The slow death of neoliberalism

Would Hayek like minimum pricing for alcohol? No.

Consider the following developments in UK policy. Last year, Britain’s Office for National Statistics published its first ever set of ‘national wellbeing’ indicators, which were based on surveys of how satisfied people felt with their lives. Next year, it will be illegal to sell a bottle of wine in Scotland for less than £4.69. Meanwhile, in the face of prolonged economic stagnation, welfare claimants and young people are being urged or forced to work for free in order to develop the mindset and motivation to render them employable in the future. 

None of these examples alone seems especially significant. Taking them together, however, we can begin to trace the outline of a subtly new way of conceiving of economic activity, one that is exerting a growing influence among policy-makers in Britain. Crucially, for good and for ill, the authority of monetary prices as authorititative indicators of value is diminishing. Formerly, society’s progress was measured in terms of GDP, a bottle of wine was worth whatever the market would allow and work was remunerated in wages. Now, the rise of psychological perspectives on the economy is providing a new framework. As the sciences of wellbeing and economic behaviour grow more sophisticated, the potential arises for a new way of understanding value. And as we witness this framework on the rise, so we may be witnessing the slow death of the paradigm known as neoliberalism. . .

The prolonged economic slow-down of the 1970s created a thirst for new policy ideas, which the neoliberals cleverly satisfied. Although the purity of Hayek’s vision was inevitably polluted by the messy reality of politics, the new era ushered in by Margaret Thatcher and Ronald Reagan treated free markets, governed by the magic of price, as the basis for the moral and economic logic of state and society. At the heart of the neoliberal era were two fundamental assumptions. Firstly, individuals were the best judge of their own tastes and welfare, not experts. Secondly, the price mechanism of the market could be trusted to adjudicate between the competing ideas, values and preferences that exist in modern societies. The state, by contrast, could not.

By this definition, a society in which it is illegal to sell a bottle of wine for £4.50, no matter how profitable it is to do so nor how much demand there is for it, is no longer a neoliberal society. A different set of assumptions is built into such a policy. Evidently it is no longer assumed that individuals are necessarily the best judge of their own welfare. And although a price still exists, it is no longer set only by the magical forces of supply and demand. Expert decree now has a place. To put this another way, policy-makers are recognising that there is a limit to how much consumer freedom we can cope with.

This is an extract from a piece published today in Aeon Magazine. Read the whole piece online.

Friedrich Hayek. Photograph: Getty Images
Photo: Getty Images
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What can you do about Europe's refugee crisis?

The death of a three-year-old boy on a beach in Europe has stirred Britain's conscience. What can you do to help stop the deaths?

The ongoing refugee crisis in the Mediterranean dominates this morning’s front pages. Photographs of the body of a small boy, Aylan Kurdi, who washed up on a beach, have stunned many into calling for action to help those fleeing persecution and conflict, both through offering shelter and in tackling the problem at root. 

The deaths are the result of ongoing turmoil in Syria and its surrounding countries, forcing people to cross the Med in makeshift boats – for the most part, those boats are anything from DIY rafts to glorified lilos.

What can you do about it?
Firstly, don’t despair. Don’t let the near-silence of David Cameron – usually, if nothing else, a depressingly good barometer of public sentiment – fool you into thinking that the British people is uniformly against taking more refugees. (I say “more” although “some” would be a better word – Britain has resettled just 216 Syrian refugees since the war there began.)

A survey by the political scientist Rob Ford in March found a clear majority – 47 per cent to 24 per cent – in favour of taking more refugees. Along with Maria Sobolewska, Ford has set up a Facebook group coordinating the various humanitarian efforts and campaigns to do more for Britain’s refugees, which you can join here.

Save the Children – whose campaign director, Kirsty McNeill, has written for the Staggers before on the causes of the crisis – have a petition that you can sign here, and the charity will be contacting signatories to do more over the coming days. Or take part in Refugee Action's 2,000 Flowers campaign: all you need is a camera-phone.

You can also give - to the UN's refugee agency here, and to MOAS (Migrant Offshore Aid Station), or to the Red Cross.

And a government petition, which you can sign here, could get the death toll debated in Parliament. 

 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.