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
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Could Jeremy Corbyn still be excluded from the leadership race? The High Court will rule today

Labour donor Michael Foster has applied for a judgement. 

If you thought Labour's National Executive Committee's decision to let Jeremy Corbyn automatically run again for leader was the end of it, think again. 

Today, the High Court will decide whether the NEC made the right judgement - or if Corbyn should have been forced to seek nominations from 51 MPs, which would effectively block him from the ballot.

The legal challenge is brought by Michael Foster, a Labour donor and former parliamentary candidate. Corbyn is listed as one of the defendants.

Before the NEC decision, both Corbyn's team and the rebel MPs sought legal advice.

Foster has maintained he is simply seeking the views of experts. 

Nevertheless, he has clashed with Corbyn before. He heckled the Labour leader, whose party has been racked with anti-Semitism scandals, at a Labour Friends of Israel event in September 2015, where he demanded: "Say the word Israel."

But should the judge decide in favour of Foster, would the Labour leadership challenge really be over?

Dr Peter Catterall, a reader in history at Westminster University and a specialist in opposition studies, doesn't think so. He said: "The Labour party is a private institution, so unless they are actually breaking the law, it seems to me it is about how you interpret the rules of the party."

Corbyn's bid to be personally mentioned on the ballot paper was a smart move, he said, and the High Court's decision is unlikely to heal wounds.

 "You have to ask yourself, what is the point of doing this? What does success look like?" he said. "Will it simply reinforce the idea that Mr Corbyn is being made a martyr by people who are out to get him?"