Neoliberalism, 1979-2008

Eric Lybeck
April 8, 2015

Last week, 40 students used cycle-locks to barricade themselves in the London School of Economics. Declaring themselves ‘Occupy LSE’, the students protested against the ‘neoliberal university’ to wide acclaim on Twitter.

But, what is the ‘neoliberal’ university exactly?

In everyday (academic) usage, neoliberalism might refer to capitalism  as a total social system. Or sometimes the term refers only to the  economic system wholly-owned by the IMF and World Bank.  Sometimes it  means the penetration of market logic into non-market systems, like the  NHS or higher education. Or, it means ‘Science’, of the ill-defined,  ‘Positivist’ variant; or one-dimensional bureaucracy and ‘new  managerialism’; or Thatcherite Toryism, including UKIP and  anti-immigration; or patriarchy; or privatised student loans; or global  mass media and mass consumption patterns; and so on and so on.

While certain accounts and definitions of ‘neoliberalism’ are more  precise than others, the term has objectively run clear off the rails.  ‘Neoliberalism’ means whatever the critic du jour wants it to mean.

To my knowledge, no actual persons, living or dead, ever adopted the  term ‘neoliberalism’ in its present usage as a self-descriptor. While  proposed atop Mont Pelerin in 1947, it was not, in the end, formally adopted by the clique of heterodox economists and philosophers in attendance.

Neither did the Reagan/Thatcher governments use the term during the  decade they supposedly applied this evil neoliberal logic upon an  unwilling Anglo-American demos (who voted overwhelmingly for both of  these politicians circa 1979).

Neoliberalism is not a formally-organised political philosophy or public policy. Scholars  cite single documents referring to a ‘Washington consensus’ in 1989 as  though this was gospel to which policymakers swear absolute allegiance.

Meanwhile, the only neoliberal consensus retained today is that which  persists amongst academic critics; dead certain this evil is  responsible for all social problems past, present and future.

Consider: many of these same social scientists were alive and well in  1979 when Thatcher was elected and Reagan began his Republican primary  campaign. If we roll back the tape would we hear a chorus of jeremiads  warning us against the pending doom caused by glancing adherence to  Austrian economics? No. Within the social sciences, we would see  technical exegeses debating ‘contradictory class positions’, ‘actually existing socialism’, ‘disorganised capitalism’, or the ‘three worlds of welfare capitalism’.

Only a tiny handful of social scientists predicted the world event  that in ten years’ time would actually flip the entire global order on  its axis: the fall of the Soviet Union, under the weight of its own  inertia.

Yes, Francis Fukuyama regrettably cited Hegel.  Yes, Jeffrey Sachs was too young and American to steer the former  Second World into capitalist prosperity. Yes, ‘neoliberalism’ had a role  to play in justifying left-liberal economic orthodoxy during a period  in which economists’ professional services were regularly requested by governments, businesses and NGOs.

But that was more than 25 years ago.

Among the more precise definitions of neoliberalism these days, Jamie Peck  recently described the project as a ‘zombie’. This walking corpse  suffered a severe crisis of legitimacy during the Great Crash of 2008  and threatens to lurch haphazardly forward until political opposition  challenges its ideological dominance within public policy.

Within neoliberalism’s zombie phase, we would be right to retweet Occupy LSE.  But, as any George Romero fan can tell you, the undead never die ‘from the bottom up’.

You kill a zombie with a shot to the brain.

This makes the work of young economists at, for example, Rethinking Economics, the Cambridge Society for Economic Pluralism, and the New Economic Forum so important.

Since 2008, students have made real headway in challenging the  dominant neoclassical paradigm within economics as an academic  discipline. Clear curricular shifts and institutional drift are  observable within the nitty-gritty play-by-play of departmental syllabus  reform.

In a few years’ time, we can expect pluralistic theory courses on  offer at leading economics departments. Soon these courses might even  become requirements for novitiate economists.

Our current phase, therefore, amounts to a gradual shift away from  neoliberal orthodoxy in the face of a legitimacy crisis, just as  economics in the 1970s shifted away from Keynesian economics in the face  of stagflation, or, as in 1878, the British Association for the Advancement of Science encouraged the development of sociology and eugenics following the failure of utilitarianism to predict or explain the economic depression of the late-Victorian period.

Still, the work of pluralists and heterodox economists, important  though it may be in challenging the current academic paradigm, all fails  to note:

Zombie neoliberalism in fact died a quiet death years ago.

I observed the autopsy when I invited myself to an event organised by the Centre for Science and Policy at Cambridge (CSaP). The talk was titled ‘The Flawed Dominance of Economics’.  Seeing in the programme the rhetoric of pluralism, including reference  to the flawed assumptions of rational actors and perfect markets and so  on, I expected a bevy of social scientists to be in attendance promoting  heterodox points of view.

Instead, I discovered that the new orthodoxy has already been set,  not in advanced postgraduate courses within Economics faculties, but in  Economics 101 at elite business schools.

Neither speakers nor audience included the deaf ears of the social scientists the Guardian’s Aditya Chakrabortty called upon to upend economic orthodoxy. Neither did the attendees include the historians David Armitage and Jo Guldi recently summoned to battle the ‘spectre’ of short term thinking.

As in 1988, before the fall of the Iron Curtain, humanistic scholars  continue to hunt the ghosts (zombies, rather) of previous epochs.

In contrast, the businessmen and technologists who co-organised the  event understood: neoliberalism died in 2008 with the cratering of the  global economy.

With support from their sponsors at the Royal Society of Arts’ ‘Social Brain Unit’,  the CSaP’s signal was loud and clear: Today, new advances in  ‘behavioural economics’ and ‘neuroeconomics’ drawing on the  ‘interdisciplinary’ ‘pluralistic’ insights of evolutionary psychology,  bio-anthropology and cognitive science point the way to the future.

Forget those idiotic economists who think everyone is rational! Haven’t you ever seen a TED talk? Harvard psychologist Steven Pinker says we have ended violence thanks to landmark discoveries which point to our ‘hardwired’ irrationalities!

The future  of economics and public policy lies in the discovery of these  biological characteristics implanted when our ancestors were running  away from a sabre-toothed tiger on the African savannah.

Neoliberalism and public choice? Forget about it. Who even needs choice when there’s no rationality?

We all know what we want, namely: to avoid tigers, spread our seed  with every attractive mate we gaze upon, eat paleolithic meat and seeds,  lead a wolfpack, and solve global warming with our iPads!

Of course, the curriculum of the rich, red-headed, step-child of every university – the business school  – is dumb. That is why it was constructed miles away from the ‘real’  university full of physicists, classicists and economists. This is why  no scientists turned up for the CSaP event.

But, just as management schools drew upon Foucault to introduce biopower and discipline into the ‘new spirit of capitalism’  during 1990s, business schools have already begun to draw on the  language of economic pluralism as they re-introduce the Pavlovian logic  of Walden Two dressed in the supposedly new scientific guise of evolutionary psychology.

This is the present and the future of economics we must challenge and resist.

However, to adequately dismantle the bogusness of neuroeconomics, we  must first stop training students in the lost Art of zombie-killing.

It was forgotten for a reason: like neoliberalism, it never worked in the first place.

Occupy LSE, like their Occupy ancestors, are expertly trained to  storm the neoliberal Bastille – leaderless and rudderless precisely as  explicitly instructed by Supreme Leader David Graeber.

But, know that the neoliberal university has been relocated. You can  find its corpse interred in the basement of the bioanthropology  department, where neuroeconomists and businessmen prepare for the coming  pluralist, neobehaviourist Vendée.

There is much to criticise within the contemporary university system  in the UK – rising fees, obsession with impacts and audits, utter  disregard for the employment of postgraduates – but are these the result  of neoliberalism or simply the symptomatic end of a global academic  profession after its 40 year evacuation of purpose?

Furthermore, within economics, curricular change is evident, and, in  any case, these academic disputes have far less bearing on the economic  world relative to paradigm shifts in business education. Bankers are  more likely to be trained in business and not necessarily advanced  economic science.

In this sense, further criticism of neoliberalism is largely  unnecessary, obsolete and counterproductive. Neoliberalism is already  dead. Kaput.

If we must raise our pitchforks – or cycle-locks; we must challenge  the intellectual incoherence of evolutionary psychology and behavioural  economics. This is the wave of the future.

Here we stand on the firm ground of history and consciousness– of  human civilization, institutional evolution, psychosocial dynamics,  performative discursive boundary work and the genealogy of morals – a  realm far more rich and red in tooth and claw than either the mythic  savannah or the neoliberal wasteland of yesteryear.


All by
Eric Lybeck