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2 4 June 2017
L
EO VARADKAR consistently asserts that
he does not believe in equality of out-
come but in equality of opportunity. He
sees himself as “right” or “either centre
right or a higher class of liberal… some-
body who believes in personal freedom,
someone who believes in a political economy
and in a free market as the best way to create
wealth”.
He wants to lead a party, and we infer a coun
-
try, for “people who get up early in the
morning”.
His highest-profile initiative came in late
April, when as Minister for Social Protection he
launched the fractious ‘Welfare Cheats Cheat Us
All’ advertising and online campaign. It aims to
encourage the reporting of suspected fraud to
the Department of Social Protection
anonymously.
The image Varadkar, who was always going to
win anyway, cultivated in his long tilt at the Fine
Gael leadership is that of champion of equality
of opportunity, liberalism… the right… those
who get up early in the morning and aren’t part
of the class responsible for welfare fraud. But
above all Varadkar speaks the language of
markets.
However, the markets are a dead end.
Neoliberalism is defined as “a modified form
of liberalism tending to favour free-market capi-
talism” (Oxford).
Like Scientology or some of the madder
dogmas of religion, it is pseudo-science or bad
science and it has been, as we shall see, com
-
prehensively discredited. But this is too tart. Of
course it has been discredited, but its hold on
us grips our lives still, grips our incoming
Taoiseach.
So let us try and whisper in the world’s ears,
and in the ears of the Taoiseach, why it is wrong
and dangerous and pushing us to the edge.
For a start there are better economic theories.
John Maynard Keynes was in Saul Bellow’s
phrase a man of “clairvoyant intelligence”.
Keynes was prophetic in his great work ‘The Eco-
nomic Consequences of the Peace’ that
predicted that the dire economic conditions
forced on Germany after the war would lead to
its economic collapse and political upheaval
throughout Europe. It resonates in our times.
Keynes’ ideas fuelled recovery after
recovery after the mistakes which fol
-
lowed 1929. Recovery was needed
after the market was shown in every
instance to be deficient in providing
macroeconomic efficiency, let
alone broader societal goals.
Keynes argued that aggre-
gate demand determines the
overall level of economic activ-
ity. Inadequate aggregate
demand can lead to prolonged
periods of high unemployment.
Keynes advocated the use of
fiscal and monetary policies to
mitigate the adverse effects of
economic recessions and
depressions.
Time Magazine has said of Keynes:
“his radical idea that governments
should spend money they don’t have may
have saved capitalism”. Keynes himself was
reportedly disparaging about capitalism itself:
“Capitalism is the astonishing belief that the
nastiest motives of the nastiest men somehow
or other work for the best results in the best of
all possible worlds”.
The stagflation of the 1970s with the shocks
Ireland should brace for market worship
dressed up as equality of opportunity and
favouring those who get up early
by David Langwallner and Ben Harper
Neoliberalism
cloaked as modernity
OPINION
Varadkar champions
equality of opportunity,
liberalism… the right… those
who get up early in the
morning and aren’t part of
the class responsible for
welfare fraud. Markets.
June 2017 2 5
to the Keynesian system generated by oil prices
opened sowed dissent. Keynes fell out of fashion
with the stranglehold of unionism and welfarism
and the imposition of socialist dogma. It created
‘a market’ for the work of the Chicago School and
trickledown economics characterised by fetish-
istic privatisation, deregulation and the
elimination of State subsidies. In the late 1970s
much of this made superficial though never pro
-
found sense. The market may have seemed like
a score counter that could be tamed for human
purposes. No longer. It is the recipe for inequal
-
ity leading to intolerance.
After the Depression which started in 2007,
Keynesianism actually underpinned some of the
measures implemented in some countries –
notably by Barack Obama and Gordon Brown in
the US and UK. This was not the case in most of
the world, particularly in Germany, which has
learnt, and insisted that others learn, the wrong
lesson from its own hyperinflation-driven catas-
trophe - or the EU, including Ireland which was
an incubator for austerity.
But it is Greece that was the laboratory. When
the Greeks decided the ignominy was too unfair
and pointless and elected a government firmly
opposed to the hopeless conditions imposed
upon them they were forced into an astonishing
U-turn to accept further self-destructive bailout
packages. Not even the IMF thinks that Greece
can comply with these terms and successfully
pay back its debt, especially when coupled with
crippling austerity conditions. The latest figures
show Greece’s debt stands at 179 percent of its
gross domestic product, or about €315 bn.
Naomi Klein in her bestseller ‘The Shock Doc
-
trine’ analyses the growth and development of
Neoliberalism across the world. An economic
paradigm dubbed by the author ‘disaster capi-
talism’. Klein particularly homes in on how these
crises and others are used to justify further dis-
aster prescriptions. She quotes Hayek’s mate
Milton Friedman:
“Only a crisis - actual or perceived - produces
real change. When that crisis occurs, the actions
that are taken depend on the ideas that are lying
around. That, I believe, is our basic function: to
develop alternatives to existing policies, to keep
them alive and available until the politically
impossible becomes politically inevitable”.
This describes the Greek decade.
Moreover, Neoliberalism has contributed to
the world order approaching a collapse at a star-
tling velocity. As shown by Thomas Piketty
decades of inexorably widening inequality lead
to economic instability and social unrest. Trump,
Le Pen and Brexit are the predictable fruits.
Racism, sexism, xenophobia, intolerance, anti-
environmentalism and disdain for the truth are
their imperatives and their currency.
It isn’t hysterical to fear that the end of human
civilisation is glaring us in the face while most
people look away. Established parties of govern-
ment in nearly all major countries have
subscribed to the Neoliberal agenda and merely
quibble about its implementation. A wild ballet
of madness.
Neoliberalism’s imprimatur for austerity has
ineluctably led to social instability and fragmen-
tation, the destruction of pension and welfare
entitlements, poorer and often more expensive
health care, homelessness, evictions and the
corralling of our world into the very rich, and the
rest.
The ineluctability comes from its focus on
competition and on the short-term, and its fail-
ure to address externalities including social,
environmental and cultural externalities.
If you aim to address certain issues and
ignore others, and you are successful, you will
ultimately tend to see the ascendancy of what
you emphasised (competition) and the demise
of what you downplayed and trivialised (undesir-
able externalities). Keynes recognised this,
looking forward to the day “when the economic
problem will take the back seat where it belongs,
and the arena of the heart and the head will be
occupied or reoccupied, by our real problems -
the problems of life and of human relations, of
creation and behavior and religion”. How far we
are from that in 2017 resurgent Ireland!
The rise of inequality as the overriding issue
of our time has tended to supersede the
However, the markets are
a dead end. Neoliberalism
is fetishistic deference
to the markets. Keynes
said “Capitalism is the
astonishing belief that the
nastiest motives of the
nastiest men work for the
best results”
Neoliberal
2 6 June 2017
relevance of what has been the primary indica-
tor of this inequality – class. Inequality in
multiple forms including sexual, gender, racial
and economic has impinged on the centrality of
the Marxist analysis of a working class that is
exploited – essentially a social analysis. Apart
from anything else the middle class too is under
pressure. Meanwhile democracy and national
sovereignty are moribund as the very rich
through corporate legal and accounting firms
and multinational corporations control and run
the world.
Privatisation and deregulation have cor-
roded democracy and basic human
decency.
Privatisation takes many
industries that were for
-
merly under public
ownership into the
hands of unaccounta
-
ble corporate
monoliths to make
easy money out of nat-
ural monopolies, free of
healthy competition.
Deregulation removes
obstacles to business
many of which are intended to
achieve human goals.
The marketisation of human activ-
ity and needs erodes the humanity in our
society as our actions are reduced to transac-
tions between self-interested actors. Consent
here is nugatory; for the playing field is not level.
It is a sure route to the serfdom its sponsor, Frie-
drich Hayek, purported to revile.
Neoliberalism is not classic Whig liberalism
which in certain forms can converge on egalitari-
anism. It is not in favour of the rights of the little
person. It does not even protect small or
medium-size holdings and businesses but seeks
to crush them. Any commitment to liberty is
merely tenuous and the liberty of the market
conduces to the concentration of wealth in the
hands of the few as individual civil and political
liberties are a dangerous threat to the status
quo. Political dissidence is discouraged.
The dark forces of Neoliberalism have proved
very powerful indeed.
The 2007 implosion has been blamed on irre
-
sponsible spending on welfare, healthcare, and
feckless immigrants - rather than the casino cap-
italism of the financial sector.
Being right is one thing; communicating it is
much trickier. Neoliberalism also specialises in
post-truth disinformation.
Donald Trump is an exponent, albeit a con-
fused one.
Some derive satisfaction from the crumbling
of the Far Right after its losses in a number of
elections in Europe culminating with Le Pen’s
defeat to the centrist Macron; but note the
narrow margins and how Hindenburg at first
defeated Hitler.
There is an histori-
cal inevitability to
the rise of the Right
in our time.
So... the political
establishment and its
corporate paymasters can
waffle on about our economic
progress over the last few decades but
statistics do not lie when they measure several
decades of stagnation of real wages in the US,
despite ever improving productivity, while glob-
ally they have collapsed in the last ten years. If
there is growth - as in Ireland in the last few
years - it is growth for big business and the rich-
est, what Naomi Klein has called the
Corporatocracy.
In fact all the evidence indicates that where
there is growth and stability it is in social demo-
cratic countries that are Nordic or Middle
European. There is a tangible link between
Keynesian economics and sustainable redistrib
-
uted growth. Neoliberalism does not generate
sustainable growth and in any event does not
provide for its distribution. In effect it is a recipe
for less human welfare, less good for the great
-
est number.
For those who remain sceptical as to the
nature of the problems and indulgent of the
status quo for the comforts it brings them it is
salutary to dwell on the essence of where we are
now. When working out whether we live in a
socialist or capitalist epoch it is salutary to con-
sider the framing by Nobel Prize winning
economist Joseph Stiglitz of the bailout of the
rich to the detriment of the poor as “Socialism
for the rich and Capitalism for the poor”.
The likes of Leo Varadkar, grounded in the
ethos of the markets, think they pass for modern
when they say their overriding belief is in equal-
ity of opportunity, dwelling on the equality part
of the formula. But it is illusory: the substance
of equality of opportunity is opportunity, not
equality. It is in effect much more about freedom
than equality. Equality of opportunity has noth-
ing to offer women experiencing glass ceilings
or Travellers weighed down by generations of
their own underprivilege and others’ prejudice
or asylum-seekers stuck in direct provision,
unable to work. It is not enough to counter the
rampage of the richest in an endemically, struc
-
turally unequal society. Equality of opportunity
has nothing in its armoury to cancel out the ine
-
qualities of history which ever militate against
the weakest.
Milton Friedman claimed, no doubt with Var
-
adkar, that the society that puts equality before
freedom will end up with neither. In fact the soci-
ety that puts freedom, or its correlative equality
of opportunity, before equality ends up with pre
-
cisely what globalised capitalism has yielded
the last generation: Cascading inequality, intol-
erance, xenophobia; and ignorance and the rise
of its agenda.
Enda Kenny was no ideologue; he became an
agent of austerity but, crucially, it was never
clear what he would have done in better eco
-
nomic circumstances. The evidence suggests he
was a pragmatist with a Centre-Right bent.
Varadkar is an ideologue less likely to embrace
the pragmatic. He ideologises for the precarious
and dangerous status quo which privileges the
wealthy and disdains the disadvantaged. He will
be out of kilter with the electorate that will deter-
mine more of his fate than the Fine Gael party:
the Irish people. As we emerge from depression
and austerity, Neoliberalism, especially in the
hands of one as politically adroit and shiny as
Varadkar, is a retrograde anachronism.
David Langwallner is Professor of Law in the
American University, Prague and a practising
barrister; Ben Harper is a Prague-based writer.
Naomi Klein quotes
Hayek’s mate Milton
Friedman: “only a
crisis - actual or
perceived - produces
real change”
OPINION
Marketisation of human activity
June 2017 2 7
Dec/Jan 2017 4 7
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