The rise of the Radical Right (Part Two): False economics

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In this second part of his three part series, Dr Geoff Davies looks at the causes of the dramatic political shift to the Right since the 1980s, along with its flimsy basis.


[Read Part One: A dramatic shift to the right]

[Read Part Three: Consequences and prospects]

There has been a dramatic shift to the political Right compared with the postwar decades, and what is now called Right is radical rather than conservative. The shift was driven substantially by a concerted long-term campaign by market fundamentalists. So-called balance now is well to the Right of Menzies.  Labor abandoned its constituency to join the Right.  Although the Right remains politically powerful, its policies have failed. Economically it achieved only mediocrity followed by disaster. Our social fabric, democratic processes, legal rights and human rights have all been weakened. The radical Right’s only future options are oblivion or authoritarian rule.


What has caused the dramatic political shift to the Right in Australia and elsewhere since around 1980?

The conventional answer would be that we all realised free markets really are the best organising principle for society. However, that does not explain the rise of xenophobia and racism and a pervasive unease in our societies — an unease that seems only to increase as our material wealth also, supposedly, increases. Nor is there any basis in performance or theory for the claimed superiority of free markets, although you’d never guess that from mainstream commentary.

It is not true that free markets have been economically successful. The actual record is of mediocrity leading to disaster. The disaster was the Global Financial Crisis that started in 2007 and is not over yet. It was a direct result of neoliberal deregulation of financial markets and it has visited immense harm on much of the world, with depression conditions existing in much of Europe and parts of the US. Even before the GFC, the neoliberal record of growth (2-4%), unemployment (5-7%) and inflation (2-3%) never matched the post-war decades, during which governments were much more involved in markets:  GDP growth 5.2%, unemployment 1.3%, inflation 3.3%.

So, the swing to the Right was not driven by the strength of the evidence. Three other factors can be found. First, simplistic ideas of supply and demand seem to make sense.  Second, an elaborate theory, dating from the late nineteenth century and called the neoclassical theory, purported to prove that free markets ensure the most efficient use of resources. Third, rich people like to be told the best thing they can do for the world is to make money as fast as they can. Put these factors together and you have the potential to powerfully advance the free-market idea.

Friedrich Hayek in 1947 founded the Mont Pelerin Society, dedicated to pushing free markets. The push gained momentum in the 1970s when they claimed the old Keynesian economics was discredited by the economic disruptions of the time, conveniently ignoring the dramatic effect of the OPEC oil embargoes. It culminated spectacularly in the elections of Margaret Thatcher and Ronald Reagan.

One should be suspicious of conspiracy theories, but it is easy to verify the existence of the Mont Pelerin Society and the fact that Thatcher’s heroes were Hayek and Milton Friedman, himself a disciple of Hayek. Reagan surely wouldn’t have understood much about free-market theory but, evidently, he sure liked the sound of it. Unfortunately, the neoclassical theory is based on absurd assumptions and its central prediction of equilibrium is plainly contradicted by financial market crashes and much other evidence as well. Simply put, it is pseudo-science. Nevertheless the confluence of conviction, simplistic arguments and money prevailed, and the free-market doctrine triumphed.

To find the source of the rise in unease and xenophobia we must dig a little deeper.

Social researcher Hugh Mackay has found that each of three generations of Australians feels insecure. Older Australians are unsettled by the direction of change, and they fear for the future of their grandchildren and for their own safety.  Baby boomers are unsettled by relentless change, and by the unexpected instability of their middle years. Younger people often feel alienated, depressed and unfocussed. So, people are actually fearful as a result of the rightward shift of thinking and policy.

Xenophobes and others I will call ‘reactionary’ are also clearly fearful — to the point of irrationality. For example, refugees arriving by boat pose only a minor challenge.  The few thousand annually are a tiny fraction, 1-2 per cent, of the 200,000-300,000 total immigration intake.  Their number is small compared with tens of thousands of illegal visa-overstayers. They are roughly equalled by refugees arriving by plane, about whom you hear almost nothing. The image of a leaky boat full of desperate, alien, Muslim and probably terrorist refugees is the lightning rod of the reactionaries’ fear.

So it is with other favourite topics of reactionaries and their shock-jock agitators.  Aborigines are just lazy parasites — never mind that we destroyed their livelihoods, much of their culture and many of them. Prime Minister Julia Gillard is called Ju-Liar because of one allegedly “broken” election promise, though John Howard gave our children the enlightened concept of the “non-core promise” and told more porkies in a day than Gillard does in a month. Moslems are trying to take over our society and impose sharia law, though they comprise just a few per cent of our very diverse population.

Global warming, of course, is the issue that really sets the dogs baying.  Climate scientists are part of a great conspiracy to fund themselves and impose a greenie-socialist global dictatorship. The science is alleged to be false or highly uncertain, even though a recent survey of about 14,000 climate-science papers found only 24, or 0.17%, seriously question it, and even though every major national science academy in the world endorses the conclusion that human-caused global warming is real and a serious threat.

This level of irrational fear can be called paranoia. It is most developed and best illustrated again in the US. Both Bartlett and Frum (who were mentioned in Part One), believe a lot of it is fomented by right-wing media like Fox News (owned by Rupert Murdoch).

Frum says the billionaires who fund the extremists are not just playing a cynical game:
‘They watch Fox News too, and they're gripped by the same apocalyptic fears as the Republican base.’

Bartlett says:
‘[We] public policy analysts aren't meant to make comparisons with the 1930s, but it is beginning to look like the Weimar Republic.’

So there are various degrees of unease, anxiety, fear and paranoia abroad in our society, but what is causing the anxiety?

You don’t have to look far. The neoliberal program has changed ordinary peoples’ lives in some basic ways: employment is less secure, working hours in Australia have increased substantially, and social activities and services are less supported.

Neoliberalism explicitly promotes “labour market flexibility”, which means treating employees as just another cost and commodity, to be disposed of at the whim of the employer. Employees need not be given any acknowledgement, need feel no loyalty, and their knowledge and experience are (supposedly) irrelevant or replaceable. As a result, employment is not only less secure, there is less reason to commit to the work or make a job ones’ own. One is in competition with fellow employees, and the workplace is less socially engaging. In other words, employment is less secure, less engaging and less fulfilling.

The Australia Institute reports that full-time workers in Australia now work an average of 44 hours per week — more than in either the U.S. or Japan.  This is far from the aspiration of thirty years ago, which was to reduce the standard working week from 37.5 hours to 35 hours. Furthermore, a significant fraction of that work is in the form of unpaid overtime.  Excessive working hours contribute to poorer health and less time with family and community. Family and community, it is increasingly recognised (or remembered), are central to our physical, social and spiritual wellbeing. As our supporting social network is weakened, so our anxiety rises.

Neoliberalism has also reduced or eliminated many formerly publicly funded services. This has had a less visible negative effect on wellbeing. Along with indirect effects of insecurity, including poor health and increased crime, our social fabric has been systematically weakened.

That neoliberalism weakens families, communities and the social fabric is not incidental, it is central. Neoliberalism extols competition and derides cooperation as interference in the competitive market place. It advocates replacing social interactions with market interactions — as happens when baby-sitting is replace by corporate child care and small shops and local markets are replaced by big-box stores and malls.

Ironically, neoliberalism is a mirror image of communism, which extols cooperation and derides competition as leading to exploitation. Each doctrine is an extreme parody of our humanity, which embraces both competition and cooperation. Indeed, the whole living world is pervaded by cooperative relationships, along with the competitive “red in tooth and claw” image that it has been simplistically characterised with. Real life is not as simple as either extreme doctrine.

In real life, there is a healthy tension between our competitive and cooperative urges. We need the support, acknowledgement and love of family and community, just as much as we need to develop our unique individuality. The need to balance competition and cooperation means life is never simple, but it also gives life its richness. The challenge is not to let one side dominate. On the one hand, it is not healthy to submerge our identity serving someone else’s purpose; on the other hand, it is neither healthy nor necessary to express our individuality at someone else’s expense. Competition in the absence of social connection quickly turns destructive, generating resentment, anger and hostility that serves no-one. Acting without social restraints is sociopathic.  Many of our modern institutions are sociopathic, the corporation being the outstanding example.

So, our society is dominated by a doctrine that denies an essential part of our humanity. It is not surprising, then, to find people are uneasy, anxious, fearful or paranoid. With our social anchors seriously weakened, we are vulnerable to simplistic solutions and to demagogues promising security. Crazy theories are proliferating; the blogosphere is full of anger and denial; and politicians seem increasingly willing to say whatever people want to hear, no matter how simplistic, inconsistent or counter-productive it may be.

Neoliberal policies have failed. However, neoliberalism retains political power through its domination of the media and its alliance with the wealthy and the reactionaries whose fears it feeds. It also dominates the academic discipline of economics, through a long-established stranglehold by neoclassical theorists on the top academic departments, journals and criteria of employment.

Neoliberalism was born of insecurity. Its central theory of markets is a theory of allocating scarce goods. It grew out of the disruptions caused by the English and European industrial revolutions. Ironically, it presumed scarcity just as greater abundance was being created.  The problem was that the social supports of traditional communities were being disrupted and people were being forced into factories and cities. Out of England’s dark satanic mills was born the robotic, disposable, asocial “agent”, the “rational economic man” of economic theory. Even the rich, with little social support to tide them through hard times, lived in greater fear of losing their wealth. Neoliberalism was born in fear and propagates fear.

The power of neoliberalism is that it promises security even as it systematically undermines our security. It is a doctrine of rugged individualism and it attracts leaders who succeed through their own ruthless strength. They present as stern father figures who will keep us safe, thus attracting the least secure in our society. Unfortunately, their program only makes us more insecure, so their promises become more simplistic and more bombastic. This is the road to Mussolini’s authoritarian world — the original fascism.

This political spiral is perfectly mirrored by consumerism in the economic domain. Our materially-focussed lives feel incomplete, and marketers promise that if only we buy product X our lives will be complete and people will love us. However, the effect of product X soon wears off and we come back for more. Yes, and then product Y is just the thing for us.

That is why our lives are filling up with stuff; why our vehicles, houses and mortgages get bigger; why we work longer hours; why the economy must keep growing inexorably; and why we are destroying the planet around us. The living environment of Earth, simply and fundamentally, is our life support system, and none of our clever technologies have altered that basic fact in the slightest. Neoliberalism has fostered an addiction to materialism, and our addiction will destroy us if we do not overcome it.

(In tomorrow's concluding Part Three, Geoff Davies will survey the current political scene.)

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