NEVER LET A SERIOUS CRISIS GO TO WASTE
by Philip Mirowski
ISBN 13 978 1 78168 079 7 Verso
Reviewed by Alan Dent
Proust wrote: “Reality does not penetrate to the sphere in which our beliefs are held.” The belief under scrutiny in this book goes by the name of neoliberalism. Mirowski is exercised by the fact that though this doctrine was responsible for the American sub-prime mortgage crisis and the subsequent catastrophe, it coolly reigns among economists and their dupes, the public. Plus ça change. Mirowski points out how neoliberals commit the cardinal intellectual sin of denying reality when it doesn’t fit their theories; this is what ethnomethodologists call, I believe, the documentary method. There’s a nice example in Leslie Brothers’ Friday’s Footprint: How Society Shapes The Human Mind: an anthropologist among a pre-historic tribe takes a walk in the moonlight. Next morning, all the villagers shun him. “What’s up ?” he asks his interpreter. “Well, you went out under a full moon and everyone knows if you do that you die.” “Oh,” scoffs the scientist, “that’s mumbo-jumbo, here I am alive and well.” “Ah yes,” replies the interpreter, “but only because our witch doctor went out before you with his amulet and followed exactly the same path.” Such is the human mind, among pre-historic tribes and in contemporary America. What would be truly surprising would be economists ditching their theories when they result in disaster or fail to solve the problems they are claimed to cure. Of course, we must avoid the clichéd dismissal of economists as glib apologists for class interests, and Mirowski is right that lack of science isn’t the problem: he points out that physicists in need of a job have rushed into the “profession” and were responsible for some of the more byzantine financial products of the pre-crisis years. If you want to understand how people behave towards one another, don’t read economists, read Proust, Flaubert, Eugene O’Neill and Shakespeare. Technical economics is indispensable, but it doesn’t tell you why King Lear gave away his land. In the case of neoliberalism, however, we have something which goes far beyond technical economics. Neoliberalism is a pre-eminently political doctrine trying desperately but hopelessly to convince itself it’s a pure science. Its pseudo-intellectualism is risible. Consider this from their high-priest Von Hayek: “It is because we normally do not know who knows best that we leave the decision to a process we do not control.” On the contrary, we normally do know who knows best. In almost every context it will be apparent. If you’ve got toothache you don’t go to the plumber. If you want England to win the World Cup, you don’t let Larry Summers pick the team. People are extremely good at recognising who in any group is best at a particular skill. Von Hayek commits the age-old sin of asserting what he’s trying to prove. Neoliberalism is a farrago of this kind of false logic. Its essential contention is that only the market has wisdom and the wisdom of the market never fails. Don’t laugh. Mirowski goes into great detail as to how the disaster of 2008 was engineered by neoliberal thinking. The failure of the market was absolute. Without deliberate intervention and injection of truly astronomical amounts of public money, the world financial system would have failed. Long live Gordon Brown. Long live the Welfare State. Yet don’t be fooled into thinking the neoliberals are old-fashioned laissez-faire capitalists; on the contrary, their aim is to control the State and to use it to promote a market which must be permitted to make all decisions. The elementary failure of logic here doesn’t deter them: wanting to control the State as a means of making the decisions which don’t need to be made because the market is potent to make all decisions, is a consistent position for neoliberals.
The neoliberal political project began in the late 1940s with the foundation of the Mont Pélerin Society, a kind of amalgam of the Masons, the Knights of St Columba, the Policy Studies Institute and the Mafia. Thoroughly undemocratic, open solely to those with the requisite right-wing prejudices, invisible to the general public it is a sort of Socialist Workers’ Party of the right, except it has access to those in power and exerts extraordinary influence over policy across the globe. Mirowski frequently points to the left’s impotence in comparison to this behind-closed-doors cabal of market fundamentalists; he points to their conviction that the epistemological battle is where the struggle is won or lost and bemoans the failure of the left to mount a countervailing intellectual campaign. It’s a convincing position, but we wouldn’t want an MPS of the left. What would it be called ? The Highgate Cemetery Society ? The success of the MPS and of the associated Neoliberal Thought Collective is a function of its secrecy and lack of democracy; a small group of ideological zealots uses its academic pre-eminence to insinuate into the minds of policymakers (among others) a set of ideas which amount to a faith and which can never be put in question either through intellectual debate or democratic contest. They win out, of course, because those they seek to influence are eager dupes: telling the rich and powerful it’s in the nature of things they should have wealth and power is unlikely to raise much opposition. Mirowski is perhaps a little too surprised by their victories but he’s correct that the left has been flat-footed by their sprint to the margins on the right. He is excellent on the suborning of the economics profession by big capital: take it for granted when you hear an “independent” economist on the radio or TV or read one in your paper, they are in the pay of some multi-billion corporation. It’s as if the unions were bribing every economist in the country to argue for workers’ co-ops, a maximum wage and democracy in the workplace. If these ideas were aired in the media by so-called experts every day, would anyone be surprised if people began to take them for granted ?
Mirowski is a Professor of Economics and this work is replete with economic detail. It isn’t, however, essentially about economics; its question is: how did the neoliberal view of things manage to survive the mauling of the financial crisis of 2008 and after? As such, it’s a book about epistemology; but it’s really about politics. It’s about something very simple and commonplace: people will say anything to defend an emotional position. Mirowski’s book is built on at least a slight surprise about the endurance of neoliberalism. Proust is not in the least surprised that people’s beliefs are held apart from reality. Novelists, at least great ones, are of course superior to economists. There is an implicit assumption is Mirowski’s stance that intellectuals who claim to be rational should cede their theories when they are shown to be ill-founded; but Einstein baulked at quantum mechanics. Even he was, to an extent, defending an emotional position. Intellectual theorists tend to overvalue the objectivity of theory, while novelists, dealing not in theory but in practice, know how flimsy objectivity turns out to be when people’s cherished beliefs are under threat. Karl Ove Knausgaard makes this point in the second volume of his six-part My Struggle (the title is ironic): life is not a matter of theory, it’s practical. This isn’t the place to examine the relationship between theory and practice, but it’s worth saying that an astute novelist or playwright wouldn’t be at all surprised that the very ideas which brought us to the brink are those that have been credited with rescuing us; self-deception is to the novelist as clay to the potter. So the book has a slightly pushing-water-uphill feel about it in that it’s burdened with a question it makes heavy when in fact it’s a light as thought itself: neoliberalism has prevailed because it’s the doctrine of the rich. It doesn’t address reality, it just reassures them. It had to be suspended to rescue their system, but such minor details don’t shake the faith of billionaires.
Economics, dare I say, is akin to theology: if you don’t believe in God, theology is meaningless, and if you don’t believe in capitalism, the same is true of economics. Theology may have some felicitous spin-offs, but they can exist without the scaffolding. The same is true of economics. It came into existence with capitalism and it will die with it. Politics, however, is always with us. The most interesting reference in this book, in my view, is to Carl Schmitt, Hitler’s jurist. Schmitt believed in a strong State. So did Hayek who depended on the German for much of his fundamental thinking. A powerful State is deemed to be the defence against democracy which is dangerous because it allows the masses to intervene in the market and thereby tends to unfreedom. The entrepreneur must control the State so the market can go about its business untroubled by the foolish wishes of the people. This is the kind of miserable tosh that passes for thinking in Hayek. It’s just a high-falutin’ way of saying the rich must control the levers of the power and the rest do as they’re told: “Man in a complex society can have no choice but between adjusting himself to what to him must seem the blind forces of the social process and obeying the orders of a superior.” There is so much dishonesty and false thinking packed into that sentence it would take a whole book to unpick it. That a man who could pen such sub-graduate twaddle should have received the Nobel Prize only makes the matter more risible. Suffice it to say social forces don’t appear blind if people are given some control over them, especially in the workplace, and the idea of obeying the orders of a superior belongs in the Middle Ages. The influence of Schmitt over neoliberalism’s key thinker gives the game away: their project is totalitarian (Hayek, in a typical semantic sleight-of hand, claims liberalism is the opposite of totalitarianism and authoritarianism the opposite of democracy, so democratic governments can be totalitarian and authoritarian ones, liberal). As I write, the news is revealed that Mrs Thatcher contemplated the use of troops to distribute goods and keep services running during the miners’ strike of 1984-85. Curious that a woman who claimed to believe in the omnipotence and omniscience of the market, which of course implies a free market in labour, saw enforced State labour as a solution to industrial conflict. Thatcher loudly proclaimed the rolling back of the State while using and extending its powers to serve the interest of the rich. Time and again we return to the witch doctor’s amulet. Time and again theory is trumped by unacknowledged meta-theory which defends an emotional position.
Schmitt was a straightforward enemy of democracy. So was Hayek and so are neoliberals. Vital to the assault on democracy is what Christopher Lasch called “the spread of stupefaction”. Mirowski makes clear just how important it is to the neoliberal project that the majority should be held in a state of ignorance. The notion of educated, informed, autonomous citizens empowered to decide how the societies they live in shall be run is anathema to neoliberals. If people are allowed to vote, suffrage must ensure the election of people who will not put the market in question; and if the market knows everything and makes the best decisions, why should individuals need to be educated or capable of choice ? Hence the degradation of education to a system of exam factories, brilliant at producing results, hopeless at forming minds. Hence also the vigorous application of the “double truth” which is fundamental to neoliberal practice: this is akin to Democratic Centralism and is just as vicious and hypocritical; the elite knows the truth – for example, educating young people to think for themselves is dangerous, so the school system must be controlled and measured; teachers must be reduced to operatives who deliver what is decided elsewhere; children must be encouraged to display their grades and not their discoveries (were they to make any that would be subversive); the pursuit of certificates must trounce the pursuit of understanding- but the public is told the opposite: we want to improve and modernise schools, kick out incompetent teachers, push up standards, dispense with trendy ideas and get back to basics; and the biggest lie of all: we care especially about the education of the disadvantaged. Neoliberals call this “double-truth” the rest of us call it lying. Yet the extent to which neoliberal ideas have permeated is stunning; the Labour Party gleefully embraces the Academy School programme without a glimmer of recognition that this is about privatising learning and creating an educational market, which like all markets is bound to favour the rich. Even a moderately intelligent moderately left-of-centre social democratic party would have the wit to see Academies as reactionary, regressive, divisive and ultimately authoritarian.
The world is dominated by neoliberal thinking. This is disastrous in many ways, not least for the planet: neoliberals think CO2 is a socialist conspiracy and, of course, their solution to global warming is to create a market in the very gases which threaten to turn London into a swamp. Mirowski is very good on their dumb response to global warming. His book is a clear warning about the danger to democracy too. If neoliberalism isn’t scuppered we will all end up being ruled by the likes of Putin or the corrupt ideologues of China. In fact, you could say China offers an ideal model to neoliberals: a market under the strict control of a tiny, authoritarian elite which rules by fear and brooks no dissent or discussion. Yet, if the financial crisis wasn’t enough to unseat the neoliberals, what will ? Mirowski has some disdain for the left’s failure to elaborate a world view which can contest the neoliberal orthodoxy. At the heart of that world view surely we need the idea of a democratic workplace ? Shouldn’t we also be encouraging the spread of cooperatives in small and medium sized enterprises ? But Mirowski is right: intellectuals on the left need to offer a compelling counter-theory. There are small signs. Students in Manchester demand they should be taught a full range of theory on their economics course, including Keynes and Marx. Perhaps things are turning. Yet we are in serious peril. Mirowski has no comfort for those who think Occupy might offer a way forward. His argument is sound, yet what Occupy has permitted us to glimpse is that hierarchy and bureaucracy are essentially conservative; perhaps the future can create movements which are horizontal, fluid, non-bureaucratic in which people come together to fight a cause without ever sinking their identity in a Party; perhaps we can combine this with a hard-headed, hard-won view of how things need to change and a resistance to being suborned by the very forces we oppose; perhaps we can create movements which carry in their form the respect for individual liberty, commitment to non-violence, egalitarianism and imagination which we would like to be the bedrock of society. Perhaps, but first of all we must destroy the neoliberal consensus and Mirowski has made an excellent contribution to that.
Finally, a quibble. Mirowski is an academic and we all understand they are expected to write in a particular way; but it’s always best to express yourself in the clearest and simplest language. Sentences like this: “Apophenia cascades at epidemic proportions when the sky seems to be falling” sent me to the dictionary. Apophenia ? Isn’t that just a dictionary word ? Couldn’t the idea in this sentence be expressed without it ? I began with Proust. I’ll end with Maupassant who is reckoned to have made use of only ten per cent of French vocabulary; his writing is beautifully clear and precise. Perhaps Mirowski could take a break from all those desiccated economic papers and read Boule de Suif or Une Vie ?