The ruling class of society keeps control through a mix of repression, ideology and material provisioning of the population it rules. Repression alone is expensive and, in the long run, ineffective to keep power. Rulers usually have to provide some material protection and provisioning of society, whether that is keeping the people of a city or country relatively safe from hunger or premature death. Ideology, in the past, often blended with religion, is a crucial factor to justify the domination of the rulers.
Capitalism has used increased living standards – or at least the hope of future improvement – as a cornerstone of its rule. The idea of “progress,” both in living standards and human rights, was key to the rising capitalist class and lasted well into the 20th century.
Due to declining profits and waves of social struggles in the 1960s and 1970s, the capitalist class shifted away from the post-war policies, described as Keynesianism, and moved to neo-liberalism. The goal was to weaken the power of the working class and boost profits. This required attacks on unions and changes to laws. A successful shift to neo-liberalism also required undermining the accepted ideas of the post-war boom. The state no longer was there to provide a social safety net and act to protect society, the vulnerable or employment. Of course, it never really did these things during the boom, but the idea was widespread. Now the “market” was going to provide, but only if “freed” from state interference.
The Neo-Liberal Promise of Paradise
“Red tape stifles economic growth and job creation.” “Tax cuts create jobs.” “Expand health capacity by using private providers.” “The private sector must provide its customers with quality goods and services.” “Privatization increases choice.” “Free trade helps everybody.” “Innovation is a foreign word in the public sector.” “Public employees are resistant to change.” “The private sector is the sole source of wealth creation in our society.” “Small government boosts the economy.” “If we can make conservation profitable, people will find ways to make it happen.” “Private ownership is the most effective protector of the environment.” “We are intensely relaxed about people getting filthy rich.” “There’s no such thing as society, there are individuals and families.”
These were just some of the many claims and promises that were used to support neo-liberalism’s attack on the past gains of the working class. Neo-liberalism launched an ideological offensive to replace the ideas that had enjoyed broad support in society during the post war boom, at least in the major capitalist countries.
Winning Public Support for Neo-liberalism
It took time and events to undermine the post-war ideas of full employment, a welfare state and the importance of public services. Neo-liberalism’s first experiment was imposed by a brutal military dictatorship, without any attempt at winning an ideological support, after the coup in Chile in 1973 to overturn a left-wing government.
In its early days neo-liberalism didn’t even have an agreed name, also going by monetarism, neo- conservatism or structural adjustment programs.
With the elections of Thatcher in Britain in 1978 and Reagan in the US in 1980, neo-liberalism gained an important base and stepped up its ideological claims and actions.
The neo-liberals exploited the failings of public services, often undermined by deliberate cuts, and their capitalist-imposed bureaucratic management, lacking democratic control.
Public support was also won by bribes and robbing the future. Modest gains now and large long-term pain. Huge tax cuts to the rich and big business were combined with small tax cuts for workers. Workers received this sugar-coating of a few dollars for a few years but paid for it many times over when their children went to university with soaring education charges. Alongside the tax cuts were cuts to public services, so that down the road workers faced sub-standard services or increased fees and charges. Public housing was cut resulting in unaffordable rents and house prices. Thatcher sold council houses at half price to tenants, a bargain for existing tenants, but the outcome is a desperate shortage of affordable rents and long waiting lists. Sometimes when publicly-owned assets were privatized the workers were given a few shares, to be paid for later with job cuts.
However, victory was not assured as many times the working class pushed back and resisted. It was only after the collapse of the Soviet Union and Stalinism, by the end of 1991, that neo-liberalism got its big boost.
Although the Soviet Union was a bureaucratic dictatorship, it demonstrated that it is possible to run the economy without capitalism. It offered an alternative to brutal imperialist exploitation in the neo-colonial world. After the collapse, the ANC in South Africa accepted capitalist rule.
The capitalist class claimed that the Soviet Union was socialist and that it had been vanquished. An idea, the hope of an alternative, that had burned for over 150 years was finished. They were triumphant, they had won and proclaimed the “end of history.” There was no alternative to capitalism. Most of the leaders of the workers’ movements, in unions and parties, already in retreat in the face of the ideological assault, abandoned resistance and accepted capitalism as the only possible economic system.
The collapse of the Soviet Union and the opening of China to the world economy also gave capitalism a temporary economic boost with new markets and an ideal source of labour – low paid, skilled and disciplined. Now 30 years later, like all good things, it has come to an end with China now a major rival of the older established capitalist countries.
Decades of Experience
Over the last thirty years, neo-liberalism has ruled supreme, permeating all sections of society. Even in the public sector, the culture has been changed from public service to monetary measurements being the top priority – patients are now customers and school students and parents are consumers of an “education product” rather than citizens with rights. One of the claims was that privatization would improve services and increase choice. It may have increased choice for those with money, but not even always for them.
Public transit in Britain was privatized, resulting in worse and more expensive services, dependent on large public subsidies. Initially even the railway tracks were privatized. However, this resulted in a lack of maintenance and several accidents, so the infrastructure was taken back into public ownership. Competing companies operate the railways with different fare structures even on the same routes and no interchange of tickets. In cities, integrated transit disintegrated, with a chaotic reality of buses and light rail competing, sometimes operating on the same routes and without standard tickets.
“Choice” in schools in the US and Britain has led to disconnecting schools from the local community, more commuting as children are driven across the city and increased inequality as money goes to the “best” schools. Public health systems everywhere have been eroded as more and more parts and services are privatized, with all the disastrous outcomes revealed by COVID.
Former publicly-owned utilities – water, electricity, gas, telephone, etc – after privatization have generated large profits for the shareholders but public services have declined. Calling customer services almost always results in being put on hold as the companies are always “experiencing high call volume.”
One of the most insidious of ideas of neo-liberalism was of individual responsibility. If you didn’t get a job it was your fault, if your child did poorly at school it was your fault, even if you got ill it was your fault. This was the logical conclusion of Thatcher’s “There’s no such thing as society.” These claims clearly ignored systemic racism, poverty and discrimination and unequal access to jobs, education and health treatment.
Alongside this idea was the claim that people succeeded through their own hard work and endeavour. This pretended that there was not discrimination, as many countries now are multicultural societies, so that the best and brightest from all backgrounds could succeed. So, women could break the glass ceiling, a Black person could become president of the US. However, the success of an individual did not change the reality for the majority of women or Blacks in the US. In fact, this view damned those who do not succeed.
It is true that during the neo-liberal era there were legal gains for LGBTQ people. However, even these gains were the product of major struggles and the gains are legal and individualistic, not economic or collective. Most of the legal and economic gains for women and people of colour came earlier in the struggles of the 1960s and 1970s.
Another myth of neo-liberalism was that globalization and trade deals would bring people together, overcome the nation state and raise people out of poverty. The European Union pedalled this idea, and it was one of the reasons young people in Britain leaned to stay in the EU. However, the free movement of people within the EU is combined with a murderous fence and moat (the Mediterranean) on the border.
Overall, the experience of mounting inequality, declining quality and more expensive services and all the other realities of neo-liberalism undermined the ideological buy-in from working people. The Great Recession of 2008-09 shattered illusions and showed that the capitalist class do need the state, with the huge bailouts. Corporate welfare for the rich.
Although the Great Recession undermined the ideology of neo-liberalism, with Occupy capturing the mood of millions talking about the 1% versus the 99%, it did not end. The resistance to neo-liberalism was widespread, with strikes, occupations, protests, mass movements and revolutionary struggles.
However, the ruling class was able to return to austerity and neo-liberalism due to the failings of the leaders of the workers’ organizations. Most union leaders did not build the mass struggles, instead called actions to let off steam and then go back to normal. The old parties of the working class by 2009 were wedded to capitalism. In some countries new parties emerged with radical phrases, but when in government had no viable alternative to capitalist rule. The most graphic was Syriza in Greece refusing to act on the massive “No” referendum result and capitulating to the European Union’s brutal austerity. Basically, these parties and leaders like Sanders and Corbyn, while opposing austerity, have no strategy to fight to win.
The public perception was that the neo-liberal promises were largely a pack of lies. The neo-liberal policies had enriched the 1%, but for most workers living standards had stagnated, many of the new jobs were low wage and often precarious, and public services had been undermined. Privatized utilities and services were often worse than the former public services. Trade deals had not led to a bonanza of jobs. The market was failing to protect the environment and act on climate change. De-regulation, or companies largely self-regulating, lowered health and safety standards and workers’ protections, sometimes leading to deaths, as in the case of the crashes of two Boeing 737 Max planes that killed 346 people.
Then Came COVID-19
While COVID-19 is caused by a virus, the huge rates of infection and death toll, the lock-down of economies and countries have raised profound questions about society and priorities.
Neo-liberalism’s approach is “lean” and just-in-time, there is no buffer to absorb shocks, no spare capacity to deal with a crisis. COVID revealed the idiocy of this short-term method.
Decades of neo-liberalism left health systems under-funded, with a shortage of hospital beds, especially intensive care units. The president of the European Society of Anaesthesiology, Professor Zacharowski, stated “For the last decade across Europe we have been cutting down on hospital beds, including intensive care beds.” Canada, a wealthy country, had slashed acute care beds from 4.99 acute beds for every 1,000 people in 1976, to only 1.96 in 2018. So-called “care” homes became death traps due to years of profit gouging that left them understaffed.
Governments around the world, due to cuts to fund tax breaks for the rich, lacked sufficient stockpiles of personal protective equipment (PPE). Even months later there are still shortages. Many countries had out-sourced production and are still scrambling to make enough as countries compete for supplies. Amazingly, governments seem incapable of making test kits that work. Nearly a year after the WHO urged governments to prepare for COVID, Canada still has a shortage of testing with backlogs, long line-ups, or restrictions on access. The British government has handed testing and tracing to private for-profit companies with the inevitable “utter shambles” that is life-threatening.
COVID revealed who the essential workers are – cleaners, grocery store workers or care workers. Yet who gets paid well – the unessential “workers,” such as CEOs, corporate lawyers, or bankers. During COVID the super-rich, while staying safe, got even richer. US billionaires have gained $637 billion during COVID-19 (Business Insider, August 2020).
For years, all the corporate owners and their advocates argued that state spending should be cut and that the less the state spends the better it is for society and the economy. In an utterly stunning move, these same people are now calling for billions or trillions of dollars from governments, and most governments have responded with wide-open wallets.
People overwhelmingly went along with the first round of restrictions to stop COVID, making enormous sacrifices. At the start of World War I, leaders claimed it would be all over by Christmas. In the end there were four years of bloody slaughter and mass misery. The same is likely true with COVID and the world depression. Months after the start of COVID, in countries that had eventually tamed the first wave, it is now surging back. Even with months to prepare, governments and businesses still can’t keep people safe.
In some countries, especially the US, India, and Brazil (with around half of the world’s total number of cases) right-wing governments never seriously tried to deal with COVID.
It is starkly clear that society and the economy needs public services and that a good health system is vital. It is evident that society needs an active government and there is plenty of money if governments decide it. Of course, so far the money has mostly been available to bail out big business.
COVID’s Even More Profound Impact
Millions of people know someone – family or friend – who died from COVID and many hundreds of millions of people know someone who had COVID. Probably a majority of the world’s population wondered if they or someone they knew was going to get COVID and die. This provokes profound questioning about what matters in life.
Very few people will answer more billionaires or less public health. All the evidence shows that people want a good health system, a job that pays well and security of job and life. Fundamentally what matters is life, other people and society. These views are totally contrary to what neo-liberals claim.
Neo-liberalism has frayed the weave of society and one key factor in dealing with COVID has been the degree of social trust and cohesion. Thatcher summed up neo-liberalism in the phrase “There’s no such thing as society. There are individual men and women and there are families.” This is the opposite of the truth and COVID-19 has cruelly proved this. We need society to survive and, hopefully, thrive.
Replacing Neo-Liberalism
Even before COVID, neo-liberalism faced growing attacks and mounting opposition from working people and even academics. COVID has dealt the ideology a serious blow, probably a death blow. Its core myths that public services and government actions are bad, that there are no funds for services, that the world needs more billionaires, and that there is no society are all in tatters.
In just over a decade, big business and banks have been bailed out again!
Capitalism does not offer improved living standards in the future. Instead it is heading for years of economic depression and a mounting ecological disaster. Unable to provide material protection and provisioning of society, it will have to rely on ideology, yet its ideology is shredded. Repression alone will not work. It needs a new ideology to legitimize its rule.
Of course, even with a tattered ideology, neo-liberalism won’t disappear. Its disciples are everywhere – in the boardrooms of companies, teaching in academia, running public services and editing the media. They will cling to the ideas and practice of neo-liberalism. Just as a cartoon character can keep running after going past the edge of a cliff, so is the case with neo-liberalism. However, in the cartoons and life, reality eventually catches up.
Deeper than ideology is the practice that underlies it. Ideology and practice need to have some correspondence. Now the ideology is totally detached from most people’s reality and needs. Neo-liberalism has been the dominant ideology and practice for decades. It has served the ruling class well, but not the masses. Now it can no longer suffice even for the ruling class.
The future dominant ideology will be a product of class struggle. It took several decades of struggles and upheavals to establish neo-liberalism as the dominant ideology. There are various strands of possible replacements. Clearly there is the growth of right-wing populist nationalism and other identity politics – Hindu chauvinism in India, racist rhetoric in the US and parts of Europe, etc. There will likely be other variations raised and tried in the increasingly desperate decades that lie ahead – years of mounting climate disaster, continuing poverty and discrimination, increasing inter-imperialist conflicts and social tensions. Unless the working class acts decisively, although neo-liberalism may be gone it will be a case of “Meet the new boss, same as the old boss,” as capitalism continues to find ways to oppress and exploit the working class.
In contrast, to the many reactionary ideas, there is growing internationalism and even anti-capitalist ideas, especially among young people. For more than a decade, there has been a void and a thirst for an alternative to neo-liberalism. Our ideology stresses society, cooperation, internationalism, solidarity and ecology. International Socialist Alternative will strive to ensure that the future ideology is the socialist alternative.
