable way better than those of 20 years ago.

    All Grand Theories are necessarily ideological constructs that tell us something about the values and prejudices of the theorist. They may offer us some degree of insight into how our world operates, but that is the best they can do. They are, in a way, fables.

    My first big problem with your theory is your resort to reification or the fallacy of misplaced concreteness. You have created a fable in which neoliberalism is a social actor with a mind of its own and a sense of purpose. Theories that do this are wrong by definition.

    Second, Neoliberalism is usually defined as a school or group of related schools of economic thought. You haven’t convinced me that a broader definition yields any special insight. In my view your rather nebulous construction yields woolly thinking and runs up the flag for the type of person who likes to blame everything they don’t like, including the disappointment sin their own life, on “capitalism”. I don’t see this as progress.

    Third, you seek to legitimate your Grand Theory by invoking the gods of science and objectivity ” I don’t offer all this as a polemic …. but rather as an exercise in the scientific description and analysis of what is, which is a necessary prolegomenon to any critique.” As I said earlier, I think Grand Theories of this nature are ideological constructs and the invocation of scientism doesn’t rescue them..

    Fourth, your testable claims are easily falsified. Two examples:

    (1) You say Neo-liberalism restricts the possibility … of alternatives.

    Government paid m/paternal leave is at odds with neoliberalism and is a key plank in the social democratic agenda and has only just been introduced. Both major parties now support it in principle.

    Also, in Australia John Howard expanded particular forms of welfare, such as family payments, to such an extent that the Hayekians derided him as a conservative social democrat (Andrew Norton for example). Howard wasn’t a neoliberal.

    (2) You say practical neo-liberalism requires a strong state in some ways, particularly the apparatus of prisons, police and defence. That is costly to explain why state expenditure hasn’t fallen. Yet in truth, even in the USA, prisons, police and military expenditure are dwarfed by welfare (broadly defined) expenditure. See here: wwwDOTusgovernmentspendingDOTcom/current_spending

    To be continued …

  7. Peter Murphy

    But, instead of hearing about new initiatives that would make Australia more competitive and open up new opportunities for the Australian people, we hear more of the class warfare rhetoric that has proved so toxic and so damaging for older nations. And, here is something else we are not hearing about: we must argue the morality of free markets and the immorality of markets that are not free.

    The cold, commercial word ‘market’ disguises its human character – a market is a collection of our aspirations, exertions, choices and desires. Typically, those of us who believe in free markets make our arguments by extolling the market’s economic superiority.

    But I believe we need to do something very different from what we are used to. We need to defend the market on precisely the grounds that its critics attack it: on justice and fairness. Yes, the morality of free markets….

    The market succeeds because it gives people incentives to put their own wants and needs aside to address the wants and needs of others. To succeed, you have to produce something that other people are willing to pay for.

    That’s part of Rupert Murdoch’s speech at the IPA. By that speech (and by the behavior of his media), d’ye reckon it’s “Yes” for (a), (b), ( c ), and (d)?

  8. BilB

    Neoliberalism is a veil made of smoke and mirrors, a type of Chinese Wall to seperate consequential realities in modern “democratic” society. With the demise of “royalty” as a universal social arrangement those who yearn to attain and maintain the benefits of “royalty” require a methodoligy to achieve this.

    Courtesy of Barak Obama’s attempts to achieve some form of social fairness in his country we have an expression of the aspirational level to which the modern commercial royal strives. 30 billion dollars of wealth is a sufficient wealth plateau at which the commercial royal can say “you can start taxing me now”.

    So if 30 billion is to be achieved in a life time lets look at what that means. If an energetic person were to work for a lifetime 16 hours per day 7 days per week for 50 years they would need to achieve an hourly income of $103,000 consistently for that entire period in order acumulate that level of wealth.

    But in our semi socially equitable society there is so much drag (taxes, taxes and more taxes) to make this target virtually impossible. There needed to be a method by which to free the worthy from the anti wealth accumulation forces that sought to make every one………….ughhhh……….equal, and bring balance to the commercial force.

    So that is what neoliberalsim is all about. It is an invisibility cloak to enable those who want to be equal, be equal,….over there, while the worthy have equal opportunity to exploit the equal at a level sufficient to achieve the notional level of the ultimately worthy, 30 billion dollars.

    As with all exclusive societies there needs to be a method of renewal, a path to seperate the worthy from equals. It is called the corporate ladder, the top run of which, the ceo rung, is the launch point from which worthy aspirants begin the journey towards true worthyness.

  9. BilB

    Veil of smoke an mirrors might need some explaining. This is an a series of measures that seem to be fair, but which are really not.

    Free trade for instance. You want more choice and lower prices don’t you? Seems fair, but the long term cost is that your standard of living will drop and you find it ever more difficult to maintain employment.

    Lower taxes. You want to pay less tax don’t you?? The consequence of this is that there are fewer social services to educate the children and heal the ailing.

    Less regulation. This is all too complicated for the average person so the can ignore this one. The cost is that those with the resources to manipulate have a free pass to exploit and secretly take the accumulations of others.

    And so on. The term neoliberalism encompasses the collection of exploitation devices worked out over decades in the cigar smoke filled club rooms of the Hamilton Society and many others to maintain the seperation that was lost with equitable democracy and social inclusion.

  10. Brian

    Golly Gosh @ 6, would you mind telling us where you stand, what your frame of reference is, in trying to make sense of the social world. Or are you claiming Olympian heights of disinterest or true objectivity, free of ideology or presuppositions, or something?

  11. Doug

    A very helpful post and useful links. In the area of public policy there is a tendency to use “neoliberalism” as a “boo’ word without clarity as to what the critic is actually opposing.

  12. Mark Bahnisch

    Thanks, Doug.

  13. Mark Bahnisch

    @1 and 2 – agree with all that, Lefty E, thanks.

  14. Mark Bahnisch

    Golly Gosh – what Brian said. I don’t take it personally, so don’t worry about that. If you’re asking me to justify the “sociological project”, I’d just ask you to reflect on where your own position is coming from.

    I can’t understand your second objection.

    As to the first, I’ll deal with that in the next post.

  15. Golly Gosh

    Thanks Mark and Brian. I have no superior frame of reference to offer. There isn’t one, given the complexity of the subject matter. All I can suggest is that all sociology and especially the grand theory variety, be treated with a great deal of caution. No sociological theory should ever be regarded as true. Sociology most certainly should never be regarded as a science even though sociologists thirst for the status of science. We should avoid falling in love with a particular theory and accept that at best a theory might yield some slither of insight. We should accept that sociological theorists are products of their time and place and values and this marinates their work. We should accept that it is OK not subscribe to any particular sociological “ism” and to see value and insight in many of them, even if this leaves us with a general outlook, a worldview, that is an uncomfortable patchwork of seemingly irreconcilable fragments.

    Sociology can offer a packet of crisps, not a three course meal, not because sociologists are fools but because we will never have the tools to unpack society in the way the hard sciences can unpack their subject matter.

    I would like to see sociologists be as honest about where sociology is at as the economist Noah Smith is about macroeconomics.

    Finally, I was upfront about my feelings about the limitations of the sociological project when I studied sociology at uni approx 25 years ago. I’m glad to say that most of the lecturers were OK about it and I actually got my degree with Distinction 😉

    Must now attend to family duties. Cheerio.

  16. Roger Jones

    Really interesting post. I’m not up with the politicisation or neo-liberalisation project, but am more so with the economics and ideology.

    I think there some key aspects from the science and economics that help explain your four reasons (and you’re no doubt aware of them to have written those reasons).

    What neo-liberalism has done is to strip away the broader aspects of social morality (moral philosophy) that was there from Smith and devolved all agency and morality to the individual. This comes back to Thatcher’s “there is no such thing as society”, which is of course a misquote. What she was saying was that there are no broader social institutions that cannot be devolved to the individual.

    This uses the economic principle that every function should be devolved in a system to the lowest functioning level. If this is turned into an ideology, and there is no such thing as society, then this will always end with the individual.

    It was codified with the Chicago school of economics who turned causality back asswards when Friedman maintained that theories were derived from statistics and that the simplest theoretical explanation was most likely the right one. It just happens that the reductionist explanation is always the right one.

    This is patently wrong. It flies in the face of how we know both social systems and complex systems work. So the first project of neo-liberalism is to either disprove science or to deflect attention through narrative. It has done the second magnificently but for the past decade has also been in a full on attack on the first.

    This is the main reason as to why Mark’s Rule c is so crucial. Because neo-liberalism is unscientific it needs to capture everything to survive. So it takes truths about individualism and magnifies these into political narratives that maintain that any different view is an attack on the individual.

    The political project of neo-liberalism becomes re-shaping the world according to this ideology. The means to do so are context specific. In Australia, it is not as easy as it looks. We do have a sense of community that needs to be adhered to. This is why Howard was a neo-liberal when he was treasurer but was not as a prime minister.
    Where the politics of tolerance can absorb many ideologies, neo-liberalism can only tolerate the one.

  17. Golly Gosh

    Agreed, Mark. I’m certainly not calling for an end to the sociological project. I suppose I am something of an amateur armchair sociologist myself. Also, for me at least, and I suspect for you as well, the unexamined life is truly not worth living 😉

  18. paul walter

    To think I almost missed it, exactly the sort of thing I look for on the virtual library of the internet.

  19. Golly Gosh

    Mark says:

    “The second is that practical neo-liberalism requires a strong state in some ways, particularly the apparatus of prisons, police and defence. ”

    Could you please justify this statement. Are you arguing that defence, prison and police spending must be much higher when a political party that accepts neoliberal economics is in government? If so why, and what is your evidence?

    I’m still looking forward to your post on reification. Cheers.

  20. Golly Gosh

    Another problem with sociological conceptions is that sociology suffers from a lack of fitness due to inbreeding depression; that is to say, sociologists are nearly all progressives of one stripe or another and accordingly that clash of ideas within sociology is anaemic and looks to outsiders like a struggle between tweedledee and tweedledum.

    Needless to say, one has to look at research done by persons outside of sociology for confirmation of the obvious:

    The party registration of tenure-track faculty at 11 California universities, ranging from small, private, religiously affiliated institutions to large, public, elite schools, shows that the “one-party campus” conjecture does not extend to all institutions or all departments. At one end of the scale, U.C. Berkeley has an adjusted Democrat:Republican ratio of almost 9:1, while Pepperdine University has a ratio of nearly 1:1. Academic field also makes a tremendous difference, with the humanities averaging a 10:1 D:R ratio and business schools averaging 1.3:1, and with departments ranging from sociology (44:1) to management (1.5:1). Across all departments and institutions, the D:R ratio is 5:1, while in the “soft” liberal-arts fields, the ratio is higher than 8:1. These findings are generally in line with comparable previous studies.

    These findings, although American, would be more or less replicated in Australia and elsewhere within the Anglosphere.

    One result of this is that other fields with a greater diversity of opinion, like economics, have expanded into the traditional territory of sociology and yielded perspectives and insights that sociology could never provide.

    Which brings me to another criticism of the OP’s theoretical conception of neoliberal hegemony – it doesn’t provide for the possibility of change or even a serious challenge to neoliberalism’s hegemony, apart from “the forces of inertia”, which by definition are forces that may slow change but cannot cause a transformation . That is to say, it is static theory that seeks to explain a world where paradigm shifting change is observably obvious. I also note with some irony that this criticism is applied by progressives to conservative theories of society.