Introduction to Liberalism

At a meeting in 1975, Margaret Thatcher reached into her briefcase and pulled out a book. According to John Ranelagh in Thatcher's People, she held the book up for all of us to see - This, she said sternly, is what we believe, and she banged the book down on the table. The book was The Constitution of Liberty by F.A. Hayek.

How much credence to give this attachment to Hayek's letters. These are the parts of an ideology. They aren't purely a banal set of instructions, an instruction manual. And yet this couldn't be just anything.

We have interests and seek to defend them. It helps for there to be a coherent narrative threading together the various moments through which power is manifested. And yet it's likely that these ideas have a degree of autonomy beyond that of cynical post hoc justification. This ought to be demonstrable empirically.

Iain Boal and Michael Watts write in a review of David Harvey's book about neoliberalism that:

"neoliberalism" should be approached – could this possibly come as a surprise to a Marxist? – as an ideology. Any adequate account of its rise to hegemony should not assume a pure body of neoliberal theory "lurking in the wings" of history, as Harvey has it. Rather it has to begin from the premiss of a contested discursive field among whose keywords are "freedom", "market", "private property".

This point is confirmed, quite starkly in the Joseph Stiglitz exposé in last week's Guardian:

I ask what discoveries Stiglitz found the most disturbing. He laughs, somewhat mirthlessly. "There were actually so many things - some of it we suspected, but there were a few things I couldn't believe." The fact that a contractor working as a security guard gets about $400,000 a year, for example, as opposed to a soldier, who might get about $40,000. That there is a discrepancy we might have guessed - but not its sheer scale, or the fact that, because it is so hard to get insurance for working in Iraq, the government pays the premiums; or the fact that, if these contractors are injured or killed, the government pays both death and injury benefits on top. Understandably, this has forced a rise in sign-up bonuses (as has the fact that the army is so desperate for recruits that it is signing up convicted felons). "So we create a competition for ourselves. Nobody in their right mind would have done that. The Bush administration did that ... that I couldn't believe. And that's not included in the cost the government talks about."

Then there was the discovery that sign-up bonuses come with conditions: a soldier injured in the first month, for example, has to pay it back. Or the fact that "the troops, for understandable reasons, are made responsible for their equipment. You lose your helmet, you have to pay. If you get blown up and you lose your helmet, they still bill you." One soldier was sued for $12,000 even though he had suffered massive brain damage. Some families have had to buy their children body armour, saving the government costs in the short term; those too poor to afford it sustain injuries that the government then has to pay for. Then there's the fact that it was not until 2006, when Robert Gates replaced Donald Rumsfeld as secretary of defence, that the DOD agreed to replace Humvees with mine-resistant ambush-protected (MRAP) armoured vehicles, which are much more able to repel roadside bombs; until that time, IEDs killed 1,500 Americans. "This kind of penny-wise, pound-poor behaviour was just unbelievable."

Yet on another level, Stiglitz is unsurprised, because such decisions are of a piece with the thoroughgoing intellectual inconsistency of the Bush administration. The general approach, he says, has been a "pastiche of corporate bail-outs, corporate welfare, and free-market economics that is not based on any consistent set of ideas. And this particular kind of pastiche actually contributed to the failures in Iraq." There are the well-rehearsed reasons: ignoring international democratic processes while advocating democracy; pushing forward liberalisation before Iraq was ready. Stiglitz's twist on this was the emails he was receiving from the United States Agency for International Development, complaining about the Treasury being obstructive. "They were saying, 'Can you help us? Because we're trying to get businesses to work, but the US Treasury is trying to tighten credit, so there's no money in this country.' "

It's probably fair to judge the liberals in these circles, the “free market people”, as the progressive element, or at least as the less anti-progressive. But I don't think the course of human freedom is going to be set back by looking at these things.