“The Invisible Doctrine, The Secret History of Neoliberalism”, is the best attempt I know of to put the currently unnamed ideological movement, which has been determining the direction in which our world is moving for more than 40 years, into a comprehensive perspective.
Neoliberalism is a difficult phenomenon to describe. Although its influence on our world is profound, hardly anyone talks about this doctrine in everyday life. Even authors critical of it tend to avoid using this term. They might instead use terms they have invented themselves, like “The Mindset”, “Market Fundamentalism” or “Modern Economics” instead. The last designation, however, is inadequate, because although neoliberalism was initially designed by economists, it was, as Monbiot and Hutchison have rightly noted, “conceived and fostered as a deliberate means of changing the nature of power.”
In an early phase, in the years before and shortly after the Second World War, the intellectual founding fathers of this movement called themselves neoliberals. Confronted with the danger of totalitarianism, which was emerging in many countries at that time, they saw a free market economy as an important element in preventing its spread. This is also true of the Austrian economist Friedrich August von Hayek, then a professor at the London School of Economics. In his book, „The Road to Serfdom“ (1944), in which he argued against socialism and any form of state or collective centralized planning (which would lead inevitably to totalitarianism) and for a free economy, he revealed his penchant for polemics and his talent for political manipulation. Winston Churchill was perhaps the first politician to recognize this potential and used Hayek’s arguments in the 1945 election campaign (making sure that more of the precious rationed paper was made available for the redistribution of that book). It did not help him, Labour won decisively, and the development of the modern welfare state could take its course. Nevertheless, Hayek’s book was still balanced and saw the need for a number of necessary state or community tasks (like providing a monetary system, institutions to ensure the flow of proper information, working-hours regulation, some social welfare, and so on).
This was about to change when, beginning soon after the Second World War, the neoliberal movement began to attract large sums of money and garnered a wealth of opportunities (via think tanks, devoted media, academic departments in universities, relationships to politics, and so on) to spread its ideas. At that stage leading intellectuals in this movement began to adapt their positions to the wishes of their very rich donors. In the words of Monbiot and Hutchison, the publication of Hayek’s “The Constitution of Liberty” in 1960 “marked the transition from an honest if extreme philosophy to a sophisticated con.”
This is not just a simple defamation. The respected economist Frank Hyneman Knight, himself involved in the early neoliberal movement, co-founder and vice-president of the Mont Pelerin Society (the most prominent organizational representation of the neoliberal movement), and founder of the Chicago School of Economics, had already reached a similar conclusion in 1967. Knight had been a life-long proponent of free market economics, but he was not a fundamentalist, and he believed that the role of the economy should be beneficial to all of society. In dealing with Hayek’s book, he recognized it “as an imposing work of historical scholarship” but he also accurately revealed that the fundamental flaws in Hayek’s concept lay in his treatment of power relationships. Knight recognized the danger emerging from “dogma”, “extremism”, “anarchism”, “impossible generalizations”, “absolutism” and “absolutizing of half-truths” and their use for “propaganda ends” in Hayek’ book. Though he was himself a staunch advocate of the free market economy, he understood the fundamental social embedding of the economy in the wider society and that “social life sets many limits to freedom”. He understood the importance of balanced conditions and he had a good idea of the threats to society if this balance were lost. Knight even foresaw the threat to freedom neoliberalism poses: “the main general problem of freedom is unequal power” and that “unequal power over things confers power over persons.” He states that Hayek was “scornful of politically organized freedom” and that his conclusions amounted to a “calumny on democracy”. Hayek was making “propaganda for ‘government by law’ but against law ‘making’ – law is to be left, or ‘almost’, to spontaneous change in tradition”. Knight thought it as “absurd to argue for either laissez faire or ‘planning’ against the other as a general principle“, since in real life it is best to have both at your disposal.
But what Knight viewed as „absurd“ is the basic principle of neoliberalism as a hidden ideology of power. It is not about coherence, it is, as is often the case with a fundamentalist approach, about the fight, about the fight for the ‘only’ truth and for ‘our group’. This is consistent with a deep-rooted conviction that life, economics and evolution are about struggle and winning. As Hayek himself said, it is not a question of rationality, but of “morality”, and this morality arose from the traditions of groups that multiplied more successfully than others, precisely because they were able to „increase at the expense of other groups, to displace them“.
Recent scientific research has not confirmed this pervasive myth. For hundreds of thousands of years in human evolution, as in the evolution of life in general, cooperation was more important than competition. However, the experience of humans over the last 5 millennia tells a story of wars, subjugation, and domination as the basis for building civilization. In evolutionary terms, this is quite recent experience, but it seems to confirm this myth or paradigm of the necessity of constant struggle on every level, and neoliberalism has been able to build on it. Neoliberalism is the latest ideological manifestation of this tradition of struggle, submission and domination that has lasted several thousand years and has produced already many manifestations throughout the course of history (colonialism, communism and National Socialism were just some of them). This, too, is hidden, as are so many of the real intentions of this doctrine. But it may best explain the overwhelming global success of this doctrine that Monbiot and Hutchison so well describe.
Neoliberalism has criticized state and government power from the outset accumulating wide popularity as a result. However, this was a false promise. In reality, this doctrine has achieved its institutionalised position of power from above, with the help of the very power of governments. Ironically, it didn’t really create a free market economy for all. Those who are already rich and powerful can rest assured that market forces will not affect them. As we all can repeatedly observe, in a crisis, even a self-inflicted one, the most powerful are bailed out by the state with taxpayers‘ money. As Hayek rightly said: “Inequality creates order”. The question is who benefits and who loses out.
The scripture that neoliberalism has provided is inconsistent, but its impact on politics, our personal lives, and our planet’s ecosystems has been consistently destructive. What Frank Knight feared more than 50 years ago has now become reality. Monbiot and Hutchison have correctly linked the rise of the “killer clowns”, populist right-wing strongmen who are stoking outrage “on behalf of the people”, a new political model, to an internal power struggle among the ultra-rich and powerful, more precisely, between corporate power and the increasing power of the oligarchs. This, as they say, results from “one of the paradoxes of neoliberalism”: “while it fetishizes competitive enterprise, in reality it empowers rentiers and asset strippers – the opposite of the creative entrepreneurs it celebrates”. People who are dissatisfied with the way the reality created by neoliberalism affects their lives are voting for even more extreme representatives of this doctrine in the desperate hope of improvement. Well-financed manipulation works.
What the authors didn’t know when writing the book, however, is how comprehensive the political triumph of this new model would be after the recent presidential elections in the USA. There, the voters have (almost unconditionally) placed power over the country and its enormous means directly into the hands of a representative of the money oligarchy. The fate of democracy – and more – now lies in his hand.
There is a deep sense of crisis everywhere, on many levels. There are different opinions, or better, confusions about what exactly the crisis is, what its cause is and what its effects are. A blame game is in full swing, exploited by those who are responsible for the state in which we find ourselves. Are the authors right, can neoliberalism be blamed for everything? Does it lie behind the bad outcomes of globalization, the endless wars, illegal migration, environmental destruction, dangerous climate change, unaffordable housing, loneliness, mental crises, technological disruption, bad public services, inadequate health care? This is certainly not easy to understand at first glance. But if, as the authors recommend, we try to understand the different and seemingly unrelated developments as belonging to a complex system, we can see this more clearly.
As the authors point out, few people have already learned to think in terms of complex systems, although these are what make our existence possible. All complex systems possess emergent or self-organizing properties. Every cell in our body is a complex system of interaction and cooperation, which in turn is part of other complex biological systems on a higher level, like tissues, organs and our entire body. It is the interaction and cooperation within and between the levels of complex systems that makes our lives possible and sustains them. When the dynamic, self-organizing interaction within our body stops, we die. When certain cells in our body no longer contribute to the common good of the body, but pursue a selfish agenda and multiply ruthlessly, we call this cancer. Cancer is known to lead to the death of the entire organism, including the selfish cells. Our life, in turn, is possible because we can find all we need to live within the ecosystems of our planet. These are complex systems too.
Cooperation within human society also takes place in the context of complex (sub-) systems on various levels, of which we are usually only partially aware. The long-known metaphor of the „invisible hand“ describes the self-organizing properties of randomly distributed decisions in the context of market relations, and this is what the neoliberal proponents were arguing for when they started their movement: within the market context, economic actors should be able to make their decisions as freely as possible and contribute to the development of general prosperity through extended cooperation.
This is basically a good idea, if crucial other basic rules for the functioning of complex systems are not overlooked. One basic rule is that a complex system can only function if it is subject to necessary constraints. For example, without the constraints of a membrane, the molecules within a cell would dissipate, and without the constraints imposed on the cells by the functioning of the higher levels of the organism, the cells could not sustain the life of the whole organism. Complex systems are always related to other complex systems, and can only function in the long run in balanced interaction with them. If a successful subsystem like the economy does not have to take account of life-sustaining ecosystems and destroys them, then it becomes a deadly danger to everyone.
Furthermore, this begs the question of how the freedom of market participants can be preserved if the market is to function as a complex system with emergent qualities? The turn initiated by Hayek, which neoliberalism has made by removing constraints on the most powerful market participants, de facto prevents the freedom of most market participants. What has emerged is that the existing market economy is not free in reality, but determined by the web of power relations within which the super-rich and some powerful states fight for influence. This is good for neither the economy nor for democracy, and it is catastrophic for our ecosystems and the stability of our climate.
Neoliberalism has shaped many of the currently active institutions, the relationships of power and the worldview of our time as has no other ideology globally available. As such, yes, it does bear responsibility for what is going on, not just for what it produces but also for what it prevents. Monbiot and Hutchison are right about this. And this leads us to the next question: What can be done to steer this gallop towards self-destruction in a good direction? The authors are not short of ideas.
Their proposals aim to involve local people everywhere in decision-making processes related to their local environment. Deliberative, participatory democracy “tends to work better in practice than it does in theory”, they argue, since “people are transformed by the process in which they engage.” Private sufficiency and public luxury would be an important principle towards a sustainable yet pleasant living environment. To build public luxury the authors propose a combination of commons and national spending, and two essential levels of organization, the community and the state. Both could be in a complementary relationship to each other. The authors are aware that constraints and limits are necessary: there should be a poverty line below which nobody should fall, and a wealth line above which no one should rise, and that there should be limits to the destruction of the “earth systems”. And the authors are aware of the fact that this requires a certain level of government planning, an absolute abhorrence from the point of view of neoliberalism. No wonder that the authors are also aware that the goals they have formulated to save humanity and ecosystems can only be achieved if a complete system change takes place.
I concur with all their proposals. They are really good, but something essential is missing: how all this can be made possible, wherever needed; in other words, globally. All the authors have to offer to answer this question is the vague idea of convincing enough people. But to convince them of what? Who is supposed to be responsible for global matters? National governments cannot defuse the existential global threats, we already know that. Important as they are at the local level, this cannot be hoped of the local groups either. The authors say nothing about the crucial question of how we can imagine the cohesion of the whole, the framework conditions for the stable and peaceful cooperation of the whole of humanity. This is surprising, because one of the authors, George Monbiot, has already written two books on this subject. In 2003 he provided a keen analysis of the hopeless situation of the current political order facing the problems of the people and the ecosystems of the earth, and proposed a world parliament to be directly elected by the people of the world as a genuinely representative and legitimate global forum. In 2017 he again argued for global democracy, a directly elected “global body, whose scope and powers would be closely defined”, and that would tackle the issues that can only be resolved globally, and for the principle of subsidiarity: “only issues that nation-states cannot handle should be determined at the global level.”
It is credible that a global approach that starts from the people and represents the interest of all (and not just interests of power) could indeed lead to institutions that work for the common good and could divert capitalism from being a force of destruction into a force of good. George Monbiot was on the right path towards developing a vision that had the potential to challenge the overwhelming might of the neoliberal system of power. However, none of these ideas is mentioned in the new book. Why was this crucial vision omitted? A quick guess to answer this question might be that Monbiot has experienced that, by proposing ideas about a united humanity he was breaking a taboo. A united and cooperating humanity is the subject not to be mentioned without embarrassing yourself. However, this was not always so. This brings us to the other book.
„Citizens of the World. U.S. Women and Global Government“ (2022) by the historian Megan Threlkeld is a research report that shows that, especially in the period from 1900 to 1950, a strong movement for a politically united world, which also resonated with the public, did exist. It was one in which women activists for peace played a leading role. This book profiles nine of them, setting their ideas and their activism in the historical context. For these women, „citizens of the world“ did not mean „citizens of nowhere.“ It was being fully rooted as part of their family, their neighbourhood, their country and the world. They saw an obligation for women and men alike to work for peace, equality and cooperation on every level, but they emphasized the global level, because it was only at this level that peace between countries could be made possible. They began when women didn’t even have the right to vote in the U.S., but they were convinced that this right ought to be available to women all over the world. Black women activists were confronted with racist legislation throughout this period but they hoped that world-wide demand for justice and equality would influence also legislation in the US for the better. For the black activists, but not only for them, an end to the colonial oppression of entire peoples was also a central concern and they believed that only a politically united world could accomplish this. All these women agreed that some kind of world government could provide the prerequisites for lasting peace and a just coexistence, but they held different opinions about how this could be best achieved. Some of them hoped that institutions such as the League of Nations or, later, the United Nations could provide the hoped-for lasting peace, while others were aware of their limited possibilities from the outset. Everyone agreed that a world government should be based on a world constitution, and most of the proposals provided no military possibilities for it. No one saw such a strictly regulated world government as a threat to individual freedoms. On the contrary, a world government was the principal way by which the activists could achieve freedoms for all in the first place. All of them wished that the primacy of law would allow for cooperation and equality everywhere and that the world would no longer be dominated just by competition and force.
Looking at their proposals from today’s point of view, that of Lola Maverick Lloyd, Rosika Schwimmer and Edith Wynner was the most radically modern and far-reaching. This proposal developed over time but the basic concept was from the outset “to establish the all-inclusive, non-military, democratic federation of nations”. The concept they campaigned for was based on the idea that people don’t want war, but power-hungry governments do. They asserted the right of the people of the world to shape a new polity for themselves, a system with absolute legal equality, in which all individuals were protected by and no one was immune from international law. All-inclusivity meant that really all people, including “colonial people and those from mandated areas”, would be able to vote for their representatives.
This might sound alien to us today, but these female peace activists and their male colleagues were heard. Not by the majority, but by many people, including numerous well-known personalities and politicians. Among them were not only President Roosevelt, his wife Eleanor and his Republican opponent in the 1940 election, Wendell Willkie, but also young politicians such as John F. Kennedy, Richard Nixon and the then actor Ronald Reagan.
After 1950 the hope for a just democratic world order and lasting peace was quashed by the incipient Cold War, forcing the discourse around this topic to fade from public consciousness. When the Cold War ended in 1989, this discourse did not return to public attention. What did emerge was globalization according to neoliberal rules and global governance, in other words, the (partial) privatization of world affairs. Today, only a few people and organizations still try to uphold the tradition of seeking a world unity, and those who do, attract scant public attention. Not many people know that this discourse even existed, and even fewer understand its impact on making the post-World War II world more civilized than to the pre-war era (for the luckier part of humanity).
This near-total silencing of the voices for a united humanity constitutes the greatest triumph of neoliberalism. Initially, the Cold War made a united humanity seem unattainable, but history shows such conflicts can end. However, by 1989, everyone was committed to one doctrine: neoliberalism. Since this ideology and its formulas for hard-core capitalism have shaped the complex system of relationships between the people and the nations of this world, there has been, in fact, no alternative; at least not one taking a national approach. In the period after the World War, it seemed that a successful alternative would exist, “a fairly solid international consensus built around John Maynard Keynes’s prescriptions” which enabled a balance between a free market economy, state planning and organized labour. It was this approach that made the modern welfare state possible. This system, as successful as it was in the first thirty years after the war, was bound to fail, because a crucial component of the Keynes package had been omitted: a just global order of relationships between trading partners. The International Clearing Union with the Bancor as an supranational account currency would have been a good start. However, this proposal was rejected at the Bretton Wood Conference in 1944 in favour of the dollar becoming the world reserve currency. This, as it has turned out, has been to the detriment of the American people and most other people of the world. Power and hegemony can never replace balanced cooperative relations.
The old peace activists were right, as has been George Monbiot in his former books. The vision of a united humanity (not necessarily that of a world government) is indispensable. Only unity can turn the complexity of the globalized world into something good for all involved. All other options can only lead to dystopia in different versions. There is no other way imaginable out of the trap in which we are currently caught. Continuing with the (self-) destructive form of competition as we are currently doing ruins both ecosystems and democracy. Furthermore, it is not certain that the wars already waging will remain regionally limited. The possibility of an all-destroying nuclear war remains present and with it the instant destruction of our civilization. This scenario could also turn out quite differently if the dictators of this world can agree on how to divide the world among themselves. In this case, we would survive, but we would lose our freedom permanently. It cannot be expected that the rule of a powerful dictator, who has at his disposal the modern technical means of surveillance, manipulation, and repression, can be challenged by the population.
A humanity united by its people (and not by powerful leaders) would not make the objectives on other levels (local as well as national) superfluous. On the contrary, a common vision would make them possible in the first place. Our best chance for a good future is to learn to trust in each other and to make the important decisions together. Whether or not we can trust each other, and whether we can make decisions together, will depend on the institutions within which we establish our relationships. Nothing is more important now than to defy the taboo and talk (again) about this topic, thereby clarifying for ourselves the possibilities we have to take our fate into our own hands.
