Writing on the Wall

Graham Thompson writes about neo-liberalism off the back of a conference at SOAS on corporate social responsibility. However, whilst articulating that neo-liberalism has moral content, he does not go very far in exploring the implications of that morality:

Responsibility and neo-liberalism | openDemocracy

My commentary was as follows:

Thompson argues coherently that neo-liberalism has become internalised into a form of governmentality, where a certain kind of personal responsibility works hand in hand with the outer forms of governance.

However it is important to remember that this internalisation of responsibility is neither new, nor unique to neo-liberalism, and that what are significant are the specific forms these internalisations take.

The nub of the problem is this: Individual responsibility is amenable to a kind of privatisation, where it is set as a target to individuals and then measured. In management speak this is broadly called management by objectives. This is the kind of form of responsibility neo-liberalism has taken on: You can see it in development with the rise of Log Frame Analysis (LFA), and in governance in the ways in which treasury departments have internalised. LFA type approaches as a way to measure the performance of public spending.

But the problem is that this kind of target setting is terrible when it comes to collective responsibility. Management by objectives has been critiqued as such int he management literature, since as a procedure, it does not tend to uncover problems that cut across the individualising metrics used. Whilst the parts may be efficient, systemic issues tend to be neglected, meaning that you get massive “Nash equilibriums”, that is situations where individual interest turn out very much less efficient than a collective approach would bring. You need look no further than Private Finance Initiatives, or the toothlessness of Corporate Social Responsibility to see this.

The problem is this: Not all bottom up, emergent solutions are good: This is why humans were interested in designing things in the first place. There is still the problem of top-down design that is irrelevant to circumstances, as totalitarian states often demonstrate, but this is not the end of the discussion, and neither is a more nuanced view of neo-liberalism.

You can take a kind of “market failure” approach, and say you need to intervene where emergent solutions don’t work. But that also misses a crucial point. That intervention need not just be fire-fighting. It can also be planning, looking ahead, and exercising foresight, alongside an awareness of how emergent economic and social forces tend to play out.

The big myth of neo-liberalism is that it is impossible to plan and predict, and so governments don’t need to take responsibility, it is better to leave it to more responsive others. But that is an obfuscation. Look at climate change: Spontaneous collective action is failing solidly in this area, and business leaders are calling for regulation, so that they can do the right thing without losing out to their competitors. This is a classic Nash equilibrium type situation, and clearly a regulating, predicting and planning governance needs to step in to break the stalemate, before we all run out of time.

This is exactly what neo-liberal approaches cannot provide: They can distribute responsibility to those with control of capital, they can make it easier to reconfigure capital, partly by limiting people’s rights, they can make more of the polity into capital, by making more of the system trade-able, but governing, planning and regulating is not a strong part of the neo-liberal approach, which is more attuned to gradual marginal tinkering. Strong, predictive, systemic planning (i.e. leadership) is the work of governments, who really need to rediscover what it means to govern well, and to lead far more based on something longer-sighted than profit.