Neoliberalism

Neoliberalism               Gerry OShea

The story is told that shortly after the great trade union leader Mike Quill arrived in New York, he inquired about what kind of government existed in America. After someone gave him a brief explanation, he replied “well we are against the government anyway.” Mike had just come from a family that fought the British in the Irish War of Independence and that was equally hostile to the Free State Government which took over in Dublin in 1922, four years before he left for the United states from his home in Kilgarvan, County Kerry.

President Reagan’s oft-quoted statement that “the most terrifying words in the English language are: I’m from the government and I am here to help” always evokes  loud applause from conservative audiences. His words encapsulate the belief that the less state involvement in all aspects of life the better. They always make one exception for military spending, and so they endorse the present defense budget in the United States which exceeds the combined total military spending of the next six most powerful countries in the world.

President Reagan and Prime Minister Thatcher, at the height of their power in the 1980s, both promoted a small government philosophy that is often called neoliberalism. This approach should not be confused with the liberal belief system, which features at the other end of the political spectrum and always advocates for state intervention in such areas as education, healthcare and provision of housing for the poor.

 In general, Republicans give their allegiance to the small government model, except in their always-predictable demand for expanding the defense budget. On the other side, the Democrats tend to favor social programs that give the poor and disadvantaged a better shot at a decent standard of living.

Neoliberals focus on the primacy of the individual. They promulgate the theory that individual rights should trump all other considerations. They view the government negatively seeing it as the institution that endeavors to limit a person’s freedom by levying taxes and imposing regulations and restrictions. This governing perspective strongly approves of citizens pursuing their own individual goals, especially in the economic area.

For instance, the center for disease Control (CDC) includes the nation’s top disease experts who are especially important at the present time when we are being pummeled by a deadly pathogen. People turn to them for the latest research data and to listen to their professional advice. Unfortunately, the CDC hasn’t given a press briefing in two months, and a recent 17-page analysis dealing with the scourge of COVID 19, including detailed recommendations geared to helping local governments, was set aside by the Trump administration. Evidently, they prefer the president’s own mercurial ways of communicating with the people regarding the devastating corona virus.

This hostility to expert scientific advice from government departments also applies to the Environmental Protection Agency in Washington, which has been denuded of most of its power. The scientists there insist that global warming cannot be dismissed as a massive hoax, which is President Trump’s Neanderthal description for what all other world leaders acknowledge as the dangerous heating of the planet.

This neoliberal focus on the centrality of the individual runs counter to the teaching of most religions. First in this regard comes the Catholic Church whose social teaching is anchored firmly on promoting the common good. The present pope’s signature 2015 encyclical, Laudato Si: On Care  for the Common Home, calls explicitly for communities to engage urgently and agree solutions to counter the degradation of our universe by individuals and corporations who show little consideration for the moral and ecological consequences of their actions.

Privatization of major industries also features prominently in the neoliberal agenda. In this view, healthcare, transportation, education, mail delivery and prison management are better dealt with by private contractors rather than by the state or local government. They argue that these services can be provided more efficiently by allowing private profit to enhance the provision of the service.

The record hardly supports this contention. Healthcare in America, mostly a for-profit enterprise, costs twice what other Western countries pay, and we have over twenty million people uninsured. Subways and the public bus service remain the cornerstone of successful transportation planning in New York. And, the number of private-run prisons has increased, but the reports from these places suggest that they have failed dismally to provide any improvement in a deteriorating system.

They also argue that taxes have to be low, otherwise, they say, they become a disincentive to investment. Every Republican budget since the Reagan era has reduced taxes, especially on the rich, claiming that by giving more to those at the top, the benefits flow downwards to the middle class and the poor. This bit of neoliberal hogwash is dubbed the Trickle Down Theory. It has never worked but it is trotted out as if it had the approval stamp of serious economists.

Back in the Eisenhower era in the 1950s, considered by many the Golden Age of Western capitalism for working people - provided, of course, your skin color was white - the big earners paid taxes of over 90% on some of their income. The figure today hovers in the mid 30% range.

 A recent study reveals that the middle class in our time pays 28% of their earnings in taxes to all levels of government, federal, state and local; the upper middle class pay a few percentage points more and the four hundred top business tycoons get away with 23%. No wonder that billionaire Warren Buffett complains that his office assistant pays a higher percentage of her earnings in taxes than he does.

Last year Steve Mnuchin, the treasury secretary in Washington, promised that the massive budget giveaway to the people at the top would trickle downwards, creating increased economic activity, and, in this way, would somehow result in a balanced budget. In fact, the deficit, a bill left for future generations, increased by a whopping one trillion dollars in just one year.

The neoliberals like to point to the recent exuberant stock market as proof that the windfalls for the affluent actually benefit workers who have some investments as shareholders on Wall Street. It is true that around 50% of American workers have some money invested in stocks, mainly in retirement accounts. However, the benefits are highly disproportionate as the 10% at the top own 90% of company shares.

There is no room for trade unions in the neoliberals’ minimal state. Bargaining rights for employees hampers the capitalists’ pursuit of maximum profits. Groups like those led by the billionaire Koch brothers have poured millions into anti-union campaigns throughout the country. Their propaganda and clout in Washington and in state legislatures have been successful and their opposition played a major role in the decline of trade union membership which has dropped precipitously from over 30% of workers in Eisenhower’s time to around 10% today.

 Not surprisingly, without a voice at the bargaining table, workers’ salaries have stalled and inequality has become much more prevalent. The minority carrying union cards still claim significantly better pay and working conditions than workers who are not organized.

The neoliberal philosophy can be correctly seen as an expansion of the laissez-faire thinking that dominated planning during the Industrial Revolution in the 19^th century – no regulations, no tariffs and no pesky government interference with the competitive markets, which were considered sacred and somehow were supposed magically to regulate themselves.

Back again to Mike Quill whose dislike for governments changed during his years in New York. He repudiated the conservative concept that small government leads to the best political results. In fact, as a member of the City Council and as a leader of the nascent trade union movement, he insisted that a progressive government was an essential part of the movement to promote his ideas for workers’ economic and civil rights.



Gerry OShea blogs at  wemustbetalking.com