“In this present crisis, government is not the solution to our problem; government is the problem.” — Ronald Reagan, Inaugural Address, Jan. 20, 1981.
Accurately identifying historical beginnings is tricky and often impossible. But former US president Ronald Reagan and former British prime minister Margaret Thatcher symbolize as well as anything the beginning of “neoliberalism”: a radical social, political and economic experiment to test the hypothesis that market forces, which express something called the “rational self-interest” of the individual, are good enough on their own to coordinate a society—or, if you take Thatcher’s word for it, a non-society—if only we free them from interference by legislative assemblies, also known as governments.
In other words, societies work best when governments don’t interfere in free markets.
“The societies which have achieved the most spectacular broad-based economic progress in the shortest period of time are not the most tightly controlled, not necessarily the biggest in size, or the wealthiest in natural resources. No, what unites them all is their willingness to believe in the magic of the marketplace.” –– Ronald Reagan, Sept. 29, 1981.
For about the last thirty years, our planet has been living this experiment. For the purposes of this column, I’m interested in the way that people like Reagan and Thatcher were inspired to undertake this experiment by specific intellectual figures. It interests me for a few reasons.
First, because the so-called “relation between ‘theory and practice’ is a problem for those of us who want to figure out our present. To date, the go-to example has been how Karl Marx’s thinking influenced totalitarian regimes in the twentieth century, but we should look a little closer to home.
Second, for personal, or maybe vocational reasons: I’m a philosopher and during my school years was often asked “What are you gonna do with that? Teach?” – a very neoliberal question, one which unofficially frames the way that people like me should understand our vocation.
Lastly, because I think that our society is in trouble when it comes to the question of ethos—the question of whether it’s possible for a society to develop an ethical disposition toward its present character—and because a good way to grasp our predicament is through the relationships between things like governmental policies and the ideas upon which they’re supposedly based.
Hayek: libertarian superhero
Here I should introduce Friedrich August Hayek, an Austrian philosopher famed as a libertarian superhero and influence on Reagan and Thatcher. The popular interpretation of Hayek’s idea is that free, or unregulated, markets are the necessary condition for a free society. Even the promotional blurb on Hayek’s celebrated book The Constitution of Liberty (1960) supports this interpretation: “Hayek elegantly demonstrates that a free market system in a democratic polity represents the best chance for the continuing existence of liberty.” Some version of this is recognizable in public debates today: in fact, it predominates and to a great extent shapes the opinions even of people who reject it. To base society on the market means that society should then be understood according to the market.
“There is no such thing as society.” — Margaret Thatcher, interview in Woman’s Own magazine, Oct. 31, 1987.
This is why “What you gonna do with that? Teach?” is a neoliberal question. What it really asks is: “How does ‘that’ look from the point of view of the market? Does it satisfy the market’s demands, whatever they happen to be right now?” Since around 1980 or so, more and more people have asked this question and have been asked this question; but it’s not much older than that. Of course, people have long wondered about the point of philosophy, art, music, sports, or whatever you like, but only since the 1980s has it become common to ask that question in this neoliberal way. This, according to a series of recent transformations symbolized by Reagan and Thatcher, comes to us from intellectuals like Hayek.
But you won’t find such a view in The Constitution of Liberty. For Hayek, what defines a free society is the effective suppression of a) unilateral political power (for example, a dictatorship or a military junta) and b) the arbitrary treatment of individuals and groups by authorities. The basis for this freedom isn’t a market but a general social disposition, an ethos. What supports a free society for Hayek is its own commitment to general principles that override immediate material needs. This commitment, for Hayek, is a commitment to the rule of law, and construes his idea of freedom or liberty as involving obedience to general principles, and laws based on those principles, that aren’t the expression of any individual person’s will or whims (The Constitution of Liberty, 221). Any market activity will produce intolerable effects without that commitment: it is not enough to assume that the “rational self-interest” of individuals will prevent catastrophes, as Alan Greenspan found out in the 2008 financial crisis.
A simpler way to put it might be that the principle “Greed is Good”, even when said tongue-in-cheek, is incompatible with freedom and with a free society as Hayek construes them.
Friedrich Hayek knew this, and insisted that there are “aims which the mechanism of the market cannot adequately take care of” (190). In other words, he knew that markets should not be allowed free rein in a society, and rejected the idea that society should be based on markets. So how do we get from him to Reagan and Thatcher or to the American lobbyist Grover Norquist, who infamously remarked: “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub”?
Drowning government in the bathtub?
Hayek already had an answer to that question in The Constitution of Liberty. In it Hayek insists that what “we must learn to understand is that human civilization has a life of its own” (131, italics mine), that although, yes, there are individuals, individuals’ actions pile up and have far-reaching consequences that get away from us through our inability to control them all or because we forget that they’re there. That’s why “What’re you gonna do with that? Teach?” is so interesting to me: it embodies an attitude that has a relatively short history, an attitude that was delivered to our society by political authorities who appealed to thinkers like the philosopher Hayek—thinkers who didn’t even necessarily have that attitude in the first place and who in fact tried to highlight its dangers.
“We might conceive of a civilization coming to a standstill,
not because the possibilities of further growth had been exhausted,
but because man had succeeded in so completely subjecting all his
actions and his immediate surroundings to his existing state of knowledge that there would be no occasion for new knowledge to appear.”
— F.A. Hayek, The Constitution of Liberty, 89.
The distortions and funny interpretations we see when “theory” meets “practice” are at the very heart of the lives of societies like ours; they’re not just trivia to note and set aside. That’s why the “market” isn’t enough and pretending that “there is no such thing” as society is a mistake. And that’s why we need committed critical thinkers, who look where most of us don’t, who remember what most of us forget, who break open what’s most “obvious” about our present to find out what makes it tick and why.
And that’s what to do with “that”.