Why neoliberalism is bad

Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows. Freedom from trade unions and collective bargaining means the freedom to suppress wages.

Freedom from regulation means the freedom to poison rivers , endanger workers, charge iniquitous rates of interest and design exotic financial instruments.

Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty. When parliaments have voted to restrict sales of cigarettes , protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully.

Democracy is reduced to theatre. Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era since in Britain and the US than it was in the preceding decades; but not for the very rich.

Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation. The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use.

Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays.

The rest reflects the fact that they have you over a barrel. In Russia and India, oligarchs acquired state assets through firesales. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich.

As property prices and the withdrawal of state funding load people with debt think of the switch from student grants to student loans , the banks and their executives clean up. Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains.

Earned income has been supplanted by unearned income. Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land , Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course.

Business takes the profits, the state keeps the risk. The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens.

The self-hating state now sinks its teeth into every organ of the public sector. Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis.

As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement.

Large numbers of people have been shed from politics. When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation.

To the admirers of Trump, for example, facts and arguments appear irrelevant. Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power.

Surprisingly, it was a Labour government, elected in , that thrust neoliberal policies onto an unsuspecting public. Neoliberal reform focused on monetary policy and on restructuring the commercial and service activities of the state. The exchange rate was floated, financial markets deregulated and most producer subsidies and import tariffs phased out. Many state commercial activities were corporatised and privatised. The Government reformed the public sector based on a preference for what were perceived to be private models of management, with a preference for private provision, competition, labour flexibility and contractual arrangements.

In deference to its traditional supporters it did not attempt major labour or welfare reform. It did, however, attempt to create a market for healthcare but this was resisted by Labour supporters and health professionals. The new National government —96 pressed on with neoliberal policies.

Nevertheless, as the theory and practice of the New Public Management became consolidated in the s, its business culture became embedded in the health system where it still pervades language and the planning and delivery of services.

Despite growth in world economic activity from the s onwards, research appraisals of the impact of neoliberalism are mixed. Nevertheless, research suggests that there have been poor outcomes for the most vulnerable economies, with most middle- and low-income countries experiencing slower economic growth and reduced progress on social indicators from —, compared with previous decades.

There are two areas of exceptionally poor outcomes: income inequalities arising from uncontrolled capital movements globalisation , and service failure from austerity measures, leading to further inequality.

Research from — indicates that structural adjustment continues to inhibit the ability of governments to plan and provide public services. In New Zealand, the impacts of the reforms were catastrophic, with over , jobs lost between and The link between social and economic inequality and ill-health is well established. On virtually all health indicators across countries of all types, health outcomes from the most obvious such as mortality rates and life expectancy to the more subtle mental health problems and chronic disease are related to levels of inequality.

Research worldwide has shown how poor health outcomes are related to deterioration in the social and economic determinants of health, such as income, housing, food security, employment, stress and educational opportunities. Besides the poor economic performance associated with austerity,10 there is also a negative relationship between austerity and health.

The second is through the direct impact on health services. For example, after the Global Financial Crisis of , health outcomes for countries where health budgets were reduced compared unfavourably with countries that protected spending on public services.

In fact, there is no indication of unsustainable funding between — This was unsuccessful because of community and professional scepticism. There was encouragement of private insurance models, but these received critical opposition.

An investigation by the Health and Disability Commissioner explicitly blamed some patient deaths on systems changes and inadequacies, and led to some tempering of the excesses of the reforms. While the public health sector was not privatised and remained in public ownership, private sector business practices and culture were embedded in public organisations.

For example, NFP community organisations were made to compete against each other in complicated tendering processes. The use of private facilities for contracting out services was encouraged and still persists, despite evidence that this may weaken elements of both public and private sectors. Despite some retreat from neoliberalism after the year , there has been persistent marginalisation of health professionals through the dominance of rules and guidelines over clinical judgment.

Since the late s, for example, the National Waiting Times Project has given priority to rationing criteria over clinical decision-making in allocating elective surgery.

Problems of access, however, go beyond surgical services. In primary care, cost barriers to access originate in the resistance of general practice to participating fully in Welfare State legislation in New Zealand in Using regulation to improve population health is the cornerstone of public health action.

In this they find willing partners among commercial interests. The deregulation of the labour market has impacts for health. In New Zealand, a review of the Pike River Mine tragedy in which 29 coal miners died in indicated serious regulatory failure attributed to neoliberal influences.

This created health and financial consequences and required re-regulation to raise construction standards. In contrast, research indicates how regulation and interventions to ensure housing insulation can lead to important health benefits by improving energy performance. Clearly there was some retreat from neoliberalism under a Labour government between —, but push-back from National occurred from — The present prime minister, Jacinda Ardern has declared that neoliberalism has failed,43 with the Government moving to strengthen the social determinants of health and raise income levels.

Health services have received some modest additional funding to improve primary care access, resource mental health and assist district health boards with capital charges. To do better, we must reject old-fashioned economic thinking that spending on health or other services is a burdensome cost.

In fact, it represents a great investment; producing significant social benefits and promoting economic growth. It will be important to rectify chronic health services underfunding by further increasing allocations, but we also need to address deficiencies within the health system.

Stronger central policy leadership and support for the integration of all aspects of primary, secondary, NFP community organisations and particularly the long-neglected population health services will be required. In conclusion, the national and international impact of neoliberalism on health and healthcare remains enormous.

In order to reverse it in New Zealand, a sea change is needed in philosophy, policy and practice with: i the immediate objective of equity of health outcomes for all citizens; ii bold re-investment in health and social security; iii the explicit rejection of the marginalisation of health professionals in decision-making, and iv a move to a more streamlined, ambitious and integrated health system.

Since the s, neoliberalism has been the dominant economic and political philosophy among global institutions and some Western governments.

Generally, these measures have negatively affected the health and wellbeing of communities. Limiting health expenditure led to inequalities in access to services with restructuring in the s, subverting the service culture of the health system. Failure to regulate for the protection of citizens has undermined health and safety systems, the security of work and collective approaches to health improvement.

Ryan A. Palley TI. From Keynesianism to neoliberalism: shifting paradigms in economics. London: Pluto Press; —9. Schrecker T, Bambra C. Basingstoke, UK: Palgrave Macmillan; Barnett R, Barnett P. Back to the future? Reflections on past reforms and future prospects for health services in New Zealand. Bagshaw P, Barnett, P. Physician advocacy in Western medicine: a 21st century challenge. The EU is obviously no exception: in fact, it is correctly seen by many as the embodiment of technocratic rule and elite estrangement from the masses, as demonstrated by the Brexit vote and the widespread euroscepticism engulfing the continent.

On the contrary, by allowing governments to maximise the well-being of their citizens, it could and should provide the basis for a renewed European project, based on multilateral cooperation between sovereign states. Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable we depend on the solidarity of our loyal readers - we depend on you. Please support our work by becoming a Social Europe member for less than 5 Euro per month.

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