Neoliberalism is a Social Disorder

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Political SpectrumFigure 5: Australian Political Spectrum 2013

This diagram shows a different way to analyze a political spectrum that shows the economic perspective from a completely state controlled economy on the far left (communism) to a deregulated economy on the far right (neoliberalism).  The vertical scale shows an authoritarian, dictatorship style government that strictly controls social roles at the top and anarchism at the bottom.  Using this spectrum we discover the trend of the last forty years in modern western society, which is that authoritarian neoliberalism has become the standard viewpoint.  So what is neoliberalism exactly? What does it see as the ideal system and how does it seek to achieve that perfection?

Whilst neoliberalism is shown here as an economic philosophy espousing free trade, it has also become a philosophy of governments who seek to place the desires of corporations as the only desire in society that the government should represent.  The argument for this viewpoint is that corporations bring jobs and money into the economy, therefore what is good for them is good for everyone.  This oversimplified view is a foundation lie of neoliberals, those lies are debunked here. The ideal system that neoliberal philosophy works towards has these fundamental beliefs:[1]

  1. Continuous economic growth is the way to human progress.
  2. Free markets without government interference would be the most efficient and socially optimal allocation of resources globally
    1. A philosophy of globalism where economic transactions increasingly cross national boundaries without any control.
    2. This also includes the deunionizing of labour forces and removal of any impediments to capital mobility, such as regulations on financial transactions.
    3. Deregulation, to allow market forces to act as a self-regulating mechanism.
    4. Economic globalization would be beneficial to everyone, where the market is self-regulating allowing the “trickle down” notion of wealth distribution.
  3. Governments should mainly function to provide the infrastructure to advance the rule of law with respect to property rights and contracts and maintain a national defence force.
    1. Defence spending overseas should only be to protect or enforce trade contracts.
    2. Privatization removes inefficiencies of public sector (government)
    3. People should look after themselves instead of relying on government, therefore dismantle all social welfare systems
  4. Change perceptions of public and community good to individualism and individual responsibility.  The change is for their own good.
    1. Reducing public expenditure for social services, such as health and education, by the government – these should be provided by the individual on a user pays basis.
  5. There Is No Alternative (TINA): This is the only way to run a good society that enjoys all the benefits of infinite growth and profits.
    1. Hard work is always rewarded by profits and vast wealth; only lazy people are poor.

This is clearly an extreme philosophy and one with deep flaws when applied to reality.  Fundamentally it denies the fact that humans are social creatures that rely on one another to succeed and excel.  Only psychopaths can believe this kind of bare faced lie and it is to this personality that neoliberalism appeals to.  The film and essay “The Corporation” explores the idea at some length, establishing that if corporations are people, as current global law states, then they are psychopaths.[2]

So what does that mean and can we test that idea against the above beliefs of neoliberalism?

According to the Diagnostic and Statistical Manual of Mental Disorders, 5th Edition (DSM V), a psychopath is a particular example of Antisocial Personality Disorder.

“Typical features of antisocial personality disorder are a failure to conform to lawful and ethical behavior, and an egocentric, callous lack of concern for others, accompanied by deceitfulness, irresponsibility, manipulativeness, and/or risk taking. Characteristic difficulties are apparent in identity, self-direction, empathy, and/or intimacy, as described below, along with specific maladaptive traits in the domains of Antagonism and Disinhibition……A distinct variant often termed psychopathy (or “primary” psychopathy) is marked by a lack of anxiety or fear and by a bold interpersonal style that may mask maladaptive behaviors (e.g., fraudulence)” [3]

So given the single goal of a corporation to acquire profit, neoliberal philosophy directly represents the desires of a psychopath to achieve that end unhindered by any concern with people or society.  The removal of government ‘interference’ with that goal, the purely selfish individual focus and the utter disdain for the society that is destroyed make neoliberalism the playground of disturbingly antisocial psychopathic behavior.

The best complete description of neoliberalism in action is found in Naomi Klein’s “The Shock Doctrine”[4].  This lays out the actions of governments around the world that have become a slave to this trend and how it has acted directly to destroy societies and concentrate global wealth in the hands of a very few corporations.  Not only have we concentrated control of the majority of the world’s wealth into less than 150 companies[5], but the wealth of those companies is effectively controlled by just four companies that set investment index ratings.[6]

These same psychopaths claim that this is the only choice we have to achieve ‘prosperity’ and ‘progress’, so what exactly is the problem with each of those core beliefs?  Milton Friedman is hailed as the economic philosophical leader of the neoliberal movement.  However, his views do differ substantially from the systems deployed by the proponents of the neoliberal philosophy.  He believed in personal freedom over authoritarian government and was against welfare, including corporate welfare, of any kind.

“There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”
Milton Friedman

Friedman, however, never accepts that the inevitable end of deregulated capitalism is a monopoly of corporate power, despite all the real world evidence from history unilaterally proving this to be a fact.  In Friedman’s utopia, small businesses perpetually form and reform to provide competition for established businesses because everybody is free to do so.  In reality, established businesses will do everything in their power to undermine and remove competition until they get large enough to simply buy government favour.  At some point they can simply buy the government; as has occurred in multiple countries suffering under neoliberal governments.  Large corporations feel less and less bound by the ‘rules of the game’ that Friedman naively thinks they will abide by as they discover it takes less resources to change the rules than it does to compete in a free market.[7]

The game ‘Monopoly’ clearly shows how unregulated capitalism works in reality; it was intended to practically demonstrate exactly this problem.  The only possible conclusion is that all the wealth is owned by very few people[8] – leaving everybody else frustrated and alienated by the system.  The early stages of the game are Friedman’s free trade ideal in action. This is the exciting part of the game where anything is possible and everyone is equal and free to move and choose.  As the game progresses and the finite property is all purchased and owned, then rent starts becoming payable and the game changes.  There is no way to unseat the rich once their rule is established.  There is no government regulator to prevent abuse of power.  The end state is typically arguments and anger at the loss of freedom that comes with allowing monopoly.  Friedman’s answer is to simply say that economic freedom is the perfect state and that this will magically solve the problems.  The reality as shown in every economy that has adopted these ideas is that wealth first gets concentrated in the hands of the few and then exported overseas to the foreign investors who prey on the ‘free’ economy.[9]

There is some good evidence that the simplified model of humans proposed by Nobel Prize winning economist John Nash and used frequently ever since is deeply flawed.  In fact the only people who behave as the utterly self-interested ‘well informed’ person of economic theory are economists themselves – and psychopaths.[10] This shows a deep failure of economic theory made clear in the 2008 crash – new approaches are needed that actually begin in reality rather than utopia[11].


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