Perhaps I am within a rare category of people who believe that ‘neoliberalism’ has created some positive outcomes for society. I will use a definition of neo-liberalism which is summed up best by the economist Fredrich von Hayek of the Austrian school. His ideology and that of the 1980s mainstream was to abandon Keysianism of the post war era which preached the economics of maximum supply and output through high government taxation and spending.
This spiralled out of control in the 1970s, contributed massively to the environmental collapse and created inflation in many oil hungry nations such as our own (“Stagflation”). The total by-products of this ideology are many and go beyond this one post, but I will make an observation on what I think it has done to politics, particularly in our own corner of the world.
The abolition of the ‘post war settlement’ in the 1980s led to an explosion of financialization in the economy. The government subscribed to the ‘monetarist’ theories of Milton Friedman who believed in a laissez-faire approach on the fiscal side of the economy but an interventionist one using the monetary levers of the state. In short the money supply itself, this is what ‘central banking’ is in a nutshell and it is why in the 2008 crash they printed over $6 Trillion of new money through quantitative easing (US figures) and pushed democratically elected governments to make their credit worthiness higher to stave off any chance of default on sovereign debt through ‘austerity.’
This spurred a short reign of the ‘technocrats’ who were mostly of banking and economics training. In Italy one of them even became prime minister, in Ireland the ‘troika’ (representatives of the IMF, ECB and EU commission) flew in to institute a similar programme. In essence they preached an ideology that was ultra-orthodox in its neoliberal approach. They told us that only through market confidence, cutting public services to reduce fiscal deficits and using public borrowing power to re-capitalise private banks could we return to normalcy.
The only error that has now haunted them in the vein of ‘populism’ was their rank arrogance in believing there was no alternative. It is this form of cold rationality that led to the creation of the workhouses in the nineteenth century as the worst excesses of a rampant free market rode roughshod over the urban working classes in Britain and Ireland.
I believe that this technocratic rationalism has blurred any concept of political choice and has in effect poisoned political discourse. This is why populism continues to take hold and why the internet runs wild with conspiracy theories about economic inequality being part of some worldwide elitist conspiracy, rather than it simply being a perverse outcome of an imperfect system.
In Northern Ireland politics, with our legalistic Assembly institutions and our ‘arm’s length bodies’ we also repeatedly fall into the trap that policy isn’t about choice. Policy should be evidence led, it should engage with stakeholders, but it will invariably have positive and negative outcomes – that is what makes it a choice. This is why I will continue to support policy causes I think are right and which I can see having the greatest effect on our collective wellbeing.
Jay is a Derry native now living in south Antrim and working in Belfast. His writing spans Law, Economics and International relations.
*He writes in a strictly personal capacity*
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