Academic journal article New Formations

Thought Bubble: Neoliberalism and the Politics of Knowledge

Academic journal article New Formations

Thought Bubble: Neoliberalism and the Politics of Knowledge

Article excerpt

On 22 July 2009 economists Tim Besley and Peter Hennessy wrote a letter on behalf of the British Academy to the British monarch, Queen Elizabeth II, attempting to answer her question as to why no one saw the 2008 financial crisis coming. Their conclusion that this failure was the result of a systemic lack of oversight 'combined with the psychology of herding and the mantra of financial and policy gurus' is highly revealing, as it counters many of the key tenets of the dogma that brought about the crash. Their conclusions are interesting because the reference to psychology raises the spectre of the 'animal spirits' that Keynes (1) gave as a reason why markets could not be considered rational and ought not be left to regulate themselves. At the time Keynes was writing, because such an understanding of the human condition merited state intervention and a central role for public works, free-marketeers were required to strenuously and vigorously re-state their case by arguing that such spirits were merely the effect of a market that was not yet free enough.

A similar refrain can be heard today. In keeping with all fundamentalisms neoliberals today insist that there was nothing wrong with what free-marketeers believed in; what were perceived to be problems with unregulated markets were in fact caused by the non-believers whose lack of faith prevented the full flowering of freedom and this alone explained the failure. Such advocates are often in thrall to the dystopian stories of Friedrich Hayek or the pseudo-science of Milton Friedman, if not the corporate porn of Ayn Rand, and believe it their duty to reach out to the invisible hand offered them by the prophet Adam Smith. Only this will guarantee the deliverance of humankind to the paradise which Friedman called the 'free private enterprise exchange economy'. (2) Thus when the letter refers to 'gurus' we may infer that Besley and Hennessy were speaking about the financial priesthood that turned the entire global economy into a delusional cult that even in crisis continues to maintain its claims to truth. It should also be noted that the persistence of this particular brand of dogmatic thinking--the infallibility of markets and their extension through deregulation and privatisation--suggests that nothing has been learnt from the revelation that what economists believed they knew about the functioning of markets was entirely spurious. This means that speaking about knowledge in such a context becomes quite difficult.

Empiricism and the practices of modern science have bequeathed us a conception of knowledge as derived from the examination of objective phenomena and sense perceptions via experimentation and repeatable processes of verification. However, the fact that further rounds of deregulation and privatisation are seen to be the solution to a problem for which the most proximate cause was a lack of regulation seems to suggest that this empirical model of knowledge is no longer prevalent. Lack of evidence is no longer a hindrance to the further entrenchment of a belief system. In fact the current conception of knowledge under these conditions seems to be much closer to the medieval meaning of 'knowledge', where the word cnawlece referred to the practice of confession through which a person would submit themselves to the claims of a specific authority. This meaning of knowledge is most readily evident in the modern word 'acknowledge', which in certain uses still connotes the recognition of a superior entity, body or office. Ordinarily, empiricism's demands for proof and verification challenges the authority of priests and mystics, but with the establishment a largely unaccountable corporate aristocracy who continue to propagate faith in the self-regulating character of markets despite all evidence to the contrary, it is perhaps appropriate that we should be called on to simply acknowledge the supremacy of the market rather than interrogate the assumptions underpinning its mystery. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.