The Assault on the public

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.