Chapter 1
Philosophy and Performance of Neoliberal Ideologies
History, Politics and Human Subjects
Michael A. Peters and Marek Tesar
âNeo-liberalism is not Adam Smith; neo-liberalism is not market society; neo-liberalism is not the Gulag on the insidious scale of capitalism.â
(Foucault, 2008, p. 131)
The Theory and Philosophy of Neoliberal Ideology
The assertion above in the opening quote means to distinguish positionings towards this governing ideology through three approaches to neo-liberalism. The political and economic theory behind neoliberal ideology is one of the main architectural and philosophical features of the educational policy paradigm in the Western world since the late 1970s and early 1980s. The notion of âpolicy enactmentsâ means to consider some of the âlived effectsâ of neoliberal policy on our contemporary educational discourses and on lived experiences and narratives that occur in education settings and that testify to these changes.
The neoliberal restructuring of state education systems, and particularly of higher education in many Western countries in recent decades, has become a new paradigm that has been positioned, historically, as a series of important shifts and turns. Some of these have been the move from public, state and free education into private and somewhat personalized education, which is the move away from the notion of âequality of opportunityâ that historically many countries were defined as (a good example is New Zealand). The other shift that has been significant in determining these changes was the move away from an emphasis on policy and administration towards the importance, and rise, of management. This idea should be considered in context with the rise and contemporary prevalence of neoliberalism as the predominant ideology of globalization.
The theory of neoliberalism and its practice differs quite radically (Peters & Tesar, 2016b). The theory takes the view that individual liberty and freedom are the paramount goals of human subjects in the civilization, and that they can be achieved, and protected, for that matter. This achievement is driven by the idea of structures of institutions, which are made up of strong private rights, property rights, free markets, and free trade. It is the civilization in which a human subject â an individual â can flourish. So the implication of such positioning of human subjects is that the state should not be involved much in navigating the economy, but that it should utilize its influence and power to preserve human subjectsâ rights to private property, and to support the institutions of the free market, and promote them on the global stage where needed. The theory of neoliberalism includes the radical policies that have been systematically embedded, such as the market liberalization and free trade, limited government, narrow monetarist policies, a deregulated labour market, and fiscal restraint, and have become common sense and beyond challenge.
Neoliberal ideology is united by the strong belief that state intervention, which promotes egalitarian social goals, has been responsible for economic decline (Peters & Tesar, 2016a). In addition, in neoliberalism such state intervention represents a violation of individual rights, self-reliance and initiative of human subjects. In that sense, the neoliberal ideology is clear in that equality and freedom are incompatible notions to human subjectsâ existence within the institutions and structures of the globalised world. In such thinking, freedom is then construed in individual and negative terms (such as freedom from intervention), and is thus indispensable for economic vitality and individual well-being. Theoretical underpinnings for this view are located, in part, in a contemporary rejuve-nation of neoclassical liberal economic theory that privileges both the free market as an institution above all others and market values over all other values that human subjects can encounter. In this sense, from the late 1970s, a combination of anti-statist critiques and public sector deficits has contributed to a climate of fiscal retrenchment. Neoliberal ideology and its political forces have argued that the constant enlargement of social welfare undermines stable economic growth, and therefore is detrimental to political legitimacy, traditional community and family values.
What are the specific features of the liberal art of government, as they were outlined in the 18th century? What crisis of governmentality characterises the present world and what revisions of liberal government has it given rise to? This is the diagnostic task addressed by Foucaultâs study of the two major 20th century schools of neo-liberalism: German ordo-liberalism and the neoliberalism of the Chicago School. In Foucaultâs work (lectures), the discussion of contemporary economic theory and practice culminates in an analysis of the model of homo economicus (Besley & Peters, 2007). He argued in The Birth of Biopolitics, âthe analysis of biopolitics can only get under way when we have understood the general regime of this governmental reason I have talked about, this general regime that we can call the question of truth, of economic truth in the first place, within governmental reasonâ (Foucault, 2008, p. 22).
The Neoliberal History of Human Subjects
When examining the histories of present neoliberalism, Harvey (2005) traces the intellectual roots of neoliberal thought back to the Austrian political philosopher Friedrich von Hayek, who authored The Consititution of Liberty in 1960. As Harvey argues, neoliberalism is a form of utopian thought, the dangers of which were first examined by Hayekâs contemporary Karl Polanyi in 1957, a Hungarian economic philosopher and historian. As Harvey (2005) works through Polanyiâs thinking, he concludes the following:
The idea of freedom âdegenerates into a mere advocacy of free enterpriseâ, which means âthe fullness of freedom for those whose income leisure and security need no enhancing, and a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of propertyâ. But if, as is always the case, âno society is possible in which power and compulsion are absent, nor a world in which force has no functionâ, then the only way this liberal utopian vision could be sustained is by force, violence and authoritarianism. Liberal or neo-liberal utopianism is doomed, in Polyaniâs view to be frustrated by authoritarianism, or even outright fascism.
(p. 37)
When examining the historical effects of neoliberalism, it is clear that some of the late 1970s and 1980s politics were strongly linked to the idea of rising neoliberalism. Ronald Reagan argued that, â[i]n this present crisis, government is not the solution to our problems; government is the problem.â And under his administration, Reaganomics became the prevalent way to operate, to implement policies based on supply-side economics and his governance emphasized and advocated a classical liberal and laissez-faire philosophy, seeking to stimulate the economy with large, across-the-board tax cuts (Peters, Paraskeva & Besley, 2015). In China, in the late 1980s, it was the leadership of Deng Xiaoping, as the chairman of the Communist Party (1978â92), who was the reform Communist to lead China on a path to a version of the market economy, stating that it was âto learn knowledge and truth from the West in order to save Chinaâ (Stewart, 2001, p. 23). In this way, since the 1980s, the economic reforms in China have accelerated towards a Western capitalist model, while his main rhetoric had a Communist-style flavor. The leader â Deng â advanced China in regards to what became known as the âfour modernizationsâ of China: economy, agriculture, scientific and technological development. Merged with national defense, these ideas came to be known as âsocialism with Chinese characteristicsâ. As Deng Xiaoping argued, âPlanning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, tooâ (Hou, 2013, p. 1).
At a similar time, in the 1980s, in the United Kingdom, the longest serving prime minister, Margaret Thatcher, was strongly influenced by the economic philosophy of Hayek and Friedman. Her administration had a persuasive agenda of lowering direct and increasing indirect taxation, systematic attacks on labor unions, and favoured the privatisation of state assets. This statement from Margaret Thatcher (1987) represents the fundamental performance of this ideology:
I think we have gone through a period when too many children and people have been given to understand âI have a problem, it is the Governmentâs job to cope with it!â or âI have a problem, I will go and get a grant to cope with it!â âI am homeless, the Government must house me!â and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbor and life is a reciprocal business and people have got the entitlements too much in mind without the obligations.
As Harvey (2005) argues, it is necessary to perceive neoliberalism not only through the policies and administrations of Reagan and Thatcher, but through developments in China, Chile and elsewhere around the world, as neoliberalism was conceived as a worldwide doctrine, albeit performed in different countries in different times and in very diverse ways. These developments since the 1970s and 1980s are the fundamental conditions which have shaped human subjectsâ lived experiences and foregrounded contemporary policy landscapes to create fertile soil for particular global economic, political, and social history, where financial politics determine the course of all state sectors including education. âFrom these several epicentres, revolutionary impulses seemingly spread and reverberated to remake the world around us in a totally different image ⌠[These leaders] plucked from the shadows of relative obscurity a particular doctrine that went under the name of âneoliberalismâ and transformed it into [a] central guiding principleâ (p. 3), argues Harvey. Harvey thus constructs a framework, not only for analyzing the political and economic dangers of the contemporary landscape, but also for assessing the prospects for the turn to more socially just alternatives, as they are being advocated by many resistance and oppositional movements.
Neoliberalism is thus the doctrine, an ideology, which argues that free market â and the market exchange â is an ethic in itself, constantly capable of re-inventing itself and acting as a guide for all human subjectsâ actions. These ideas have become dominant in thought and practice since the rise of neoliberalism. The way this doctrine has been elevated and spread was in line with, and at the same time depended upon, a reconstitution of policies and state powers that included the privatization of state assets, and the way financial markets processes were emphasized in policy making. In this doctrine, state interventions into the economy are limited, and the obligations of the state to provide for the welfare of its citizens are minimized, if not diminished (Hood, 1991).
Neoliberal Account of Personal Responsibility
Neoliberal ideology has been focused on the rising and apparently irreversible tide of welfare expectations, arguing that the notion of the welfare state evaded both investment and work incentives. From the neoliberal viewpoint, the welfare state has directly contributed to the economic recession that Western countries have been encountering since the 1970s. According to neoliberal ideology, the combined effects of social policies, which included guaranteed minimum wages, superannuation, and the exponential growth of the health and education sectors, have also strengthened organised labour vis-a-vis capital, augmented wages as against capital goods, and increased state borrowings from itself, leading to a decline of profitability and capital shortage (Peters & Marshall, 1996). According to the neoliberal ideology, the effects of this welfare state led to greater state interventionism in both social and economic terms: however, the more this welfare state helps, the more it will support the regression of capital and diminish the effectiveness that the free market thrives on (Hood, 1992). The neoliberal critique of increasing levels of intervention that led to the so-called crisis and imbalance between state receipts and expenditure, thus leading to the neoliberal ideology long-term removing liberalism of its vitality: âit sounds the death knell of the market economy, of competition â in a word, of private enterpriseâ (Delcourt, 1985, p. 36). To the neoliberal ideology, the effects of economic and social intervention represent a fundamental threat to human subjectsâ political, economic and democratic freedom. The neoliberal policy to redeem this situation is the revival of faith in the philosophy of economic liberalism, and thus a return of the privatization of public assets aimed at capital accumulation, and the elevation of the principles of a free market economy.
Through this powerful critique, neoliberal ideology has emerged as the dominant paradigm of public policy in the globalized world. Human subjects have been re-configured as individual consumers of very competitive public services that have been significantly re-structured, downsized and rationalized. Their management has been delegated or devolved while executive power has been further concentrated at the top levels of institutions. In social welfare, this has, for example, represented a shift from universality to a âmodest safety netâ (Peters & Tesar, 2016c). The values of the welfare state of participation and belonging have been weakened, and human subjects are being charged for social services that have been introduced across the board. Similarly, substantial cuts in benefits and other forms of income support have accompanied this shift, as eligibility criteria have been re-thought and new measurements and targets introduced. Social assistance has become the new social philosophy, and there is a greater policing of the welfare state, aimed at reducing benefit fraud. Neoliberal ideology argues for the release of human subjects from the dependency of state welfare, since, in their argumentation, the policies of the welfare state discourage effort and self-reliance. It also argues that strong government and state monopolies in the delivery of social welfare services has encouraged the growth of âdysfunctional familiesâ, and the problem with the educational and health sectors is that they are monopoly public services run by the state. Neoliberalism targets them, arguing that these services need the discipline of free market forces, as rightful benefits, which has led to a loss of personal responsibility (Power, 1997).
Perpetual Neoliberal Restructurings
In the past decades, the restructuring of state education systems, and in particular of higher education, has, in many Western countries, involved a very significant shift away from an emphasis on administration and policy, to an emphasis on management, which is referred to as ânew managerialismâ. In its theory, it has relied theoretically, on the one hand, on the model of corporate managerialism and private sector management styles and, on the other, on public choice theory and new institutional economics, such as agency theory and transaction cost analysis. These theoretical underpinnings cannot, however, be seen without the rise of neoliberalism as a predominant ideology of globalisation (Kascak & Pupala, 2014).
The theories and models of the new public management and new institutional economics have been used both as the legitimating basis and instrumental means for redesigning state educational bureaucracies, educational institutions, and even public policy processes. This has had a tremendous impact on the education sector. Most importantly, there has been a decentralization of management control away from the individual institution â sometimes referred to as the doctrine of self-management â which was coupled with forms of a new accountability and introducing new funding structures (Peters, 2005). This shift has in many cases been accompanied by a disaggregation of large state bureaucracies into autonomous agencies, leading to the clarification of organizational objectives, and a clear separation between functions of implementation and policy advice (Peters, 2005). This form of ânew managerialismâ has also involved a shift from input controls to quantifiable outputs that should be measurable and comparable, and to the introduction of performance targets to raise the desired productivity agenda. Alongside these measures, these changes incl...