‘Neoliberalism’ is being used as a straw man to close down reasonable debate on policies

Some sectors require more involvement by the state and some sectors less

Wed, Jun 12, 2013, 00:00

In the US, reactionaries on the right of the political spectrum frequently label as “socialists” those espousing policies, such as Obamacare in health, which are government-led. Their knee-jerk description of proposals, such as higher taxes for those on the highest incomes, is simply to call them a form of “socialism”.

These reactionaries seek to close down debate by tarnishing policies that involve a role for government with something that is ill-defined but supposedly pernicious. In the American case, that is socialism. These reactionaries do this despite there being almost no individuals or organisations in the US who describes themselves as socialists. Straw men are easy to knock down.

In Ireland, a similar unhealthy trend in political debate is emerging. Reactionaries on the left of the political spectrum increasingly describe others very critically as “neoliberals” and policy proposals that are not state-led as forms of “neoliberalism”. The private creche scandal revealed by RTE is the most recent example this sort of name-calling, and it happens even though no political party, grouping or individual in Ireland describes itself/himself/herself as “neoliberal”.

Just as socialism is rarely if ever defined when Americans sling mud, those who bandy about the term neoliberalism here feel little need to define it. And just as socialism in American debate is portrayed as a self-evident evil, so too is neoliberalism in the Irish context.

Both varieties of reactionaries make the most outlandish claims. Some opponents of Obamacare in the US say with great certainty that under the plan “death panels” are being created that will result in the sick being allowed to die. Here, the neo-liberal agenda is, apparently, designed to crush the majority into some form or serfdom, or, as one angry letter writer to this newspaper last week wrote, its objective is the “impoverishment of many and the enrichment of a few”.

Reactionaries cannot resist resorting to such black and white characterisations. They do not like nuance and complexity. They prefer political prejudice over reason and evidence.

But in a world that is increasingly complex, reason and evidence are, thankfully, triumphing. In universities, think tanks and ministries around the world, policy-thinkers and policy-makers are generating a vast and ever growing body of literature on how best to combine the state, its agencies, market mechanisms and private business in the provision of services and much else besides. In most cases, some mix of public and private works best. At times, more private involvement is preferable; in other cases a greater public role will deliver the best outcomes.

Healthcare in America provides a perfect example of the latter. The US spends very considerably more on health as a proportion of its gross domestic product (GDP) than any other country in the world. Despite this it achieves relatively poor outcomes. The comparatively limited role of government explains this.

A bigger role for the government in the US in healthcare provision, along the lines of most other developed countries, will not only give more Americans access to affordable health care, it will lower costs, because massive economies of scale can be exploited when the state plays a co-ordinating and regulatory role.

In Ireland, as elsewhere, there is a case for more state involvement in some areas and less in others. That is what is happening and has happened. Talk of so-called neoliberals dictating the policy agenda has simply no supporting evidence.

In every single country in the developed world, public spending in real terms has been rising over many decades. In the decade to the crash it rose more rapidly in Ireland than in any other peer country.

If the redistributive role of government is not on the wane here or across the western world, nor is its regulatory role. State regulation is rolling forward in some areas and back in others. Over the decades there have been examples of a lessening of regulation (successfully in the cases of air travel and telecoms; unsuccessfully in the case of finance) and examples of increased regulation - in environmental protection, equality and health and safety.

Given the evidence, one might have expected leadership in the debate from the more cerebral members of the political class. Unfortunately, that has not happened. Indeed, one of more cerebral career politicians who is perhaps best positioned to encourage real debate - the first citizen of the State - has done the opposite.

In a recent speech president Michael D Higgins stated that “the neo-liberal model of unregulated markets, the privatising of the public space and the redirection of active participating citizens with rights to an existence of passive consumers with unlimited needs has exacted a terrible price on our economy and society”.

This is not only a highly politicised statement - made despite the constitutional obligation on heads of State to remain above the political fray - it runs counter to Michael D Higgins’s own objective for his presidency of encouraging questioning and opening up debate. Such a crude and politicised characterisation Ireland’s current woes will give succour to reactionaries and do nothing to raise the quality of intellectual life in Ireland.

Dan O’Brien is Economics Editor and is also Adjunct Senior Research Fellow at University College Dublin

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