The Assault on the public

Just about everything with the word “public” in front of it is under attack. Public education, public health, public housing, public transport, public corporations, public sphere, public libraries and so on.

We say just about everything for some things, crucially but also instructively, are to be left out from our list. Public bailout of banks, public bailout of investors, and public subsidy for high technology industry are all excluded.

If something with the word “public “in front of it is designed to serve “the public,” understood as the broad mass of the population, then it’s under attack. If it is meant as public subsidy for, and bailout of, the rich then it flourishes.

This suggests that it is the public itself that is under attack, both literally and conceptually. 

The increases in inequality in the advanced industrial economies during the neoliberal era show us that the public have been under attack for the rich have gotten richer in the past 30 years by extracting resources from, and by lowering their obligations to, the wider population. This was achieved by wage restraint, lower corporate and high end taxes, lower social welfare spending, and the attack on public goods provision.

The dominant narrative on inequality is that the economic dynamism unleashed by neoliberal deregulation has, regrettably perhaps, fostered inequality alongside economic growth. Despite the recent emphasis on the issue this narrative has not changed. Focus is directed at the failure of the trickle down effect to distribute the proceeds of economic growth down to the masses.

Yet this ignores the crucial point that trend rates of economic growth during the neoliberal era are almost half of what they were during the post war Keynesian era. It is not uneven distribution of economic growth that has led to the rise in inequality.

Rather, it is the assault on the public that has led to a redistribution of resources and wealth away from the public toward the upper class in a period characterised by lower economic growth.

This assault on the public also entailed an attack on the very idea of “the public.” This offensive was facilitated by the rise to dominance of neoclassical economic theory with its view that society, to the extent that there is “such a thing” as society, is a self-organised system composed of rational utility maximising individuals. A rational society is a society that frames public policy with reference to such ideas, we are led to believe.  A society of rational individuals that “forgets all but self” is a rational one, and niceties such as social justice are chimerical and irrational.

There are many things that we may say about this, but it is useful to focus on three aspects. Namely, how did democratic societies attack their own population? What does this tell us about the role of the state in neoliberal practice? How much intellectual worth does the neoliberal system of ideas have that assaults the very concept of “the public?”

Public discourse by now is dominated by the dismal science. We can see this by observing how economists, especially financial market economists, have enjoyed a privileged role in public debate. Yet the story of the past 30 years is as much a political story as it is an economic story. The shift to free markets in the neoliberal era had to be facilitated through political action; without Ronald Reagan and Margaret Thatcher there is “no such thing” as neoliberalism bar words on paper.

Neoliberal ideas could be used to attack the public only because democracy itself came under attack. Aristotle, who possessed one of history’s keenest pair of eyes, observed that a democratic society could only function in a society characterised by economic equality.

The sharp increase in inequality has come about because of an attack on democracy, and an attack on democracy is an attack on the public. This has taken a number of forms. For instance, as parliamentary assemblies lost sovereignty through free trade agreements, which are agreements to dilute parliamentary oversight in the interests of investors, by an alliance between corporations and the apparatchiks of social democratic and labour parties constructed to attack democracy within the previously massed based parties of the Left, but most especially by developing Seinfeld elections that are much ado about nothing.

Elections are non-affairs that are essentially driven by focus polling, the public relations industry and big money in a contest where the major candidates must be committed to the attack on the public. 

Though the candidates themselves are committed to the offensive, it is understood that the public isn’t. Generally speaking, throughout the advanced industrial states, public opinion during the neoliberal era has supported social democratic ideas and policies.

Because of this it was, and is, not possible to pursue policy that is designed to increase inequality when the public is wedded to social democratic ideas unless democracy itself is attacked.  The ultimate expression of this is the elimination of meaningful elections.

In the neoliberal scheme of things the state is viewed with derision. The neoliberal state is the state of classical liberalism; a necessary evil to be made as small as possible. This view, though popular, is quite false. Consider, for example, Hayek’s The Road to Serfdom.

When Hayek’s call to arms was published, and thereafter distributed by Reader’s Digest, the reach of the state was being extended in two crucial ways. Firstly, the state became a “welfare state” dedicated to the pursuit of social security under the broad rubric of social justice. Secondly, the state, certainly in the United States, became a “national security state” which saw its size and reach grow.

Hayek, and all neoliberals following him, became especially interested in the first aspect. The second aspect was conveniently ignored.

It is not possible, because of positive externalities, to achieve socially optimal levels of scientific research and technological advance in a market driven society. Public subsidy, via the agency of the state, is necessary when economic growth is being driven by science. Most of the great advances of 20^th century science that facilitated economic growth came via public subsidy. The profits, however, were handed over to private corporations.  In the United States, subsides were provided for the national security state.

Take two oft-cited examples. The computer was initially developed in the public sector in order to support numerical calculations during the development of the “Hydrogen bomb.” Its key architect, John von Neumann, consciously made a Faustian bargain with the state. The internet developed in order to facilitate command and control during nuclear war. But not just any nuclear war; a war based on conceptions of nuclear strategy that held that nuclear wars could be fought and won.

This crucial feature of the national security state was not a problem, even though it threatened to lead to a significant attack on the public through large scale population decline.

Public subsidy of high technology via a militarised system of waste production does not lead to a more equal society.  By contrast, in Japan, Europe and Australia, such public subsidies developed around a social contract between capital and labour, which lowered inequality. Neoliberals opposed the latter, but not the former. 

When big governments are used to support corporate profits, only neoliberals see no issue with it. However, when state power is used to additionally ameliorate the socially suboptimal distribution of resources then it is vociferously opposed.

Furthermore, the power of the state was directed against the labour movement and other social movements if they resisted the attack. Hayek himself and Milton Friedman, for instance, had little issue with the exercise of the coercive powers of the state if they were used against labour, even by quasi fascist states such as Pinochet’s Chile.

The intellectual story is no less interesting.  In the neoliberal scheme of things, society is an emergent property of rational utility maximisers engaged in market based voluntary exchange. This is “rational” for only such a society can efficiently produce, distribute and allocate resources.

The neoliberals that came after Adam Smith fully realised that markets hardly promote equality, but also, unlike Smith, they were elitists with little to no concern for equality.

The staples of neoclassical economic theory have been expanded beyond the economic domain under the rubric of a highly mathematical “rational choice theory.” There can be no such thing as a public with collective interests and concerns of its own.  Here rational actors, existing in a world characterised by competition, act strategically in order to achieve a given set of preferences. There are no collective interests and public cooperation arises either through force or through recognition that collective action promotes individual interests.

There exists hardly any room for the common good, morality, altruism and social norms unless they somehow promote individual interests; such concepts largely serve as fig leaves to hide the self-interested motives that lie beneath them.

The intellectual edifice used to support the attack on the public has no grounding.  To be sure the theorems of rational choice theory are correct in so far as the proofs of the theory are soundly made following a logical chain of reasoning founded on a set of axioms or assumptions. But that does not mean that the axioms themselves are sound or that the proofs have empirical validity, much less implications for government policy.

It is the second point that is crucial for the attack on the public is based on the assumption that rational choice theory does indeed possess such empirical validity, so thereby any rational society would frame policy with reference to it.

We might identify three problems with all this. Firstly, studies of economic behaviour demonstrate that we are not as rational nor utility maximising as neoclassical economic theory assumes. Secondly, it tallies against the cognitive revolution. Thirdly, the global economic crisis has amply demonstrated that neoclassical economic theory, from which rational choice theory emerges, falsely concludes that markets are rational.

The first and third are by now familiar, however the second is less so. There are many social species in the living world that develop social structures and social norms; we are no exception. These social structures must somehow be based on some cognitive system of information processing that occurs within the mind/brain, itself arising from a natural or genetic endowment specifically focused on the social domain rather than a generalised faculty of reason. So it is with Homo sapiens.  The empirical study of this particular social faculty is what social theory ought to be.

Rational choice theory is a particular perversion of liberal political theory. A key idea of traditional liberalism is the notion of a social contract. The various permutations of social contract theory are not as important as is the obvious recognition that in liberal approaches people band together in social structures in order to promote collective interestsand some idea of the collective good in ways not made possible through the set of individual action.

It is an especial irony that rational choice theory developed out of the RAND Corporation, which was tasked with developing theories of nuclear deterrence to support nuclear war fighting strategies that the public in democratic societies opposed.

That points out to us another form of public subsidy our erstwhile rationalists and liberals do not question namely the public subsidy of quasi scientific ideas in secular societies that buttress the attack on the public. That is why economics is placed on a pedestal, and rational choice theory is de rigueur in American political science departments.  Should the attack continue such subsidisation shall doubtless also continue.

In the global debate on university funding public subsidy of attacks on the public are rarely discussed.

The attack on the public is made possible by a full frontal assault on democracy, the coercive use of state power, and politically motivated intellectual sophistry none of which are remotely liberal.