The Flaws and Failings of Neoliberalism

national | anti-capitalism | opinion/analysis Monday April 13, 2009 01:24 by Richard Whelan whelanno-1 at hotmail dot com

The system of economics which we have lived by for well over a decade has given us the many benefits of a booming economy- higher wages, a better standard of living, and an overall sense of happiness and well being. But what of those left behind? What of the multi-national companies, and profit driven banks, who take full advantage of the elitist and greedy philosophy of this system driven totally by profit? It's time to ask ourselves tough questions of the system we live under and how it affects us in our own lives, and in the lives of the most vulnerable in society.

The spectre of our burgeoning wealth and economic success accumulated over the Celtic Tiger years suddenly imploding in a very short space of time has been a major shock to the populace, who had gained so much in this extravagant decade. The dismal days of recession, government borrowing, unemployment and a living standard well below EU average seemed to have been left behind in the past, with a new found confidence and optimism driving people forward to buy the new car, have that extra foreign holiday or even just buy the dream house that you have to beat 10 other people to buy.
But now, as we languish about where it all went and if we can possibly get it back, is this the time to look more fundamentally about the system in which we all participate in and support, but which has now in full circle come to utterly fail us? How is it that a full employment rate of 4.8 per cent has ballooned to an astonishing 11 per cent (and rising) in the course of just 15 months? How can it be explained that the Government must bridge a deficit of 18 billion euro, created in less than a year? Aside from the collapse in our economic fortune, we should also ask ourselves what the boom did for us, and whether it could have done more or not.
The neoliberal system of economics, the system which enabled the Irish economic miracle to occour, is a mainly American philosophy, in which barriers to international trade and investment are broken down in order to make it easier for business to take place. Seems good on paper right? Big companies like Google come in, invest in thousands of jobs and everyone’s happy- the Government collect more taxes, people get jobs and Ireland becomes an attractive destination for more investment. The only problem is, if our country becomes too expensive, or if demand collapses, they can leave. We can’t make them stay; after all, didn’t we get the jobs from others in America? This is what has been seen in the case of Dell moving from it’s high cost Limerick base, to a far cheaper factory in Poland. Companies are only concerned about how to make profits- if it means ruining the lives of 2000 factory workers in Limerick, so be it. If an oil company needs to destroy the culture and tradition of peoples along the Niger Delta in order to make more profits, then they’ll do it. It’s the nature of the system to favour profits over people.
The system of neoliberalism also prides itself on the low tax, low regulation philosophy of the Government in relation to the economy. State interference is seen as backward, and is frowned upon- instead the forces of the free market (ie share prices, profits, revenues) should control the running of the economy, including in some cases, some public services unable to be totally State funded due to low rates of taxation. Banks and financial institutions should lend according to market need, and risky ventures are encouraged if the end result means more profits. This, in short, describes somewhat the experience of Ireland in the past few years, and which we all think is the best system for us.
The fundamental flaw in the system we all seem to cherish is the complete lack of regard for people and their well being it has, along with it’s reward system for the most greedy and ruthless who we so eagerly call “entrepeneurs”. The elite control vast amounts of wealth, power and influence within a country governed not particularly with the view of for the people, but also in tune with the needs of the wealthy and rich in society, who bankroll politicians at every election time. (It is estimated that the top 1 percent of Irish citizens own 40 percent of the country’s wealth). The system, like all capitalist systems, believes in the trickle effect (that increased wealth from the top must make it’s way to the bottom). While this can be said to be true in a way, it is mostly not the case. There are many in our society who face struggling by on an average weekly income of around €300 a week and who gain little from the inadequate public services the Government provides. The extravegant bonuses paid to bankers, CEOs, and industrialists for very poor results run into many times greater than the average income of a Social Welfare recipient.
It is astounding that we have not pondered over the failings of our system more. Because of the greed and strive for more, more, more we have not only left behind those forgotten during the boom, we have deprived many thousands more of their jobs, pensions, and in some cases their hope. We have squandered our opportunity to genuinely provide for the most vulnerable in our society with a world class health system, a fair education system to the benefit of all and to provide a decent standard of public infrastructure to make travel and communication more sustainable. We have left many burdened with the debts of the property boom, and have condemnded the country’s own finances to oblivion for the years to come.
This neglect of our fellow man, our fellow citizen is built within this system, a system which causes misery for the majority when it all goes wrong, and which keeps a small powerful class of people in control of our media, our politics, and our economy no matter what. We have all been caught up in the buzz of the past 10 years- I myself have had a childhood of much more plenty than any generation before me. But let it be known that a system that runs just on money, without any care or regard for the well being of the people behind it, is one destined to fail. A system which guarantees that every 20-30 years, many millions of people lose their jobs and which keeps the worst off in society at the bottom, is one that cannot be continued. Let us ask questions of the system we live under- now is our chance to reform and take into account people, the environment, and sustainability- and that the failings of yesterday are learned and taken into account for the planning of tomorrow.