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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Michelle Obama's powerful speech demolishes Donald Trump without even mentioning his name

This is one speech he won't be able to steal. 

After her stirring speech at the Democratic Convention, Michelle Obama can be sure of one thing - Melania Trump won't be able to copy it.

Obama, like her husband, is a fine orator, so much so that the wife of Republican nominee Donald Trump was widely suspected of borrowing from her speeches.

But those who crowded into the audience on Monday night could be sure of the real deal. 

Obama did not mention Trump by name, but in an implicit criticism of him, she spoke passionately about the responsibilities of the Presidency, and how the United States had moved on since the days of slavery and oppression. 

The Obamas knew their kids were watching them, she said: "We know that our words and actions matter." 

And in a reference to Trump's Twitter obsession, she declared: The issues a President faces "cannot be boiled down to 140 characters".

Obama, whose husband fought a fierce campaign against Hillary Clinton to clinch the Democratic nomination in 2008, now heaped praise on his former rival. 

Clinton was a "true public servant" who "did not pack up and go home" after losing to Obama in 2008, she said. She had carried out "relentless, thankless work" to actually make a difference in children's lives. 

And she reminded the audience the Presidential election was not just about left-right politics: "It is about who will have the power to shape our children for the next four or eight years of their lives."

But the African-American First Lady's most powerful statements were a reflection on race, gender and social mobility - issues far outside of Trump territory. 

In a reference to Clinton's 2008 concession speech, where she talked of making "cracks in the glass ceiling", Obama declared: 

"That is the story of this country, the story that has brought me to this stage tonight, the story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving and hoping and doing what needed to be done so that today I wake up every morning in a house that was built by slaves.

"And I watch my daughters, two beautiful, intelligent, black young women playing with their dogs on the White House lawn.

"And because of Hillary Clinton, my daughters and all our sons and daughters now take for granted that a woman can be president of the United States."

She also recalled the little black boy who made headlines around the world when he visited the White House and asked the President: "Is my hair like yours?"

Obama's calm but intense delivery brought the packed arena to its feet, and earned her several standing ovations. Bill Clinton, former President and husband of Hillary, was seen to say "wow" from his place in the audience.

She ended with a final dig at Trump's slogan "Make America Great Again". Obama told the crowd:

"Don’t let anyone ever tell you that this country isn’t great, that somehow we need to make it great again. 

"Because this right now is the greatest country on earth."

Michelle Obama's speech: The best quotes

On Obama's 2008 victory

I will never forget that winter morning as I watched our girls, just 7 and 10 years old, pile into those black SUVs with all those big men with guns.

And I saw their little faces pressed up against the window, and the only thing I could think was, what have we done?

On bringing up kids

We insist that the hateful language they hear from public figures on TV does not represent the true spirit of this country.

How we explain that when someone is cruel or acts like a bully, you don’t stoop to their level. No, our motto is, when they go low, we go high.

On Hillary Clinton

What I admire most about Hillary is that she never buckles under pressure. She never takes the easy way out. And Hillary Clinton has never quit on anything in her life.

On who shouldn't be President

When you have the nuclear codes at your fingertips and the military in your command, you can’t make snap decisions. You can’t have a thin skin or a tendency to lash out. You need to be steady and measured and well-informed.

On equality

I wake up every morning in a house that was built by slaves. And I watch my daughters, two beautiful, intelligent, black young women playing with their dogs on the White House lawn.

And because of Hillary Clinton, my daughters and all our sons and daughters now take for granted that a woman can be president of the United States.

On the US

Don’t let anyone ever tell you that this country isn’t great, that somehow we need to make it great again. Because this right now is the greatest country on earth.

You can read a copy of the full speech here.