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Chapter 1

The wondrous rebirth of liberalism

In the autumn of 1994 the Dutch Christian television channel NCRV broadcast a remarkable series of programmes under the title Poor and Rich. For an evening in the studio members of the public were invited to play the role of the minister for social affairs and employment in a cash-strapped Dutch government. The idea for the programme came from an earlier series, On Life and Death, in which viewers were presented with medical-ethical dilemmas such as "who has more right to an operation, a heartpatient of 65 or a child with leukaemia?"
In Poor and Rich two similarly worthy causes vied for the public's favour. This time, however, a typical question might be this: if you were looking to make new savings, which would you choose, a person on disability allowance who, thanks to the reassessment of his benefits, has seen them almost halved to less than £500 a month, or a mother on social security who has to keep herself and her children on a monthly income only slightly higher than that? And who has more right to complain, a family with five children which has just lost £70 a month in child benefit, or that same disabled person? The choice was yours – and at the end of the show, in order to put the audience's solidarity to the test, there was an appeal for money for the `winner'.
These examples were not dreamed up by the programme's producers. They came direct from the actual practice of the newly-formed Labour-Liberal government, the so-called Purple Coalition headed by a Labour Prime Minister, Wim Kok. All the same, the dilemmas were in a real sense false, and they were presented moreover under a misleading title. Clearly the choice here presented was not between poor and rich, but between poor and poor. Nobody asked whether any of Holland's fast-growing band of millionaires should not perhaps give something up for the benefit of, say, unemployed immigrants. No: before the eyes of the nation's viewers one `outcast' was pitched against another. Who could have predicted even ten years ago that a respected European television station with a serious reputation would have contributed in such a way to the growth of divisions between people who should surely feel only solidarity for each other?

The Silent Revolution

Poor and Rich is the direct product of a silent revolution which has, during the last few years, taken over not only the whole of Europe but most of the rest of the world. Up to the beginning of the 1980s a sort of social-democratic consensus prevailed amongst the major political parties of what is now the European Union. To one extent or another they had all accepted the creed of ever-widening knowledge, wealth and power. Everyone agreed that the state had a duty to protect `the weak'. The welfare state could count on broad popular support. In the course of that decade, however, this near-unanimity began slowly, and then ever-more-rapidly, to crumble, in the end giving way to an entirely new consensus: neoliberalism.
At the end of the nineteenth century Marx considered the speedy demise of capitalism and its free-market ideology to be an historical inevitability. A century later, however, this ideology seems stronger than ever. The mind-set which in the early '80s began its long advance under the leadership of Ronald Reagan and Margaret Thatcher has quickly conquered virtually the whole world. From Peru to Indonesia, from Albania to Zimbabwe, can be heard the same call for more market and less government.
The implication, everywhere, is that free market capitalism should be given its head, even at the cost of welfare systems, working conditions or the environment. This is the core of neo-liberal thought: it seeks to rid the capitalist system as far as is possible of any social-democratic influences. Drawing a contrast unfavourable to European traditions, it speaks of the necessity for American dynamism, looking to replace the welfare state with a system in which government retreats to perform only the most minimal functions. In everyday reality this means, in country after country, the privatisation of the health system and other caring services, the deregulation of public transport, cutting back of levels of pensions and unemployment, sickness and other benefits, attacks on education, publicly-funded arts programmes, and so on.
The neo-liberal programme seeks to replace what has been called the `Rhineland' variant of the capitalist model with the `Anglo-Saxon'. The distinction between these two types of capitalism was first made by the former director of the French State Planning Office, Michel Albert. He stated that in countries such as France, Germany, Holland, Sweden and Denmark the free market was to a large extent kept in check by the state, as well as through negotiation between the `social partners' – trade unions and employers' groups. This he termed the `Rhineland' model. In contrast to this stood the British and American version of capitalism. In these countries there was a longstanding faith in the self-regulating workings of the market and corresponding distrust of state interference.
Albert wrote:

The neo-American model is based on individual and financial profit in the short term. The Rhineland model (...) attaches great value to collective success, consensus and long-term concerns. (...) The last ten years have demonstrated that the Rhineland model, that up to now was not seen as a separate system, is both fairer and more efficient.
(Michel Albert, Capitalism v.Capitalism, 1992)

Albert based this conclusion on a large number of comparative studies. From these he deduced that both systems had experienced enormous increases in prosperity, but that in the Rhineland model more people were able to share in this well-being. Moreover he considered the Rhineland model to be superior not only on social grounds, but also in economic terms. This, he argued, was due to three causes: in comparison to those in Britain and America, firms gave far more attention to the quality of their products; twice as much was spent on training; and twice as much was invested in civil research and development.
Despite this, since the 1980s the Anglo-Saxon model has spread to an impressive degree through the world, at least on the level of politics and ideology. According to Albert the explanation for this lies principally in two factors. The first of these is the relentless propaganda for `the American way of life'. Through advertising, films and television the temptations of the Anglo-Saxon system are continually dangled before our eyes. From the Nike slogan just do it to the therapeutic pep-talks of Oprah Winfrey, the message is repeated and repeated: become like us and you'll be happy. Albert:

The fact is now that Rhineland capitalism, with all its virtues, its social equality, foresight and considerateness, has not been found attractive by the international public. (...) And that is something of a euphemism. (...) The competing American model offers exactly the spectacle that the public finds beautiful: fine words, romance and legends. (...) It is as if the consumer were to choose a car with pretty bodywork hidden within which lay a chuffing and puffing little motor.

The élites in the Rhineland economies during the '80s began to develop a taste for another attraction of the American system: the fast buck. The dynamism of the Anglo-American market had made it possible, through, for example, speculation or trading in stocks, to make huge sums of money in a very short space of time. For an ever-growing section of the western élite the allure of the hedonistic slogan "the present in service of profit, profit in service of the present" appeared irresistible.

The success of Reaganomics and Thatcherism

In the United States and Great Britain there had long been a tradition of resistance to government interference in the economy. At the beginning of the 80s, Ronald Reagan and Margaret Thatcher found themselves in a position to carry through their neoliberal revolution. The tearing down of `big government' in the cause of the freedom of the market was, to use an advertising term, the unique selling point in the election campaigns of the Great Communicator and the Iron Lady.
Both leaders attacked the edifice of the state with unprecedented energy. Taxes on corporations and high earners were drastically reduced, countless laws and regulations concerning working conditions were scrapped, state-owned industries such as railways and electricity and water companies were privatised, and benefits for retired people, the unemployed and those with disabilities, scarcely generous in either country, were further reduced.
The apparent results of this enormous neoliberal vigour were impressive. In America Reaganomics created thousands of new jobs, forcing down unemployment. In England Thatcherism led to a new flowering of the City of London financial district and to a fast-growing community of the super-rich. At the end of the '80s, however, the realization began slowly to emerge that a huge price would have to be paid for this new prosperity. Americans watched their inner cities burn, as poor blacks who saw no future poured out their anger over the police violence of which they were daily victims. Meanwhile the British could only stand powerlessly by as what was left of the pride of the world's first manufacturing nation dwindled away: British Leyland car factories closed down, Rolls Royce and other famous marques were sold abroad, coal, steel and other heavy industries were reduced to a rump. British Rail, which had long suffered from under-investment, was transformed into a collection of slow, badly-maintained trains, while the flagship of British health-care, the NHS, was starved of funds as private clinics sprung up like mushrooms from the ground.
Great Britain, in the estimation of the British themselves, was left, in social terms, miles behind the rest of western Europe. In one of the richest countries in the world more and more people were beginning to ask themselves how it could be that their towns and cities, their roads and even that source of national pride, the countryside, had begun to resemble the Third World.

The unaffordable welfare state

The long recession of the late '70s and early '80s brought about record unemployment in most parts of the west. The large number of economically inactive people led to a sharp increase in the cost of the welfare state. Government debts rose accordingly.
At the same time state spending came under pressure from a different direction. Under the leadership of the US, the industrialised nations had been working since the beginning of the 1970s towards a major liberalisation of world trade. As a result, international competition was in a process of ongoing intensification. Naturally a great deal of this competition came from low-wage economies where working conditions were poor. Anyone who could limit their labour costs would thus be able to take better advantage of the world market. This thinking led not only to pressure on wages but, in addition, to demands for a cut in non-wage labour costs, largely made up of payroll-related taxes and employers' social insurance contributions.
Just as water always flows to its lowest point, so corporations will invariably go to where profit yields are highest. The countries with the lowest gross wage levels are thus at an advantage. If a government wants to be successful in the relentlessly competitive struggle to attract corporate employers, and thus jobs, then it has no choice but to cut the financial burden on enterprises and therefore its own income and spending. The overriding political cry of the '80s and 90s was born: "in Europe the collective financial burden is too high – we have to find savings." In order to continue to compete internationally, every country has to subject itself to "the discipline of the market", which means in practice that national authorities are taken hostage by commerce – with unemployment as the chains which bind and the reduction of the corporate financial burden as the ransom.
To the extent that there were still political leaders who doubted the beneficence of the market – and instead of less state interference demanded more – they finally had the rug pulled from under them by the collapse of the Eastern Bloc. The failure of "actually existing socialism", in the opinion of many, delivered the definitive proof of the erroneous nature of left-wing ideas. At the same time it gave to the champions of neoliberalism a powerful psychological boost: their already growing self-confidence suddenly took on fantastical forms. The American philosopher Francis Fukuyama euphorically proclaimed the end of history. Humanity's struggle for an ideal society had at last reached its goal. Now the great communist enemy had been destroyed, the centuries-long hegemony of liberalism could be established.

Criticisms of neoliberalism

If neoliberalism has been embraced by so many in such a short space of time, what can be wrong with it? This is, of course, the question to which as socialists we must urgently address ourselves.
In the neoliberal worldview human intercourse is conducted essentially in service of a single goal: the pursuit of personal gain. The solution to every social problem can be found in the unrestrained striving towards this single end by every member of society. Without any intention to do so, each person, by attempting to further his or her own interests, best serves the public good.
This one-dimensional view of people is not only unjust and inaccurate, it is also dangerous. The complexity of society renders correspondingly complex the position of every one of its members. A doctrine in which people are seen exclusively as homo economicus might exhibit the charm of simplicity, but it does not provide a workable basis for politics. Whatever importance may be given to the idea that people are responsible for their own life and happiness, the view that the pursuit of personal gain is the only true purpose of human activity is held only by a few. Yet it is this view that forms the ideological justification for the political-economic situation that is now advancing on all fronts throughout the world, and which, crucially, has its concrete economic manifestation in the private ownership of the means of production and in the striving to maximise profits.
No sensible person would disagree with the principle that the individual is of ultimate value. But does this apply to every individual in equal measure? Is it not rather one of the distinctive features of liberalism that it actively approves of social inequality, justifies it and tries to pass it off as a fact of life? How does this vaunted respect for the individual fit with the health risks to which workers are purposely and knowingly exposed by their employers, employers who are after all doing only what liberalism demands – maximising their profits? And how does it fit with the obviously unequal circumstances in which different individuals must begin their lives?
The implicit message of liberalism can, then, be no other than this: whoever is unsuccessful in life is to blame for their own lack of success. Blaming the victim, the Americans call it,
and under the neoliberal administration of Reagan and Bush this cynical view of one's fellow human beings gained in popularity. In his book The Culture of Contentment, the American economist J.K.Galbraith explained that the contented in society needed a doctrine which was capable of bringing together a number of their desires in a coherent fashion. He summed up the three most important aspects of such a doctrine as follows:

One is the need to defend general limitation on government as regards the economy; there must be a doctrine that offers a feasible presumption against government intervention (…) The second more specific need is to find social justification for the untrammelled, uninhibited pursuit of possession and wealth. This cannot rest in the enjoyment of wealth by the wealthy, undoubted as that enjoyment may be. There is no need for demonstration that the pursuit of wealth or even less spectacular well being serves a serious, even grave social purpose. (…)
The third need is to justify a reduced sense of public responsibility for the poor. Those so situated, the members of the functional and socially immobilised underclass, must, in some very real way, be seen as the architects of their own fate. If not, they could be, however marginally, on the conscience of the comfortable. There could be a disturbing feeling, however fleeting, of unease, even guilt. Why is one so happy while so many struggle to survive – or fail the struggle? This could be psychologically unpleasant ad, if carried to extremes through socially compelled charity and philanthropy or, more forcefully through government action, could result into unwanted personal expense.

So emerged this new doctrine. Several of its ideas were taken from the freelance philosopher George Gilder, whose book Wealth and Poverty acquired virtually Biblical authority at the beginning of the 1980s. Gilder's most important proposal was the introduction of a regressive system of taxation, on the grounds that such a system would help the poor. To succeed socially, Gilder argued, the poor need, above all, the spur of their poverty. At the same time the new rich could consider their fortunate position to be exclusively the product of their own efforts. They had no need, therefore, to feel any sense of responsibility towards those whom success had not favoured.
The social consequences of these attitudes were devastating. Another American, social critic Christopher Lasch wrote of the new rich in his country:

They send their children to private schools, insure themselves against medical emergencies by enrolling in company-supported plans, and hire private security guards to protect themselves against the mounting violence. It is not just that they see no point in paying for public services they no longer use; many of them have ceased to think of themselves as Americans in any important sense, implicated in America's destiny for better or worse. Their ties to an international culture of work and leisure – of business, entertainment, information and 'information retrieval' – make many members of the elite deeply indifferent to the prospect of national decline.

The second distinctive feature of `modern liberalism' – the idea that the social order must in large part emerge from self-regulating, spontaneous processes, an idea which again gives implicit approval to the social inequality which is an inherent feature of capitalism – is in reality no different to the time-honoured plea for "the free play of market forces". And like that slogan, which is as old as capitalism itself, it ignores the obvious fact that these forces are manifestly unequal, that freedom for the wolves means death for the lambs. The struggle for life and the survival of the fittest might well be the laws of the animal kingdom, but they should have no role to play in the organisation of human societies.
In his book, Michel Albert sketches the three phases through which the relationship between capitalism and the state has passed. The end of the eighteenth century was, he argues, the era of "capitalism against the state", the period during which the bourgeoisie struggled to free itself from the old feudal authority. The end of the nineteenth century was the time of "capitalism directed by the state". It was the period in which the aid of the state was called in in order to correct the excesses of the free market and smooth off its sharp edges. And it was the end of the twentieth century as the epoch of "capitalism in place of the state". The time in which the state is no longer seen as protector or regulator, but as a parasite, as dead weight. Ideas of the state as safety net or guiding light have been ditched. No longer a safety net for those in need of protection. No longer a source of moral or social guidance or innovation, the state has instead come to be seen more as a sort of criminal suspect, its place not above or around but before us, in the dock of a never-ending court. The only good state is a dead state, or one that comes to life only at night: the state as night watchman.
As for the third of neoliberalism's distinctive features, the plea for constitutional democracy. If one accepts that many of its adherents genuinely believe themselves to be democrats, then it would be reasonable to ask them if, within the gamut of European politics, they also honestly believe that this distinguishes them from the rest of us. Yet how `democratic' is their precious market? The social and economic operations of the state are after all, in a democracy, limited by the wishes of the electorate. The `invisible hand' of the market, on the contrary, works not according to the principle of `one person one vote', but of `one dollar one vote'. What that means for a world in which two billion people have to survive on less than a dollar a day, while Microsoft boss Bill Gates has a total personal estate of 18 billion dollars, is not difficult to guess. Under the democratic president Clinton the introduction and spread of the Internet and the much-discussed electronic superhighway is given considerably higher priority than the struggle against poverty.
One final important point of criticism: the fact is that the market is incapable of dealing with the long-term or of accommodating the broader social context. This is, once more, a consequence of the monomaniacal fixation on profit maximisation. The neoliberal hobbyhorse of the 24-hour economy offers a good illustration of this.
In order to see a return on the high level of investment in new technology, business has sought to boost profits through the introduction of longer opening hours and a more flexible labour market. Overtime and weekend working are less and less generously and frequently rewarded by higher rates of pay. Everyone must be available whenever the boss says so. The fact that this leads to greater stress and fatigue and therefore more health problems is of no concern to the employer and is therefore no longer of any interest to the liberal state. No one in authority bothers to ask how working parents of young children can lead responsible and fulfilling family lives in the 24-hour economy. No one considers the consequences for communal life, for citizenship, for the broad range of activities in which people should be able to indulge if they are to lead happy, healthy, socially conscious lives. None of this can be measured in the profit and loss figures of the neoliberal master accountants; but that these costs must sooner or later be paid, of that there is no doubt.
The same short-sightedness and irresponsibility can be seen when it comes to the environment. Troublesome questions such as "but how do we dispose of the waste?" stand in the way of profit maximisation and are thus swept under the carpet. Unless someone with the power or determination to stand up to the dictatorship of the market (environmentalist groups or a strong, responsible government) is able to do something about it.
The mass embrace of an ideology with only one principle is more dangerous than religious fanaticism. The biggest threat to our wellbeing and civilisation comes not from Islam, as is often suggested, but from the market fundamentalism of the neoliberal Ayatollahs.

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“Enough” Contents:

• Index
• Preface
• Introduction
• Chapter 1 The wondrous rebirth of liberalism
• Chapter 2 The death of social democracy
• Chapter 3 The disempowerment of the people
• Chapter 4 Poverty in the midst of plenty
• Chapter 5 The assault of the market
• Chapter 6 The unbearable lightness of commerce
• Chapter 7 A question of civilisation
• Chapter 8 The United States of Europe
• Chapter 9 The spectre of the world market
• Chapter 10 The inevitability of an alternative
• Preface to the 2006 - updated edition
• Chapter 11 Ten years later, in the Netherlands
• Chapter 12 2006: Another world is possible
• Chapter 13 New optimism