The failure of neoliberal thinking is increasingly seen all around us. That thinking is, of course, intensely simplistic. It says, without having any foundation in reality, that if only everyone profit maximised then the world would be a perfect place.
Err, no. Really, no.
Neoliberalism (to the extent that it isn’t just a code word for “things the Murphmeister doesn’t like”) does not assume that if everyone profit maximised then the world would be a better place.
It doesn’t even assume (nor even desire!) that everyone profit maximises.
It does rather assume that individuals maximise, to the best of their ability and knowledge, their utility. But as any fule kno, utility and profit are not the same thing. Utility leaves room for feeling better about contributing to the care of others for example, something that profit doesn’t.
But do note that neoliberalism only assumes that everyone’s trying, within their limitations, to do this. It most certainly does not go on to state that the world would be a better place if everyone were able to achieve this.
To take an absurdly extreme example. There are those who enjoy torturing kittens. Torturing kittens increases their utility. Neoliberalism does not go on to say therefore torturing kittens is just fine as utility maximising behaviour.
Indeed, to relax the absurdity, neoliberalism places very strict limits upon such utility maximisation. The utility maximisation of fist swinging very definitely should be stopped in the vicinity of others’ noses for example.
We can go on: neoliberalism (I can say this because I am indeed that Hoodoo Man, the unrepentant neoliberal) is entirely happy with the idea of action to deal with externalities. Say, road pricing to deal with congestion, carbon taxes to deal with emissions. Even, dare I say it, areas where we really would not like to have competing market suppliers of goods and or services. The Wars of the Roses were an example of how we most certainly do not want to have competing private armies.
I have a very strong feeling that Richard Murphy hates neoliberalism for one very important to him reason. He’s got a very large case of Kip Esquire’s Law. The planners always imagine themselves as the planners. One of my definitions of neoliberalism (perhaps better to call it a personal prejudice?) is that I want the system to be built upon the certainty that I’m not going to be the planner.
That is, instead of a system in which I get to tell people to do what I tell them, what system which still actually works can be built where I don’t have to do what others tell me to do?
Yes, there must be rules. Yes, there has to be governance. Even, yes, there has to be tax to pay for it. But I want a world in which we set general rules and then observe how people act within them in order to solve those societal and communal problems. Perhaps neoliberalism is the wrong word for this: Worstallism if you like. What I absolutely do not want is planners getting the power to force us all to do as they want. Perhaps that’s why Ritchie hates neoliberalism/Worstallism so much. The system would provide no space for him to impose his rules upon us.