Monday, 9 March 2015
Neoliberalism is wicked. I’m disgusted.
It’s pathetically easy to organise a witch hunt: i.e. get the human race worked up into a frenzy of righteous indignation about almost anything.
As William Hazlitt (1778-1830) put it, “Defoe says that there were a hundred thousand stout country fellows in his time ready to fight to the death against popery, without knowing whether popery was a man or a horse.”
One of the currently fashionable witches to hunt is “neoliberalism”. All self-respecting lefties have declared themselves willing to die in the fight against neo-liberalism (without actually being able to define the term). Looking up words in dictionaries is far too much like hard work for lefties, and indeed most of the rest of the population.
One of the many disasters allegedly wrought by neo-liberalism is the current Euro shambles, i.e. the austerity being suffered by the EZ periphery. Just Google “neoliberalism” and “eurozone” and “periphery” and you’ll find dozens of articles attributing Europe’s problems to neoliberalism. But there’s a couple of examples here and here.
As to the definition of neoliberalism, it’s defined in most dictionaries as a belief in the merits of free markets and minimising government involvement or interference in the economy.
Now what is particularly “free market” about the Eurozone? The basic or defining characteristic of the Eurozone is simply that it’s a geographical area which uses the same currency, rather than each country having ITS OWN currency. I can’t see anything inherently neoliberal about that.
And when it comes to competitiveness disparities between different countries, that is dealt with in the Eurozone by internal devaluation, as compared to “regular” or “normal” devaluation in the case of countries which all have their own currencies. Nothing inherently neoliberal there either.
There is of course the point that internal devaluation takes much longer to work than normal devaluation, and results in more austerity. But the architects of the Eurozone presumably thought that was a price worth paying for the benefits of the Eurozone. It looks very much like they miscalculated. But that miscalculation does not stem from a belief in neoliberalism.