Avoiding Opposition?

A lot of commentary on Labour’s dismal result in New Zealand’s recent election points to problems with their presentation, communication style and leadership within the party. This criticism is well-founded¹, but it emphasises locally unique characteristics and doesn’t take into account what New Zealand has in common with its cultural neighbours.

Internationally, New Zealand Labour is just one of various traditional left wing parties wracked with leadership crises, sinking in the polls, and publicly framed by the media as rudderless and directionless, unable to present a viable alternative to the status quo. This is strongly evident in Australia and Britain, the countries with Labour parties that are politically closest to New Zealand’s. At their high-point in the mid 20th century, the Labour parties were nationally important vehicles for mass membership and had strong foundations in civil society. Over the past three decades, this base of institutional support has been stripped away, as Western economies have transformed from a base of productive industry towards a system dominated by financial leverage.

In response to the 2008 global financial crisis, Kevin Rudd published a 7000 word essay in The Monthly magazine, writing that “the great neoliberal experiment of the past 30 years has failed.” His proposed solution—a mix of Keynesianism and technocratic state capitalism—seemed out of sync with the actual agenda of his government, which at the time was directly pursuing neoliberal reforms and continued to do so after Rudd was deposed by Julia Gillard. Rudd’s criticism of neoliberalism and his call for a new brand of ‘social capitalism’ highlights the deep ideological confusion that permeates present day Labour parties who readily use socialist sounding rhetoric while continuing to implement neoliberal market-driven policies.

In order to understand what’s going on, we first need to recognise that the ‘market fundamentalism’ idea of neoliberalism so often vilified by the left is a straw man. There are many overlapping, contradictory and inconsistent definitions of neoliberalism; a reality far more nuanced and complicated than the standard stereotype of ‘Thatcher and Reagan’. The rampage of Rogernomics in the 1980s was an extremist aberration rather than the norm. Hawke and Keating’s more measured technocratic reforms as well as the Blair government’s ‘Third Way’ policies should be classified as neoliberal projects, alongside the financialisation associated with the Clinton regime. So too, should the German variation known as the ‘Social Market Economy’. More recent intellectual efforts like the ‘Freakanomics’ brand, should also be classified as neoliberal, both in scope and in tone.

The biggest problem with the left’s caricature of market fundamentalism is that it confuses what neoliberals say with what neoliberals do. Rather than literally trying to get rid of the state from a radical libertarian perspective, the collusion between government and business comes from an innate understanding that markets owe their existence to being embedded in institutions. For those elected to power, gaining control of public institutions puts them in a privileged position to act as intermediaries in the creation and operation of markets. In this context, ‘deregulation’ is not so much about eliminating the role of the state, as it is about reconstructing as many aspects of society as possible under a corporate style of governance. ‘Re-regulation’ would be a more accurate description. There will always be arguments and debates over the extent of privatisation and how it should happen, but contrary to what many leftists believe, the actual functional existence of the state is never radically disputed by the neoliberals, who have found a home in both left wing and right wing political parties.

From this perspective, neoliberalism is not merely a political ideology, nor an economic doctrine. It’s a process of social change, focused on erasing the boundaries between society, the market and the state. In other words, it’s a public relations project.

Participating in this project are a ‘thought collective’ of economists, philosophers, social scientists, bureaucrats and business leaders as well as politicians. Rather than operating as a ‘vast right wing conspiracy’, the strength of neoliberalism is its diversity and plurality of ideas, and its competitive acceptance of marginal as well as mainstream theories. Neoliberalism’s vast constellation of academic institutions, think tanks and NGOs is rhizomatic as much as it is hierarchical. It’s virtually impossible to define a centre of control or an unequivocal ideological core, and this makes it extremely difficult to challenge. Politicians who criticise it appear mendacious and hypocritical. Academics and intellectuals who question it are easily cast off as fringe idealists or outdated Marxists.

The persistence of neoliberalism is based on a fundamental contradiction. It exists in a kind of quantum superposition, drawing on intellectual prestige—the kind that emanates from Nobel prize winning economists and powerful technocratic and academic institutions like the Chicago School of Economics—and at the same time, being extremely receptive to anti-intellectualism and populism—aptly demonstrated by Don Brash in his 1996 Hayek Memorial Lecture, where he sheepishly admitted that he had never read any of Hayek’s original work².

In some ways, this contradiction echoes the ‘two track’ style of attack politics. Neoliberalism’s intellectual framework provides an aura of credibility that clothes the emperor, while the coarse jargon that constructs a market-based social reality is used to bolster populist political campaigns without needing to stand up to serious academic scrutiny. The end result is a society where public debate is so thoroughly steeped in the language of the market that formerly abstract economic concepts now appear as natural realism.

In his 2013 Bruce Jesson Memorial lecture³, Sir Edmund Thomas listed a number of tropes that have contributed to this long-term process of social engineering:

• small government
• flexible labour
• choice
• market discipline
• the politics of envy
• nanny state
• welfare cheats
• light-handed regulation

Like many stereotypes, these phrases are evocative enough to resonate with a quality of truthiness. When repeated over and over, they become idiomatic descriptions of social reality rather than just figures of speech.

Successful counter-arguments—such as the creation of the ‘child poverty’ meme in New Zealand—are not backed up by a clearly articulated project to transform the neoliberal social reality. In the case of child poverty, irrespective of the rightness of the underlying research and policy recommendations, the fundamental social problem has been too easily deconstructed and packaged as a single issue for the short term electoral cycle. This tends to obscure the moral and intellectual justification for addressing poverty in the first place. Long term vision is sacrificed in favour of scoring political hits.

One of the great achievements of neoliberalism is the transformation of politics itself into a market. Voters have become consumers rather than citizens. The left’s long-running obsession with the radical versus democratic liberal schism⁴ has meant less energy devoted to understanding the insidious way that neoliberal values have colonised every aspect of our society.

It should be obvious by now that the challenge for the left is not about winning elections, but in creating an alternative social vision and developing robust institutions and organisations that support it.

A focus beyond winning elections places the Labour parties in an awkward position. Neoliberalism has transformed the nature of work from its traditional basis in collective labour into an individualistic notion of market availability. Despite being the primary architects of this transformation, it appears the Labour parties are failing to understand its implications for their own legitimacy. Are the Labour parties socialist? Or are they neoliberal? The lack of a clearly articulated philosophy has contributed to a perception amongst potential voters that Labour parties are factionalised, ineffective in opposition and lack a reason for their continuing existence beyond blind pursuit of power and upholding capitalist order. The vicious and undoing irony here is that survival in the present political environment requires large amounts of cash from big money donors. In order to facilitate such donations, concessions have to be made.

Politicians seeking to move government towards the left must find a way to negotiate this dilemma. Direct criticism of capitalism simply doesn’t appeal to mainstream voters, particularly those with mortgages who are deeply committed to financial leverage and who see no realistic alternative to the market society. Blaming the media, and big business is similarly futile. It’s well known now that political biases influence the way people perceive information, so when facts conflict with someone’s pre-existing beliefs, this often causes their beliefs to become stronger.⁵

This is not to say that neoliberal social reality is widely and uncritically accepted. Financialisation and monetarism has shaken productive global capitalism to an extent that governments are shamelessly and unethically intervening in the morass of corporations and banks that are ‘too big to fail’—or in the case of the Abbott government, attempting to destroy the emerging solar industry in favour of protecting profits from crude resource extraction. Such cynical actions are destabilising to the legitimacy of neoliberal orthodoxy. As inequality further diminishes the middle classes, it becomes easier to make the traditional argument that what’s really going on is a class-based power struggle for the benefit of corporations and high net worth individuals. This argument provides strong justification for grassroots resistance and activism, but it can be dangerous for organised political parties when a large proportion of the affected population aren’t interested in voting.

Finding a way out of this mess has a lot to do with language. In order to confront neoliberalism more effectively, we need to challenge its basis in social reality rather than in theory. This means paying more attention to what Gramsci and Bernays got right, rather than what Hayek, Friedman and Keynes got wrong.

The first step is accepting that neoliberalism has won. The Australian and New Zealand public now hold generally right wing values. Instead of continuing to indiscriminately attack the market fundamentalism straw man, the left needs to re-establish a vision of humanity beyond what markets have to offer.

This cannot happen if we continue to talk deterministically about ‘the Market’ instead of ‘markets’, confusing the notion of the economy dictating human fate with the more reasonable concepts of markets being tools of exchange and forms of social technology. Using neoliberal language to advocate a shift away from neoliberalism is doomed from the outset.

We should be skeptical of placing too much faith in government and politicians to solve these problems. Democracy is more than just voting for a parliament. It’s also about participation in robust and diverse social organisations and community groups working as safeguards against the corrosive forces of government coercion and corporate power.

If there is anything to be gained from representative democracy, the entire spectrum of the political left—from radical activists to centrists and moderates; social justice advocates and social conservatives—must build a long-term case for a core set of principles as human rights that cannot be compromised.

Free education, free basic healthcare, the right to dignity through a living wage or a basic income, are the most obvious things that must be reframed. In a neoliberal society, these things are neither rational nor self-evident. Before they can be expressed as policy goals, they need to be broadly accepted by society as having intrinsic worth rather than just market value. Otherwise the argument for profit will always win.