The Myth of Neoliberalism: Fabrications of a Lost World


…to postulate the possibility that we are animated by an alien will is the stepping stone for imagining a counterfactual life for everything that lives.

—Reza Negarestani

The story goes something like this (at least to its critics):  Neoliberals, we are told, believe in global laissez-faire: self-regulating markets, shrunken states, and the reduction of all human motivation to the one-dimensional rational self-interest of Homo economicus. The neoliberal globalists, it is claimed by these critics, conflated free-market capitalism with democracy and fantasized about a single world market without borders. At the heart of this picture is the notion that some inexorable alien will has been guiding the initiatives of globalists everywhere. As if capitalism itself were at heart a system of anti-life manipulating and using humans in its inevitable bid to overtake the planet in a death drive that is neither Freud’s Cosmocrator nor the secret geist of some Schopenhauerian cosmic pessimism. Instead, under the rubric of alien and alienating world of numbers, machines, and capital we’ve become the zombies who live out our lives captured by forces of physical and spiritual powers not our own, and more blatantly not of this world.

Yet, the truth is that none of the above helps us get to the truth of this entity: Neoliberalism. We should change the narrative to incorporate what actually happened, rather than the metaphysical humbug of petty critics nor conspiratorial gadflies. The actual narrative shows that our self-described neoliberals did not believe in self-regulating markets as autonomous entities. They did not see democracy and capitalism as synonymous. They did not see humans as motivated only by economic rationality. They sought neither the disappearance of the state nor the disappearance of borders. And they did not see the world only through the lens of the individual. In fact, the foundational neoliberal insight is comparable to that of John Maynard Keynes and Karl Polanyi: the market does not and cannot take care of itself. The core of twentieth-century neoliberal theorizing involves what was called the meta-economic or extra-economic conditions for safeguarding capitalism at the scale of the entire world. The neoliberal project focused on designing institutions—not to liberate markets but to encase them, to inoculate capitalism against the threat of democracy, to create a framework to contain often-irrational human behavior, and to reorder the world after empire as a space of competing states in which borders fulfill a necessary function.1

In other words the whole edifice of the neoliberal order was an attempt to create by fiat a completely lifeless universe of rationality which could control the actual real world of human emotion and madness. A regime of totalitarian design that would encompass the totality of the world thereby regulating and controlling every aspect of existence through the power of the rational mind. One might even add – an artificial mind, a mind controlled not by human, but rather in-human alien thought forms of pure mathematical and calculating powers on a world-wide scale. In the past I’ve toyed with various – what shall I term it – systems of evil operative in the world at large. By this I am not literalizing some gnostic cosmocrator at the heart of existence: some eternal metaphysical presence/absence behind the scenes of world-history intervening its affairs. No. Such cosmic pessimism of Gnostics or Schopenhauerian design are merely useful tools, metaphors of a much more mundane tendency – and, as Nietzsche would have it, an all-too-human truth at the heart of this strange amalgam of ideas underpinning our global predicament.

Usually when something becomes a term in the vocabulary of critics it is already mute, dead – and, useless. For years many have claimed that the term neoliberalism is virtually meaningless. “There is for all practical purposes, no such thing” as neoliberal theory, one scholar claimed recently.2 For many neoliberalism, coined at the Walter Lippmann Colloquium in Paris in 1938 was meant more as a revitalization of the liberal traditions on a new footing allowing as one scholar argued, as “an organized group of individuals exchanging ideas within a common intellectual framework.” Historians have focused, in particular, on the Mont Pèlerin Society, formed by F. A. Hayek and others in 1947, as a group of like-minded intellectuals and policy makers who would meet periodically to discuss world affairs and the contemporary condition of the political cause to which they were devoted. (p. 4: Slobodian) At the heart of this enterprise of the creation of a World Economic Order outside of the control of any one State and disentangled from the politics of local democratic regimes. The point was to create a global system both pervasive and invisible that would bind both democratic and totalitarian regimes under the control of Capital. A New World Order that would infiltrate every aspect of life on the planet to the point that it would become indispensable and global without any connection to politics or its agents of control.

Most critics of the so called myth of neoliberalism tell us that the keys to unlock this history is “market fundamentalism,” and the free trade ideology. But the truth is that the core though of most of the pioneers was at heart a way of ordering the world through the power of global laws, impersonal and outside the margins of the State, a set of rules that would encompass and curtail democratic rule to protect the rich and their investments from taxation and local governing bodies.  At its heart was an exit strategy from the muddle of democratic failures and failed decaying empires of colonial rule based on strong arm politics for one based on the impersonal exactitude of economics and instrumental reason. One aspect of this I’ve observed over time is that the very success of this new principle of order operative in the world at large has itself contributed to its demise and unraveling in a direction that its progenitors could not have imagined. The world we see around us is the product of many minute mistakes based on this belief in instrumental and calculating reason and its ability to create a viable architecture and global order against democracy. This is only the opening salvo on such a critique and reevaluation of the Left/Right divide that cuts across the critical landscape of our current time. As Slobodian remarks in a recent book “the neoliberal idea that markets are not natural but are products of the political construction of institutions to encase them. Markets buttress the repository of cultural values that are a necessary but not sufficient condition for markets’ continued existence” (p. 7). It is this notion of institutions to curtail and encompass, even regulate democracies, while protecting and safeguarding capital through the power of global legal systems  that cannot be changed nor debunked by local Statist democracies or totalitarian dictators which is the true kernel of the neo-liberal order. An order that subtly vanishes the moment politics raises its ire, but is there nevertheless regulating every aspect of your existence through the electronic devices and networks that have glibly overtaken your personal and private existence.

More to come…

  1. Slobodian, Quinn. Globalists: The End of Empire and the Birth of Neoliberalism. (2018 by the President and Fellows of Harvard College)
  2.  Rajesh Venugopal, “Neoliberalism as Concept,” Economy and Society 44, no. 2 (2015): 181. See also Bill Dunn, “Against Neoliberalism as a Concept,” Capital and Class.

5 thoughts on “The Myth of Neoliberalism: Fabrications of a Lost World

  1. Interesting thoughts. Capital is always key. Capital was once key to building productive powers but clearly that is less the case now, technology has changed, environmental limits are more in play. Capital is now abundant so why pay good interest (take a look at Harry Shutt’s blog)? So capital is desperate to maintain itself, to maintain the inequality it has built up, to maintain order and the status quo, to avoid a great write-off of unpayable debts. Yes talk of markets and free trade is mere cover for keeping democracies, workers, consumers, environmentalists, States, etc, in check, they must not follow anything that might raise their interests against the status quo. To keep the status quo, the current unequal settlement, means strong men, authoritarianism, division, financialisation, neo-feudalism, new coalitions, capital and the mob. Some questions however: can it be pulled off, or is it flawed and unsustainable, are they clever enough, will these coalitions hold, will environmental limits bite, can an alternative be articulated, etc?

    Liked by 1 person

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