Abstract
Damien Cahill, The End of Laissez-Faire? On the Durability of Embedded Neoliberalism , Cheltenham, UK: Edward Elgar, 2014; 224 pp., ISBN 9781781000274, AU$99 (hbk).
As much as I admired the author’s other work (see e.g. Cahill, 2010; Cahill et al., 2012; Spies-Butcher et al., 2012; see also Cahill, 2013), I did not see how I could possibly agree with Damien Cahill when I started this book. To a firm and uncritical believer that it had been ideas that had spread neoliberalism into every corner, it seemed unlikely that a feasible and proper alternative explanation could be found. I was very wrong. Cahill’s book clearly, relentlessly and thoroughly dismantles all the arguments for ideational explanations and then equally relentlessly and thoroughly sets up the case for neoliberalism materially embedded in institutions, structures and norms.
For Cahill, the springboard for the book was his view that neoliberal ideas are important but they are not the foundation of neoliberalism in practice. Rather, neoliberalism, as Cahill repeats often to his readers, is founded in the microeconomic policies of privatisation, marketisation, deregulation and monetary policies such as inflation targeting. In so doing, Cahill is focussing on the differences between ideas or theory and material structural bases. Throughout he uses the terms idealists and ideation, where the former seeks to privilege ideals and represent things as they might be, and the latter refers to the formation of ideas. Thus, what Cahill sets out to do is to understand the neoliberal regime as embedded in different spheres – class relations, ideological norms and institutions. He deals with these in the latter half of the book, after he has sought to convince his readers that idealist or ideationist assumptions are fine but they do not explain the embeddedness and substance of neoliberalism. Because this book was a challenge for a grubby empiricist, I will survey each chapter in turn.
It begins with an excellent Introduction – a very good overview of the book without the deep scholarship that follows. Chapter 1 (‘The idealist view of neoliberalism’) begins by questioning the nature of causation of neoliberalism, and distinguishes between idealist perspectives of neoliberalism, and neoliberalism in practice as espoused and practised by states and institutions across the world. As with the rest of the book, the arguments flow, multiple perspectives are analysed, and Cahill’s recourse to wide-ranging scholarship and a very critical eye are all evident.
Chapter 2 (‘Actually existing neoliberalism’) is a fascinating chapter. It notes the correlations between theory and practice, and then, in the relentless scholarly fashion noted above, explores the possibilities for transformation of states and demolishes much of the ideas-centred understanding of neoliberalism. In so doing Cahill notes, for example, that leftist rhetoric against neoliberalism tends to ignore the persistence of decommodified state institutions and structures, especially education and health. This is one of many examples offered that emphasise the gap between normative visions of neoliberal polemicists (and attackers) and policy realities.
In Chapter 3 (‘Did neoliberal ideas create a neoliberal state and economy?’), the author identifies three mechanisms or conditions that must be met if the ‘ideationists’ were right, and ideas have delivered policy. In so doing, the chapter explores the neoliberal ideals of economists like Friedman and scholars like Hayek, and asks how these might have influenced states. He also shows how some ideas, especially those of scholars such as Hayek, are cherry-picked to fit the neoliberal explanation, while other aspects of Hayek’s scholarship that might conflict with that idealism are wholly ignored. The chapter also draws on the fascinating Philip Mirowski who argues for the ‘double truth doctrine’: that fundamentalist elites want one truth for the masses and one for the policymakers. Having explained and considered such a fearsome conceptualisation, Cahill then systematically deflates Mirowski’s argument that such ideas were formalised in the famous fundamentalist think tank Mont Pelerin Society, or indeed any other think tank. It is in this way, argument-by-argument, scholarly point-by-point, that Cahill drives the reader away from the view that it was ideas that drove neoliberal policy or policy makers to neoliberal solutions. And accepting Cahill’s argument thus far then raises the question, ‘what did drive the rise and rise of neoliberal policy?’ (p. 57) – leading into Chapter 4 (‘Always embedded neoliberalism’).
Chapter 4 was the heart of the book for me. Firstly, the author explores how the state is always essential to capitalism so that notions like small government or the ‘withering away of the state’, so beloved of neoliberal proponents, is unlikely ever to be achieved. As is shown clearly, from the first, capitalism needed the state for Poor Laws, Combination Acts, anti-collectivist regulations and monopoly trading policies and the like. This emphasises the explanatory capacity of the notion, which draws cleverly and deeply on the work of Block (2003) and others, of ‘always embeddedness’, the notion that markets and economics and policies always depend on social structures: they cannot act out of context or without social structures and social relations of production. It is not that Cahill makes these cases and carefully wrought arguments as flat statements. On the contrary, he logically interrogates concepts and perspectives in all ways, including giving fair weight to competing ideas and interpretations. Not surprisingly then, he acknowledges that his findings do not see neoliberalism as operating as a seamless monolithic whole, but rather as a writhing uneven process which reflects and develops according to constraints and opportunities, historical structures and relations. In so doing, he builds on the earlier scholarship of greats such as Polanyi and Block, a further indicator of his deep capacity for rigorous Marxist scholarship.
Having thus made the case for ‘always embedded neoliberalism’ and its unquestionable durability, Cahill then asks how the dynamics of states and institutions have interacted to embed neoliberal regime in ‘specific patterns of class relations, institutional logic and ideological norms’, (p. 83) because cognisance of these assist in understanding the resilience of neoliberalism and the crises that have emerged within neoliberalism. These three mechanisms (class relations, institutional logic and ideological norms) then become the focus of Chapters 5–7, again with that sweep and panache that is always evident in really good intellectuals, those scholars who can take a reader from popular histories to global economic data, and thence, in Chapter 5, to an almost incontrovertible case for the ways in which neoliberalism is embedded with a transformed set of class relations revitalised and the power of capital strengthened. This is followed by a chapter which explores the ways in which neoliberalism has become so institutionally embedded that it becomes an imperative that states must always privilege neoliberalism.
In this respect, Chapter 6 was tough work, not because it was not good, but because it was so unremitting in making the case for the structural biases towards neoliberalism – and de-democratisation. Cahill depicts all the ways in which Structural Adjustment Programmes, ‘free trade’ agreements and EU protocols force neoliberal policies on states with no reference to the citizens of any of the countries. The neoliberal prescriptions and processes enforce social relations of neoliberalism by three main means – the constitutional privileging of private sector capital for public services (p. 114), exposing governments to market discipline, and more indirectly but just as effectively, lessening the power of organised labour and bolstering the relative strength of capital (p. 115). Such processes, like labour market policies and monetary policies, which ensure higher levels of unemployment, have long been recognised as weakening labour and the labour movement, but when taken within a broad suite of other initiatives reveal the evident and broad entrenchment of neoliberal policy objectives. Chapter 7 is perhaps even bleaker. It seeks to explore the ideology of neoliberalism and how neoliberal ideals and policies are unpopular, yet neoliberal practices are embedded and resistant to change.
As noted above, while Cahill makes a strong case, he also constantly reminds the reader of obvious unevenness in neoliberalism’s success. He shows how neoliberalism has in many cases seen no blanket ascendancy, and that it has been ‘significantly conditioned by the inherited institutional architecture of any given nation state’ (p. 119). Thus, he frequently describes those processes – privatisation, deregulation, marketization and corporatisation – as having varying form, import and modes, such that ‘variegated neoliberalism’ is an acceptable term to highlight the multiple manifestations of neoliberalism. Cahill also does a fine job in Chapter 7 of describing and deconstructing the malleable and always convenient facets of neoliberal theory, which are so fluid, so easily reshaped, and so readily used to justify, explain and at times misrepresent the neoliberal world.
Even so, Cahill, yet again cautious not to overstate his case, notes that while neoliberalism has become ‘hegemonic among policy elites it has [also] been subject to persistent dissent from those who have been exposed to it’ (p. 126). The difficulty with contestations to neoliberalism as he demonstrates is the variegated forms and foundations of protestation that diffuse the countervailing movements such as the anti-globalisation movement or the proactive World Social Forum, and make it difficult to build an effective agenda or coherent movements. The last section of Chapter 8 then describes and considers all of the societal and economic impacts of neoliberalism, noting the growth of inequality, marginalisation and precariousness, and the concomitant growth of populist and nationalist discourses. These are familiar to the reader but, coming as they do near the end of an intense but outstanding scholarly argument, they underline the implacability of neoliberalism even as it generates its own tensions.
The title of Chapter 8, ‘The global financial crisis and the future of embedded neoliberalism’, hints at most of the story of the last chapter. Cahill returns to what appears to have been the catalyst for the book – the interpretations of some scholars who saw neoliberalism as an ideational project and the responses to the global financial crisis (GFC) as spelling the end of neoliberalism. Now Cahill is talking to a convinced reader. He explores the nature and effect of the responses to the GFC and the ways these have paradoxically sustained neoliberalism. Next, he explores some possible futures for neoliberalism, across a wide range from authoritarian economic nationalism to de-commodification. And then he takes up a ‘home straight’ discussion of ‘where to next’, in which, once again, he logically and thoroughly shows his readers that the GFC and similar crises (including one that may be emerging even as I write in October 2014) are crises in, but not of, neoliberalism. He concludes that there have certainly been ‘significant cracks in the neoliberal edifice’, which might have opened up spaces for policies which could make ‘a just system that affords the vast majority of the human population a decent standard of living’ (p. 164). However, having clearly and thoroughly demonstrated the embeddedness of neoliberalism, his readers may find such ambitions are in the category of the hopeful rather than the possible, at least for now. Nevertheless, it is much better to understand the material foundations and key features of neoliberalism than the false and idealist foundations with which readers may start this book. It is only then that those who care can begin to find ways to build resistance and mobilise.
There are of course the expected quibbles – a few typos and misused words – but not many; the rare times, such as in parts of Chapter 8 where Cahill goes too quickly and skims over some of the futures, or in Chapter 4 where this grubby empiricist with poor theoretical skills was driven to drawing maps of arguments, but really, these are few and personal. The End of Laissez-Faire? On the Durability of Embedded Neoliberalism is outstanding, a thoroughly researched and most cogently argued piece of scholarship. It is highly readable and enjoyable – even as one’s unquestioned beliefs are logically destroyed. Scholars who care about social justice, about societies of citizens rather than consumers, about decent standards of living – and about thorough scholarship – should read this book and ponder what is to be done.