In previous posts I have written about the technocratic tendencies of neoliberalism in which procedural democracy is subordinated to the rule of economic ‘experts’ in order to ensure the ‘proper’ functioning of the market economy. This may seem controversial to some, as prominent neoliberal thinkers like F. A. Hayek tended to associate the rule of ‘experts’ with socialism and ‘progressive’ liberalism. According to Hayek, the unrealistic expectations promoted by ‘unlimited democracy’ can only be realised by ‘taking the powers of decision out of the hands of democratic assemblies and entrusting them to the established coalitions of organized interests and their hired experts.’ In other words, ‘unlimited democracy’ results in the creation of unwieldy bureaucratic structures that expand executive (and discretionary) power at the expense of the legislature. Neoliberals often extolled the decentralizing tendencies of the market against the state. The claim was that the distribution of property in a market economy guaranteed a dispersion of political power. They argued for the ‘rule of law’, which tended to take the form of constitutionalism plus some guarantee for individual rights.
All of this is very nice in theory, but in practice, neoliberalism tends to assume a rather different and more authoritarian form. Back in the heyday of Thatcher, Andrew Gamble characterized her ‘neoliberal’ politics as a mix of the ‘free market and the strong state’. More recently, David Harvey has argued that neoliberals ‘tend to favour governance by experts and elites’, display a preference for ‘government by executive order and by judicial decision rather than democratic and parliamentary decision-making’, and seek to ‘insulate key institutions, such as the central bank, from democratic pressures.’ This characterization of the neoliberal reality is far from the supposed neoliberal ideal. It comes as little surprise then, that one of the proposed neoliberal solutions to the Eurozone crisis more closely resembles Gamble’s and Harvey’s depiction of ‘neoliberal authoritarianism’ than Hayek’s ‘constitution of liberty’. In May this year, a series of reforms for the Southern European periphery were promoted by JP Morgan. A glance at the provisions gives us a glimpse into the realities of neoliberal authoritarianism.
Here is the second paragraph in the section titled ‘The Journey of National Political Reform’:
The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece).
The obstacles to effective ‘crisis management’ (neoliberal-speak for the successful implementation of austerity) are: weak executives; weak centralized states; constitutional protection of labour rights; consensus building systems; and the right to protest. So, while in theory, neoliberals extol the power of legislatures in decentralized ‘liberal’ states, in practice they seek to strengthen executive (including bureaucratic and police) power against legislatures and citizens. While they praise decentralization, they propose centralization in order to rein in the regions and consolidate central control. While they tout the rule of law and constitutionalism, they want to expunge the defense of labour rights from the constitution and clamp down on the democratic right of peaceful protest.