Robert W. McChesney
Monthly Review, April 1, 1999
NEOLIBERALISM is the defining political economic paradigm of our time – it refers to the policies and processes whereby a relative handful of private interests are permitted to control as much as possible of social life in order to maximize their personal profit. Associated initially with Reagan and Thatcher, neoliberalism has for the past two decades been the dominant global political economic trend adopted by political parties of the center, much of the traditional left, and the right. These parties and the policies they enact represent the immediate interests of extremely wealthy investors and less than one thousand large corporations.
Aside from some academics and members of the business community, the term neoliberalism is largely unknown and unused by the public at large, especially in the United States. There, to the contrary, neoliberal initiatives are characterized as free market policies that encourage private enterprise and consumer choice, reward personal responsibility and entrepreneurial initiative, and undermine the dead hand of the incompetent, bureaucratic, and parasitic government, which can never do good (even when well intentioned, which it rarely is). A generation of corporate-financed public relations efforts has given these terms and ideas a near-sacred aura. As a result, these phrases and the claims they imply rarely require empirical defense, and are invoked to rationalize anything from lowering taxes on the wealthy and scrapping environmental regulations to dismantling public education and social welfare programs. Indeed, any activity that might interfere with corporate domination of society is automatically suspect because it would impede the workings of the free market, which is advanced as the only rational, fair, and democratic allocator of goods and services. At their most eloquent, proponents of neoliberalism sound as if they are doing poor people, the environment, and everybody else a tremendous service as they enact policies on behalf of the wealthy few.
The economic consequences of these policies have been the same just about everywhere, and exactly what one would expect: a massive increase in social and economic inequality, a marked increase in severe deprivation for the poorest nations and peoples of the world, a disastrous global environment, an unstable global economy, and an unprecedented bonanza for the wealthy. Confronted with these facts, defenders of the neoliberal order claim that the spoils of the good life will invariably spread to the broad mass of the population – as long as the neoliberal policies that exacerbated these problems are not interfered with by anyone!
In the end, proponents of neoliberalism cannot and do not offer an empirical defense for the world they are making. To the contrary, they offer – no, demand – a religious faith in the infallibility of the unregulated market, drawing upon nineteenth century theories that have little connection to the actual world. The ultimate trump card for the defenders of neoliberalism, however, is that there is no alternative. Communist societies, social democracies, and even modest social welfare states like the United States have all failed, the neoliberals proclaim, and their citizens have accepted neoliberalism as the only feasible course. It may well be imperfect, but it is the only economic system possible.
Earlier in the twentieth century some critics called fascism “capitalism with the gloves off,” meaning that fascism was pure capitalism without democratic rights and organizations. In fact, we know that fascism is vastly more complex than that. Neoliberalism, on the other hand, is indeed “capitalism with the gloves off.” It represents an era in which business forces are stronger and more aggressive, and face less organized opposition than ever before. In this political climate they attempt to codify their political power and enact their vision on every possible front. As a result, business is increasingly difficult to challenge, and civil society (nonmarket, noncommercial, and democratic forces) barely exists at all.
It is precisely in its oppression of nonmarket forces that we see how neoliberalism operates – not only as an economic system, but as a political and cultural system as well. Here the differences with fascism, with its contempt for formal democracy and highly mobilized social movements based upon racism and nationalism, are striking. Neoliberalism works best when there is formal electoral democracy, but when the population is diverted from the information, access, and public forums necessary for meaningful participation in decision-making. As neoliberal guru Milton Friedman put it in Capitalism and Freedom, because profitmaking is the essence of democracy, any government that pursues antimarket policies is being antidemocratic, no matter how much informed popular support they might enjoy. Therefore it is best to restrict governments to the job of protecting private property and enforcing contracts, and to limit political debate to minor issues. (The real matters of resource production and distribution and social organization should be determined by market forces.)
Equipped with this perverse understanding of democracy, neoliberals like Friedman had no qualms over the military overthrow of Chile’s democratically elected Allende government in 1973, because Allende was interfering with business control of Chilean society. After fifteen years of often brutal and savage dictatorship – all in the name of the democratic free market – formal democracy was restored in 1989 with a constitution that made it vastly more difficult (if not impossible) for the citizenry to challenge the business-military domination of Chilean society. That is neoliberal democracy in a nutshell: trivial debate over minor issues by parties that basically pursue the same pro-business policies regardless of formal differences and campaign debate. Democracy is permissible as long as the control of business is off-limits to popular deliberation or change; i.e., so long as it isn’t democracy.
Neoliberal democracy therefore has an important and necessary byproduct – a depoliticized citizenry marked by apathy and cynicism. If electoral democracy affects little of social life, it is irrational to devote much attention to it; in the United States, the spawning ground of neoliberal democracy, voter turnout in the 1998 congressional elections was a record low, with just one-third of eligible voters going to the polls. Although occasionally generating concern from those established parties like the U.S. Democratic Party that tend to attract the votes of the dispossessed, low voter turnout tends to be accepted and encouraged by the powers that be as a very good thing since nonvoters are, not surprisingly, disproportionately found among the poor and working class. Policies that quickly could increase voter interest and participation rates are stymied before ever getting into the public arena. In the United States, for example, the two main business-dominated parties, with the support of the corporate community, have refused to reform laws – some of which they put on the boos – making it virtually impossible to create new political parties (that might appeal to non-business interests) and let them be effective. Although there is marked and frequently observed dissatisfaction with the Republicans and Democrats, electoral politics is one area where notions of competition and free choice have little meaning. In some respects, the caliber of debate and choice in neoliberal elections tends to be closer to that of the one-party communist state than that of a genuine democracy.
But this barely indicates neoliberalism’s pernicious implications for a civic-centered political culture. On one hand, the social inequality generated by neoliberal policies undermines any effort to realize the legal equality necessary to make democracy credible. Large corporations have resources to influence media and overwhelm the political process, and do so accordingly. In U.S. electoral politics, for just one example, the richest one-quarter of one percent of Americans make 80 percent of all individual political contributions and corporations outspend labor by a margin of ten to one. Under neoliberalism this all makes sense; elections then reflect market principles, with contributions being equated with investments. As a result, it reinforces the irrelevance of electoral politics to most people and assures the maintenance of unquestioned corporate rule.
On the other hand, to be effective, democracy requires that people feel a connection to their fellow citizens, and that this connection manifests itself though a variety of nonmarket organizations and institutions. A vibrant political culture needs community groups, libraries, public schools, neighborhood organizations, cooperatives, public meeting places, voluntary associations, and trade unions to provide ways for citizens to meet, communicate, and interact with their fellow citizens. Neoliberal democracy, with its notion of the market uber alles, takes dead aim at this sector. Instead of citizens, it produces consumers. Instead of communities, it produces shopping malls. The net result is an atomized society of disengaged individuals who feel demoralized and socially powerless.
In sum, neoliberalism is the immediate and foremost enemy of genuine participatory democracy, not just in the United States but across the planet, and will be for the foreseeable future. It is fitting that Noam Chomsky is the leading intellectual figure in the world today in the battle for democracy and against neoliberalism. In the 1960s, Chomsky was a prominent U.S. critic of the Vietnam war and, more broadly, became perhaps the most trenchant analyst of the ways U.S. foreign policy undermines democracy, quashes human rights, and promotes the interests of the wealthy few. In the 1970s, Chomsky (along with his co-author Edward S. Herman) began researching the ways the U.S. news media serve elite interests and undermine the capacity of the citizenry to actually rule their lives in a democratic fashion. Their 1988 book, Manufacturing Consent, remains the starting point for any serious inquiry into news media performance.
Throughout these years Chomsky, who could be characterized as an anarchist or, perhaps more accurately, a libertarian socialist, was a vocal, principled, and consistent democratic opponent and critic of Communist and Leninist political states and parties. He educated countless people, including myself, that democracy was a non-negotiable cornerstone of any postcapitalist society worth living in or fighting for. At the same time, he has demonstrated the absurdity of equating capitalism with democracy, or thinking that capitalist societies, even under the best of circumstances, will ever open access to information or decision-making beyond the most narrow and controlled possibilities. I doubt any author, aside from perhaps George Orwell, has approached Chomsky in systematically skewering the hypocrisy of rulers and ideologues in both Communist and capitalist societies as they claim that theirs is the only form of true democracy available to humanity.
In the 1990s, all these strands of Chomsky’s political work – from anti-imperialism and critical media analysis to writings on democracy and the labor movement – have come together, culminating in work like Profit Over People, about democracy and the neoliberal threat. Chomsky has done much to reinvigorate an understanding of the social requirements for democracy, drawing upon the ancient Greeks as well as the leading thinkers of democratic revolutions in the seventeenth and eighteenth centuries. As he makes clear, it is impossible to be a proponent of participatory democracy and at the same time a champion of capitalism or any other class-divided society. In assessing the real historical struggles for democracy, Chomsky also reveals that neoliberalism is hardly a new thing; it is merely the current version of the battle for the wealthy few to circumscribe the political rights and civic powers of the many.
Chomsky may also be the leading critic of the mythology of the natural “free” market, that cheery hymn that is pounded into our heads about how the economy is competitive, rational, efficient, and fair. As Chomsky points out, markets are almost never competitive. Most of the economy is dominated by massive corporations with tremendous control over their markets and which therefore face precious little competition of the sort described in economics textbooks and politicians’ speeches. Moreover, corporations themselves are effectively totalitarian organizations, operating along nondemocratic lines. That our economy is centered around such institutions severely compromises our ability to have a democratic society.
The mythology of the free market also submits that governments are inefficient institutions that should be limited, so as not to hurt the magic of the natural laissez faire market. In fact, as Chomsky emphasizes, governments are central to the modern capitalist system. They lavishly subsidize corporations and work to advance corporate interests on numerous fronts. The same corporations that exult in neoliberal ideology are in fact often hypocritical: they want and expect governments to funnel tax dollars to them, and to protect their markets from competition for them, but they want to be assured that governments will not tax them or work supportively on behalf of non-business interests, especially the poor and working class. Governments are bigger than ever, but under neoliberalism they have far less pretense to addressing non-corporate interests.
Nowhere is the centrality of governments and policymaking more apparent than in the emergence of the global market economy. What is presented by pro-business ideologues as the natural expansion of free markets across borders is, in fact, quite the opposite. Globalization is the result of powerful governments, especially that of the United States, pushing trade deals and other accords down the throats of the world’s people to make it easier for corporations and the wealthy to dominate the economies of nations around the world without having obligations to the peoples of those nations. Nowhere is the process more apparent than in the creation of the World Trade Organization in the early 1990s and, now, in the secret deliberations on behalf of the Multilateral Agreement on Investment (MAI).
Indeed, it is the inability to have honest and candid discussions and debates about neoliberalism in the United States and elsewhere that is one of its most striking features. Chomsky’s critique of the neoliberal order is effectively off-limits to mainstream analysis despite its empirical strength and because of its commitment to democratic values. Here, Chomsky’s analysis of the doctrinal system in capitalist democracies is useful. The corporate news media, the PR industry, the academic ideologues, and the intellectual culture writ large play the central role of providing the “necessary illusions” to make this unpalatable situation appear rational, benevolent, and necessary (if not necessarily desirable). As Chomsky hastens to point out, this is no formal conspiracy by powerful interests; it doesn’t have to be. Through a variety of institutional mechanisms, signals are sent to intellectuals, pundits, and journalists, pushing toward seeing the status quo as the best of all possible worlds, and away from challenging those who benefit from that status quo. Chomsky’s work is a direct call for democratic activists to remake our media system so it can be opened up to anticorporate, antineoliberal perspectives and inquiry. It is also a challenge to all intellectuals, or at least those who express a commitment to democracy, to take a long, hard look in the mirror and to ask themselves in whose interests, and for what values, do they do their work.
Chomsky’s description of the neoliberal/corporate hold over our economy, polity, journalism, and culture is so powerful and overwhelming that for some readers it can produce a sense of resignation. In our demoralized political times, a few may go a step further and conclude that we are enmeshed in this regressive system because, alas, humanity is simply incapable of creating a more humane, egalitarian, and democratic social order.
In fact, Chomsky’s greatest contribution may well be his insistence upon the fundamental democratic inclinations of the world’s peoples, and the revolutionary potential implicit in those impulses. The best evidence of this possibility is the extent to which corporate forces go to prevent genuine political democracy from being established. The world’s rulers understand implicitly that theirs is a system established to suit the needs of the few, not the many, and that the many therefore cannot ever be permitted to question and alter corporate rule. Even in the hobbled democracies that do exist, the corporate community works incessantly to see that important issues like the MAI are never publicly debated. And the business community spends a fortune bankrolling a PR apparatus to convince Americans that this is the best of all possible worlds. The time to worry about the possibility of social change for the better, by this logic, will be when the corporate community abandons PR and buying elections, permits a representative media, and is comfortable establishing a genuinely egalitarian participatory democracy because it no longer fears the power of the many. But there is no reason to think that day will ever come.
Neoliberalism’s loudest message is that there is no alternative to the status quo, and that humanity has reached its highest level. Chomsky points out that there have been several other periods designated as the “end of history” in the past. In the 1920s and 1950s, for example, U.S. elites claimed that the system was working and that mass quiescence reflected widespread satisfaction with the status quo. Events shortly thereafter highlighted the silliness of those beliefs. I suspect that as soon as democratic forces record a few tangible victories the blood will return to their veins, and talk of no possible hope for change will go the same route as all previous elite fantasies about their glorious rule being enshrined for a millennium.
The notion that no superior alternative to the status quo exists is more farfetched today than ever, in this era when there are mind-boggling technologies for bettering the human condition. It is true that it remains unclear how we might establish a viable, free, and humane post-capitalist order; the very notion has a utopian air about it. But every advance in history, from ending slavery and establishing democracy to ending formal colonialism, has at some point had to conquer the notion that it was impossible to do because it had never been done before. As Chomsky points out, organized political activism is responsible for the degree of democracy we have today, for universal adult suffrage, for women’s rights, for trade unions, for civil rights, for the freedoms we do enjoy. Even if the notion of a post-capitalist society seems unattainable, we know that human political activity can make the world we live in vastly more humane. As we get to that point, perhaps we will again be able to think in terms of building a political economy based on principles of cooperation, equality, self-government, and individual freedom.
Until then, the struggle for social change is not a hypothetical issue. The current neoliberal order has generated massive political and economic crises from east Asia to eastern Europe and Latin America. The quality of life in the developed nations of Europe, Japan, and North America is fragile and the societies are in considerable turmoil. Tremendous upheaval is in the cards for the coming years and decades. There is considerable doubt about the outcome of that upheaval, however, and little reason to think it will lead automatically to a democratic and humane resolution. That will be determined by how we, the people, organize, respond, and act. As Chomsky says, if you act like there is no possibility of change for the better, you guarantee that there will be no change for the better. The choice is ours, the choice is yours.
ROBERT McCHESNEY, a leading activist in the politics of mass communications, is the author of The Problem of the Media, and several other books examining the effect of concentrated media power in the modern world.