A short but thorough explanation by the great cultural and political theorist Professor Jeremy Gilbert who describes Capitalism as an economic practice and Neoliberalism as a philosophy about how societies in which that practice prevails should be managed.
My personal experience of living in a neoliberal world for over four decades has led me to believe that it views and uses the functions of capitalism in a narrow and deterministic way, assuming predictable human reactions to the needs, wants, and desires of everyday life. The microeconomic theory of modeling, as promoted by neoliberal economist Milton Friedman, would be rendered obsolete if we were to incorporate the infinite variables of empathy, love, and charity. By judging humans solely as seekers of utility, status, and wealth, neoliberalism appears more aligned with the mercantile class of the 17th and 18th centuries, which used their ill-gotten wealth to manipulate markets and determine value solely by the final price point, ignoring the actual production costs.
This view of human behavior contrasts with the classical economists, such as Smith, Ricardo, Malthus, and Mill, who recognized the corruption of markets by the mercantile class and developed theories in opposition to this. However, I do not promote classical economic theory but rather recognize that it arose from lived experiences and observations of market corruption.
In addition to market manipulation, neoliberal philosophy often involves lobbying governments, exploiting weaker nations and individuals, and holding the belief that “all is fair in the love and war” of trade. Such practices are prevalent in the current “evil corps” that dominate our lives and harm the planet. Defining neoliberalism solely within the context of classical economic theories is insufficient, as it fails to account for the present reality of corporate-lobbied corridors of government, tax avoidance mechanisms, and exploitation of less capable countries and individuals for the sole purpose of wealth accumulation beyond what is necessary.
I currently lean towards Keynesian economics, which embraces the idea of uncertainty and a focus on achieving the “good life.” Nonetheless, I acknowledge the relevance of Marx’s critique of capitalism, particularly concerning the exploitation of surplus value.
Ai Instruction; Karl Marx as a 21st Century angry economist in the style of graffiti artist
“Please read below to see the difference between an angry amateur and a nuanced professional”.
I wrote this in response to a discussion of this theme on the NEON list. Thinking it was both too long for an email list and might be a useful resource for some people, I posted it here…
What’s the difference between ‘neoliberalism’ and ‘capitalism’
I think that neoliberalism and capitalism are simply different types of thing.
The Housing Act of 1988 deregulated new lettings to encourage the PRS to return, 44 years later the potential for 1910 rent strikes of pre The Rent Control Act of 1914 look like they may return.
Sitting in the library, grinding my way through various papers and journals on Rent Control (RC), I started to read a report from the much admired Joseph Rowntree Foundation (JRF) published in 1992 with various academic, housing pressure groups, practitioners and financiers together with advisors to politicians from different parties all contributing to the discussion. So far so good, but…..
The book in question amongst my usual chaos
Two issues of cognitive bias became increasingly apparent, both of which we all suffer from as emotional beings, so I’m not specifically criticising the authors of the report, but taking the more cautious route of an anthropologists like, the sadly departed David Graeber and also the political economist Thomas Piketty. Graeber in his book (and the secret is in the title) Debt; The First 5000 years and Piketty to a lesser extent focussed on the past 200 years in his highly acclaimed and fascinating book Capital of the 21st Century.
“Recency bias is a cognitive bias that favors recent events over historic ones“
The first bias was the effect of just looking to the lived and experienced recent past (recency bias) and making a judgment that a correlation of rent controls of the recent past have meant that the PRS has reduced due to not enough yield being available from old RC properties, that is a fair judgment, but does that mean that to get more rented properties available for the small sector (at the time of the report) of transient renters, namely young people on their way to purchase and temporary work force ( in fact a red herring) moving around the country, you just simply reverse the model?
So with that logic, if rent control causes PRS shortages then abandon rent control and supplement the PRS and a ‘fair’ rental market will return with the benefit of landlords now also getting a ‘fair return’.
“What could possibly go wrong’?
The issue with this decision is that now in 2022 we are seeing the true consequences of this reversal, rather than market rates settling to a ‘fair rent’ level they are driving people into cohabitation and single room conversions with shared bathrooms as incomes have stagnated (not so much trickle down, but rather, trickle up), but rents increase as scarcity within the ‘free market’ predicts.
Whereas if they had taken the time and effort to look back to pre 1914 Rent Act they would’ve seen the issues of free market rents gradually consuming and therefore monopolising a sector that even Winston Churchill in 1909 fumed and rallied against to the greed and slothfulness of the rentier class.
3 examples of products that arose out of a deregulated lending sector that was allowed to self regulate, with the post 1979 political ideological support of a ‘free market neoliberal doctrine’ allowing a light touch regulation regime within the sector.
Spoiler alert, it didn’t turn out well
Three examples that I personally and many millions of citizens had to navigate (1988-2009), through mazes of poor legislation, based on neoliberal ideologies of individualism and therefore individual responsibility.
“Which is a handy smokescreen for those businesses who want to shift risk from one party (the lender) to another (the borrower) whilst isolating the borrower as an independent individual versus the banking system”.
“There is only one winner in this loaded game”.
I’m glad to say this eventually unravelled, but with huge losses to the borrowers and to the once trusted reputations of various banks and building societies, here are just three of many heavily marketed products from the 1988-2008 that were sold to the unsuspecting public. The Mutual Building Society mortgage model of pre Big Bang (1988) no longer existed and the public had yet to catch up with this fact, so the driven lenders (who needed to show ever increasing profits for their shareholders) had to find other and additional ways of extracting money from future borrowers, knowing that only a few people actually understood the true value of the products namely, the inventors
In the following three pages are just 3 of the most prominent and now all banned examples of these products
On the 4th of November I had a lecture on Neoliberalism, a term that I have a rough grasp as to its meaning as we all live in a neoliberal world in most of the northern hemisphere, this is the present ‘normative common sense’ of our economy and social individualistic aspirations.
A really great and thorough lecture with angles that i had not seen before and thus consequences.
Knowing how well researched and read Anna Minton is it was rather depressing to hear her admit that to a point that the concepts of the ‘reclaiming the commons’ had fizzled out. Yet as Mark ( PhD student attending the class who is working on voluntary housing schemes) commented there are projects on the go in the country, but had to admit the enthusiasm of the recent past has declined. Bumped into a paper this morning reinforcing this depressing reality (see further below for an abstract);
Blair’s ‘Third Way and Cameron’s ‘Big Society’ both tried (and failed) to tap into our former natural egalitarian sense of societal values (Henrich 2021) that are a disconnect from the baseline of Neoliberal thought, that as Hayek would say that at our core we are all ‘self seeking’ and therefore the only real value is monetary and thus we all should work and accept this value, and the invisible hand of the market will solve all our woes if we just give it time (recently completely dismantled by ‘trussanomiocs’).
The reason the Big Society almost instantly failed was that it’s such a contradiction to the common sense that we the public had been taught/indoctrinated for the past 40 years (1979-2010), namely; ‘there is no such thing as society’ every man woman and child for themselves, along with the suspicion we were being taken for fools, expected to work for nothing to support the bottom end of society whist the wealthy yet again ,’run off with the money’. A London East End term would be, to be ‘Mugged off’.
This is the classic ‘all actions have a reaction’ reality, you prime a population to become hyper individualistic, to follow ‘their ‘ dreams, add to the mix ‘positivity’ ie, you can do this! with a sprinkling of status aspiration and boosterism ( no negativity even with obvious failures, think Boris Johnson former PM who promoted Brexit for his own gain and could never understand the criticism as to why it failed, and it has ref -4% growth compared with those in the EU) and you have a citizen that relies on ‘feelings’ more than reality. Perfect politician and media fodder for manipulation and denial of uncomfortable facts ( ie Michael Gove; ‘we no longer need experts’).
The term from an academic perspective is ‘social capital theory’, where we take what we have to offer as individuals with others and collectively do something for the benefit of society/community and not necessarily for monetary profit, ie ‘the big society’.
Two examples of people movement on the Isle of Dogs; Sideways and Vertical.
When putting together a presentation concerning a brief history of the Isle of Dogs in the Eastend of London, I stumbled on a 2nd less well known influx during the 1960’s, also promoted by a centralised organisation, but far more inclusive than the later corporate organisation foisted upon the community in 1981, namely The London Docklands Development Corporation (LDDC).
The former was the London County Council (LCC) (later to become the GLC) which derived from the post war housing consensus and in particular the 1947 housing act.
So as with all things, looking a little more deeply into the policy of a pre LDDC government select committee, comments within the paper questioning the new law to be presented to parliament. As with many acts of parliament is has to go through various cross parliamentary committees to scrutinise a controversial bill. This bill was no exception born out a new ideology of Free Market Neoliberal Capitalism as promoted by the Thatcher Government of 1979, from the theories of Friedrich Hayek and Milton Friedman (and the rest of what was known as the ‘Austrian School’).
“This was the first real opportunity to enact the low regulation ring fenced policy centrally governed via unelected quangos on a large scale”.
To say this was a 180 degree shift from the previous economic and social ideology would be no exaggeration. This is born out in the two shifts in the islands population, the first in the 1960’s which I will call a horizontal shift of people, so not strictly Gentrification in the Ruth Glass terminology of the 1960’s and the present day, and a 2nd more seemingly effective solution in the context of monetary value to the area, but not necessarily for the original local population.
It's about people, stupid... 