Book review: The Secret History of Neoliberalism
Some common understanding between critics and proponents
“The Invisible Doctrine. The Secret History of Neoliberalism (& How It Came to Control Your Life)” by George Monbiot and Peter Hutchison
Review by Anthony J. Evans
In his recent book, co-authored with Peter Hutchison, George Monbiot makes a distinction between a bridging network (which brings together people from different groups) and a bonding network (which strengthens the ties of those within the same group). But is he sincere in his claim to want to seek dialogue between different groups? Despite not being the target audience for The Invisible Doctrine: The Secret History of Neoliberalism, I found it to be entertaining and well worth reading. With that in mind, I wish to highlight four claims that Monbiot makes, which I believe constitute a link to the intellectual foundations of the IEA.
1. A commercial society is good and just.
Monbiot makes it clear that his target is capitalism, not commerce. And because he uses an idiosyncratic definition of capitalism, it is important to avoid letting a semantic debate obscure a substantive one. To the extent to which free market economists advocate the traditional marketplace, where small traders engage in voluntary exchange, Monbiot is on board. Economists would probably emphasise that this rests on an assumption of competition, and Monbiot rejects competition as being a defining necessity of social coordination, but I suspect that even large traders, if they result from economies of scale, and don’t abuse their monopoly power to exploit consumers, are morally OK. The issue for Marxists is the claim that capitalism generates increased concentrations of capital. The issue for free market economists is that the state wields powers that can protect large companies from their need to provide goods and services that genuinely satisfy consumers. This just comes down to whether you pin the blame for an unhealthy reliance between business and the government on the former or the latter. Perhaps crony capitalism and capitalism are one and the same. If so, let’s agree on the importance of a commercial society.
2. Friedrich Hayek is a relevant and insightful scholar.
Monbiot criticises neoliberalism for neglecting the concept of complexity, arguing that:
“All complex systems possess emergency properties. This means that their components, however simple they each might be, behave in non-linear ways when they combine. Through networks created in ways that nobody could possibly have planned, via billions of randomly distributed decisions, they organize themselves — spontaneously creating order without central control” (p.112).
Keen readers should detect the Hayekian insights within that paragraph, which reveals that Hayek’s work on complexity theory is incredibly important. Whether Monbiot believes Hayekian scholars (people like Bruce Caldwell, Peter Boettke and Paul Lewis) misinterpret Hayek, or misrepresent him, I’m not sure (Monbiot doesn’t seem to engage with the scholarly literature on his intellectual foes). But to the extent to which Monbiot believes complexity theory is worthy of study, he is boosting the intellectual legacy of the 1974 Nobel Laureate.
3. Elinor Ostrom is a relevant and insightful scholar.
Monbiot does not advocate a large and strong state to take over all of the functions that he deems to have been inappropriately handed over to “the market”. He recognises the broad concept of governance, which relates to collective action problems that markets may struggle to resolve. Indeed, his suggested alternative to neoliberalism is a focus on protecting the commons. While he doesn’t devote significant time to the work of Elinor Ostrom, the 2009 Nobel Laureate showed how community action can navigate the middle ground between market and state to provide services that are consistent with local desires as well as long term, sustainable outcomes. Monbiot’s book constitutes a ringing endorsement of her intellectual legacy.
4. Growth isn’t everything.
Monbiot believes that the economy should not be run to promote growth at all costs, and that other concerns – chiefly those relating to environmental degradation – should be emphasised. So it’s important to note that since the 1970s there has been concerted attention to environmental protection and there has been a major slowdown in economic growth. Perhaps not sufficient to satisfy Monbiot, but he should take pride in his own role in persuading the public that a benefit of wealth is the resources and inclination to become better stewards of the natural planet. The peak of neoliberal dominance – the 1990s – coincided with unprecedented high living standards and material and cultural wellbeing in those countries that respected basic freedoms. That wasn’t just a result of globalisation, but also a sense of solidarity and concern for the marginalised. An important victory.
I don’t expect to agree with Monbiot about neoliberalism. He is an activist, and his objective is to move public opinion away from capitalism. I am an academic, trying to understand what neoliberalism is and whether it is a useful label to frame political debate. While Monbiot’s book claims to be about neoliberalism, it is really about capitalism, and that does call into question whether Monbiot’s use is a rhetorical ploy more than an attempt to enlighten. (I have previously argued that critics of neoliberalism struggle to distinguish between the Austrian school and neoclassical economics). But it is important to engage in a charitable reading and seek agreement where possible.
Most people who talk about neoliberalism despise it. And Monbiot is one of their chief cheerleaders. But there are important grounds for common understanding.
This article is a shortened version of: Exploring neoliberalism: Notes on Monbiot & Hutchison 2024)
Hayek and Ostrom are both obviously from their era. Hayek born in the reign of Victoria who taught in WW1 and Ostrom born during the Great Depression so both have been influenced by poverty and war. Baby boomers of the 60s have different views and drive Capitalism without the social side thought by both scholars. So we have all now further and added experiences. An analysis that reaches no clear and obvious result that turns into facts is just an analysis. So we must take older views with the knowledge of now and the use of hindsight. As for Growth and the understanding of growth is in my view still unclear. What is growth? Growth of GDP? growth of wealth? Growth of capital? Growth of population? Growth of borrowing, (bearing in mind GDP figures go up with borrowing) Growth of the stock market? Growth of wages? Growth of prices? Growth of profits? Or what I think it should and really mean in political economic terms is growth if tax revenue or tax take? There is nothing liberal in the capitalist views of the baby boomers who now see that disability benefits which were acceptable just a few months ago are now deemed as too much because they are looking at the bottom line and class non workers as a cost too far to that need to balance the books and borrow less to keep their capital stake. I am neither a capitalist nor a liberal nor a communist nor a socialist. Pigeon holes are like having analysis without answers, useless. Facts are the basis for reason. Democracy which is not always democratic, is the best we have and laws are the best we have to organise the framework. If you accept that then you have to accept fairness and equality of all. And politicians should snd must think of all whilst in charge. To that end we need an economy fit for purpose and fit for all. Just because you have a job and work doesn’t automatically mean you are a good person within that framework. Do you point the finger of blame in benefit recipients is wrong, unfair, unequal and deluded. All benefits recipients pay their way. They pay taxes, vat, duty, council tax etc. and their spending contributes to profits and GDP. Indeed the public sector pay for the profits of the private sector! Without both nothing gets done! It’s not one or the other it’s all people within a democracy spending their income however it comes. Pension companies wouldn’t work without the money from the public and private sector for example. It’s not about pigeon holes! It’s about money! And we have seen and learned it works well for a few and not well for the majority. And badly for the poor, old, infirm, disabled, unemployed and the unemployable! A minority but a contributor more than the mega rich who pay no tax on money unspent and unused! None!! You get taxed when money is spent but nothing when nothing is held on to! There is the problem for our democratic fair lawful and equal society. It’s not fair or democratic that the few rich can hold on to most of our money for too long sometimes centuries, without paying any tax! Those on benefits pay all taxes because they spend all their money. And let’s face it income tax and NI isn’t paid by the worker employee. They are paid by the employer! Spending on the wages of the worker. Do we the taxpayer are not just the workers. It’s all those who work or not. They pay the same pro rata of income, and those spending all their income each month pay all their taxes! But the few rich are allowed to keep their indecent unused money without paying any taxes for years. Making the majority devoid of it. Wealth should be based on the product if spending not the money itself and there is the reform needed. We gave computer digital electronic systems now. So use them! Re introduce exchange control. Let hoods glow accrues borders but not the money! We need it! Do analysis us ok but answers that work based on our basic rights are the utopia. You won’t find that in the book!
I too have read this book. Socialists used to talk about the overthrow, or at least the dismantling of the capitalist system. These days, the left no longer speaks of capitalism, preferring to use the term neoliberalism instead. Yes, I agree Anthony Evans – it’s basically the same thing. Monbiot and Hutchinson seem to label all and sundry as proponents of neoliberalism. So they also include a number of politicians on the left such as Bill Clinton, Barak Obama and Tony Blair as neoliberals. Basically, anyone who doesn’t accept their idiosyncratic definition and discourse of the ills of capitalism is a neoliberal. Having given themselves such a huge target to shoot at: they cannot possibly miss. It’s a kind of self-fulling circular argument.