Reclaiming the N-word

The Adam Smith Institute is rebranding itself as “neoliberal”. I'm not sure this is a good idea.

I say this not because I disagree with them – though I do on some matters – but because of the respects in which I agree with them.

I agree that capitalism has been a force for progress – as, of course, did Marx. I agree that hard-core libertarianism is a difficult position to sustain; it always required a very selective reading to suggest that Adam Smith was a libertarian. And I agree on the need for some kind of mixed economy.

However, there are (very roughly speaking!) two types of mixed economy.

In healthy versions, the government corrects market failures whilst the market corrects government failures, and government acts to support entrepreneurship, perhaps in more ways than merely providing stable property rights – for example by ensuring the availability of finance and funding or even conducting fundamental research.

In unhealthy versions, however, we have crony capitalism in which the state supports capitalists at the expense of workers and funnels cash towards favoured clients.

And here’s the problem. For many of us, neoliberalism – insofar as it means anything – is the ideology which helps sustain the latter. Many on the left use “neoliberalism” to describe not just free market economics but also managerialism, hostility to the working class, the crass pursuit of wealth and power and the use of the state to enrich capitalists for example via the too big to fail subsidy to banks.  

Now, Sam intends to re-appropriate “neoliberalism” in much the same way as gays have reclaimed that fine word, “queer”. But I’m not sure this is wise. There’s a big difference here. Those who used the word “queer” to attack gays deserved to be slapped down. But many of those who use “neoliberal” as a boo-word are potential allies of Sam.

Here’s what I mean. Both Sam and much of the left favour a liberal approach to immigration, and both would deplore an industrial strategy that favours big business over small. In both respects the left and the Adam Smith Institute can make common cause against Tory statism – though of course they differ in other respects! The use of the word “neoliberal” would jeopardize this alliance; it could be seen as an attempt to troll the left, and would exacerbate the mindless tribalism that disfigures politics.

So, how should the Adam Smith Institute describe itself? The problem here, of course, is that simple words cannot describe a complex reality. Perhaps an improvement would be simply to say they are advocates of an open society. And we need these.   

Comments

[AndrewD]

I much prefer the term Neofeudal to neoliberal, it is a much more accurate description of the outcome of neoliberal policies.

[Steve]

Classical liberal?

[David Friedman]

Whether Adam Smith was a libertarian depends on how you are using "libertarian." He was a classical liberal. That makes him a libertarian in the broad sense of generally favoring liberty in the sense in which libertarians use the term. He wasn't a libertarian in the hard core sense of opposing all initiation of force, and of course he was not an anarchist.

But how unlibertarian he was tends to be exaggerated by people who want to recruit him for their causes. He was not in favor of government schooling, although many claim he was. He was not in favor of progressive taxation ditto.

Both points discussed at:

http://daviddfriedman.blogspot.com/2011/03/misrepresenting-adam-smith.html

I agree with you, however, that trying to claim "neoliberal" is probably a mistake.

[Kevin Carson]

The problem is that the ASI has been THOROUGHLY neoliberal in your second, bad sense for a long time. In the tradition of Thatcher and Reagan, it has taken global corporate capitalism -- a thoroughly statist construct to which "cronyism" and "disaster capitalism" are indispensable -- and defended it in terms of fake "free market" language.

[Chris Shaw]

This seems more like a form of virtue signalling from the ASI rather than some ideological turnaround. By positioning themselves as neoliberal, it can come across as "edgy" or some other ridiculous sentiment.

In terms of its actual meaning, it shows the ASI for what they really are: people who believe in modern markets that are bolstered by tacit (rather than explicit) government intervention.

[Nanikore]

I would argue another distinction between good and bad capitalism. In one version regulation is good and ensures the orderly functioning of markets and ensures fair competition. In another it stifles innovation. The neo-liberal consensus was clearly pro-deregulation, with serious consequences that were first very clearly seen in the Asian Financial Crisis. However classical Anglo-Saxon Victorian economists right up to even Friedman understood the importance of the law in maintaining a 'healthy ;market place.

Big government (Large G/Y ratios), heavy regulation, redistributive policy and counter-cyclical policy are often lumped together - but they are different things which sometimes make clear red blue distinctions difficult.

NK.

[Jay Jeffers]

Great post. Very interesting.

But, I'm afraid the train may have left the station on the term "neoliberal." In my experience, being a sort of centrist-liberal myself, judging by the Overton Window of the world's liberal democracies (but noticeably to the left of the Adam Smith Institute), I've seen a lot less than the Adam Smith Institute characterized by the left as neoliberal.

I think a helpful blogosphere example is Professor Henry Farrell's dogged pursuit (at Crooked Timber) of what he perceived to be Matthew Yglesias's blindspots (and once one sees that dynamic, one can notice it more generally as well), which manifested in a drawn-out series of posts and back and forths between lefists/social democrats on the one hand, and "left-neoliberals" on the other. It wasn't just the relative centrists trolling the left. Rather, it was the left applying purity tests such that any diversion from the doctrine of social democracy is enough to make one a neoliberal, regardless of the rest (the key difference being the level of support for labor unions).

And it wasn't just a couple people in their underwear in their mom's basement. It was a lot of folks, including popular writers and academia. And I don't think it can be viewed as a local dust up, either. I've noticed the pattern quite a bit since.

That is, I can be well to the left of the Adam Smith Institute, in favor of redistribution, regulation, higher minimum wages, etc. But if I think teacher's unions sometimes say weird stuff and it's worth talking about (like Yglesias), or have reservations about public sector unions (like FDR) or think cost-benefit analyses in government might be worth it (like Obama's regulation czar Cass Suntein) then I'm a left-neoliberal. I've seen this categorization many more times from the left to relative centrists than from centrists and "liberaltarians" trolling the left, for whatever it's worth.