What is Neo-liberalism and why knowing matters. – John Kelly

I have said it before but it deserves repeating. Democracy is not failing us; it is we who fail democracy when we fail to actively engage with it. Democracy, as we practice it today, has lost its essential direction and has been usurped by a divisive creed full of vitriolic, jingoistic spin.

Over the past 12 months there have been a number of articles by me and other contributors who have made references to the evils of ‘neo-liberalism’, but it occurred to me that we did that without explaining exactly what neo liberalism is.

US academic David Kotz wrote in 2002 that:

“Neoliberal theory claims that a largely unregulated capitalist system (a “free market economy”) not only embodies the ideal of free individual choice but also achieves optimum economic performance with respect to efficiency, economic growth, technical progress, and distributional justice. The state is assigned a very limited economic role: defining property rights, enforcing contracts, and regulating the money supply. State intervention to correct market failures is viewed with suspicion, on the ground that such intervention is likely to create more problems than it solves.”

He then goes on to say,

kotz“The policy recommendations of neoliberalism are concerned mainly with dismantling what remains of the regulationist welfare state. These recommendations include deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class. In the international sphere, neoliberalism calls for free movement of goods, services, capital, and money (but not people) across national boundaries.”

It is not hard to see a close association between Kotz’s description of neoliberalism and the way the Liberal and National Parties conduct themselves in government today. Neo-liberalism reads like an LNP manifesto.

Remember to, this is not a description of a theory or principal set in stone. It is a political preference chosen by a particular subset.


This is the Magna Carta of the rich and powerful. It was they who, by puppeteering Ronald Reagan and Margaret Thatcher, and with a great deal of effort and money, penetrated not just the media and simple-minded politicians, but also economists and academics the world over, who expounded their mantras, including ‘trickle down economics’ wherever they could.

The Liberal Party of Australia supports deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class.

The worldwide neo-liberal movement have been so successful over the past 45 years that much of what they preach has become the standard understanding of what constitutes a democratic system of government. Can you now see how clever they have been?

In gradually unwinding the very principles of democracy and shaping our minds to believe that their way of seeing things is the true democratic way, they have been able, particularly since 1971, to acquire, accumulate and centralise massive wealth and thus assume control over practically every facet of our lives.

Their greed has wrought devastating pain, poverty, hardship, war, disease and the deaths of millions of ordinary people around the globe, but if you dare challenge them, they would say, “Look over there. A terrorist.”

It has been a relentless campaign conducted largely through a compliant media and by lobbying both corrupt politicians and those that simple don’t know any better; the latter being the vast majority.

billTo quote Professor Bill Mitchell “The general population lives in smoke haze of half-truths, misperceptions and outright lies, all driven by some fear of loss that is whipped up daily in the media as part of the above campaign.”

The vast majority of voters are ignorant souls. We love to hear politicians tell us how smart we are and how we won’t be fooled by “unsubstantiated claims” from rogue academics and lefty journalists; how we generally get it right when we throw a government out of office.

All this is very flattering and appeals to our limited understanding of what specifics they are referring to, whether it be in defence, social welfare, economics or some other marginally complicated issue. Even when we feel we will be worse of, we accept a politician’s soothing assurances that we will be much better off in the long run.

I daresay, also, you will find that those who have been duped by this campaign are mostly conservative people and also religious people. When times are bad, those who cling to a god belief are encouraged to pray. They pray that their god will hear them, that their prayers will be answered, that things happen for a reason and other such consoling rituals.

One can’t help thinking that those faceless fathers of neo-liberalism thrived on the faith of the religious that it would act as a smokescreen they could hide behind. I could even go so far as to suggest they used the same blueprint the early fathers of the church used to spread their influence and domination.

I am constantly staggered when engaging with conservative supporters on Facebook at how vehemently they cling to the neo-liberal ideology; how often they cite Christian values when posting supporting comments.

corpI am staggered to see how utterly oblivious they appear to the aims and objectives of the rich and powerful who must be chuckling away behind closed doors at how successfully they have blindsided the masses.

So who do we blame for all this? Is it the neo-liberals themselves, the media, the spin doctors? The fact is, you and I are to blame.

Democracy today is no longer government of, by and for the people. It is government of the most influential, the loudest shock jock, the focus group, the public relations consultant and whoever else is able to exercise their lust for power.

This dysfunctional gathering ignores concern for national unity and prosperity. The voice of the special interest group has come to dominate the present model. Debate, divide and conquer is the aim and its tactic is to fragment the collective energy of the nation, split it down the middle, weaken its resolve and make it easier for vested interests to have their way.

moneyMost people, I am convinced, do not realise that we have surrendered that noble ideal in favour of neo-liberalism, a self-centred, greedy, winner take all ideology that is slowly destroying us. As the saying goes, “none are so blind as they who will not see.”

Neo-liberalism is the reason the AIM network and other independent blog sites exist. We are the voice in the wilderness.

When you wake up one morning and you suddenly realise you have no power or influence anymore, that your voice is meaningless, don’t say you didn’t see it coming.

Source: What is Neo-liberalism and why knowing matters. – » The Australian Independent Media Network

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