Conclusions: Financial Scandal and Neoliberalism
…to engage in corruption, and to expect to survive in public life is to have either a generous faith in the mechanisms of secrecy or a confident sense of what one can get away with in the event that activities hitherto hidden are suddenly made visible to others. —John B. Thompson, in Political Scandal
Please note: this is the sixth post in a series; to read the rest of the series, click on any of the following:
Part 1: Introduction
Part 2: When Knowledge Is Exchanged
Part 3: Case Study A: the Beeching ‘Axe’
Part 4: Case Study B: the Newby-Mandelson ‘Axes’
Part 5: Scandal in the Times of the Internet
Part 6: Conclusions: Financial Scandal and Neoliberalism
In this, the final post in the Financial Scandal series, I’d like to return to some of the issues which motivated me to write the series in the first place. What are the implications, both present and future, of my analysis for the relationship between financial scandal, corruption, and censorship in Britain? In particular, what are the implications for the neoliberal politics which this blog has critiqued?
Neoliberalism is a discourse of market fundamentalism: the most zealous advocates of neoliberalism—better known as neo-conservatives—attempt to reduce everything to ‘the economy’, and this on the basis of a model that conceptualizes the economic in terms of a peculiarly idealised marketplace: one in which individuals are at once driven and controlled by greed. In this world of macho predators, competition amongst alleged economic equals results in the fabled ‘invisible hand’ that produces at once ‘free’ and ‘stable’ markets. By this account, such markets are not only the most ‘efficient’ way of conducting business, but if Milton Friedman is to be believed, the markets go hand in hand with democracy. According to Friedman and his many followers, democracy can and must be conceived in ‘free’-market terms: to be free is to be free to buy and sell things in an ostensibly unfettered marketplace, and vice-versa: a democratic economy is one in which individuals are ‘free’ to buy and sell whatever they please. The role of government is paradoxically to police a freedom thus conceived. In Friedman’s now infamous terms, ‘…the scope of government must be limited. Its major function must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets.’
Alas, it doesn’t take a degree in sociology or critical theory—the very subjects that are now amongst the first to be threatened with closure by neoliberal managers in some of the UK’s foremost universities(1)—to realise that this discourse is utterly ideological: as many people have discovered, so-called ‘unfettered’ markets are actually those in which the dominant private corporations and their managers—popularly known in Britain as the fat cats—are able dictate terms not just to individuals, but to entire nations (witness what has happened with the financial markets in the case of Greece and Spain, and what happened with Rupert Murdoch in the case of the UK). As Adam Smith himself recognised, an unregulated market is one that eventually results in less competition, not more. Indeed, in so far as some individuals, organisations or social networks become disproportionately powerful, this selfsame power contradicts the other fundamental(ist) tenet of neoliberalism: that the economy is purely economic, in the sense that it is entirely separate from politics and culture.
If the economy is always purely ‘economical’, how can we explain what many believe is a link between Alan Milburn, Capita, and New Labour’s NHS policies? Or indeed, how can we explain any analogous link between David Blunkett, Entrust, and New Labour’s ID card proposals? (In the U.S., the example that comes to mind is that of Dick Cheney, Haliburton and Iraq)
In my view, the answer to these, and countless other questions seems obvious: as certain individuals, corporations, and/or social networks accumulate more and more profits, they are bound to attempt to exchange some of their economic power for political, cultural and symbolic power. In so doing, they are bound to use that power to attempt to modify legal and other market conditions in order to further increase their economic capital. There is, from this perspective, an inexorable link between economic, cultural/political, and symbolic forms of capital. In so far as this link remains unregulated, or is regulated in ways that serve the interests of those with the most capital, then there is likely to be a snow-balling dynamic that eventually spreads throughout more and more social and cultural spheres. This process not only contradicts the very discourse of neoliberalism, but is likely to lead the agents of neoliberalism to transgress moral or legal thresholds that they themselves claim to observe—the boundaries of what counts as morally or indeed legally acceptable behaviour.
It is here that ideology—which I define with John B. Thompson as meaning that serves to develop and then sustain durable relations of domination within and between social groups(2)—may play a key role. On the one hand, a variety of forms of everyday practices—media, DIY, etc.—may serve an ideological role in so far as they help to keep people preoccupied with matters that distract them from the overarching political process, or at least lessen the pain of neoliberalism’s harshest prescriptions. On the other hand, it would be a mistake to assume that we are simply ‘duped’ or ‘distracted’; many of us may realise that there is a fundamentally ‘unfair’, if not corrupt social order, but may still be persuaded that there is ‘something in it for us’, or worse, that there is no alternative. Then again, many take an active part in furthering the ideological relation by demanding lower taxes, rejecting the very principle of public services, expressing their support for expeditionary wars in Iraq and Afghanistan, and so forth.
If ideology may work to dissimulate social inequality, financial scandals may work to puncture the ideological ‘spell’, or at least to contradict any easy adherence to the predominant forms of rationalisation. A manager may argue that it is necessary to shut down railway lines or to close university departments, and this for reasons to do with economic scarcity. S/he may also attempt to make the case that such closures further the cause of managerial efficiency, the long term survival of an organisation, etc. Arguments such as these may be greeted with some scepticism, but by and large, are likely to be accepted, however grudgingly, by all but those most directly affected by a proposed closure.
If, however, it is alleged, or indeed it becomes known that the manager stands to benefit personally and financially from such policies, then moral outrage may ensure, and, in more ways than one, the proverbial cat may well and truly come out of the bag: the ‘fat’ cat may be exposed as having a vested interest in pursuing policies to real or alleged problems that might have alternative solutions; and the lion of public opprobrium may be released in so far as localized groups, and social groups at one remove become aware of the arbitrary nature of an ostensibly ‘economic’ form of management. One may have difficulty understanding the complex nature of what I have described as the ‘nocturnal’ connections between politics and the economy, but no critical pedagogy is required to explain a manifest conflict of interest, let alone crude financial corruption of the kind commonly associated with financial scandals.
I further believe that it is in this context that censorship, and indeed Britain’s extraordinary libel laws, come to the fore. In so far as New Labour’s, and before it the Tory’s neoliberalism advanced the kind of market fundamentalism I outlined above, then the risk of financial conflicts of interest, if not of a culture of corruption has arguably increased exponentially. A government that is predisposed to accommodate big business, or a political party whose leading members declare, as Peter Mandelson famously did, that they are intensely relaxed with people becoming ‘filthy rich’ may promote, however inadvertently, corrupt and/or fraudulent practices. When all that matters, or appears to matter is money, then why should social regulations be allowed to stand in the way of making more money?
While some of the media of mass communication may have a vested interest in concealing any ensuing transgressions, others may be keen to expose them. In this series I have suggested that, in the context of Ernest Marples and Richard Beeching’s railways, a ‘quiet word’ was apparently enough to silence the most powerful media; in the context of Peter Mandelson and Howard Newby’s higher education, and in contemporary politics more generally, a growing army of bloggers has proven more difficult to silence. Indeed, unless some legal means may be found that can operate to silence the critics, then moral or legal trangressions, real or alleged, may develop into internet-based forms of mediated scandal. As I suggested in Part 5, this then alters the dynamics of scandal in a variety of complex and far-reaching ways.
It thus comes as no surprise that Jack Straw allowed extraordinarily authoritarian libel laws (by Western standards) to prevail in the UK until the dying days of his tenure as New Labour’s Justice Secretary. These laws meant, amongst other things, that the British Chiropractic Association could sue Simon Singh for critiquing its practitioners’ claims regarding the power of their spinal manipulations (see Simon Singh’s account of how the attempted censorship took place in his case). But they also meant that this blog had four posts temporarily removed simply because they mentioned the possibility of a conflict of interest involving Howard Newby and the private training firm Carter & Carter (see Parts 4 and 5 of this series; see also When the Exchange of Knowledge is Threatened).
As Jack Straw rather belatedly—some might say, cynically—recognised, the political economy of the British libel laws, as reflected in the fees commanded by lawyers, means that they are skewed in favour of the very wealthy. From this perspective alone, far from being just legal instruments to stop defamation, the laws work, in practice if not in principle, as a weapon of mass silencing: unless a critic is very wealthy, or unless s/he is so disempowered (or otherwise empowered) that s/he stands little or nothing to lose from a libel trial, then only a very brave, naïve or foolhardy person (the boundary between these is not always clear) would dare to take on the corrupt minister or the powerful manager. The implications of this state of affairs for Britain’s democracy are difficult to overstate.
Looking towards the future, it seems clear that unless David Cameron’s much vaunted ‘Liberal Conservative’ coalition prevails in its stated aim of rolling back over a decade of New Labour authoritarianism, then it may well be that we will witness, sooner rather than later, a transition from what might be described as the New Labour, to the Chinese model of censorship. It is, in my view, no coincidence that Friedman’s economic model was first tested in Pinochet’s Chile, or indeed that Margaret Thatcher sent her own Cecil Parkinson to Santiago to look and learn from the Pinochet economic team: as Parkinson explained in El Mercurio, Chile’s leading newspaper at the time, the Chilean ‘economic experience’ was ‘very similar to what we are trying to develop now in Great Britain’. Asked about the differences between the two countries, he almost wistfully suggested that ‘Chile could impose a policy and a speed of application of that policy which just isn’t possible in this country’(3).
If or when the mentioned transition occurs, it may be necessary to speak of the ‘early internet’ era, i.e. a period when it was still possible, despite some risks, for individuals to engage in an honest exchange of knowledge, that is to say, to speak up and out against corruption and populist authoritarianism, as well as to communicate about all manner of things both economic, and more–than–economic.
1) At Liverpool, Howard Newby tried to close philosophy, politics and communication. Middlesex is now threatening to close its highly regarded philosophy department.
2) in (1990) Ideology and Modern Culture. Cambridge: Polity Press.
3) Quoted in the Latin America Bureau’s (1983) Chile: the Pinochet Decade. London: LAB, p. 16.