The economic theory that now prevails worldwide – the capitalist offshoot known colloquially as “neoliberalism” – is killing us all, says Colin Tudge
Human history to a great extent is a saga of heroism and endeavour and imagination and self-sacrifice and a search for truth but it’s also a saga of huge mistakes, and of mistakes piled on mistakes, layer upon layer, a palimpsest of error. And, I suggest, the greatest mistake of modern humanity and a prime cause of all the world’s multifarious ills is to have put our faith in an astonishingly crude economic system. Namely: the 20th century offshoot of capitalism colloquially known as Neoliberalism.
I do not believe as many on the Left proclaim that capitalism itself is the world’s great enemy — or not at least as capitalism has been commonly understood these last 250 years by many and perhaps most of the industrialists and shopkeepers who have practiced it, and as espoused by traditional (pre-neoliberal) Tories, and by the pre-capitalist Puritan merchants of the 17th century as portrayed so sympathetically by Hals and so ironically by Rembrandt. For capitalism in its traditional forms, and its Jewish, Muslim and Christian predecessors, had and may still have a strong and sometimes puritanical moral base.
It is of course true that many capitalists – including, regrettably, some of the most commercially successful and powerful ones — had and have the mentality of gangsters. They cared and care not one whit for the wellbeing of humanity at large, at least beyond their immediate circle, and treat the natural world as a “resource”, a cornucopia laid on for their express material benefit, to be put to use and turned into (private) wealth with all possible speed, and call that “progress”. The result has often been horrific, and still is: the “dark Satanic mills” of early 19th century England, in Blake’s chilling phrase, and the misery of England’s agricultural workers that Cobbett described; the unspeakable conditions in England of the 1840s that Dickens wrote about and so enraged Marx and Engels; the sheer awfulness of early 20th century capitalist agriculture and mining in the US, as portrayed not least by Upton Sinclair in The Jungle and King Coal; the mines of Lancashire and Yorkshire that George Orwell described in The Road to Wigan Pier, published in the 1937; the modern sweat shop – and indeed Amazon and the whole grey economy of zero-hour contracts, which may fill a gap for those wanting casual employment but are no substitute for careers, whatever governments may pretend; and of course, throughout the whole sorry saga, the relentless destruction of the natural world – sometimes as “collateral damage” and sometimes of deliberate policy.
On the human front the most egregious offence of all has been and is the slave trade, on which so many “great” families, especially in Britain and the US, built their fortunes and their estates in the 18th and early 19th centuries. The aftermath of slavery is still with us and of course it lives on, sometimes in literal form and in essence in the form of bonded labour. The wounds of the past never fully heal.
Yet to many people at least, and not simply to writers and reformers, these excesses have always been repellent. As A N Wilson observed in God’s Funeral (1999):
“The sheer injustice and ugliness of early 19th-century capitalism was obvious to everyone. The desire to put it right was universal – on the part of the capitalists themselves, as well as of radicals …; of benign Tories of Peel colouring, of Whigs and of liberals.”
For there is nothing in the canon of capitalism to say that its practitioners have to be vile. The acknowledged founder of modern capitalism, Adam Smith, 18th century pillar of the Scottish Enlightenment, was a moral philosopher before he was an economist and he clearly believed in the basic decency of what Orwell was content to call “ordinary” human beings. Indeed, Smith’s first book published in 1759 was called The Theory of Moral Sentiments and it begins:
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it.”
And:
“The wise and virtuous man is at all times willing that his own private interest should be sacrificed to the public interest of his own particular order or society”
Overall, said Smith, human beings are imbued with “natural sympathy”.
Despite the injustice and widespread cruelty and ugliness of early modern industry some at least of the early capitalists were true moralists who cared very much about the state and wellbeing of their workers, including the three great chocolate companies founded by Quakers, Fry’s, Rowntree’s, and Cadbury’s. All are criticised as “patriarchal” but they were intent nonetheless on doing good and in practice they enabled a lot of people to enjoy a far more relaxed and fulfilled life than most working people endured in those days, or indeed must endure in our own times.
By the same token, I could never vote Tory but I certainly don’t believe as many do that all Tories have forked tails. Many traditional Tories could properly claim to be moralists, seeking to create wealth efficiently for general good, including the two most recent pre-Thatcher Tory prime ministers, Harold Macmillan and Edward Heath. In our own time, Kenneth Clarke, the erstwhile Tory Chancellor and Home Secretary (and sundry other posts from time to time) speaks of “business with a conscience”. In short, although never above criticism (nothing is), and far from ideal, capitalism is not intrinsically nasty. It’s the way it’s used that’s nasty. That, and the modern version of it that now seems to hold the whole world in thrall — which indeed is neoliberalism.
For although various modern and essentially neoliberal think tanks invoke the name of Adam Smith, they tend to focus not on his moral philosophy but on the best-known paragraph from his most famous book of 1776, The Wealth of Nations:
“Every individual [trader] neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention … By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.”
In this paragraph Smith seems simply to be saying, “If we leave our financial affairs to the market ‘the invisible hand’ will ensure that all is well” – and this has become the core philosophy of neoliberalism. According to the most extreme neoliberals (who tend to prevail, as extremists often do in all contexts) the market can safely be left to take over our lives and determine the fate of the Earth itself. The market, say the neoliberal purists, needs no interference by governments or religious leaders or general do-gooders. The market is designed to be ultra-competitive (give or take a few cartels and special deals) – as Tennyson perceived to be true of nature as a whole. Only the traders that do what’s required most efficiently (“efficiency” is the great neoliberal watchword) can survive the competition. This is Darwinian natural selection at work in the economic sphere. Natural selection clearly works in nature – it has produced us, after all – so why not in everyday life?
While creatures in a state of nature compete for food, space, and mates, the participants in the global market compete for profit and for market share – and they can make profits only by cutting costs (which is efficiency) and/or by selling more goods (or services). They can sell more goods only if their goods are better than anyone else’s (which means that the competition leads inexorably to improvement) and by selling what people are prepared to buy. In short, the traders can succeed only by giving people at large what they want – which means that the market is intrinsically and unimpeachably democratic. For what could be more democratic, than to provide the people with what they want?
Thus, too, the market becomes society’s moral arbiter. Whatever people are prepared to buy is ipso facto OK, up to and including (at least in many states in America) military-grade automatic weapons. And what people will pay most for, is obviously the best. What need is there for moralising priests (like Britain’s pesky archbishop Welby) – except for ceremonial purposes and to ratify the status quo, to make us all feel good? The economy should above all be efficient and the market economy works most efficiently when it is not hampered by moralising outsiders. It should indeed be “de-regulated” or – the more general and emotive term – “free”. A free market in a free society! Can’t be bad!
The market should of course be subject to the rule of law – international, national, local. There are a few taboos, too — child pornography is emphatically verboten — but otherwise the market itself, reflecting human wants and antipathies, decides what’s acceptable and what isn’t. Furthermore, the global market is open to everyone from the mega-corporate to the one-acre smallholder whether in Shropshire or Zimbabwe or Guatemala. Yet no-one is forced to join in the global free-for-all. The participants join of their own free will.
So the free market economy is efficient and democratic and above all seems eminently rational. What’s not to like? By competition the free market ensures that the goods on offer get better and better. The competitors succeed only by doing what people want, which is what they are prepared to pay for. The market is self-policing, too – or so Adam Smith argued in the 18th century. Traders who cheat are soon found out, and shunned, and go to the wall. Overall, most importantly, wealth increases, to everyone’s benefit. True, some people do better than others – the market is competitive, after all, and in a competition there are bound to be a few outstanding winners. There are bound to be a great many losers too but you can’t make an omelette without breaking eggs and the losers for the most part have only themselves to blame – too lazy or too feckless. In any case, the wealth of the richest will “trickle” down to the lower ranks, as Margaret Thatcher was wont to point out. All that – and yet the traders and the customers are free – free to make their own decisions, to do their own thing, yet kept on track by the market’s built-in “invisible hand”! Magic!
And so it is that in the end, everyone benefits. The ever-increasing wealth generated so efficiently by the “free” market is “the rising tide that lifts all boats” — a cliché that J F Kennedy, no less, was happy to echo way back in the early 1960s, well before Mrs Thatcher rose to prominence.
The theory behind neoliberalism was spelled out by the Viennese-British economist Friedrich Hayek (1899-1992) and in particular by the Chicago-based Milton Friedman (1912-2006). Mrs Thatcher in Britain cottoned on to Friedman’s work before she became Prime Minister in 1979, and she passed on its ideas to her chum Ronald Reagan, who became the US President in 1981. The gung-ho nature of the exercize with the emphasis on freedom – or at least on commercial freedom — appealed to them both. It all seemed so logical and straightforward – the royal road to wealth and liberty. The western dream. Now the neoliberal version of capitalism has become the global norm, even or especially in Russia and China, though both claim to despise the West and to offer something different. Yet there were detractors from the outset – not just from the Left but among traditional Tories too, not least from Thatcher’s prime ministerial Tory predecessors, Harold Macmillan and Edward Heath. And the past 40-odd years of neoliberal influence have shown all too hideously that those early fears were justified. For as Robert Burns put the matter in his apology To a Mouse in 1785:
“The best laid schemes o’ mice an’ men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!”
In truth the shortcomings are all too obvious. Most obviously, neoliberalism may be perceived as capitalism with all its moral restraints stripped away, leaving the economy unfettered and in free flight. This ought in itself to ring alarm bells for surely the moral and spiritual cogitations over the past few thousand years of prophets and clerics and philosophers and – most of all! – of our own consciences cannot simply be cast away so lightly? Many neoliberals not least of the American Christian Right make up for the ruthlessness of their working week by ostentatious shows of piety on Sundays, and by endowing university libraries and hospital wings with foundation stones engraved with their names to remind us of their generosity. But sceptics are wont to point out that such apparent altruism usually comes with a large dose of self-interest, which may not be particularly enlightened, including tax-breaks, social kudos, and political influence. The again, although the high-profile benefactors are happy to endow prestige architecture with their name on it but they rarely contribute to the running costs.
It’s rare, too, for such benefactors to ask very conscientiously what the recipients actually need. Do people in poor countries really need spanking new hospitals with marble veneers and huge maintenance costs, or would they benefit more from local, functional clinics with more doctors and nurses? Does Africa really need the high-tech agriculture with GM crops that Bill Gates is so generously bestowing upon them, in which he himself is so heavily invested? Is he really trying to benefit the Africans or seeking to create a new market for his own goods?
More broadly, too, zealots make a make a virtue of the markets competitiveness – but competitions in general produce far more losers than winners. And although the market is supposed to be even-handed, with fair deals for all, in practice the playing field is far from level. Whoever begins with a small advantage for whatever reason (having the right parents certainly helps) can build on that advantage year on year and so become richer and richer while those without the head start drift further to the wilderness. So the rich grow richer while the poor get poorer. Thus in January 2023 Oxfam told us in its latest report on economic inequality (Survival of the Richest: How we must tax the super-rich now to fight inequality) that in the world as a whole, 81 billionaires now have more wealth than the poorest 50% of the world combined. As economist Ann Pettifor relates in my interview with her on this website (see under “Videos”) the defence strategy of the Ukrainians depends in part on whether or not Elon Musk will let them have particular technologies that he alone controls. Thus the wellbeing and indeed the survival of entire nations may depend on the whims of billionaires – billionaires created by the “free” market. That doesn’t seem to be very democratic at all, and neither is it what most people mean by “efficiency”.
In any case, even if the “rising tide” did lift all boats that would not get to the roots of the world’s economic miseries – not unless by some mysterious and unspecified means it raised the boats of the poor much more than those of the rich. For as many a study has shown, the poverty of the poorest is only part of the issue. At least when people are not actually starving what really drags us down is inequality. It’s OK to be poor (provided you’re not starving or cold or ill) if everyone else is poor too. Societies of the genteel poor can be the most agreeable of all. They can bring out the camaraderie. But it’s sad and demeaning in the extreme to be relatively poor in a society of rich people. It’s not so much envy that brings people down as the constant sense of failure, the sense of being made of lesser clay, of not quite belonging, of being of no account. In fact, as Richard Wilkinson and Kate Picket describe in The Spirit Level (2009), even well-off people fare better and are happier as ordinary citizens in an egalitarian society than they would if they were top of the tree in an unequal one. This seems to be precisely in line with Adam Smith’s comments in The Theory of Moral Sentiments, quote above. Clearly, an economy that very obviously increases inequality is counter-productive – if, that is, we really would like to make a better world which, I think, most people would. Only psychopaths could be satisfied with the status quo, and feel that the present world is OK, and is on the right track. But then as various studies have shown, and seems obvious enough to anyone who takes an interest, a disproportionate number of the world’s leaders and the super-rich, the people who in practice have most influence over all our lives, are psychopaths, completely lacking in the “natural sympathy” that Smith suggested is common to all humankind.
Is it really true, too, as the neolibs insist, that competition is the key to “efficiency”? As many a study has shown and as indeed seems obvious, human beings and indeed all creatures achieve most by cooperation. It now seems to be commonly understood at least in high places that human beings by nature are selfish and self-seeking, when the chips are down, since in a competitive world we need to out-gun and out-smart everyone else, or at least try to, in order to survive. So self-centredness is seen to natural – the natural result of Darwinian natural selection; and Darwin’s theory is very much part of the scientific canon and can’t be wrong. To be consistently unselfish and cooperative thus goes against our nature. Societies that depend on cooperativeness are unnatural and so are innately fragile.
But Darwin merely said that natural selection favours whatever qualities enhance a creature’s chances of survival and of leaving viable offspring. His theory does not specify what those qualities should be. We cannot assume that mere physical prowess or braininess will favour survival. In practice the most unlikely creatures do well if the conditions are right, from tree kangaroos to swallowtail butterflies. In practice, I suggest, and as discussed not least by Darwin’s younger contemporary Peter Kropotkin in Mutual Aid (1902), the most universally efficacious quality is not the ability to bash and outstrip everybody else but to cooperate. Far from being anti-Darwinian (and therefore “non-scientific” and therefore not worth considering), that we should be cooperative is a Darwinian prediction. Ultra-competitiveness too is counter-productive, if we really want to make a better and more viable world. (I discussed these ideas at length in Why Genes are Not Selfish and People are Nice (Floris Books 2013).
Anyway — what is “efficiency” supposed to mean? In reality, in the neoliberal world, efficiency is measured purely in money: money invested versus money returned. This means among much else that the only things taken into account are those that can easily be costed. Happiness, contentment, fulfilment, beauty, and love are among the qualities of life that cannot be easily costed and so are left out of account in the fiscal musings of corporations and hard-headed governments. HS2 is of course a disaster on every front but it was meant to be profitable and the financial gain was taken to outweigh the loss of nice places and wildlife and ways of life that it was always bound to push aside. Why is it good to pursue such awfulness “efficiently”?
In truth, too, nature itself, by the standards of modern accountancy, is woefully inefficient – and yet it works wonderfully well. To have sustained such diversity through thick and thin over four billion years is truly a miracle. Yet in any one ecosystem we are liable to find several or indeed a great many different creatures all doing much the same thing. So in tropical rainforest we find literally thousands of species of trees, all producing canopies of leaves and photosynthesising in the same kind of way, and any one tree provides dozens of ecological niches, each of which is liable to be occupied by a variety of animals, fungi, and epiphytic plants where, you might suppose, just one would suffice. A modern business manager steeped in the wisdom of the business school would surely sweep most of the trees and their inhabitants away and plant a monoculture of whatever tree is most useful, meaning profitable: teak, eucalyptus, oil palm. Indeed that is what has been done these past few hundred years with ever-increasing zeal in the name of profit and progress. The modern accountants have decided that most of the species they came along and imposed a little rationality were and are “redundant” since they don’t obvious contribute to the productivity and sales potential of the whole. Such “redundancy” in the natural world seems at first sight to be the antithesis of “efficiency” — and yet it is a vital asset. It’s the apparent surplus of species that makes the ecosystem resilient and “robust”. Above all, the variety of species in any one ecosystem is the best protection against pathogens and parasites, for no one bug can get a grip of the whole. Monocultures are prone to pandemic and to extinction, as history has often shown. In general, the more we simplify the natural world the more precarious it becomes – and, as the exclusively anthropocentric rationalists may care to note, the more precarious our own existence becomes too.
Alas in a crowded and finite world it is necessary to some extent to employ the principle of triage – to work out what we can really afford to do and what we can’t, and to focus our efforts on the former. Thus in practice the cost of rescuing some specialist subspecies of beetle might gobble up the entire GDP, and it’s as well to know that before we embark on strategies of conservation that detract precious funds from elsewhere. But it is a huge and crass mistake nonetheless to decide that nature should be saved only insofar as it contributes to the nation’s wealth, or rather to the wealth of whoever has their hands on the purse-strings. Nature cannot simply be “financialised”. The philosophy of the “free” market applied to the natural world threatens to kill us all or at best reduce the world to a kind of theme park. But it’s being applied nonetheless.
Overall, too, obviously, the neoliberal worldview is entirely materialistic. Nothing is valued except stuff, and the stuff that’s valued most is what can be sold for most. The cynic, said Oscar Wilde, is one who knows “the price of everything and the value of nothing”. By this token the attempt to squeeze wildlife conservation into the neoliberal straitjacket is cynical in the extreme. Yet despite all this the neoliberal attitude to life and all that goes with it is said above all to be “rational”. What is “rational” after all, the thinking has it, is what can be measured, and easily theorised about. Abstractions like fulfilment and love and generosity of spirit are mere “sentiment”. In truth they are matters of morality and morality in turn is rooted in ideas of a metaphysical nature. And, or so the would-be rationalist insists, ordinary moral sentiments with their metaphysical underpinning must give way to the certainties or at least to the falsifiability of science. Yet as the arch-rationalist David Hume pointed out in the 18th century (he the best chum of Adam Smith), rationality has its limits. Specifically, in 1739 in A Treatise in Human Nature: Being an Attempt to introduce the experimental method into Moral Subjects he wrote:
“Morals excite passions, and produce or prevent actions. Reason itself is utterly impotent in this particular. The rules of morality, therefore, are not conclusions of our reason”.
In other words, morality in the end is rooted in and depends upon feelings. Collectively these moral feelings form the stuff of conscience. Where these feelings come from is one of humanity’s great debates. Some say they are evolved, like everything else – favoured by natural selection because they have survival value and now encapsulated in our biology. Some appeal to the mysterious “collective unconscious”. Some say our moral sentiments have been inspired by God, and brought down to us by His prophets: Moses, Jesus, Muhammad. The Taoists speak of universal harmony, to which we are all tuned, or would be, it only we listened to our inner selves. Buddhists have a similar idea. The various kinds of ideas are not mutually exclusive although some of their adherents think they are. But wherever our moral sentiments come from they must be preciously guarded, cultivated, and promulgated. To argue as the ostensibly ultra-rationalist neoliberals do that our inmost feelings must give way to hard-headed accountancy is to abandon morality altogether.
Only a psychopath could possibly agree that this is a desirable and safe route to go down. It is, though, regrettably the case that the world’s most influential people – political and industrial leaders, financiers, and the super-rich in general – include a great many psychopaths. This is one of nature’s nasty tricks. For although natural selection must surely favour cooperativeness and the niceness that must go with it, all creatures including human beings can often gain an advantage in the short term by putting the boot in, as described and recommended in the early 16th century by Niccolo Machiavelli. Cooperativeness should indeed triumph in the long term – “the meek shall inherit the Earth” said Jesus (Matthew 5:5). But the long term in reality is a lot of short terms joined end to end. So short termism tend to prevail, as is abundantly obvious in politics. And besides, as J M Keynes remarked, in the long term we’re all dead.
So what can be done? Even at this late hour, when we are staring Armageddon in the face, we need to undertake “the great re-think”. We need indeed need to re-think everything from first principles – the principles of morality and ecology – and to re-think everything in the light of everything else. And we need – an approach that is far from mainstream – to relate the very big ideas of morality and ecology to everyday life – and in particular to agriculture. We need to recognize that all the biggest ideas including those of morality and indeed of science are rooted in metaphysics, and restore metaphysics to the centre stage. It all amounts to nothing less than a cross-the-board Renaissance, which must be led by us, people at large, because the people with most influence in the world, the powers-that-be, are not on the case, and continue to pursue strategies based on seriously inadequate ideas, of which neoliberalism is a prime example and perhaps, in its day-to-day impact, is the prime example.
The broader picture – what’s really required and why and how to go about it – is the subject and the objective of this whole website (and of my book, The Great Re-Think, published by Pari in 2021).
To be continued …
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