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October 17, 2011



Interesting and timely post, thank you.
On R4 Today prog yesterday, as you say above, the PM was "vowing" to get energy costs reduced. At 6pm news the message from him was "shop around".

So at one level, one could say, so much for the "summit". But it seems clear that energy and its cost is a complex challenge for the government, and (as you seem to be arguing), especially interesting because of how it highlights the Conservative psychological conflict about whether they ultimately want less or more regulation, freer or more constained markets etc.


An excellent post, and thanks also for the Economics of Unhappiness paper, with which I agree completely.

The corporatism of the Long 1980s (1980-ad nauseam) reflects the political limits to pure neoliberalism. This sees public goods and collective needs either as something that are handled by blind individual transactions en masse, or as regrettable necessities to be dealt with by the minimalist state. Actually existing neoliberals in the West have to live with the need to get elected by voters with considerable interests in the legacy of the social democratic state. The way to do this is to try to 'marketise' as much of that state as you can, and then you have no option but to enter into endless stitch-ups and market-bending policies to deal with the unwelcome political consequences of capitalists doing what comes naturally.

The current situation seems to reflect the enormous political and psychological strain for policymakers committed to a neoliberal worldview and yet unable to deny the evidence of its immensely damaging contradictions. They have no will or vocabulary to work out an alternative worldview and strategy, but can't make the old ones work. Gramsci quotations come to mind.

Dick Pountain

Will - it seems to me inevitable that your definition of neo-liberalism must be "somewhat idealist" because the phenomenon itself is an idealist illusion - namely the idea of "the market" which deploys forces acting on the real world. In reality a market is nothing but the vector sum of a colossal number of individual material transactions (probably not computable even in theory). The illusion of a market rationality is essential to its working - as Soros describes in his book - and is hence vulnerable to catastrophic bouts of mass psychosis.

Jason Treit

Politics in living practice is such that you should always be surrounded by evidence that a worldview is dead, dying, or on the wane. Who dares touch the minimum wage? When last did regulators or public planners fall in number or kind? Wasn't it Reagan who pushed export quotas on Japanese automakers? And taxed and spent through much of the '80s?

That you see much space between nudgers and Hayekians, though, tells me something about what impact neoliberalism continues to have on the range of viable worldviews.

Will Davies

Dick - yes, very good point. The pioneers and early practitioners were constructivists and idealists, so some sort of deconstructivist perspective becomes critically essential.

Jason - I don't quite understand your first paragraph. As for your point about nudgers, I do think that there is a key distinction here, which may not immediately generate a new policy paradigm, but represents a significant departure from the dogmatic value relativism of Hayek and the Chicago School. Though I can also see other ways in which behavioural economics is an effort to rescue the authority of consumer choice.

Jason Treit

Sorry, my first point was to stress how contingent any worldview's influence is on politics, whose currents pull in many directions at once. Most agree neoliberalism thrived in the '80s – or had a pulse, at least – yet it would've fared as miserably then as now in a battery of contradiction tests.

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