Neoliberal economics is based on faith: undermining faith is the key to change

I am a huge admirer of Richard Murphy, accountant turned campaigner for tax responsibility and economic reform, pithy blogger about economics and society, and author of The Courageous State.  Today he’s blogged a longer-than-usual piece about the faith-based nature of neoliberal economics, and how to challenge it.  It’s an optimistic, grounded and hopeful piece and I think it’s worth reproducing in full:

I want to reflect again on something I wrote about last night and which arose as a result of discussion during and after the lecture I did last night.

The question is, why will change happen. Indeed, is change possible?

Let me deal with the last first. One of the things I talked about – indeed it was a major theme of what I said – was that economics abounds with faith systems, and neoliberalism represents this more than most economic theory. As I said:

There are those who do have complete faith in markets as if they are revealed truth. They do believe that the government plays the role of the devil.

The former is, of course, a salvation belief and the latter a damnation belief represented by the view, as I put it, that any form of regulation by government, and anything other than that minimal taxation required to enforce the laws of private property would so impede the markets that the salvation they might offer could not be delivered here on earth.

Now the question is not whether this is right or wrong – my position on that is, I am sure, clear – but how this belief system which dominates almost all political discourse in the UK can be challenged.

And to do that it has to be understood that this belief system is not based on fact – it is based on dogma and quite remarkable claims that are unconnected to the human condition and our innate sense of community. We are not maximisers. We do not put self interest first on all occasions, although clearly we must on some. We do share. We are compassionate. We quite clearly need not just the neighbour we know and who we recognise as our peer, but also all those who make up the community in which we live. The rich can only be rich because there are others who are not, to out it bluntly.

And that belief system, false as it is, was propagated. It started with the Mont Pelerin Society and has been spread through all the think tanks it has spawned (call them churches if you like), the most notable of which in the UK is the Institute of Economic Affairs.

But like all belief systems it will only work if it is apparent that its leadership is delivering to enough of its followers the rewards from faith that they promise as a consequence if following faithfully. Faith systems only survive on the basis of that condition being met; it’s a pretty good assessment tool for their effectiveness. Of course, some morph and change on the way, but the premise is correct, I think.

And that suggests why change is possible in this case – even if, as yet, t has not happened.

Recession for the great majority, even if there is now a recovery for the few, challenges this faith but candidly, not enough to promote change, as is now apparent. A majority are now sufficiently materially comfortable to not challenge the system for this reason.

They will challenge it for another much more pragmatic reason, and that is fear. When they see disabled people being evicted from their homes they will see themselves as potentially disabled.

When they see realise foodbanks are for people in work who cannot afford to feed their children they will see themselves as hungry people.

When they know long term unemployed people – or their children never get a job – they will see themselves as workless.

When the middle classes are punished for being paid child benefit and are fined as a result they’ll question why the system does that. And they’ll be angry.

When the NHS charges they will ask why – and it will.

When people have to work into years when their bodies cannot face the demand to do so they’ll wonder how that can be reconciled with being one of the richest countries on earth.

I could list more such catalysts for changed thinking. Of course the media is fighting all such changes: they have to; they are the friends of those imposing them. They want to create the ‘difference’ perception that underpins neoliberal thinking – that those who lose deserve it; that it is not happenstance that left so many in misfortune. Hence the ‘benefit scrounger’ narrative.

But people won’t forever but that. There is their own inner narrative that they will see that in conflict with. I believe in the decency of most people: that is my optimistic view. I also believe that many people, far too many people, live lives dominated by fear that they will happenstance become one of the losers, because they know that is possible, and they will know those who are.

And that narrative of fear is a powerful one. It is the desire for that freedom from fear that will create the demand for change. At some point a liberation narrative will develop.

It has not as yet, and there is a massive void that I and many others seek to fill, but which I know we have not done as yet, for a truly coherent alternative about which we can coalesce. But there are people working on that – I met some of them last night. And that narrative is developing. And because it will, literally, be one of liberation it will deliver.

The aim, to go back to belief systems, is to deliver what might be called the Kingdom of Heaven here on earth: we do not need to wait.

Maybe that’s always been the aim.  So what? Isn’t that encouraging? Isn’t that the evidence that the demand for this exists?

I have no idea of the outcome, the event that will trigger change, or when it will happen. All I know is we are living with a failed narrative that many want to change.

And I believe they will. And that is why change is possible.

 

Today we’ve seen the Government launching proposals for a deeply cynical Immigration Bill, based on rumour, lies and prejudice.  Optimism like Richard Murphy’s increasingly seems like the only answer.

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One thought on “Neoliberal economics is based on faith: undermining faith is the key to change

  1. I agree with much of what this interesting analysis has to say. But I do find it interesting that despite the author’s claims that the neoliberal faith system is false because, ‘We are not maximisers. We do not put self interest first on all occasions, although clearly we must on some. We do share. We are compassionate…’ he then appears to buy into these beliefs by suggesting that it is our fear of what we stand to loose ourselves that will spur us not to buy into this system any longer. I would hope that a society which is based on compassion and an innate sense of justice would challenge the current system because of what some of its members are already losing, not just on what we realise we could lose ourselves.

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