The Revolution of Civil Society

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From Locke to Hayek to Trump: The Trail of Neo-liberalism and the Need for a New Social Enlightenment

How We Got Neo-liberalism

John Locke was a philosopher of the British Enlightenment in the 17th century. His views, together with his Scottish contemporary Adam Smith, ushered in the concepts of liberal individualism and the unmediated, by human agency, market. Theirs was a rejection of authority. In the case of Locke the authority was God. In the case of Smith the authority was the King.

Locke ideas inspired, via Thomas Paine, another Englishman, directly the American Revolution and indirectly the French Revolution.

Much later, indeed in the 1980’s, a disciple of Locke and of Smith, Friedrich Hayek strongly influenced Margaret Thatcher, and the modern age of neo-liberalism began. Hayek was an Austrian, but he spent most of his life in the UK and wrote widely on issues of philosophy, politics, and economics  and is probably the most influential proponent of neo-liberalism, together with his American colleague the monetarist economist Milton Friedman.

Neo-liberal market capitalism has since the 1980s become embedded in the fabric of Western societies, and those countries emulating the model. With the extension of marketisation has come the reduction of the direct provision of goods and services by the state. In the UK this can clearly be seen in the NHS ,in Social Care, in Education, and in the Public Utilities. Accompanying this marketisation has come a substantial shift in income distribution, with a significant reduction in the proportion of Gross Domestic Product taken by real wages declining and that of profits, and also, since the global financial crash in 2008, the advent of austerity policies and a further squeeze on living standards.

At the same time the market model applied to trade, investment, and latterly the large-scale movement of people has seen the development of globalisation. Globalisation has itself been stimulated by the advent of global financial capitalism and the growth of mega-global corporations, dominating international trade and communications.

However, the past 2 years has witnessed the remarkable rise of populist nationalism, ostensibly challenging the neo-liberal market orthodoxy in respect of trade globalisation. This rise has seen the advent of Brexit in the UK, the election of President Trump in the US, and increasing populist tendencies in many EU countries other than the UK.

If this populist nationalism represented a genuine intellectually cogent and political challenge to neo-liberalism we might be able to celebrate such a movement. In fact its challenge is based on a superficial economic analysis and a crude response to an atavistic response to their socio-economic position by the jobless working class communities and the petit-bourgeois middle classes threatened by both occupational insecurity and cultural miscegenation. What is required is a genuine intellectual and political revolution, able to provide an inspiration for radical change.

A New Social Enlightenment.

If populist nationalism is not the answer to neo-liberalism, has inherent dangers, and is unlikely to be more than a painful, reactionary phase, what is the answer?

In this book, Michael Lloyd, sets out a comprehensive analysis and counter-narrative to the neo-liberal market capitalist orthodoxy.

He uses Hayek as a stalking horse. Hayek is commonly acknowledged to have presented the most comprehensive view of neo-liberalism.

Hence, Lloyd covers a similar ground: challenging the psychological, philosophical, sociological, political, and economic neo-liberal positions. But aiming also to provide the basis for a practical political and economic challenge to improve the social, economic, and political nature of our societies: an agenda for change.

As indicated, Lloyd attempts to achieve this objective by arguing against not only neoliberalism, but also its philosophical and political antecedents, deriving from Locke and to an extent from Smith, but reflected in Hayek and other neo-liberal advocates to the present day. A new social enlightenment is required which sweeps away the foundations of the liberal individualist enlightenment, and which persist into today, in the form of neo-liberal market economics and its philosophical underpinning. Lloyd also reviews recent contributions of a number of authors who have analysed neo-liberalism and finds common ground with a number of their arguments and positions.

In so doing it will also attack the false prospectus of Trump. Le Pen, Farage, and other populist nationalists. However, it will also challenge some of the shibboleths of the Left such as its naive anti-elitism, its concentration on identity politics rather than class politics, its own tendency to put nation before class, and its modern tendency on occasions to over-stress the importance ofindividual rights, as opposed to the values of solidarity and fraternity.

The Areas of Debate

Knowing the World

Lloyd starts, in the first major part of the book, by examining the psychological and philosophical positions of Hayek and his contemporaries, such as Karl Popper. In so doing Lloyd not only provides an analysis of the positions of Hayek, finding some areas of agreement as well as disagreement, but also develops his own underpinning philosophical position in opposition to that of Hayek’s neo-liberalism. In this part also Lloyd pays tribute to Andrew Gamble’s definitive book on Hayek.

In essence Lloyd argues that just as we are both part of the material universe, but also consciously exist separate from it, so also we are separate conscious individuals, but also part of the social universe. We are connected to each other, across both time and space, via our use of common language, or more correctly communication. We are quintessentially social beings, connected by language.

The final chapter of this part also reviews the recent contributions to the literature on neo-liberalism by various authors, among them Dardot and Laval and Phillip Mirowski, and indicates, in general terms, his own position in relation to these analyses.

Societal Development and An Emerging World Order

In the second major part of the book, Lloyd develops his argument that social order does not emerge via an evolutionary or co-evolutionary process. Hence, social order and the development of social rules are the product of rational human intervention over centuries, but can always be modified and improved. The neo-liberal traditions rest either on a Hayekian/ Von Mises notion of the emergence of social order in the same manner that market-clearing prices occur in the economy or they are based on the notion of a rights-based approach rooted in liberal individualism, e.g. Murray Rothbard, a doyen of the US libertarian movement. Lloyd argues that neither of these approaches is adequate. Instead he argues that social order and liberty are functional aspects of the connectedness of people in societal groups.

Lloyd then examines the development of the modern state and its governance, and how various damaging trends, including neo-liberal marketisation, are emerging in the wider global world order (now subject to the populist national challenges of Trump and Le Pen, and others). He suggests a federalised political governance model running from local to global.

Lloyd also insists that in large, complex, modern societies that representative democracy is the only valid form of democracy. The shift towards plebiscitary, direct democracy, supported by the populist nationalists is dangerous. It entrenches majoritarianism and can easily deteriorate into ill-informed  ‘mob-rule. He argues that all governance systems are effectively elitist. The issue is how the elitists are selected, elected, and what structures are established to monitor and influence the elites during the period of governance.

Turning to global economic structures Lloyd then proposes an alternative to the current dominance of centralised global corporate capitalism, arguing that, in any case, current changes in this model are moving towards a more federalised corporate governance system, paralleling the desirable global political federalised system he advocates.

Finally, Lloyd suggests an alternative to the orthodox neo-classical economic paradigm, which dominates UK and US academic economics teaching, and looks at what this means for developing an alternative progressive economic state and how this might work, with a reducing area of marketisation and a corresponding increase in the role of the state, but with the state seen as representative of society and its values of solidarity, fraternity, and universality of provision, and not as seen by neo-liberalism as being fundamentally antithetic to society.

Towards an Open Future

In the third and final part of the book Lloyd offers a modern vision, based on the main theoretical propositions developed in the book, and suggests how an alternative view may be developed in the modern globalising world, based on a new social enlightenment.

The arguments in the book are summarised to present a political programme for challenging neo-liberalism in the modern world and opening up the possibilities for building a ‘progressive state’ at all levels of governance from local to global.

The book concludes with an indication of a more positive vision for mankind than that offered by neo-liberalism and how this can offer positive hope for the future.

About the GPI

The Global Policy Institute is a research institute on international affairs. It is based in the City of London, and draws on both a rich pool of international thinkers, academics as well as policy and business professionals. The Institute gives non-partisan guidance to policymakers and decision takers in business, government, and NGOs.

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