My life was saved last year by the Churchill Hospital in Oxford, through a skilful procedure to remove a cancer from my body. Now I will need another operation, to remove my jaw from the floor. I’ve just learned what was happening at the hospital while I was being treated. On the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff had objected to a decision by the National Health Service to privatise the hospital’s cancer scanning. They complained that the scanners the private company was offering were less sensitive than the hospital’s own machines. Privatisation, they said, would put patients at risk. In response, as the Guardian revealed last week, NHS England threatened to sue the hospital for libel if its staff continued to criticise the decision.
The dominant system of political thought in this country, which produced both the creeping privatisation of public health services and this astonishing attempt to stifle free speech, promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more oppressive than the system it replaced.
Workers find themselves enmeshed in a Kafkaesque bureaucracy, centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom but demands conformity and silence.
Much of the theory behind these transformations arises from the work of Ludwig von Mises. In his book Bureaucracy, published in 1944, he argued that there could be no accommodation between capitalism and socialism. The creation of the National Health Service in the UK, the New Deal in the US and other experiments in social democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and Nazi Germany.
He recognised that some state bureaucracy was inevitable; there were certain functions that could not be discharged without it. But unless the role of the state is minimised – confined to defence, security, taxation, customs and not much else – workers would be reduced to cogs “in a vast bureaucratic machine”, deprived of initiative and free will. By contrast, those who labour within an “unhampered capitalist system” are “free men”, whose liberty is guaranteed by “an economic democracy in which every penny gives a right to vote”. He forgot to add that some people, in his capitalist utopia, have more votes than others. And those votes become a source of power.
His ideas, alongside the writings of Friedrich Hayek, Milton Friedman and other neoliberal thinkers, have been applied in this country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony Blair. All of those have attempted to privatise or marketise public services in the name of freedom and efficiency, but they keep hitting the same snag: democracy. People want essential services to remain public, and they are right to do so.
If you hand public services to private companies, either you create a private monopoly, which can use its dominance to extract wealth and shape the system to serve its own needs – or you introduce competition, creating an incoherent, fragmented service characterised by the institutional failure you can see every day on our railways. We’re not idiots, even if we are treated as such. We know what the profit motive does to public services.
So successive governments decided that if they could not privatise our core services outright, they would subject them to “market discipline”. Von Mises repeatedly warned against this approach. “No reform could transform a public office into a sort of private enterprise,” he cautioned. The value of public administration “cannot be expressed in terms of money”. “Government efficiency and industrial efficiency are entirely different things.” “Intellectual work cannot be measured and valued by mechanical devices.” “You cannot ‘measure’ a doctor according to the time he employs in examining one case.” They ignored his warnings.
Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control. Public-service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself.
Its perversities afflict all public services. Schools teach to the test, depriving children of a rounded and useful education. Hospitals manipulate waiting times, shuffling patients from one list to another. Police forces ignore some crimes, reclassify others, and persuade suspects to admit to extra offences to improve their statistics. Universities urge their researchers to write quick and superficial papers, instead of deep monographs, to maximise their scores under the research excellence framework.
As a result, public services become highly inefficient for an obvious reason: the destruction of staff morale. Skilled people, including surgeons whose training costs hundreds of thousands of pounds, resign or retire early because of the stress and misery the system causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania claims to address.
New extremes in the surveillance and control of workers are not, of course, confined to the public sector. Amazon has patented a wristband that can track workers’ movements and detect the slightest deviation from protocol. Technologies are used to monitor peoples’ keystrokes, language, moods and tone of voice. Some companies have begun to experiment with the micro-chipping of their staff. As the philosopher Byung-Chul Han points out, neoliberal work practices, epitomised by the gig economy, that reclassifies workers as independent contractors, internalise exploitation. “Everyone is a self-exploiting worker in their own enterprise.”
The freedom we were promised turns out to be freedom for capital, gained at the expense of human liberty. The system neoliberalism has created is a bureaucracy that tends towards absolutism, produced in the public services by managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency measures, and in the private sector by subjection to faceless technologies that can brook no argument or complaint.
Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated drones. But the system his disciples have created is heading the same way.
The book was The Constitution of Liberty by Frederick Hayek. Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism. It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.
This, at any rate, is how it was originally conceived. But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap.
He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.
Democracy, by contrast, “is not an ultimate or absolute value”. In fact, liberty depends on preventing the majority from exercising choice over the direction that politics and society might take.
He justifies this position by creating a heroic narrative of extreme wealth. He conflates the economic elite, spending their money in new ways, with philosophical and scientific pioneers. Just as the political philosopher should be free to think the unthinkable, so the very rich should be free to do the undoable, without constraint by public interest or public opinion.
The ultra rich are “scouts”, “experimenting with new styles of living”, who blaze the trails that the rest of society will follow. The progress of society depends on the liberty of these “independents” to gain as much money as they want and spend it how they wish. All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction made between earned and unearned income, and no limit to the rents they can charge.
Inherited wealth is more socially useful than earned wealth: “the idle rich”, who don’t have to work for their money, can devote themselves to influencing “fields of thought and opinion, of tastes and beliefs”. Even when they seem to be spending money on nothing but “aimless display”, they are in fact acting as society’s vanguard.
Hayek softened his opposition to monopolies and hardened his opposition to trade unions. He lambasted progressive taxation and attempts by the state to raise the general welfare of citizens. He insisted that there is “an overwhelming case against a free health service for all” and dismissed the conservation of natural resources. It should come as no surprise to those who follow such matters that he was awarded the Nobel prize for economics.
By the time Thatcher slammed his book on the table, a lively network of thinktanks, lobbyists and academics promoting Hayek’s doctrines had been established on both sides of the Atlantic, abundantly financed by some of the world’s richest people and businesses, including DuPont, General Electric, the Coors brewing company, Charles Koch, Richard Mellon Scaife, Lawrence Fertig, the William Volker Fund and the Earhart Foundation. Using psychology and linguistics to brilliant effect, the thinkers these people sponsored found the words and arguments required to turn Hayek’s anthem to the elite into a plausible political programme.
Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the right, but its colonisation of parties that once stood for everything Hayek detested.
Bill Clinton and Tony Blair did not possess a narrative of their own. Rather than develop a new political story, they thought it was sufficient to triangulate. In other words, they extracted a few elements of what their parties had once believed, mixed them with elements of what their opponents believed, and developed from this unlikely combination a “third way”.
It was inevitable that the blazing, insurrectionary confidence of neoliberalism would exert a stronger gravitational pull than the dying star of social democracy. Hayek’s triumph could be witnessed everywhere from Blair’s expansion of the private finance initiative to Clinton’s repeal of the Glass-Steagal Act, which had regulated the financial sector. For all his grace and touch, Barack Obama, who didn’t possess a narrative either (except “hope”), was slowly reeled in by those who owned the means of persuasion.
The result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people’s lives; debate is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments are replaced by slogans, symbols and sensation. The man who sank Hillary Clinton’s bid for the presidency was not Donald Trump. It was her husband.
The paradoxical result is that the backlash against neoliberalism’s crushing of political choice has elevated just the kind of man that Hayek worshipped. Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation of Hayek’s “independent”; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting to be filled by those who know what they want. The likely result is the demolition of our remaining decencies, beginning with the agreement to limit global warming.
Those who tell the stories run the world. Politics has failed through a lack of competing narratives. The key task now is to tell a new story of what it is to be a human in the 21st century. It must be as appealing to some who have voted for Trump and Ukip as it is to the supporters of Clinton, Bernie Sanders or Jeremy Corbyn.
A few of us have been working on this, and can discern what may be the beginning of a story. It’s too early to say much yet, but at its core is the recognition that – as modern psychology and neuroscience make abundantly clear – human beings, by comparison with any other animals, are both remarkably social and remarkably unselfish. The atomisation and self-interested behaviour neoliberalism promotes run counter to much of what comprises human nature.
Hayek told us who we are, and he was wrong. Our first step is to reclaim our humanity.
(header image: “The gates of hell, the end of space and time.”)