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What is Neo-liberalism and why knowing matters

I have said it before but it deserves repeating. Democracy is not failing us; it is we who fail democracy when we fail to actively engage with it. Democracy, as we practice it today, has lost its essential direction and has been usurped by a divisive creed full of vitriolic, jingoistic spin.

Over the past 12 months there have been a number of articles by me and other contributors who have made references to the evils of ‘neo-liberalism’, but it occurred to me that we did that without explaining exactly what neo liberalism is.

US academic David Kotz wrote in 2002 that:

“Neoliberal theory claims that a largely unregulated capitalist system (a “free market economy”) not only embodies the ideal of free individual choice but also achieves optimum economic performance with respect to efficiency, economic growth, technical progress, and distributional justice. The state is assigned a very limited economic role: defining property rights, enforcing contracts, and regulating the money supply. State intervention to correct market failures is viewed with suspicion, on the ground that such intervention is likely to create more problems than it solves.”

He then goes on to say,

“The policy recommendations of neoliberalism are concerned mainly with dismantling what remains of the regulationist welfare state. These recommendations include deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class. In the international sphere, neoliberalism calls for free movement of goods, services, capital, and money (but not people) across national boundaries.”

It is not hard to see a close association between Kotz’s description of neoliberalism and the way the Liberal and National Parties conduct themselves in government today. Neo-liberalism reads like an LNP manifesto.

Remember to, this is not a description of a theory or principal set-in stone. It is a political preference chosen by a particular subset.


This is the Magna Carta of the rich and powerful. It was they who, by puppeteering Ronald Reagan and Margaret Thatcher, and with a great deal of effort and money, penetrated not just the media and simple-minded politicians, but also economists and academics the world over, who expounded their mantras, including ‘trickle down economics’ wherever they could.

The Liberal Party of Australia supports deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class.

The worldwide neo-liberal movement have been so successful over the past 45 years that much of what they preach has become the standard understanding of what constitutes a democratic system of government. Can you now see how clever they have been?

In gradually unwinding the very principles of democracy and shaping our minds to believe that their way of seeing things is the true democratic way, they have been able, particularly since 1971, to acquire, accumulate and centralise massive wealth and thus assume control over practically every facet of our lives.

Their greed has wrought devastating pain, poverty, hardship, war, disease and the deaths of millions of ordinary people around the globe, but if you dare challenge them, they would say, “Look over there. A terrorist.”

It has been a relentless campaign conducted largely through a compliant media and by lobbying both corrupt politicians and those that simple don’t know any better; the latter being the vast majority.

To quote Professor Bill Mitchell:

“The general population lives in smoke haze of half-truths, misperceptions and outright lies, all driven by some fear of loss that is whipped up daily in the media as part of the above campaign.”

The vast majority of voters are ignorant souls. We love to hear politicians tell us how smart we are and how we won’t be fooled by “unsubstantiated claims” from rogue academics and lefty journalists; how we generally get it right when we throw a government out of office.

All this is very flattering and appeals to our limited understanding of what specifics they are referring to, whether it be in defence, social welfare, economics or some other marginally complicated issue. Even when we feel we will be worse of, we accept a politician’s soothing assurances that we will be much better off in the long run.

I daresay, also, you will find that those who have been duped by this campaign are mostly conservative people and also religious people. When times are bad, those who cling to a god belief are encouraged to pray. They pray that their god will hear them, that their prayers will be answered, that things happen for a reason and other such consoling rituals.

One can’t help thinking that those faceless fathers of neo-liberalism thrived on the faith of the religious that it would act as a smokescreen they could hide behind. I could even go so far as to suggest they used the same blueprint the early fathers of the church used to spread their influence and domination.

I am constantly staggered when engaging with conservative supporters on Facebook at how vehemently they cling to the neo-liberal ideology; how often they cite Christian values when posting supporting comments.

I am staggered to see how utterly oblivious they appear to the aims and objectives of the rich and powerful who must be chuckling away behind closed doors at how successfully they have blindsided the masses.

So who do we blame for all this? Is it the neo-liberals themselves, the media, the spin doctors? The fact is, you and I are to blame.

Democracy today is no longer government of, by and for the people. It is government of the most influential, the loudest shock jock, the focus group, the public relations consultant and whoever else is able to exercise their lust for power.

This dysfunctional gathering ignores concern for national unity and prosperity. The voice of the special interest group has come to dominate the present model. Debate, divide and conquer is the aim and its tactic is to fragment the collective energy of the nation, split it down the middle, weaken its resolve and make it easier for vested interests to have their way.

Most people, I am convinced, do not realise that we have surrendered that noble ideal in favour of neo-liberalism, a self-centred, greedy, winner take all ideology that is slowly destroying us. As the saying goes, “none are so blind as they who will not see.”

Neo-liberalism is the reason the AIM network and other independent blog sites exist. We are the voice in the wilderness.

When you wake up one morning and you suddenly realise you have no power or influence anymore, that your voice is meaningless, don’t say you didn’t see it coming.


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  1. Stephen

    I thought we already were there.

  2. Kaye Lee

    The Swiss constitution begins…..

    The Swiss People and the Cantons,

    mindful of their responsibility towards creation,

    resolved to renew their alliance so as to strengthen liberty, democracy, independence and peace in a spirit of solidarity and openness towards the world,

    determined to live together with mutual consideration and respect for their diversity,

    conscious of their common achievements and their responsibility towards future generations,

    and in the knowledge that only those who use their freedom remain free, and that the strength of a people is measured by the well-being of its weakest members;

    adopt the following Constitution:

  3. Adrienne Lovleock

    None so blind as those who *will not* see.

  4. Glenn K

    exceptionally well put John. I remember well my first political science lecture in my first week at university back in 1982 (in Canada) – the professor’s opening comment was “the worst thing to happen in international relations and global democracy in the past year was the election of Ronald Reagan as president of the USA.” She then spent the remainder of the term explaining why. Any you’re right, we’re all responsible.

  5. Klaus

    As sad as your perfectly true account of the state of our democracy is, I need to agree. It is beyond comprehension that many liberal supporters on the lower end of the income scale, support this trash economy. They in fact support being cut off from welfare, being punished for working Sundays, being punished when trying to give their kids a better education than themselves enjoyed etc.. All in the name of Security, Terror, Christianity. To this day, I will state that there was no genuine terror attack in Australia (thank god). What we have instead is deranged people who fight for an ideal that does not exist. They are loners, not terrorists.
    What we fail to do as a society, paint a true and effective picture of who we really are. We are bad at it and the right wing loves the masses being sidetracked by the most minute event in the name of national security. This has to be stopped. Already, they are now citing German foolishness for having been to generous and are now riddled with sexual deviants as well as terrorists. Even Australian MSM is using this as an example of how to not do it.
    Australians are lazy democratic participants. That needs to chenge

  6. Anthony Element (@observationpt)

    I entirely agree with the article but its focus is largely upon, what we might call, a moral argument against Neoliberalism.
    There is another, rather more practical stall before which this philosophy falls, and that is that for Neoliberalism to work from a practical standpoint two conditions must exist.
    First there must be no artificial manipulation of the market, otherwise it’s supposed self correcting mechanism must inevitably fail.
    Second, participants in the free market must behave legally and honestly, otherwise the entire system fails.
    Good luck with achieving either.
    Neoliberalism is in fact a rather naive, dare I say it, childish belief system.
    Not surprising really when one considers its profoundly mentally disturbed goddess, Ayn Rand.

  7. Ronson Dalby

    Sorry for being a tad shallow but the fonts in this article are awful.

  8. Jaq

    Democracy? What’s that Daddy?

  9. Kaye Lee

    Very good points Anthony. Fossil fuel subsidies, bank guarantees and the like distort the market. Corporate tax evasion, worker exploitation, and a refusal to endorse sustainable practice means that neoliberals are breaking their side of the social contract.

    And they are also working very hard on undermining the collective voice of the workers.

  10. margcal

    I’m becoming weary of the constant (often ignorant) Christian bashing on the AIMN site.
    You rightly decry tarring all Muslims with the same brush. It’s hypocrisy to then do exactly that to Christians.
    You don’t win friends by being gratuitously offensive.

  11. Backyard Bob

    The Swiss constitution begins…..

    I fell asleep reading ours.

  12. JohnB

    Well said John K.
    It’s hard to improve on your essay, but in nit picking I would word your following para. a little stronger:
    “…It has been a relentless campaign conducted largely through a compliant media and by lobbying both corrupt politicians and those that simple don’t know any better; the latter being the vast majority…”
    It has been a relentless campaign conducted through their strategically acquired MSM network – by lobbying both corrupt politicians and those lacking commitment or courage to resist, to stand for honesty, fairness and decency; the latter being the vast majority.

    The powerful industrialists orchestrating the Neoliberal assault on democracy of recent decades are clever and zealous followers of the Bernays and Goebbels’ method – they have refined and adapted the proven techniques of those master practitioners of propaganda to global mass communication; to impose global ‘freemarket’ corporatism on the unwitting masses.

  13. flohri1754

    Unfortunately, you have stated very clearly the point at which much of the Western world finds itself …. can it be brought back from the neo-liberal devised brink? Will enough of us come to see things for what they are in time? A countdown that is linked to the one keeping track of the neo-liberal spurred climate degradation situation …….

  14. Matthew Oborne

    Democracy was never a finished product lovingly handed to the masses by the wealthy and powerful.
    It was fought for and the masses only got enough to stop revolutions like happened after world war one.

    The world had one great advantage after world war two large populations of citizens forced to be soldiers returned home and governments rather than upset the returning soldiers gave concessions again.

    Taking away the public services we own like electricity and water and then saying market forces dictate is ridiculous because when they were government owned entities a massive price hike could be an election issue, now the best we can get is inquiries that go nowhere, inquiries that sometimes find the exact problem and have solutions but the solutions are never enacted, simply when unrest grows they promise another inquiry to get to the bottom of it.

    In my state we had some huge infrastructure projects some are still going, and whilst we needed them overall it was at the expense of other services that served the public well.

    The problem with the perception of a finite pie for governments is they spend the whole pie but want to do something with their time in government.

    It is acceptable to me at least that if governments spending is at maximum that we maintain the existing systems of public benefit, not dismantle them to have a new big idea of questionable benefit.

    Internet Neo-cons are funny as most of the neocons John Mentions have been negatively hit by bad policy

    Internet politics is far too extreme to get a measure of what people want, for example any observer will see most liberals still love Abbott when that is far from true.

  15. John Hermann

    ” The Liberal Party of Australia support deregulation of business; privatization of public activities and assets; elimination of, or cutbacks in, social welfare programs; and reduction of taxes on businesses and the investing class. ”

    Yes, all true, however you neglected to mention that the Australian Labor Party has been travelling down a similar ideological pathway, even if not as extreme as that of the Liberal Party. Neo-liberalism is not confined to a single political party. In regard to the Labor Party, the rot started with the “reforms” implemented by Paul Keating, both as Treasurer and Prime Minister.

  16. Glenn K

    oh, and a truly “free market” in the neoliberal tradition naturally evolves into monopolies – the real ultimate death of democracy.

  17. John Greenway

    Hi John,
    The actual quote is : “None so blind as those who WILL not see”. Minor point only, rest of the article is spot on.

  18. Wsherlockscottholmes

    Adam smith allowed the greatest con when he argued that money could go to righteous people. Suddenly those with money believed themselves to be righteous.

  19. John Kelly

    My apologies for the font change. A gremlin of some sort has penetrated the software. We are trying to fix it.

  20. John Kelly

    John Greenway, thanks. Fixed it.

  21. Florence nee Fedup

    What I have never seen over the last few years, any of those who are entrapped by this ideology/dogma ever put forward any date, research or evidence proving what they spruik actually works.

    Morals and religion beliefs should never undermine any economy.

    We are seeing our parliamentary system trashed, our democracy undermined by conventions and judicial system being dismantled.

  22. Florence nee Fedup

    Government by prejudices and personal bias.

  23. Florence nee Fedup

    margcal, not Christian in general but those who appear to have a fundamental, extremist bent, who are outside what could be considered to be normal Christianity. They have even founded their own Churches to fit in with their dogma.

    I wouldn’t consider many to be Christians.

  24. Zathras

    So this is the New Jerusalem the Neo-Cons see in the distance and everything they do is a step toward it – a paradise where the poor are showered by all that limitless wealth trickling down from on high and everybody happy in their work as we transform the planet into landfill at an ever-increasing rate.

    As for inconvenient symptoms like homelessness, youth suicide and environmental damage, well “the market” will fix all of these as well.

    When investment returns start to fall, all we need to do is start another war and even money will flow from the public sector into private hands. I don’t know what today’s returns are but WW1 created 2,000 new millionaires in the USA alone! The rich follow the money and the soldiers follow the flag.

    Meanwhile it’s just too difficult to drag ourselves away from the TV and all those new shiny gadgets that distract us and there is nobody around to lead the way. Like sheep grazing in the paddock, we deserve to get fleeced periodically.

    Sadly, things will need to get horrendously worse before they start to get better.

  25. Florence nee Fedup

    “naturally evolves into monopolies”

    What then? The monopolies implode then capital arises from the ashes. The capital merry go round begins again.

  26. wmmbb

    Much of the mass media is not simply compliant – it is out of self-interest actively anti-democratic. Most of it is irrelevant to democratic process, so it is best to ignore it.

  27. Florence nee Fedup

    Many believe that making money, the more the better makes them righteous in the eyes of God. No more of Jesus throwing the rich out of the temples. No more belief that it is as hard for the wealthy man to get into heaven as a camel through the eyes of a needle.

    They treat as blasphemy that anyone could believe the poor could inherit the earth.

    They see the poor as unworthy, bringing on their own plight.

    They believe in tough love, that welfare only weakens the masses.

    All have to be made stand on their own feet. If they don’t survive, that is too bad.

    They don’t believe that they or government hold any responsibility for anyone.

    it is survival of the fittest, dog eat dog.

    If that is Christianity, I fear for all.

  28. Florence nee Fedup

    I don’t believe this mob have any belief in any trickle down effect. You make it or you die.

  29. philgorman2014

    All too true and all too well entrenched. Welcome to the ever so shiny Corpocracy of Australia.

  30. Just saying is all

    I think we can do no better than to quote J. K. Galbraith:

    “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” from “Stop the Madness,” John Kenneth Galbraith in an interview with Rupert Cornwell, Toronto Globe and Mail (6 July 2002) (see http://wist.info/galbraith-john-kenneth/7463/ )

  31. diannaart

    the search for a superior moral justification for selfishness.

    Pretty much sums up the entire neo-con myth.

  32. paul walter

    wmmbb, once again the succinct comment.

  33. Anomander

    The corporations fought for years to regulate themselves, in particular the finance sector. The result – the GFC. Predatory lenders took out insurance policies against loans they knew would fail and then raked-in truckloads of money, collapsing banks, wreaking havoc with people’s savings and super, causing job losses by the millions. And in the end the governments bailed them out, using public money, because they were “too big to fail”.

    And most of the general public are oblivious. Try talking to them about it and you get the usual responses;
    “It’s too hard to understand”.
    “It doesn’t affect me”.
    “I have more important things to worry about than that”.
    “You’re always so negative”.
    “You can’t change it, so why bother even trying?”

  34. win jeavons

    Those who rubbish government departments have never had to argue with an Indian call centre employee who is slow to answer the phone and has to leave you on hold for an eternity while they run to their seniors for answers. I”ve HAD it with private enterprise, just another name for profit skimmers. Give us back Aussie government public servants, who know what to do, and do it. The market economy is the world’s biggest scam. I might be old now, but I can’t see progress, rather reversion to the 1800’s.Technology is often another way to take our money and leave us angry.

  35. jim

    (mindful of their responsibility towards creation) Does this mean respect for creation with out a god, or the magic one jesus??

  36. jim

    Is Jerry Hall a Neo LIbr feral???.

  37. jim

    This is what should be shared/go viral., Most people, I am convinced, do not realise that we have surrendered that noble ideal in favour of neo-liberalism, a self-centred, greedy, winner take all ideology that is slowly destroying us. As the saying goes, “none are so blind as they who will not see.”also the Right wing media or MSM would be at fault BIG TIME.https://www.newscientist.com/article/dn2817-right-wing-governments-increase-suicide-rates/

  38. Matters Not

    however you neglected to mention that the Australian Labor Party has been travelling down a similar ideological pathway, even if not as extreme as that of the Liberal Party. Neo-liberalism is not confined to a single political party. In regard to the Labor Party, the rot started with the “reforms” implemented by Paul Keating, both as Treasurer and Prime Minister.

    Yes the the rot started with the “reforms” implemented by Paul Keating, both as Treasurer and Prime Minister. We shouldn’t forget that. Rudd wrote a rejection of sorts in an essay but the underlying ‘common sense’ of the Labor Party remains unchanged, given that it hasn’t been explicitly rejected.

    Being ‘baby sitting’ today and far from my computer but I did hear Ciobo, Tehan and others demand that the Unions not pay for fines imposed on their representatives. Fair enough, but there was no mention of how large corporations always take the rap when it comes to the massive frauds engineered by their CEOs and others and simply pay same without any regard to shareholders. Indeed it’s very rare if any corporate representative is actually charged. That the company will pay the fine is now the ‘common sense’ here and elsewhere.

    Saw an interview with someone called Laura Jayes (?) on Sky who was completely hopeless. And of course it was ‘fair and balanced’. Hilarious!

    Ps, there is a difference between ‘principle’ and ‘principal’.

  39. Florence nee Fedup

    Keep in mind this mob is into social engineering that we probably have not seen since the days of communism or Hitler.

  40. Florence nee Fedup

    Win you are lucky you got a human being, not just a recording. Try your luck at Telstra.

  41. paul walter

    Neo lib as lunacy, or alibi for a form of imperialism: http://www.canberratimes.com.au/federal-politics/political-news/transpacific-partnership-will-barely-benefit-australia-says-world-bank-report-20160111-gm3g9w.html

    Ij ust don tbuy that neo lib FTA’s are about helping dependent states, rather their dependency will increase through monocultural economics. Same old, In the end.

    Ialso think the thing is about powerful outside forces gutting places like Australia.

  42. Pingback: What is Neo-liberalism and why knowing matters? – » The Australian Independent Media Network | olddogthoughts

  43. Pingback: What is Neo-liberalism and why knowing matters. | THE VIEW FROM MY GARDEN

  44. terry

    well written john like your work . one could nearly call it a program installed to be taken for granted

  45. Jexpat

    We can be considerably more concise:

    Neoliberalism is, per the quote Mussilini lifted from an Italian academic: a merger of state and corporate power

  46. Wayne Turner

    “The vast majority of voters are ignorant souls.” – Indeed. The reason democracy fails.

    Sadly,the majority of people that need to read this article,will never read this article.

    Us informed and questioning people here,are in the minority. We are being dictated to by a stupid majority,who are very gullible and easily conned/manipulated by the MSM.

  47. Bernard Bernard Bernard

    I hate to say it, but this is basically wrong. Equating neoliberalism with liassez faire is both pointless (as laissez faire existed as a theory well before Reagan/Thatcher et al) and simply wrong. Look at government spending around the world distinguishing between more progressive and more conservative. You’ll find that conservative governments like the LNP are usually higher taxing (as a proportion of GDP) and have higher government spending. So they are definitely not adherents to liassez faire which argues for a reduced State. I’ve written about neoliberalism here: https://politicsforpeoplenotcorporations.wordpress.com/2015/10/11/neoliberalism-is-a-more-than-economics-its-an-approach-to-social-organisation/ It’s not a fully polished post, but it gives you an idea of what neoliberalism really is.

  48. Neil of Sydney

    You’ll find that conservative governments like the LNP are usually higher taxing (as a proportion of GDP)

    I wish you lefties would make up your minds. You used to say that the Costello tax cuts destroyed the budget. Now you say they taxed the crap out of people.

  49. Roswell

    Neil, this site wasn’t around when Costello was Treasurer. I’m fairly certain that none of the commenters here weren’t either. I certainly wasn’t. So you’d be hard pressed to come up with any evidence to support your claim. Me thinks you’re just talking shit again.

  50. Roswell

    Which is the only reason why I approved your comment: I want everybody here to see that you talk nothing but shit.

    As if they didn’t know, anyway.

  51. Florence nee Fedup

    Neil, once again the Howard government was high spending. He also cut taxes that couldn’t be maintained.

    They managed both, just as Howard ads treasurer managed high inflation in a stagnant economy.

    Interest rates trend upwards during his long reign. How many rises?

  52. Florence nee Fedup

    Neoliberalism is more than a economical ideology. It is also about social engineering, changing society as we know it.

    Aside. We have the PM today telling Europe what to do, following in Abbott’s footsteps. Much waffling on as always when speaking to the troops/

  53. Neil of Sydney

    I’m fairly certain that none of the commenters here weren’t either

    Wow my comment got posted. I wished i had known. Actually i have been commenting with some people who post here since 2007 when Costello was Treasurer on Tim Dunlops blog

    He also cut taxes that couldn’t be maintained.

    Yes that used to be the story, The Costello tax cuts which he gave every year destroyed the budget. However the story has changed. The new story is that the Howard govt was a high taxing govt and taxed the crap out of people. This new story is led by Koukoulas


    The budget papers also show that the Howard government was the highest taxing government in Australia’s history.

    However i should say i never believe anything Koukoulas says but this is the new lefty talking point. Howard taxed the crap out of people.

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