Year: 2023
Type: article
Abstract: Neoliberalism is a notoriously contested term, and even among those who principally subscribe to it, which is mostly its critics, fierce debates persist over its nature, how to study it properly—and whether it is still the appropriate conceptual armament to understand the contemporary world and an arguably emerging "post-neoliberalism" (Davies & Gane, 2021). Not only is it controversial how neoliberalism should be defined—a governing rationality in the spirit of Foucault's governmentality lectures (Foucault, 2008), a portfolio of certain policies, or a strategy of transnational capital to restore and safeguard profit rates (Harvey, 2005)—but also on what level to study it, either that of "actually existing neoliberalism" (Brenner & Theodore, 2002; Cahill, 2014), a set of theories and arguments, or both. My starting point and focus for most of this paper is neoliberal thought as it is represented by the writings of Friedrich Hayek, Milton Friedman, the German ordoliberals, and, importantly, James Buchanan. My aim is to develop a critical account of neoliberal thought that will abstain from explicitly normative criticisms and rather opt for a more indirect but effective and somewhat novel critique that holds neoliberalism to its own standards and shows how it fails to meet them or is pushed into adopting highly questionable positions in the attempt to do so. The argument proceeds as follows: As already suggested, the meaning of neoliberalism is heavily contested, so I will provide the basis of my argument by laying out a brief account of neoliberalism, which relies on a theoretical-historical reconstruction of its context of emergence around the middle of the 20th century. What I conclude from this reconstruction is that we are well-advised not to narrow down neoliberalism too much and not to downplay its internal heterogeneities. Therefore, rather than trying to isolate a number of doctrines or positions as quintessentially neoliberal or even considering them to be the "essence" of neoliberalism, I argue that what unites neoliberal discourse is not a set of positive convictions—although there is some significant overlap in certain areas—but rather a shared problematic that pertains to the preconditions of functioning markets. Within that overall problematic, democracy is one of the most pressing problems according to neoliberal thinkers, because virtually all of them agree that it complicates the task of setting up and securing the workings of functioning markets significantly. Still, this basic agreement notwithstanding, neoliberal accounts of democracy display a considerable range of specific diagnoses as to the nature and source of its dysfunctionalities or even pathologies. Accordingly, the second step of the argument is a survey of some selected lines of critique of democracy as they are formulated by leading neoliberals. Among other things, this survey helps us appreciate the heterogeneities of neoliberal thought, but, more importantly for my purposes, it also gives us a sense of the deep reservations neoliberals have with regard to democracy and the trenchant nature of their critique. As the specific critiques of democracy vary among neoliberals, so do the suggested remedies and reforms put forward. Accordingly, in the next step, several selected reform proposals are scrutinized that range from the vague call for a "strong state" to Hayek's "model constitution" and the much more specific argument for the introduction of a constitutional balanced-budget amendment, which is a signature demand of Buchanan. What this survey shows us, among other things, is the radical nature of the neoliberal reform proposals, which is important to my overall argument. Despite the highly controversial implications of all of these reform proposals, I will deliberately forego engaging them directly based on normative arguments. Instead, my critique focuses on the missing analytical link between neoliberal diagnostics and respective remedies. In order to show this, the fourth and final part of the argument shifts attention to the politics of neoliberal transformation, that is, whether and how this kind of politics is theorized in neoliberal accounts. Again, there is a certain degree of variance between Hayek, Eucken and Buchanan, but the common denominator here is the inability to theorize such a politics without violating the respective assumptions underlying the critical diagnostics or moving beyond the confines of liberal democracy as a condition of implementing such reforms. Thus, the key thesis I wish to defend in the following contends that neoliberal thought lacks any plausible solution to the so-called problem of transition—if they care to reflect on it at all.1 These findings lead to several different interpretations with more or less far-reaching implications that are discussed in the concluding section. It is commonplace nowadays to note the contested nature and potential vacuity of the term neoliberalism. Faced with these allegations, scholars of neoliberalism often hasten to offer some kind of working definition of neoliberalism, lest they lend credence to suspicions that they are operating with an empty signifier carrying political rather than analytical meaning. Accordingly, a set of policies—typically centered around the agenda of the Washington Consensus—is identified as quintessentially neoliberal, certain ideas or principles are considered to make up its core or essence or, neoliberal is simply that, which members of the Mont Pèlerin Society promulgate, which is an elegant but, upon closer inspection, not entirely convincing way to circumvent the problem (Chomsky, 1999; Crouch, 2011; Mirowski & Plehwe, 2009). On the other hand, there are regular interventions by scholars who emphasize the enormous variability/transformability of neoliberalism and its characteristic ability to form more or less tension-laden amalgamations with other political-intellectual projects, which makes it seemingly impossible, or at least intellectually imprudent, to aim for some hard and fast definition that "fixes" neoliberalism and its meaning(s): "Crisply unambiguous, essentialist definitions of neoliberalism have proved to be incredibly elusive" (Peck, 2010, p. 8). My own account of neoliberalism will try to strike a balance between overly parsimonious definitional attempts that do not hold up under closer scrutiny and the analytically defeatist solution to dissolve neoliberalism into various neoliberalisms that allegedly share nothing but Wittgensteinian family resemblances. The starting point of my conceptual approach is the observation that neoliberalism has become a truly toxic label these days, and it might therefore be useful to begin with a look at those who did describe themselves, albeit fleetingly and reluctantly, as neoliberals at the time and clarify the intellectual and political agenda that they attached the label "neoliberal" to. In other words, it is necessary to reconstruct the intellectual and political context of neoliberalism's emergence. Processes of emergence do not have a single origin but are dispersed, and the same goes for neoliberalism. Nevertheless, it is possible to identify the Colloque Walter Lippmann as the "birth" of neoliberalism in the sense of the first culmination point of these processes and the event at which, for the first time, the term was officially adopted, denoting a shared agenda of the participants, which included not just Hayek, Wilhelm Röpke, and Alexander Rüstow but also Jacques Rueff, Louis Rougier (the convener of the meeting) and, of course, Walter Lippmann himself. At this point, an impressive scholarship on the Colloque exists, so there is no need to go into the details of the proceedings (see instead Burgin, 2012; Dardot & Laval, 2013; Innset, 2020; Reinhoudt & Audier, 2018). The overall picture that emerges from them is a liberalism on the defensive that seeks to regain the status of a real contender against its main antagonists, collectivism and—to a lesser degree back then—Keynesianism. In the eyes of practically all of the participants except for Ludwig von Mises, this endeavor presupposed a critical revision of the classical liberal agenda, and, most notably, abandoning simplistic formulas such as "laissez-faire," or, what some referred to as "Manchesterism."2 The neoliberal discourse in formation here was, thus, a far cry from the creed of "self-regulating markets." Instead, the entire point of the neoliberal approach is to affirm the value of markets against collectivists and Keynesians while insisting that they are not nearly as robust and self-sustaining as large parts of the liberal tradition were inclined to believe up to that point. To put it more pointedly, the market per se was not the solution to all problems; rather, the market itself turned into a problem for neoliberal thought as it was seen as an entity in need of constant care and premised upon a number of preconditions. Therefore, what I call the neoliberal problematic pertains to the preconditions of functioning markets, that is, markets on which the price mechanism reigns as unperturbed as possible.3 The irreducible heterogeneities that characterize neoliberal discourse are not the least due to the manifold and at times contradictory ways in which this problematic can be, and has been, spelled out and addressed. Still, what becomes clear is that neoliberal thought might be centered around the notion of markets, but the intellectual energies of those whose work is animated by this problematic, such as Buchanan, Hayek, or the German ordoliberals, inevitably gravitate toward the infrastructure that needs to be put in place and defended against changing adversaries for these markets to function. This is the realm of the social and the political, and therefore it is only stringent for the neoliberals to invest so much time into conceptualizing the state—and democracy. When neoliberals talk about democracy, they typically refer to democracy in its existing form, that is, their discourse rarely ventures into philosophical inquiries into the nature and theory of democracy. The predominant form their discourse takes is that of a critique of the respective contemporary forms of representative democracy. These respective contexts leave an imprint on the various accounts of democracy, but rather than probing the details of each, in this survey, I will highlight what I consider to be three types of arguments or varieties of the neoliberal critique of democracy that can be analytically distinguished.4 The first set of arguments against democracy considered here is particularly prominent in ordoliberal discourse but not exclusive to it:5 For Wilhelm Röpke and Walter Eucken, the main threat associated with democracy is due to the influence of a new phenomenon on the political scene, namely, the masses. With the rise of mass democracy, the latter have acquired a heretofore unknown leverage over political decisions, or at least this is the assumption under which the ordoliberals in particular are operating. Hence, the problem is not the existence of masses per se but rather their integration into the political process through mass democratic institutions as it unfolds unevenly but steadily over the course of the first half of the 20th century. While the aversion against the masses may seem no more than a variant on the venerable liberal-conservative topos of the tyranny of the majority, there is more to it. The masses are more than a majority. In a discourse crucially shaped by Gustave Le Bon's Crowds, Sigmund Freud's Group Psychology and the Analysis of the Ego, and Jose Ortega Y. Gasset's Revolt of the Masses (who was invited to the Colloque but did not participate), the concept of the masses is psychologically (and at times racially) charged. Masses are attributed with infantilism and general irrationality, which makes them the perfect molding material for demagogues who exploit their uncritical receptiveness and malleability to mobilize them for political projects—typically ones that involve state planning and collectivization from the perspective of the ordoliberals. There is ample textual evidence for this stance, so a few examples may suffice here as the basis of this interpretation. Eucken notes: "But while people can only live in certain orders, the mass tends towards destroying these exact orders" (Eucken, 1960, p. 14), and in one of the classic texts inaugurating the ordoliberal tradition from 1932, he laments "that the simultaneous process of democratisation lent the parties, and the masses and interest groups that they organised, much greater influence over the management of the state, and so upon economic policy" (Eucken, 2017, [1932], p. 59). Röpke complements these views: "In all countries, in some less, in others more, society has been ground into a mass of individuals, who have never been so closely herded together and so dependent on each other and yet at the same time they are more rootless, more isolated and more like grains of sand than ever before … All the misery, all the problems of our time have their ultimate roots here…" (Röpke, 1950, [1942], p. 92). Elsewhere, he draws on the above-mentioned social psychological framing of the masses: "As a part of 'mass', we are different from what we normally are and should be in healthy circumstances; we are subhuman, herdlike, and the state of society dangerously corresponds to our own" (Röpke, 1960, p. 53). And while the most extreme manifestations of what might be called the mass syndrome only occur in what Röpke terms mass in the "acute state," massification as a permanent condition is hardly less alarming, since it heralds the reign of mediocre brutes at the expense of the "unalterable aristocracy of nature" Röpke hopes to defend (Röpke, 1960, p. 55). To sum up this line of criticism, economic policy is simply too important and much too intricate to leave it to the wayward masses, who may not sit in parliaments and run governments in representative democracies, but are still too influential under the conditions of mass democracy, even if only as the object of demagogic agitation and mobilization. If the alliance of these forces had their way, democracy is bound to transform into collectivism, that is, the prime adversary of neoliberal thought: "There is no denying it: the collectivist state is rooted in the masses" (Röpke, 1950, p. 86). The second line of criticism also owes its classic formulation to another ordoliberal, namely, Alexander Rüstow. The target of this criticism, in addition to the mass dimension of contemporary democracy, is its alleged excessive "pluralism." Rüstow succinctly sums up the respective core concern: "The democratic, parliamentary structure of some of the economically leading states caused the economic corruption to spread to the internal policy of the state, to the political parties, and to the [sic!] parliamentarism itself. The political parties were slowly transformed into parliamentary agencies of economic pressure groups and were financed by them. … The pathological form of government which developed this way was that of pluralism…" (Rüstow, 2017a, [1942], p. 159). Under conditions of mass democracy, (economic) pressure groups will gain such extraordinary influence that they can almost dictate their will to political parties; the result is marginalization of a vaguely defined common good, which is dissolved into what Eucken calls in no uncertain terms "group anarchy" (Eucken, 1960, p. 171). The state, as the presumptive guardian of this common good, is undermined in this process of economic-political clientelism, and Rüstow echoes the scathing criticism of pluralism by Carl Schmitt in his conclusion: "What takes place here accords with the motto: 'The state as prey'" (Rüstow, 2017b, [1932], p. 147). Under conditions of unchecked pluralism, the state is weakened continuously and the resulting centrifugal dynamics ultimately become unmanageable as the political community falls apart at the hands of particularistic actors emerging from every corner of society. Thirdly, there is a strictly contemporary line of criticism that still exhibits some correspondence to the critique of pluralism just sketched. The central theorem underlying this critique is that of rent-seeking, which describes a behavior that seeks to gain some kind of advantage over others not through productive action and competition but rather by lobbying for some kind of special treatment, typically an exemption from certain rules. This idea builds on the insights of game theory and rational choice approaches, according to which individual utility is often maximized when (generally beneficial) rules apply to all but the individual in question, and much of the public choice critique of democracy is built around this basal notion: Under conditions of democracy, the constant demand for special treatment of actors is by an in the form of political actors to their of As one of the of the public choice it is a of course, that the theorem at the of his critique of representative democracy and he is not the only neoliberal who Milton as as the albeit not on the basic of (see & Friedman, The problem that allegedly from can be up in the following that in rent-seeking, individual rationality that one so as one be to the degree that others gain from rules that still apply to This that has an and as a general it against the of its because even if individual may be and an this is by the one has to due to all other they are as Thus, in of their individual the actors in a society up at a as in the it is that albeit with a not only the its and other special typically with some kind of price and since through is not a under public choice and as as have less and less over the prime strategy to for is through and the almost with that they had no a clear of the democratic of there is a line of critique that focuses on the of the of in to democracy and the alleged nature of the The prime of this line of argument is Friedrich Hayek, who out the various in To be that democracy, in had its is the only we have yet to make p. the of democracy and its basic of over The of already the central point of Hayek's critique in a "The of the is that of This to that is and The of democracy, to all becomes the for a new p. The for this, according to Hayek, is the of the of the of which he in the of and that the of any of what a While in the of only those rules that were and at behavior were considered to be in the sense of the term, emerges from a is to have the of parliaments to in the kind of planning that he to be on any number of And since there are no any on this democracy, have no at their to the from interest "The of the is, of course, to sum that in an democracy the of are to whether they wish it or to particular groups on whose their p. Hayek, in this regard the second and lines of critique out The main of Hayek's is a of the critique of democracy as out most in The of (see Hayek, the that this is no in any way, rise to an almost which, thought, ultimately lead toward work and has been by a about the in which the political order of what to be as the most is The … that this towards a state is by certain of of the of government has to through various p. It is to these in the of the various neoliberals accounts discussed here that we to. It the of this paper to survey every reform by leading neoliberals, so I will focus on three more or less specific reform put by Buchanan, as as the ordoliberals Rüstow and Eucken, which are to with the various or of democracy as they are in the diagnoses out in the section. us begin with what arguably is the most specific to be in the neoliberal reform portfolio and which to be a signature demand by James Buchanan, a different has also been by Milton The seeks to the to in behavior or rather to to interest groups on of in order to at ever more in his of democracy over the that to the of and not least to in the that in its is to out of the of the & Buchanan, p. In order to to terms with this one of prime is to the strategy of in democratic through of the way public are What democracy is a that the of these and it should be on the possible a constitutional balanced-budget The rather that all state be financed through be it or it be simply to and to state such are to and public instead of to on a strategy to at the this is a for the of such a be discussed in much greater as be the normative to it, but following the strategy of my critique out I will to this and on to the second and much more reform which is Hayek's "model constitution" The of Hayek's is a of a of between government and the of and therefore real has to be only in the sense of the term that the for action the government the of this in I will only highlight one particularly that has also considerable In the governing hardly in its main from existing is the of who or from the state in p. Still, the target of criticism is the rules for the which is arguably the real of in this new as the is to be strictly by the rules of just down by the p. of the are to be in the following all of the of their out of the of their to the of at the of their What has in is of and at a for such as so they not be to to a in the market but be of public in such but positions as so that their as they be dependent on about their p. The this is clear The to be and to the to in behavior on of and, the of groups allegedly the formation of political the And even if they were to form, towards different parties be to the and become that they had the common task of the of their p. this radical is to criticisms from the perspective of democratic but us leave this and instead to the final to be considered which is also the least for the of into a "strong state" as its main Alexander Rüstow and Walter Eucken refer to it. This the stringent from the critical of excessive pluralism, which is among most even Röpke, who is less on this his that of this pluralism is that pressure groups the state" and that government all the possible of this of the state" (Röpke, 1960, Still, the most calls for a state from his ordoliberal Rüstow and The his and the for from with the following "The new which I and my a state, a state that is the the parties, in the place it And with this of in a state that liberal economic the condition each liberal economic that a state, with this I should like to (Rüstow, 2017b, p. The state is to itself from the of political parties and interest groups and up a that it to the from these In the same Eucken what will to be considered a of the ordoliberal of the and the of In this Eucken out his own of the of liberal which, in his to with that of Carl Schmitt in this and to the in of the liberal state into an economic state" (Eucken, 2017, p. 59). For Eucken, the of state, and in the economic state is of the most as it undermined on the part of the state, upon which its existence … All economic policy this it to a of
Source: Constellations
Author: Thomas Biebricher
Institution: Goethe University Frankfurt
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,630
OpenAlex ID: W4387019003