Many people feel that there is something fundamentally wrong with western politics and society today, which goes beyond this or that policy. However, there is reason for hope, because the problems of our society do not require anything as dramatic as overturning Liberalism or Capitalism, only their contemporary guises – Neoliberalism and Free Market Capitalism. We have been through many versions of Liberalism and Capitalism in the modern era. The present versions have been in existence since the Thatcher-Reagan revolution of the 1980s, but the turmoil of the last ten years or so, which has in part been driven by a populist backlash against Neoliberalism and Free Market Capitalism, can be seen as part of the process of transitioning to something new. The question is, what are we transitioning to?
No Stake in Society
There are two underlying concerns that a majority of people have in relation to western society today. The first is that it is fundamentally unfair, and the second is that they are powerless to do anything about it. This combines to make people feel that they have no stake in society, and it explains the attraction of populist leaders (both right and left wing) who appeal directly to ‘the people’ and rail against ‘the establishment’. It also explains the appeal of the simple but powerful slogan ‘take back control’. Populists thrive on blaming vaguely defined groups for society’s problems, such as the establishment, the media, experts, foreigners and so on. They are not and will not be successful because they misdiagnose the problem.
The reason why so many people feel they have no stake in society is because of the effects of Neoliberalism and Free Market Capitalism. Liberalism has always prioritised liberty over equality, but Neoliberalism takes the principle of freedom of the individual to an extreme. According to this doctrine, people should be as free as possible to pursue their own interests. They should not be constrained by obligations to their fellow citizens, or by government interference. Indeed, Reagan said that government is the cause of our problems not its solution. Neoliberals believe that government should be as small as possible, and therefore advocate for deregulation and privatisation. As the power of governments receded, large global corporations formed in many sectors, taking on virtual monopolistic powers. Some corporations, such as the Tech Giants, now have more power than many national governments. The problem is that these corporations, consistent with Neoliberal thinking, do not act in the interest of society in general. Company directors are required to maximise shareholder return even at the expense of other stakeholders, including employees. In previous times, people were able to exercise power through elected governments who would defend their interests, but this is often no longer the case. This system has given those with power and wealth the unbridled freedom to accrue more power and wealth at the expense of others. This is demonstrated starkly by the fact that, in both the U.S. and U.K. the bottom half of the population in terms of wealth has seen no significant real term wage rise since the late 1970s. At the same time, they have had to watch the other half leave them behind. This largely explains why approximately half of the population of the U.S. and U.K voted for Donald Trump and Brexit respectively in 2016.
The Dark Side of Meritocracy
Neoliberalism has also gone hand in hand with the rise of meritocracy. This is the idea that the success of an individual depends on their merit. At first glance this sounds good, and it has been championed by left wing politicians in the Neoliberal era including Tony Blair and Barak Obama. However, as philosopher Michael Sandel explains in his book ‘The Tyranny of Merit’, meritocracy has a dark side. The justification for meritocracy rests on the assumption that those with merit deserve their success, but this is not necessarily the case. Firstly, wealth in western society is closely correlated to education. It is no coincidence that approximately half of the adult populations of the U.S. and U.K have a university degree. Do natural talents guarantee a place at university? Not necessarily – wealthy parents have access to the best schools and can afford benefits including additional professional tuition. Secondly, none of us have achieved our merits on our own. We have all had help to get where we are, from friends, family and other environmental factors. Many of us have genetic gifts that we cannot claim to have ‘earnt’. The fact is that most of us will never be able to break the 100m Olympic sprint record, no matter how hard we train. Secondly, why are some merits given higher reward than others? Why is the greatest footballer given greater financial reward than the greatest nurse? The answer is that questions of ethical value are currently determined by the free market. However, it is far from clear that the free market is able to make good ethical decisions regarding value. Is it right that the world’s greatest footballer, whose merits come partly through accidents of nature and nurture, is rewarded so well, compared to the world’s greatest nurse?
What about those who, also through accidents of nature and nurture, are not lucky enough to have merits highly valued by the free market? Meritocracy says that if you work hard you can earn success in life. What does this say to the bottom half of society who have not achieved a real term wage rise under Neoliberalism? It says that their lack of success is their own fault – you had a chance at success and did not take it. This understandably leads to a sense of resentment towards those who have succeeded (the ‘elite’), which has been harnessed by populist politicians. Leaving aside the fact that this resentment is corroding our society, the real injustice is that the premise behind the resentment is wrong. If Sandel is right in saying that those who succeed do not earn their success, that also means those who fail are also not responsible for their failure. Responsibility lies with the Neoliberal status quo, which makes immoral value judgements and allows the wealthy to exploit the rest. Meritocracy is an attractive solution to left-wing politicians who have given up on the challenging pursuit of equality. It allows the pretence that everyone can make it if they try hard enough, but this is not the case. Everyone needs help in life.
The Post War Consensus
If the current political system needs to change, an obvious solution is to revert to what was in place before. The political system before Neoliberalism has been referred to under various names, including ‘Welfare State Liberalism’ and the ‘Post War Consensus’. Regardless of left or right wing, it was characterised by powerful, centralised government and public ownership of industry. It took a paternalistic approach to government, which was there to take care of people. However, it suffered to a lesser degree from the problems faced by Totalitarian government. Government was done to people, not with people. Further, the complexity of the modern state means that countries cannot be effectively run by a single central administration, remote from the people it is trying to govern.
If both the current and previous political systems are to be rejected, what is the alternative? It is perhaps best to start the answer with an analogy based on models for ownership of business. Neoliberalism can be compared to a model where a business is owned by a small number of wealthy and powerful shareholders. Welfare State Liberalism can be compared to a business which is publicly owned by the government but whose employees have little say in how the business is run. The third option is a business which is owned by its employees, and whose directors are primarily responsible for meeting the needs of its employees. What would a society based on that model look like?
A New Liberalism
I started by saying that the problem is that people feel they have no stake in society. The solution is to give people real political power. This can be done by devolving power as locally as possible, from regional parliaments and administrations with real sovereign political power, down to local community leaders with small grants of public money as well as support and training from local government. This can be augmented by regular Citizen’s Assemblies at the local, regional and national levels, to bring people into the decision-making process in an informed way. It is not enough for a centralised government to ‘listen’ to local people. It is not enough for local governments to be given grants from central government. Westminster is a middleman which in most areas of politics needs to be cut out of the loop, so that local and regional areas can decide how to solve their own problems. Freedom of the individual is at the core of Neoliberalism. The objective of this new way of thinking is to create a society of engaged citizens, each with the political responsibility to help ensure the success of their community.
Earlier I spoke about the dark side of the meritocratic mindset, but what is the alternative? The answer is provided by Michael Sandel. We must stop using the free market as the means of determining value, including how much a person should be paid (i.e. how much their job is worth). It is obvious that a financial speculator or hedge fund manager is not worth hundreds or thousands of times more to society than a nurse or teacher. We must instead go back to assigning value based on the ‘common good’. In my post reflecting on western philosophy, I concluded that ethics is about how we should live in order to be happy. The ultimate aim of politics, therefore, is to manage society in a way that best ensures our collective happiness. This is what is meant by the common good (things that are generally good for everyone, not merely a niche section of society), and it is the extent of contribution to the common good that should guide how much value we assign to the work that people do.
I also said in a previous post that there is no certain knowledge in the field of ethics, only opinions and beliefs. We need to recognise that everyone has talents, and that there is no certain logical way to determine that one type of talent is ethically more valuable than another. Therefore, we should not be too proud of our own talents, or too dismissive of others. Those with a University degree have no reason to presume that they are superior to those with a vocational qualification or experience. Further, we need to recognise that our success in life is determined largely by accidents of nature and nurture, rather than being earnt (even our inclination to ‘work hard’ is heavily influenced by our upbringing). If we find ourselves with the good fortune of being relatively successful in life, we have a responsibility to help those who have not been as fortunate.
Subjects like devolution can easily appear unimportant compared to all of the urgent problems we face in the world today, but it gets to the core of the strength of our democracy. We have hard choices ahead, such as in relation to the environment, inequality and disruptive technologies, and we need everyone to participate in coming up with the solutions. Environmental policy will not work if it is done to people; it must be done with people. Democracy is the vehicle that allows us to get things done, and at the moment our democracy is a rust bucket running on fumes.
How do we heal a society, half of which has been left behind by Neoliberalism and the Free Market? It does not require the overturning of Liberalism, which values the freedom (agency) of each of us. Neither does it require the overturning of Capitalism, which says that wealth can be owned privately and should be invested in society to increase growth and prosperity. We must give everyone real power to influence what happens in their lives and their communities. We must challenge our own assumptions as to whether certain jobs and types of education are superior to others and stop looking down on those who we consider to be inferior. Finally, we must stop focusing on our differences, and work together towards enhancing the common good of society. I do not have a name for this new form of Liberal political philosophy, but these must be its aims.