Neoliberalism: More recent times

By the last quarter of the 20th century, the growth, consolidation and extension of the nation-state as a force in the lives of citizens seemed to be slowing down and even, in places, to be reversing. The change was by no means sudden; it is more in the nature of a shift in broad trends than a sudden transformation of the civic order. One of the key ideologies articulating and advocating a smaller role in society for the state is called ‘neoliberalism’. The ‘neo’ part of the word indicates that these ideas are not new. Rather, they are a revival of earlier ideas about markets and society that date back to the beginnings of the modern, market economy. Neoliberalism’s case is that civil society is better regulated by the market than by state intervention, and that the state should withdraw from any areas of social activity that can be safely left to the market.

See Adam Smith’s ‘Invisible Hand’.

Until this return to classical liberalism, the tendencies of the nationalist state had been to grow the size of government. The protective scope of the universal welfare state expanded, often in order to counteract the excesses of the market. By contrast, the ideology of neoliberalism advocates a shrinking of the state and the development of an ethics of self-reliance as an alternative to dependence on the welfare of the state. In this respect, neoliberalism also represents a return to older ideas of social hierarchy based on the values of the market and competition. If some people do better than others, the neoliberal argument goes, it is because they have worked harder or smarter in the market. Thus, inequality is attributed to individual differences. In their more recent reincarnations, these ideas are reminiscent of another 19th-century concept: the ‘survival of the fittest’.

See Herbert Spencer on the Survival of the Fittest.

Dimension 1: State power

The era of nationalism was the heyday of the big, strong state whose realm of activity started and ended at the borders of the nation. In the era of neoliberalism, the state is made smaller and weaker. In order to achieve this, neoliberal states undertake privatisation; they cut back the welfare state; they ‘open’ labour markets by restricting the power of trade unions; and they deregulate business, allowing the forces of the market to do their work unimpeded by government legislation.

See Ronald Reagan on Small Government.

Neoliberalism is an ideology that mistrusts government and thinks that the market is the best mechanism to provide people with social resources. The market gives people an incentive to work and do well, so the neoliberal theory goes, whereas the ‘nanny’ or social welfare state is costly, inefficient and protects people to a point where they learn helplessness.

See Margaret Thatcher: There’s No Such Thing as Society.

The turning point in the drift towards neoliberalism occurred in the 1980s, in the last years of the Cold War while communism in its classical forms was teetering towards collapse. In the advanced capitalist world, government enterprises – including state-owned utility systems, airlines, railways and banks – were sold as part of the trend to privatisation. Even social welfare and education were partly privatised, and when these social services stayed in public ownership, the logics of market choice and competition were introduced.

The Berlin Wall fell in 1989, and within a few years the post-communist states of Eastern Europe and the former Soviet Union had taken the neoliberal path. Whereas all industry and farms had been owned by the state in former communist nations, most were now privatised. In effect, this meant that either the managers and other well-placed people took over state industries as their own private property, or foreign firms came in and bought them up, often at bargain prices. In China and Vietnam, the communist parties stayed in control. All production had previously been controlled by the state, but now villagers were allowed a measure of ‘personal responsibility’ and to produce for the market. Foreign investment was also allowed, state-owned enterprises were increasingly encouraged to run along market lines and private businesses were permitted.

See Deng Xiaoping: Socialism with Chinese Characteristics.

Meanwhile, in almost every country of the world, the welfare state’s safety net was cut. The key driving these cuts was that the market is the best provider of welfare simply because it provides jobs. Better to force people to work than to allow the easy option of living on welfare. State-sponsored welfare, argue the advocates of neoliberal retrenchment, removes the incentive for people to take responsibility for their own support. In fact, anything that interferes with the market – trade unions or government regulation, for instance – is a bad thing. Neoliberals believe that the economy would be stronger if the market was allowed to determine the cost of labour.

Deregulation becomes another one of neoliberalism’s catch-cries. The strong state that had developed in the earlier part of the 20th century created rules for every aspect of social life. It had interfered in areas in which it was not necessarily an expert. The neoliberals argue that all these regulations make it hard for businesses to operate and the market to be truly free – environmental controls, labour controls and controls regulating professions, for instance.

Once freed of these controls, the neoliberal case is that enterprises, industries or professional groups regulate their own behaviour because it is in their own best interests to do this. People do things well and efficiently because the market runs on the principle of competition, rather than according to rules imposed by government. This, the neoliberals argue, is the best way to produce the social good.

See David Harvey, A Brief History of Neoliberalism.

Meanwhile, along with the rise of neoliberalism and the shrinking of the size and dominance of the state, came the larger forces of globalisation. Globalisation also reduces the relevance of the state by blurring its previously neater borders. Free markets – one of the shibboleths of neoliberalism – meant freedom of international finance and trade. Enterprises should be able to invest anywhere (for instance, where labour is cheapest) and trade anywhere without restrictions, such as tariffs, quotas or subsidies. Currency exchange rates should be determined by financial markets. Interest rates should be determined by financial markets. Even labour markets are globalised as waves of legal and illegal migrants cross borders in search of work. The result is that, today, we have labour forces of such diversity that the idea of the homogeneous nation-state is an anachronistic impossibility.

Dimension 2: Public services

The period during which the dust settled after the end of the Cold War represents a turning point in the history of the nation-state and the nature of the relationship of states to citizenries. The welfare state had been the capitalist world’s answer to, or defence against, communism. Twentieth-century capitalist governments felt that they had to afford a program of redistributive justice, requiring a large and expensive state that blunted the sharper edges of the market and addressed the worst of its inequalities.

With the end of the Cold War, milder economic cycles and lower unemployment, states around the world began a conscious program of retreat, shrinking the state and reducing the scale of its welfare programs. The ideology of neoliberalism claims that small states afford citizens greater liberty. According to this theory, society is created through the market, and the state should stay out of social and economic affairs to as great a degree as possible.

Every tax cut, every program cut, is made in the name of this neoliberal interpretation of liberty. One side-effect has been to increase inequality. While the affluent have become considerably more affluent, the disparities between the affluent and the poor have grown.

In the social service that is education, the drift to neoliberalism has been experienced as shrinking state funding; pressure for teaching to become a self-regulating profession; the emergence of self-managing schools that are run like businesses or corporations; the end of geographical catchment areas so schools can compete for students; and an increase in the numbers of private schools and even privately owned, for-profit schools. Education is conceived more as a market than a service provided to citizens, as it had been during the era of the welfare state. In the context of the shrinking state, public education is reduced to the most basic of basics. Literacy is reduced to phonics and reading comprehension and numeracy to mathematical procedures that are simple to teach and easy to test. The assumption seems to be that the market can do the rest for those who can afford the tuition fees and find value for their money. Neoliberalism in practice reduces the relative quality and status of education for many, particularly those who have no alternative but public schooling (Apple 2006).

Dimension 3: Belonging and citizenship

This is also when narratives of belonging solely to one people, one land, one nation start to become less plausible. One reason for this is that the influence of states as sites of citizenship and focal points for community is waning. Their role in civil society is powerfully supplemented by, indeed perhaps replaced by, transnational corporations (where your work belongs), globalised professional communities, the global media that bring the world closer to home, and geographically dispersed and perpetually shifting diasporas. Migrant communities are more interested in their roots and connections than ever and, with modern transport and communications, they are more able to maintain these connections. People’s identities, in other words, are less tied to one neatly defined nation-state – the one in which they live – than they were in the past.

The paradox of globalisation is that, although it seems to lead to cultural uniformity – a McDonald’s in every neighbourhood – its universalising spread also produces startling diversification. Neighbourhoods are constantly changing as a consequence of global migration. The local community comes to feel like a microcosm of the whole world. And since 1989, global markets are such that there is almost no place in the world where you cannot sell your wares and no place in the world from which people are unable sell their wares into your local market. There is almost no place in the world to which you cannot journey in a few days and almost no place in the world that is not instantaneously to be seen or heard at the other end of a telephone call, or the Internet link, or a television reporter’s camera. Hence, we propose this definition of our contemporary moment of ‘total globalisation’: for the first time in human history, the globe is the potential domain for any action or representation.

In an era of total globalisation, the racism that often accompanies nationalism is not only bad in principle; it is dysfunctional in practice. It is bad for business. If your neighbourhood or your workplace is diverse as a consequence of global labour lows, you need to get on with your neighbours, your team mates and your customers, or at least quietly accept their differences. If your workplace is part of a global enterprise, you need to be able to get on with parts of the organisation located in different places, and even move to live there if needs be. If your goods can be sold at the other end of the Earth, you need to find out about the kinds of people who might be purchasing them if they are going to sell well. If global tourism is one of the new boom industries, you need to be tolerant of the quirks of visitors from distant places and respectful of cultures you visit. If the big news is now as much global as it is local and national, you need to become an aware global citizen. As for imperialism, there is no need to take over other people’s countries by force in order to access their markets – as the Spanish had done in Central and South America from the 15th to the 18th centuries, and as the British Empire had done from Ireland to the Americas, India and Australia between the 16th and 20th centuries. In fact, if you try it, you’ll find that the costs today outweigh the benefits. Besides, why would you? When other people’s markets are open, your enterprises can do business there without having to ire a single shot.

Meanwhile, the powers that be in former nation-states discover that all is not happily homogeneous among their citizens. Civil rights movements, anti-colonial movements, feminists and supporters of multiculturalism all begin to say, loudly and clearly, that exclusion and discrimination on the basis of race, religion, ethnicity, nationality, gender, disability and sexual orientation are not acceptable, in principle or in practice. All manner of social movements vociferously dispute and discredit the idea of the homogeneous nation. The voices of difference become louder and, as Charles Taylor says, their ‘denunciations of discrimination and refusals of second class citizenship’ become more and more vehement (Taylor 1994). In place of one-people, one- state nationalism, the early phases of ‘multiculturalism’ emerge.

One side of this trend is to take pleasure in a new cosmopolitanism – the varied foods and the vibrant neighbourhoods. Another side is a libertarian detachment of the variety, ‘I don’t give a damn how you live. Live whatever way you like, as long as I can live my life my way and prosper in the market.’ According to the neoliberal argument, the state has no business interfering in culture, or telling people how they should lead their lives beyond that most basic of basics: the market. Create market conditions within which people can pursue their individual material self-interest, so the argument goes, and social welfare and harmony will follow. The market will provide and culture will look after itself. Let the ‘invisible hand’ of the market do its work, as Adam Smith advised, and society will progress of its own accord (Smith 1776). Culture will flourish free of the meddling state. In other words, the state should interfere in society and culture as little as possible. Its main role is to enforce the basic rights and obligations that the workings of the market presuppose, such as contracts and private property. Citizenship carries with it no weight of cultural responsibility beyond allowing people to pursue their own self-interest in the market. In this context, cultural variations may flourish as fashion and fetish and fad. Each to their own, according to individual taste and market choice.

People who grew up with the neat assurances of nationalism sometimes find today’s bewildering range of in-your-face differences to be disconcerting and disorienting. They regret the fragmentation of society and the dissolution of ‘traditional’ values. In this debate, we hear ‘back to the future’ reactions in which some people argue for good, old-fashioned civics. Indeed, in many places in the world, the end of the Cold War was accompanied by the virulent ethno-nationalisms speaking for peoples who supposedly wanted their own states to the exclusion of cultural, linguistic and religious differences. These were belated attempts at the project of creating the modern, ethnically homogeneous nation-state, often in places that have been ethnically diverse since time immemorial – in the former lands of Yugoslavia and the Soviet Union, or central and northeast Africa, for instance. This represents a kind of catching up with modernity, and the human cost has been comparable to earlier attempts, from policies designed to assist the Indigenous people to either assimilate or die out in Australia, or the creation of an homogeneous German Reich under Hitler. Indigenous ‘protection’ and fascism each made a terrible kind of sense in the era of modern nationalism. But states that want to catch up now by going back to the future, neglect another future that is already upon us: the future of global interconnectedness and local diversity.

Dimension 4: Learning civility

Schooling was a significant institutional part of the regime of modern nationalism and compulsory schooling. Mass, institutionalised education was a creature of the rise of the modern nation-state. With the trend to neoliberalism, however, schooling faces the same crises and transformations that the state does more generally. How do teachers deal with all the differences they face, and that now demand their attention in the classroom? The old citizenship education was easy, but how does one teach for multicultural citizenship? And how do schools and their communities deal with the partial withdrawal of interest of the state in education and, with a reduced tax base, a diminishing capacity to act?

The partial withdrawal of the state from education takes many forms: ‘self- managing’ public schools with devolved budgets and school councils; the proliferation of private schools offering every kind of cultural promise, from entree to ruling-class networks to fundamentalist religious discipline; parents removing their children and undertaking home schooling; flexibly delivered, distance-mode, work-relevant training as education; and the sponsorships and marketing that reflect the widespread commercialisation of education, a space once sacrosanct and clearly separated from commercial interests. As a consequence, the singularity of purpose within education during the era of nationalism has dissipated, as has its institutional continuity and coherence.

See McLaren on Life in Schools.

At points, even the rationale for education changes. From the idea of a common curriculum for all, the new catch-cries are freedom, choice and diversity of educational offerings. In reality, this means one of two things. The first is tokenism when it appears that diversity is honoured – a superficial ‘spaghetti and polka’ multiculturalism of ‘national days’ and country studies and community events – but in which nothing much changes in terms of patterns of core curriculum processes and thus educational outcomes.

The second is the phenomenon of different social groups parting company. Educational institutions fracture and fragment as they attempt to create self-enclosed communities. Children go to a fundamentalist religious school, run by their religious community, later to be employed in businesses run by their co-religionists. Children of migrant ethnic groups go to a school that teaches bilingually and is run by their diasporic community, later to be able to be employed or do their business anywhere in the world within that particular diaspora. Often, this is a sign of a certain kind of politics of disappointment – a retreat that begins with the failed promise of modernity to include everybody on a genuinely fair and equal basis.

In the face of this fragmentation, there is a revival of back-to-the-future educational nostalgias. Hence, the ‘culture wars’ in which the opponents of multicultural- ism loudly articulate their regret for the apparent loss of the virtues of the traditional subject content, the ‘Western canon’, ‘cultural literacy’, ‘the basics’, and a golden era before ‘political correctness’ became the response to the overwhelming range of differences (Cope and Kalantzis 1997b). These nostalgias are no less anachronistic than the ethno-nationalist backlashes, reacting to the new realities of local diversity and global connectedness. The fact that education is a significant site of these ‘wars’ is evidence of its central importance in the project of nationalism, and now neoliberalism and the backlash against neoliberalism.