In a recent EUROPP article, Steve Fuller argued that social democracy and neoliberalism may have more in common than we think. In a response to Fuller’s article, Johan Söderberg writes that if it appears there are no important distinctions to be made between neoliberalism and social democracy, then this is only because of a tendency to look through the analytical lenses of the former, according to which there can be no alternatives.
Steve Fuller argues that there is less difference between neoliberalism and social democracy than we have been led to believe. He thanks me for having inspired him to make this claim, which I did inadvertently, through my intervention in the debate between him and Philip Mirowski in Lancaster in July.
There Fuller defended the provocative statement that higher education has benefited from neoliberal reforms. To pull this argument off, he sought to establish a continuity between recent university reforms, introduced during a period of neoliberal hegemony, and the expansion of higher education in the 1960s, introduced at the zenith of social democracy. Hence the need for conflating the two ideologies.
The counterargument that I will elaborate here, is that neoliberalism and social democracy should be treated as two distinct and internally consistent thought and value systems. The integrity of the two ideologies must neither be reduced to practices/policies, which occasionally may overlap, nor to individual representatives, who, over the course of a lifetime, can move from one pole to the other.
Neoliberalism and the university system
Fuller’s argument pivots on the mixed legacy of Lionel Robbins. On the one hand, Robbins’ credentials as a neoliberal are firmly established by his decision to recruit Friedrich Hayek to the LSE. On the other hand, Robbins authored the government report whereby many regional universities in the UK were founded, in keeping with a classic social democratic agenda of enrolling more students from the working class. This encourages Fuller to draw an arc from the 1963 Robbins Report to university reforms of a more recent date (and with a more distinct, neoliberal flavour).
The common denominator of all the reforms, Fuller says, is the ambition to enhance human capital. Alas, the enhancement of human capital is blocked on all sides by incumbent traditions and rent-seeking monopolies. From this problem description – which Fuller attributes to the neoliberals, but which is also his own – follows the solution: to increase the competition between knowledge providers. Just as the monopoly that Oxbridge held over higher education was offset by the creation of regional universities in the 1960s, so is the current university system’s monopoly over knowledge acquisition sidelined by reforms to multiply and diversify the paths to learning.
Underpinning this analysis is a bleak diagnosis of what purpose the university system and its employees serve. It is a diagnosis that Fuller, by his own admission, has gleaned from the Virginia-style neoliberal Gordon Tullock. The task assigned to the university, i.e. to certify bodies of trustworthy knowledge, is not called for by any intrinsic property of that knowledge (it being true, safe…etc.), but is rather a form of rent-seeking. The rent is extracted from the university’s state-induced monopoly over the access rights to future employment opportunities. Rent-seeking is the raison-d’être of the university’s claim to be the royal road to knowledge.
In this acid bath of cynicism, the notions of truth and falsehood are dissolved into the basic element that Tullock’s world is made up of – self-interest. This reasoning lines up with a 19th century, free market epistemology, according to which the evolutionary process will sift out the propositions that swim from those that sink. With a theory of knowledge like that, university-certified experts have no rationale for being. Their knowledge claims are just so many excuses for lifting a salary on the taxpayers’ expense. It bears to stress that this argument can easily be given a leftist spin, by emphasising the pluralism of this epistemology. This resonates with statements that Steve Fuller has made elsewhere, concerning the claimants of alternative facts.
Granted, the cynical reading of the university system as a rent-seeking diploma-mill has a ring of truth to it when we, for instance, think of how students are asked to pay higher and higher tuition fees, while the curriculum is successively being hollowed-out. However, as was pointed out to Fuller by many in the audience in Lancaster, this is the result of the consecutive waves of university reforms since the 1990s to ground knowledge production on market principles. If university employees behave like self-interested rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them.
Thirty years of neoliberal politics have created the conditions under which categories such as “human capital” and “rent-seeking” start to make good sense. And this is also why Fuller’s argument is so problematic. By relying on those same categories, he contributes to rendering the framing conditions and the history whereby those were put in place invisible. If it appears to Fuller as if there are no important distinctions to be made between neoliberalism and social democracy, then that might be because he is looking through the analytical lenses of the former, according to which there can be no alternatives.
Defining social democracy
This brings me to the objection that I first made in Lancaster, concerning Fullers’ definition of “social democracy”. In his article, he lays down that the distinguishing feature of this ideology is that it will do just about anything to secure power. That is to say, social democracy has no ideology of its own. To prove this point, he marshals a list of social democratic leaders that have pursued neoliberal economic policies: Bill Clinton, Tony Blair, Gerhard Schröder, and François Mitterand. The ease with which they swung from social democracy to neoliberalism is held up as evidence of the proximity between the two ideologies.
Fuller never answered my question, however, of why he takes those leaders to be the best representatives of the spirit of social democracy? In his article, he qualifies his selection with “in recent times”. If he went further back in time, let’s say to Victor Adler or Olof Palme, then his thesis about the non-ideology of social democracy would crumble. But that makes his truncated timeline even more conspicuous. On what grounds has he left out the most recent of social democratic leaders, Jeremy Corbyn?
What the list “Clinton, Blair, Schröder and Mitterand” signals is not “social democracy”, but its submission under the neoliberal hegemony during the late 1980s up until the financial crisis in 2008 (since then, the rise of authoritarian populism has complicated the picture somewhat). This is to stress, once more, the importance of making analytical distinctions between, on the one hand, internally coherent thought and value systems, and, on the other hand, the individuals that represent those ideologies.
Indeed, the same objection can be made in relation to Fuller’s crown witness, Lionel Robbins. Does the mixed legacy of Robbins suggest an ideological closeness between neoliberalism and social democracy? Or should it rather be said that when the economist hired Hayek at the LSE, he subscribed to one ideology (Manchester liberalism), and, 30 years later, when he advocated state-backed expansion of higher education, he had been influenced by another ideology (Keynesianism)? Robbins made the following reflection:
“Whatever we may think of the virtues of the price system as a mechanism of allocation […] I am quite clear that as an instrument for maintaining reasonable constancy of aggregate demand it has most profound limitations […] I confess that I have not always held this conviction as strongly as I do today […] I owe much to Cambridge economists, particularly to Lord Keynes and Professor Robertson, for having awakened me from dogmatic slumbers in this very important respect.” (Robbins, 1947, p.67-8)
Fuller is entitled to ask me to stick my own neck out and give a positive definition of social democracy in contradistinction to neoliberalism. My five cents is that the dividing line between the two runs along the “sociological imagination” of the former. Here I lean on the insights of (the young, pre-Pareto?) Steve Fuller. In The New Sociological Imagination, he described an alliance between knowledge (sociology) and power (socialism). This alliance forged an imaginary within which society could be reorganised on a more rational ground, as opposed to letting society be carried away by the blind forces of the market. That ground is the principled equality and uniqueness of all human beings.
This, of course, is the humanism of the Enlightenment, to which social democracy is not the sole heir. Marxism and various strands of social liberalisms drink from the same well. What is more important to my argument, however, is that neoliberalism does not. As the other discussant in Lancaster, Philip Mirowski, has documented over the years, the latter ideology was born in the socialist calculus debate, in fierce opposition to the social democratically governed “Red Vienna”.
Mises and Hayek took up a classic conservative defence-line against the sociological imagination of the reformers by insisting on the limited cognitive capacities of human beings. By replacing God with the Market, they came up with a new supernatural entity that overwhelmed human comprehension, and to which man must bow. It goes without saying that a political reform programme for the university based in Humanism will produce very different results, compared to the kind of university reforms that will be brought forth by an ideology authored by Tullock, Mises and Hayek.
The author would like to thank Adam Netzén, Karolina Enquist Källgren and Eric Deibel for feedback given on early drafts of this blog post, and especially Steve Fuller, for having invited a response to his argument.
Please read our comments policy before commenting.
Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: See-ming Lee (CC BY 2.0)
Johan Söderberg – University of Gothenburg
Johan Söderberg is Associate Professor in Theory of Science in the Department of Philosophy at the University of Gothenburg.
The main rhetorical error that Söderberg makes is to presume that I’m defending neo-liberalism over social democracy, whereas in fact I’m asserting the common nature of the two. In other words, the distinction is more spurious than real. As it stands, neither side includes the other in its self-understanding. Neo-liberals treat social democracy as a watered-down if not incoherent form of socialism, and Söderberg – sticking quite closely to the conventional social democratic script – treats neo-liberalism as ‘the other’, especially at the moral level. Both assessments are wrong.
Put another way, if I’m ‘cynical’ about anything, it is about any account that amplifies the difference between the two positions. Neo-liberals and social democrats agree on both a strong state and the centrality of markets. They differ over how exactly these two points are supposed to relate to each other – in particular, just how much the state can control markets once it has created them. (This is what the ‘socialist calculation’ debate was really about – and it was here that Robbins moved closer to Keynes’ more ‘socialist’ position.) And the differences in their answers are ones of degree not of kind.
After all, the person most responsible for making West Germany the beacon of postwar ‘social democracy’ was its early ordo-liberal Chancellor Ludwig Erhard, and the most intellectually important work of postwar ‘social democracy’ in the UK was Anthony Crosland’s The Future of Socialism, which theorized the sort of ‘aspirationalism’ that first Thatcher and then Blair took to repeated electoral victories. And lest we forget, hovering above it all was the ‘European Economic Community’, that bastion of ‘social democracy’ we now know as the EU, which began life as the ‘Common Market’ – much to the suspicion of ‘true socialists’, arguably including Jeremy Corbyn today.
Indeed, when Marxists dismissed all these guys and initiatives as just a bunch of ‘bourgeois liberals’, they had a point – except that they should be praised, not dismissed, for being that! Perhaps the disappearance of Marxism as a serious political force over the past thirty years has now helped to increase the perceived distance between neo-liberalism and social democracy, since in effect there is more ideological space to occupy. But it’s also been a period when neo-liberalism has politically benefitted at the expense of social democracy. And so a familiar – one might say ‘Hegelian’ — division of labour has developed: While neo-liberals actually try to rule their countries, the social democrats write highly critical histories of them. And Söderberg’s article clearly fits this mould.
We see here the usual demonizing that we’ve come to expect from these histories, including a promiscuous use of ‘conservative’ and ‘self-interest’ to describe neo-liberalism, even though neo-liberal regimes are noted for the socio-cultural disruptions caused by their aggressive marketization strategies and their general expectation that people will radically change their lives (i.e. their sense of ‘self-interest’, aka class mobility) if the incentives are right. These were certainly Thatcher’s calling cards. Sometimes I think people like Söderberg take the label ‘Conservative’ a bit too literally in a party-political context. If anything, the term ‘conservatism’ properly belongs to the nostalgic attitude to ‘organized labour’ as the bulwark of modern society, which in some ‘Left’ quarters – say, the Corbynite wing of the UK Labour Party — still seems to be worth preserving at all cost.
From a strictly historiographical standpoint, it’s noteworthy that Söderberg makes it seem that social democracy sprang from Keynes’ head – ignoring the prehistory involving the German SPD, UK Fabianism and US Progressivism. It helps that Keynes held many different positions over a wide range of relevant areas and died before he could make them cohere properly. This allows for an idealized post-mortem ‘pick and mix’ view of Keynes to emerge triumphant. Equally, it’s convenient to think that neo-liberalism is nothing more than a cynical concoction of the likes of Hayek and Tullock, when in fact these guys are simply ‘reformers’ of political economy in the sense of Luther and Calvin, returning to Smith and Ricardo as their inspiration. A guy named Karl Marx was arguably trying to do the same thing as well, though he drew somewhat different lessons from them.
The best book by Phil Mirowski, who I believe deserves the label ‘cynical’ much more than I, shows just how closely the fates of social democracy and neo-liberalism – and perhaps even Soviet socialism – have been at a deep conceptual level. And it boils down to the Cowles Commission of the 1930s, as a result of which the economy came to be seen across the ideological spectrum as an information processor, a vision that acquired momentum with the advent of mainframe computers in the postwar era. Keynes and Hayek aren’t part of this story – but their emissaries on Earth are: Paul Samuelson, Milton Friedman and even Oskar Lange, who introduced ‘market socialism’ to Stalin. The book is Machine Dreams, and I highly recommend it, not least for the positive proposals that Mirowski offers at the end to ‘liberalize’ our understanding of markets.
In terms of my own political orientation, what I have begun to call the ‘Alt-Left’ amounts to removing the rhetorical divide that has been recently increasing between self-described ‘social democrats’ and ‘neo-liberals’. If I had to select one issue that these two siblings of the same parent should focus on, it would be the significance of ‘inequality’. Neo-liberals operate with quite a strong sense of the distinction between ‘equality of opportunity’ and ‘equality of outcome’. And they also tend to valorise – and try to legislate for – the ‘reversibility’ of outcomes. Both of these principles are fine. Unfortunately, the latter tends to be applied mainly to big players who lose big (e.g. banks that are ‘too big to fail’). Social democracy rightly wants to extend this ‘second chance’ mentality across society. Unfortunately, it tends to suffer from a residual paternalism – culturally expressed as ‘political correctness’ – which does not sufficiently credit the intelligence of people when they make choices that go against what the social democrats would like. Instead, it’s dismissed as ‘populism’, as if you’re ‘never big enough to fail’.
(DISCLAIMER: Steve Fuller is my PhD supervisor)
I would argue that by now, contrary to the common view among scholars, the onus is on those who want to stress the differences between neoliberalism and social democracy. This is simply because by now anyone who argues for a clear-cut divide between Social Democracy and Neoliberalism should explain the fact that neoliberal policies have been carried out across the world by political parties who represent themselves as defenders of social democracy. I do disagree with Fuller’s comment above that this is a good thing.
The clearest example is Chile, my own country. The Concertación governments, the heirs of the progressive coalition that managed to get Pinochet out of office, implemented the neoliberal policies that ended up entrenching the “Chicago Boys” economic model. The student revolts of 2006 and 2011 were a response to the lack of any relevant political difference between the traditional left (Social Democratic) and right (Neoliberal) parties. This is why the Nueva Mayoría (formerly, the “Concertación”) was unable to capture votes and support by the newly formed Frente Amplio, the political force that formed from the student revolts. Even if the reader is not familiar with Chilean politics, this picture should be familiar enough, since the same has happened in the US and the UK. Not in vain, Nancy Fraser has coined the expression “progressive neoliberalism” to try to mark a difference between the Obama administration and Trump:
This is not surprising since the historical goal of social democracy and its related political projects has always been to offer an alternative to more radical forms of socialism: dealing with the more egregious forms of injustice to avoid social upheaval and eventually revolution. In this sense, both social democracy and neoliberalism are the theoretical answer to the bankruptcy of classical liberalism. This is the original meaning of the “third way”: something in between (classical) liberalism and (totalitarian) socialism.
Another way to make the same point is to ask (in a Schmittean fashion): Who is the political hostis (i.e. enemy) of neoliberalism and social democracy?
The short answer: NOT the capitalist class, which they both regard as necessary for societal progress.
As I mentioned in a (yet) unpublished comment under Fuller’s original article, both social democracy and neoliberalism aim at curtailing “corporate power”: i.e. avoiding capital concentration capable of affecting other social formations (for instance, politics or culture). They diverge regarding the mechanism used for dealing with this issue: whereas social democracy uses citizenship-based access criteria for distributing goods, neoliberalism uses market-based access criteria for the same goal. Both mechanisms could be called “centrifugal mechanisms” insofar as they aim at “dispersing” capital.
Alas, this difference between social democrats and neoliberals looks rather insignificant when compared to the socialist radical stance against inequality, defined not in terms of income, opportunities or results, but in terms of the goal of equating peoples’ relationship to the means of production (i.e. common ownership of the means of production)