The Essence of Neoliberalism
Tomorrow sees the publication of my book, “The Neoliberal Mind.” This is a summary of its conclusions:
Neoliberalism is anchored in the real world of things that actually happen and can be observed to happen. In other words it is an empirical outlook, one that can adapt to observable reality. The test of its precepts is of whether they achieve the desired results in the real world. It is not rights-based, nor is it to be deduced from allegedly necessary truths about the universe. Instead it is an approach that seeks to achieve things generally desired, things such as prosperity and freedom, by means that have been shown to work in practice.
Most neoliberals are characterized by an optimism that human effort and ingenuity can achieve worthwhile goals. They are not gloomy about human nature or fearful that humanity is headed for catastrophe. On the contrary, they hold the view that human problems can be solved if people are clever enough and sufficiently resourceful.
They tend to compare the present with the past, rather than with some imagined and hypothetical future. They look at the tremendous strides humankind has made in the modern world, they examine the causes behind those successes, and try to apply the same kind of practices to stimulate further improvement.
Neoliberals are conscious that investment is the key to growth, and seek policies to encourage it. They know that because it involves deferring present gratification, there must be rewards to motivate people to do it.
They reject preconceived visions of what the future should be like, concerning themselves instead with the mechanisms by which a spontaneous outcome can emerge from the interaction of millions of people. They regard the resulting order as one that contains more intelligence and more knowledge, dispersed though it is, than any that can be dreamed up by a few planners. They also see it as more compatible with a free society.
They take a realistic view of history, especially that of the Industrial Revolution. They regard it as the development that made possible the improvement of the lives of ordinary people, lifting them from rural poverty and squalor. They welcome the fact that trade and industry and the wealth they bring are helping the world’s poor today just as they helped the poor in Britain’s industrialization.
Neoliberalism seeks to remove barriers to trade and investment, not to help the rich in developed countries, but to raise the living standards of people in poor countries, and applauds the progress made recently in lifting a majority of humankind up from subsistence and starvation. It works to do more of what has worked before. It rejects notions that growth should be curbed, and takes the opposite view that growth is limitless.
Neoliberals look at the world as it actually is, not seeking to reduce it to models of it that omit its ever-changing complexity. They do not seek to make it conform to some prior precept of what it ought to be, but to allow it to develop where people want to take it. And their optimism persuades them that people can make it better.