Neoliberalism as lack of self-restraint

Which do people choose – more money or less? If you think the answer’s obvious, you’ve been too influenced by economism and not enough by science. Sigve Tjotta shows that, in a variety of experiments, a significant minority of people choose the smaller sum over the larger.

This would not have surprised the Adam Smith who wrote the Theory of Moral Sentiments. “To restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature” he wrote (TMS I.I.44). Our sense of propriety, or our desire to look good to others, he thought, reined in greed:

Though it may be true…that every individual, in his own breast, naturally prefers himself to all mankind, yet he dares not look mankind in the face, and avow that he acts according to this principle. He feels that in this preference they can never go along with him, and that how natural soever it may be to him, it must always appear excessive and extravagant to them…In the race for wealth, and honours, and preferments, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should justle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of. (TMS II.II.11)

Which brings me to a theory. One feature of neoliberalism is that restraint in the pursuit of self-interest is now absent. Bosses lack Smith’s “impartial spectator” which tells them to hold back, and instead feel no compunction about jostling others. They are content to plunder customers, pensioners, sub-contractors, workers or future workers.

Among her many claims for expenses, Glynis Breakwell, Vice-Chancellor of Bath University, claimed £2 for biscuits. Many of us would not have done so, thinking it too petty-minded to bother. Neoliberals, however, not only are petty-minded but don’t mind being seen as such by others.

In this context, critics of mainstream economics have a point. Economics’ language of optimization serves to normalize the maximal pursuit of money. What it misses is the potential trade-off which Smith identified, between greed and the good opinion of others. Randian talk of the rich as heroes also plays an important role here, as it functions to counter-act the stigma which greed would otherwise attract.

From this perspective, neoliberal bosses have something in common with child molesters. Both lack restraint in the pursuit of their own self-gratification in situations where they think they can get away with it.

And there’s the rub: where they think they can get away with it. My story here is not just about morality. Perhaps there never was a golden era of benevolent paternalistic bosses. What’s happened since around the 1970s is that the restraints upon bosses – from law, social norms and trades unions – have diminished. The problem isn’t just greed, but power.

Update. On Twitter, I’ve been asked to withdraw that analogy between bosses and CEOs. On reflection, I’ll not do so.

I can see why I should. It is insensitive to survivors of child abuse and would upset them, the more so for being unexpected. I apologise for that.

There are, however, offsetting considerations. One is that I think the analogy holds in the sense I meant it. You can draw an analogy between two things without saying there is moral equivalence. I’m not attributing to bosses the same evil intentions that child abusers have.

That said, bosses’ excessive power does do real harm. It contributed to the financial crisis; had Goodwin had less power, RBS might well not have taken over ABN Amro. It might well be one factor (of many) behind stagnant productivity and hence flat real wages over the last ten years. And oppressive working conditions and exploitative pay impose stress and hardship upon millions. Granted, the pain per person isn’t as great as that caused by child abuse. But pain there is.

I had another reason to draw the analogy. We need stronger social norms against bosses rent-seeking. (This is not a uniquely leftist view: Jesse Norman complains (pdf) about the “legitimating culture” behind crony capitalism). Maybe intemperate language to demonstrate our strength of feeling is one way to build such norms. I was using the Economist’s approach: “simplify then exaggerate.” I’ll concede that it’s an open question whether this approach will work. But we need something – and that something is certainly not silence.

Which raises another point. Calls for me to withdraw that analogy don’t come only from survivors of child abuse, whose voices must be heard. They also come from a Guido-inspired mob whose censoriousness is selective: those who oppose students’ safe spaces suddenly aren’t so keen on free speech when it’s used to attack the rich. I will not kow-tow to rightist hypocrisy.

Comments

[Dave Timoney]

I think the point about petty claims is that if you admit that there is a line between the acceptable and the unacceptable then you are agreeing that there is an ethical standard superior to "just deserts" and that you have a responsibility to observe it. Outsourcing ethics to the market is psychologically liberating, but only if you commit to the treadmill of constant reinforcement, hence the £2 packet of biscuits.

[e]

Is it likely expenses claim in question was filled in by a clerical assistant ? I ask, not to excuse, but because, it seems to me, when neo-liberalism is attributed to individual fault/greed (which I don't dismiss but will always be with us unlike poverty) we overlook the nature of the beast.
Neo-liberalism (an approach) fosters the institutionalisation of corrupt power relations.
Its one of the intellectual building blocks which enables constitutions to decry: biscuits are a cost for me; for you they are a benefit which must be paid for....

[Zoltan Jorovic]

Isn't the problem that Economics is being used outwith it's applicable realm? That is, you are posing a question about values rather than value. How we live our lives, what decisions we make depend on our values - what we consider important or acceptable. A great deal of effort has gone in to trying to modify our values (through advertising and other more subtle propaganda) so that we put our own personal needs or desires above those of the community and to remove obstacles such as morality or a sense of shame, that might hinder this. The shameless greed and narcissism now widely displayed is the inevitable result of all this careful manipulation. Excess and self-indulgence is encouraged and celebrated while generosity, humility, kindness and compassion are ridiculed. Economics has become the preferred tool for framing this destructive and divisive world view as natural and inevitable.

[Blissex]

«Isn't the problem that Economics is being used outwith it's applicable realm?»

What a loaded and naive question! :-)
And it is all about the word "Economics".
In the "good old times" up to the "revolt of the elites" and the consequent thatcherism/... there was a "discipline" called "political economy" (note lower case), to contrast it to studies of "domestic economy" (management of house budgets) and "mercantile economy" (management of commercial enterprises).

The "political economy" studies were indeed multi-faceted, they were indeed about the economy of the state, of the political realm, and of course included historical, political, sociological, elements.

But the "science" of "Economics" (note upper case capital) as intended today is a shadow of that complex but insightful discipline, because the ideology that it embodies is that "everything is just a transaction, nothing personal, nothing political, mate".
That is also the foundation of identity politics, of the transformation of the view of people from "political subjects" to "market agents".

Therefore "Economics" is represented as being the *only* social science. Also "because end of history". Including as a replacement for theology: because "the markets" know everything, judge everybody, and punish or reward people according to their worthiness.

This ideology has arisen because the political factions that in practice have a bigger role in "the markets" of course want to elevate them and transactions to the measure of everything.
The current ideology is that "mene mene tekel upharsin" is written in every transaction, in every stock-market movement, in every "performance assessment" of an employee.
Therefore "Economics" is currently the definite, universal "science".

[Dipper]

what's the issue with the biscuits?

If she is expected to entertain as part of her job then surely the cost of the entertainment is provided by the university. That includes biscuits. If they run out and she gets biscuits for entertaining then she should be entitled to claim for it.

Would you rather she pay for entertainment out of her salary? In which case there is always an incentive to "under-entertain"

[Kaleberg]

Did you miss the Thatcher era somehow? Google it. This shouldn't be a surprise. The 1980s were all about getting rid of the restraints. One writer at the time called it the rise of the mutant elite. She had a point.

[Alex]

The biscuits thing is kind of Prussian. Secondary virtues - in this case, punctiliousness and exactitude - stand in for the greater ones.

[Bert]

Jeremy Corbyn once claimed £3.55 for two items in his 2013/14 expenses claim.
That's £1.755 per item.
Just wondering where that fits in on your neo-liberalism scale given you see a £2 claim as petty and evidence of a neo-liberal mindset?

[Tom]

So is it just a case of the profit motive overriding people's moral sensibilities, which neoliberal culture erodes anyway with its "People are naturally competitive" mantra?

I mean, woe betide the partner/director who turns down work for moral reasons. Based on anecdotal evidence, unless there's risk of a legal or consumer backlash, bosses/companies will take Nazi gold from child-trafficking Klan members.

Either way, excuse for this classic Simpsons clip:

https://www.youtube.com/watch?v=lMleW92DsA8&t=2s

[Blissex]

«bosses/companies will take Nazi gold from child-trafficking Klan members.»

Many/most will take the children too and get them to work hard, no "scroungers" allowed.

«excuse for this classic Simpsons clip»

Hehe. I propose "Thatcher's day" in which employees work without pay to show how grateful they are for liberating them from burdens like raises, pensions, job security, workplace rights, that made them "uncompetitive". :-)

[Zoltan Jorovic]

@Blissex. I don't quite get whether you are agreeing with me, or not, nor whether you are calling me naive or just being sarcastic. To clear things up, the question was entirely rhetorical. Economics, at least in its more extreme free market manifestations, is used to justify decisions or practices as the inevitable result of the "invisible hand" rather than deliberate choices made and controlled by those who stand to benefit from them. CEO pay is a good example.