{"id":9561,"date":"2023-01-27T08:30:00","date_gmt":"2023-01-26T22:30:00","guid":{"rendered":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/?p=9561"},"modified":"2024-03-18T18:54:42","modified_gmt":"2024-03-18T08:54:42","slug":"privatising-poverty-series-part-5-a-uniquely-appropriate-caricature","status":"publish","type":"post","link":"https:\/\/testblogs.griffith.edu.au\/asiainsights\/privatising-poverty-series-part-5-a-uniquely-appropriate-caricature\/","title":{"rendered":"Privatising Poverty Series Part 5: A uniquely appropriate caricature"},"content":{"rendered":"\n

RON BEVACQUA<\/a>\u00a0 |\u00a0 <\/p>\n\n\n\n

As discussed in the fourth post<\/a> in this series, right-leaning neo-liberalism\u2019s focus on protecting property rights is an exercise in raw power. Its underlying logic is the other<\/em> Golden Rule: he who has the gold rules.<\/p>\n\n\n\n

Seen in this light, free market fundamentalism is not the raison d\u2019etre of right-leaning neo-liberalism. It is simply a means to the further end of protecting the owners of property (business, land, buildings, and intellectual property) from having restrictions put on them through the political process.<\/p>\n\n\n\n

Property rights was only one of the \u201cinstitutions\u201d right-leaning neo-liberalism claimed to preserve a free society. The other, according to the Mont P\u00e8lerin Society\u2019s Statement of Aims<\/a>, is the competitive market.<\/p>\n\n\n\n

In this context, the \u201ccompetitive market\u201d should not be read with its modern connotation\u2013\u2013a kind of Coliseum where economic gladiators create the future with their risk-taking and guile. Instead, it is the realm where people pursue their private interests, as opposed to the realm of government with its monopoly on the delivery of public goods. Although Joseph Schumpeter, the renowned economist known for his theories of the development of capitalist economies, linked competition with innovation in 1942, he actually said that it was not perfectly competitive markets but instead oligopolies and especially monopolies that were better at innovating because the economic rents they could earn financed research and development. Competition in general did not begin to take on its magical quality as a handmaiden to innovation until the 1970s<\/a>.<\/p>\n\n\n\n

Lurking behind the neo-liberals\u2019 talk about competitive markets is the issue of sovereignty. In economic terms, this can be described as a question of who has the right to decide how resources are allocated in the economy and who enjoys the profits that those resources generate. When right-leaning neo-liberals say \u201cmarkets\u201d should do that, they really mean the owners of those resources.<\/p>\n\n\n\n

That\u2019s why policy recommendations that expand market principles to realms thought to be public, such as education, health and safety, and environmental protection, should not be taken at face value as free-market fundamentalism either. They are actually a rhetorical sleight of hand. What they really intend is to extend the power of property owners beyond the traditional \u201cprivate\u201d sector into allocating resources in areas normally considered the realm of government.<\/p>\n\n\n\n

Property owners might prefer oligopolies or monopolies, but right-leaning neo-liberals do expect people to compete in markets. This is because the world they perceive is not one in which people maximize their happiness within the context of prevailing laws and social norms, but instead seek to take advantage of their transactional counterparts. As our old friend James McGill Buchanan and co-author, Geoffrey Brennan wrote when discussing why person A needs a contract when hiring person B: \u201cA will make the working hypothesis that B is a rogue who is out to defraud him if the opportunity permits.\u201d<\/p>\n\n\n\n

Let\u2019s let them continue<\/a>:<\/p>\n\n\n\n

\n

A central presupposition in our methodological framework, then, is that individuals have interests that conflict. \u2026 whether or not [benevolence] is present is essentially irrelevant \u2026 therefore, Homo economicus<\/em> is a uniquely appropriate caricature of human behavior.<\/p>\n<\/blockquote>\n\n\n\n

\n

[T]he Homo economicus<\/em> model may be justified despite the fact that it embodies more cynicism about persons\u2019 behavior patterns than the simple evidence warrants. To put the same point differently, if we array models of behavior along a conceptual spectrum from \u201cworst-case\u201d to \u201cbest-case\u201d poles, the model that is appropriate for making a comparison among social arrangements is somewhat closer to the worst-case pole than that corresponding to the simple \u201caverage\u201d description of behavior.<\/p>\n<\/blockquote>\n\n\n\n

In other words, economic models\u2013\u2013and, by extension, economic policies\u2013\u2013should be based on the assumption that everyone is trying to screw everyone else.<\/p>\n\n\n\n

For right-leaning neo-liberals, it\u2019s a zero-sum world. Of course, it would seem that way to them since they are completely fixated on the idea that \u201ceveryone\u201d will use the political system to take property away from its rightful owners.<\/p>\n\n\n\n

Naturally, the world they see is the one their policy prescriptions help create. When market measures are applied to value everything from human life to the environment. (i.e., labor is a commodity, education is a marketplace of ideas, healthcare is a service no different than any other, and environmental goals should be achieved through market mechanisms), there is no room for non-economic calculations.<\/p>\n\n\n\n

In that world, there is no \u201cpublic good\u201d. In fact, there is no \u201cpublic\u201d at all. We are not mutually responsible for our shared fate but isolated units liable solely for our own lives. And when we compete among ourselves for jobs and for access to goods and services, it gives the providers of those things\u2013\u2013property owners\u2013\u2013even more power over us.<\/p>\n\n\n\n

The fact is that right-leaning neo-liberals understand economics very well. They know that power differences exist in market transactions. They also know that the distribution of income and wealth in an economy is tied to the differences in power among economic actors. And they know that power can be attenuated by laws and regulations\u2013\u2013politics.<\/p>\n\n\n\n

In seeking to remove politics from the economy, their goal is to take that power without any public accountability. For them, the main role of government is to dump the risks of business activities onto society.<\/p>\n\n\n\n

These days, \u201cneo-liberalism\u201d has become a metonym for rapacious, anti-social capitalism. Its perniciousness is so well known there is now a Museum of Neoliberalism<\/a>, with takedowns of the financial and political systems that govern our existence, such as a genuine bottle of urine from an Amazon worker not permitted to take a toilet break.<\/p>\n\n\n\n

It would be funny if It weren\u2019t so sad. But even this satire misses the point about what right-leaning neo-liberals really believe. Mont P\u00e8lerin Society founding member Ludwig Von Mises made it clear in a letter<\/a> congratulating Ayn Rand on her publication of Atlas Shrugged:<\/p>\n\n\n\n

\u201cYou have the courage to tell the masses what no politician told them: you are inferior and all the improvements in our conditions which you simply take for granted you owe to the effort of men who are better than you.\u201d<\/p>\n\n\n\n

\n\n\n\n

AUTHOR<\/p>\n\n\n\n

Ron Bevacqua<\/strong> is an Adjunct Research Fellow at the Griffith Asia Institute as well as the Co-Founder and Managing Director of ACCESS Advisory Inc.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Economy, Privatising poverty, Ron Bevacqua,<\/p>\n","protected":false},"author":14,"featured_media":9563,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[1170,2065,1764,1973,1729,1728,1055],"tags":[1376,1734,1715,1714],"class_list":["post-9561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary","category-inclusive-growth-and-rural-development","category-privatising-poverty","category-sdg-1-no-poverty","category-sdg10","category-sdg8","category-economies-and-development","tag-financial-inclusion","tag-neo-liberalism","tag-privatising-poverty","tag-ron-bevacqua"],"acf":[],"modified_by":"Jill Moriarty","yoast_head":"\nPrivatising Poverty Series Part 5: A uniquely appropriate caricature | Griffith Asia 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