NEOLIBERALISM
AND THE CONSEQUENCES FOR SOCIAL WORK
Christian Stark,
Studiengang
Sozialarbeit Studiengangsleitung SDL
(Soziale
Dienstleistungen für Menschen mit Betreuungsbedarf)
FH OÖ
Studienbetriebs GmbH
Garnisonstr.21
4020 Linz
An attempt to
define neoliberalism
Coined by the economists Friedrich August von Hayek, Wilhelm
Röpke, Walter Eucken, an others at a conference in Paris in 1938, the term neoliberalism was developed as an
economic counter-concept to Keynesianism.[1] The economic
theory of John M. Keynes stated that the deficits of capitalism were in the
inability of the market to set up an effective production and distribution
system which would ensure security for the whole of the population. In view of
this inability, Keynes claimed that complementary intervention by the state was
necessary.[2]
Although Friedrich A. von Hayek can be
seen as the founder of neoliberal ideas, there is no one school of neoliberal
thought. On the contrary, there is a manifold, institutionalized network, where
different manifestations may exist side by side. The central theory of
neoliberalism is based on neoclassic theory and the monetarist principles of
the Chicago school. Negt describes neoliberalism as capitalism which has been
freed from all democratic and social inhibitions and scruples:
Nowadays,
for the first time, capitalism finds itself in a situation in which the logic
of capital works in exactly the way that Marx described. For the first time the
logic of capital has been freed from all the inhibitions which have long been
applied both internally and externally.[3]
Neoliberalism can be described as an economic project for
the capitalist elite, the main points of which will be described in the
following section.
Main elements
of neoliberal thought
The economization
of all areas of life – the universal organization of the market
The principle of the neoliberal economy is claimed to be
valid for all areas of life. Altvater refers to the imperialism of the economy.[4]
All areas of life are subject to the logic of the market, the logic of economic
optimization and the individual maximization of utilization. Even the
individual is seen in the light of the logic of the market – transformed
into human capital. The individual becomes an entrepreneur. A person becomes a
firm, to a constantly self-optimising ‘I, Ltd.’. The relationship to him- or
herself and others is seen only in terms of money.
The lean state:
less state, more private enterprise?
According to neoliberal thought, it is not the job of the
state to act as an entrepreneur. The public sector should be limited in favour
of the private sector. Privatization of nationalized companies is encouraged as
well as that of national monopolies and holdings in telecommunications,
transport, energy, and water industries. The state has to fulfil the tasks
defined by the neoliberal economists. Its function is to ensure and secure the
conditions necessary for the free market. Under the neoliberal concept, the
welfare state becomes a national competitive state whose function is, through
its policy, to ensure that it remains competitive in the world market. The
state therefore furthers neoliberal private business interests.
Economic
globalization
Neoliberal thinking endorses globalization as the
encouragement of free trade between the states, either through global organizations
such as the WTO, with its agreements such as GATT, GATS or TRIPS, whether
supporting free trade or special business zones. Borders should be opened for
the global transport of goods, services, capital, and investment. Regulations
and laws which hinder free trade, such as protective duties or state subsidies
to certain branches of the economy, should be eliminated, as they are an
obstacle to investment. Globalization is seen as a process of natural growth
which forces industrial states to lower both social and environmental standards
in order to remain competitive in the world market. The dismantling of social
services and the reduction of the state deficits, which are seen as a handicap
to performance, are a means to this end. However, these measures are only
carried out for as long as they serve the purpose of neoliberal economies:
countries of the Third World are required to provide free trade, and at the
same time protective duties are set on goods from these countries in the USA,
and also agriculture in the EU is highly subsidized.
Deregulation
Deregulation does not mean the relinquishing of state
regulations, but rather that they concentrate on supporting competitive
economic performance and profit from capital. In order to encourage investment
and competitiveness, taxes for companies are reduced and obstacles such as
worker representatives and state intervention are minimized. Regulations
concerning health and safety or environmental protection are seen both as
obstacles to investment and limiting the freedom of the market for the
entrepreneur.
What kind of freedom for the entrepreneur
is required? The freedom to exploit
workers? The freedom of the wolf to poach among the free chickens in the free chicken coop? Unlimited autonomy for
those owning money and the means of production is to be enforced against the
interests of the majority of the population.
Neoliberalism
and social policy
In neoliberal thought poverty is seen as a destiny brought
upon oneself; it is basically a just punishment for refusing to work or for the
inability to sell oneself or one’s work successfully on the free market.
Thereby, the state and enterprises are relieved of the responsibility for
realising ethical or social principles as this is solely the responsibility of
the individual: ‘Indeed a major aim of
the liberal is to leave the ethical problem for the individual to wrestle with’,
according to Friedman.[5]
Creating mass unemployment or leaving
people to starve is not seen as a lack of help, but as a side effect of the
free market and as such is beyond criticism.[6] The only
social responsibility of enterprises is, according to Friedman, to make profit
for the shareholders:
There
are few developmental tendencies which can undermine the foundations of our
society as thoroughly as the idea that businesses can have any other
responsibility other than to make as much profit as possible for their
shareholders.[7]
Friedrich A. von Hayek claims not to understand the term
‘social’ at all:
I
have spent more than 10 years searching intensively for the meaning of the term
‘social justice’. I have failed in this or, rather, I have come to the
conclusion that the term has no meaning for a society of free people … Social
does not refer to a definable ideal, but today only serves to take away the
meaning of the regulations of free society, to which we all have to be grateful
for our affluence. Even if some people will be horrified to hear it, I have to
say that I cannot think ‘socially’, because I do not understand what that means.[8]
Demands for social justice limit the right to unlimited
private property. Altruism and solidarity are described as low collective
morals and tribal instincts, and according to Darwin’s social evolution theory
they are even a rebellion against higher standards of civilization and to be
seen as amoral.[9]
The formation
of the neoliberal project
The formation of the neoliberal project – after the
downfall of the classical liberalism in the first third of the 20th century
– can be traced to the 1930s when economists came together in 1938 at the
aforementioned conference in Paris, under the leadership of Friedrich von
Hayek, in order to found a counter-concept to Keynesianism. In 1947, Hayek
founded the Mont Pelerin Society as a think tank in order to propagate and
further his ideas.
As a consequence, an international
network of foundations (e.g. the Heritage Foundation in 1973 in Washington DC),
institutes (the Institute of Economic Affairs, 1971, in
London), research centres, print media, academics, and PR agents was founded, devoted
to the cause of neoliberal ideology. The political breakthrough was achieved
with the help of a series of Nobel Prize winners for Economics – awarded
for the first time in 1969. Among those were a number of neoliberal economists
such as Friederich von Hayek in 1974 and Milton Friedman in 1976.[10]
In this way neoliberal thinking achieved control of the discourse in economics
and was exported into the area of practical politics and among the movers and
shakers in the media influencing all areas of life.
Chile was the laboratory in which
neoliberal economic policies were first tested. From 1975, the so-called
Chicago Boys, the representatives of the Chicago school, were able to undertake
a neoliberal restructuring with the aid of the military junta of General
Pinochet. The Chicago Boys under the tutelage of Milton Friedman accepted an
extreme, authoritarian regime in support of their plan to introduce their model
of an economy. Pinochet’s regime was considered extremely positive as a vehicle
for the application of this model. De Castro, a member of this working group,
was quoted in Il Mercurio (15 February
1976) as saying: ‘the real freedom of the
person is only guaranteed by an authoritarian regime, which exercises its power
by means of norms which are the same for all’.[11]
With the entry into office of Margaret
Thatcher in 1979 and the election of Ronald Reagan as US President in 1980, the
neoliberals achieved the transfer of their project from the periphery to the
centre. Reagan and Reagonomics and Thatcher and Thatcherism were the first significant
political actors to apply neoliberal doctrines in industrial states. The
breakdown of Soviet Communism was decisive in establishing neoliberalism as the
dominant economic ideology.
The construction
of a consensus – the acceptance of neoliberal thought
The pushing through of the neoliberal project was in the end
due to the successful ‘Fabrication of a Consensus’.[12] The representatives
of neoliberalism sought a more powerful grip on social definitions and ways of
thinking. Poisonous tales about social abuses, debates about saving money and
resources, and slogans were generalized and permeated the public consciousness.
Gradually, both the individual and society were subjected to and accepted this ideological
transformation.
In this sense, the mental poison of
blackmail using slogans reflecting attitudes drives numerous economies into a
race based on undercutting the competition. Talk of debates about savings is
being misused to the shattering of the social state, and the talk of the abuse
of the social system and of scroungers is a diversion from the really guilty party.
It makes the victims the offenders, not the multinationals avoiding tax and the
multimillionaires ruining the community. The victims themselves are being
turned into the guilty: the unemployed, those on social security, are
responsible for the empty public purse. Politicians and managers speak about
having to ‘ tighten our belts’ about ‘living beyond our means’ while they
themselves have filled their pockets.[13]
Labour law and social rights such as
protection against unlawful dismissal, unemployment benefit, sick pay –
not the private fortune of multimillionaires – have become the possession
of the unexplained dismantling of laws protecting employees, while at the same
time no attempt is made to make savings on the bureaucracy disciplining the
unemployed and those on social security, or on the EU administration. The
barbed slogans of neoliberal ideology are designed to undermine relations of
social solidarity and to transform the solidarity to a profit-based dependence
on those above and ruthlessness to those below.[14]
Social manifestations considered as
negative are no longer denied, but rather regarded as socially unavoidable
conditions, the so-called ‘material constraints’. Mrs Thatcher’s bon mot ‘There
is no alternative’ underlines this alleged inevitability. Political dealing
which is driven by specific interests is passed off as the unavoidable
operation of anonymous forces pointing in the direction of the only possible
and sensible way out.
These negative events bolstered by
euphemistic forms of speech are represented as desirable: everything will be
made flexible and rationalized. Impediments to investment will be removed,
companies must become leaner and fitter, employees must be ‘released’. The
worker, who is always available for work, can be called up at any time on an
hourly or daily basis. Workers must become fitter, i.e. more productive, and
for that they must be content with less pay.
The concept of reform which was
associated with the former plan aimed at achieving more social justice, better
educational opportunities and a social safety net is now a synonym for cuts in
social services. Neoliberal myths and dogmas join up with these neoliberal toxic
notions. It emerges as a type of new world religion with a claim to absolute
validity, which is otherwise associated with various forms of religious
fundamentalism. These dogmas and myths are reflected in slogans such as ‘We can
no longer afford the welfare state’, ‘If the economy works well, everybody is
better off’, and ‘Economic growth produces jobs’.
All of these toxic ideas and myths are
chanted like mantras by politicians, economic experts and representatives of
the media as long as the falsehood gives the lie to the truth. Bourdieu
describes this process as ‘the symbolic imprint ... the journalists and
ordinary citizens have had this repeated, which in a targeted manner has been brought
into circulation by certain intellectuals’.[15] This
explains why these septic concepts are so deeply anchored in the consciousness
of the population, although their empirical experience of what is actually
happening and numerous studies contradict them:[16]
- The
question concerning the ability to finance the welfare state is not a
question of inadequate resources but of political will and distribution.
- The
current gulf between rich and poor – not only within the state but
also between states – contradicts the dogma that a flourishing
economy is a blessing for all and that growth brings jobs.
- If
companies make a profit, share prices rise, which means that not everybody
is better off – only the boards of directors, the managers and the
shareholders. Despite this, workers are laid off.
- If
the welfare and woe of an economy depends on the low wages or the
additional costs of pension and social insurance payments, as the
neoliberals argue, then countries such as Bangladesh and Somalia would
have had full employment long ago and would be living in luxury.
Consequences
for social work
The dismantling
of the welfare state
One consequence of neoliberal politics is the dismantling of
the welfare state and the deepening of the gulf between rich and poor, not only
between states but also within states. Ulrich Beck observed in his book The Risk Society (1986) a social
elevator effect which had lifted all classes and social strata together as one.
In respect of the later development of the global community since 1986, it is
more accurate to speak of a paternoster effect: to the extent that as one
manages to rise, the other falls.[17]
As a consequence, new forms of social difficulty have emerged and with them
more tasks for social work, but in a context where resources have been either
frozen or cut.
Economization
of social work – new public management
Under the ‘economization of social work’, I understand the
reality that social work has been subjected to the logic of the profit motive
and the market. This is connected to strengthened methods and concepts of
business management and running social work as a private company which has
found an entry with its promises of more effectiveness and efficiency, and
linked to that the visible improvement of quality in social work.
Since the beginning of the 1990s in
Austria, managerialism has penetrated the area of community social policy under
the label of ‘New Public Management’ (NPM) (the new control model of targeted
management). NPM follows management rationalism in which public administration
is regarded as a type of service industry in which there is an attempt to apply
the instruments of modern management.
Competition
instead of solidarity
Social associations and institutions have been transformed
into companies based on managerial thinking and action by the use of
performance-related contracts and invitations to competitive tender. This has
led to the economization of institutions in which the philosophy of cost
efficiency leads in turn to competitive relations between the social service
organizations. Competition, in this context, has thus taken on a greater
significance without sufficient public awareness that to a degree this has a
destructive effect. Community organizations compete with each other and also
increasingly with commercial suppliers of services. The central, provincial or
local governments who pay the bills hence have expectations that increased
competition will improve the efficiency of the staff and the effectiveness of
the service provided, which above all will result in lowered costs.
This competition can lead to ‘creaming’ effects
in the support system in the area of marginal groups, and specifically to the
displacement of the weakest clients to the benefit of those more easily cared
for, with positive results for these clients. Only those are treated and
advised, those who have not crudely and negligently been the cause of their own
plight, and for whom the sponsor can be charged in a cost-effective way. Accordingly,
those responsible for supporting social rights become the individual purchasers
of social services, who have to pay for these services which are determined by
supply and demand.
Public goods, which the welfare state
legally guarantees its citizens in respect of social provision ensuring
life-conditions fit for human beings, have become goods which have to be
bought. Citizens with inalienable rights have become economic citizens who have
rights only over what they can buy. Social work’s clients have mutated into
customers and as such they are themselves responsible for the causes of their
difficulties, but above all for the solutions to their problems and with that
their success or failure.
The economy
before professionalism
In the analysis of the economic processes of social work
since the 1990s too little attention has been paid to the fact that the point
of departure is not the well-being of the client and an improvement in the
quality of the social work but more the pressure to save resources. The
economization of social work is a kind of Trojan Horse. Professional social
work is used to follow aims inimical to the profession: cost savings instead of
help related to need in promoting conditions of life fit for human beings.
Strict housekeeping, costs not
professional diagnosis, principally determines what is said to be useful,
efficient and feasible; as a rule making successful savings is placed before
success in providing help. Social work is being driven by the logic of the
administration of finance which finds expression in competitive contracts, the
formalization of advisory and supervisory services as a product, similarly as
in the standardized production of these services: instead of building a
relationship with the client, social work is all about the most efficient
possible management of the case. The result is that the social work activity
and everything connected with it neglects the clients.[18]
The dynamic welfare
state – ‘workfare’ instead of welfare
In place of an active welfare state, a dynamic welfare state
is emerging. By means of the neoliberal neologisms such as ‘Promote and demand’,
‘Help only for the really needy’, ‘Get people moving towards self-help and
using their own initiative’, and ‘an end to the state benefit mentality’,
unemployment and poverty, according to the Social Darwinist canon, have become
problems of the individual, of character weakness and a lack of readiness to
perform in a job. In a crisis of unemployment where jobs but not those willing
to work are missing, the pressure to work is strengthened by reference to such
slogans without any attempt to improve the life chances of the socially
disadvantaged.
Thus, the community becomes divided into a
welfare state market on the one hand and a charity state on the other. Those
citizens who can afford to, buy social security (i.e. care for the aged). In
contrast, the ‘workfare’ state offers only a minimum of service protecting
people from starving and freezing, who otherwise would be handed over to
private charitable organizations. Although reference is made to ‘personal
responsibility’, what is meant is an extra burden for those working and those receiving
the lowest pensions.
‘Activation’ amounts in a broader context
to a kind of authoritarian withdrawal of social rights: help to find work is
transformed into threats of forced labour. Hence, the welfare state becomes a
goal-oriented ‘workfare’ state which focuses on the functions of repression and
social exclusion.[19]
The reaction of
social workers
The reaction of social workers to the economization of the
social sphere is varied. Kleve speaks of the ambivalent relation between social
work and economization:[20]
The
neo-liberal transformation of the welfare state community cannot from the
perspective of the social worker be explicitly condemned nor greeted with
pleasure.[21]
Dimmel refers to an adaptation position which does not
criticize the economization of social work in the sense of its effectiveness,
but rather the neoliberal understanding of it.[22]
Another strategy has described the economization
as a largely untested adoption of business concepts and apparatus applied to
social work. Neoliberal dogma is repeated parrot fashion, and the efficiency
and effectiveness of the neoliberal economy is relatively uncritically
presented without reflecting on where efficiency and effectiveness really stand
in the equation. The public and private sponsors of social service departments
bring in consultants who have no idea about social work but who believe they
are qualified to evaluate whether jobs should be cut or not. Dimmel describes
these cases as an assimilation position.[23]
A final reaction is the renewal of the
socially-critical political function of social work.[24] Social work
is understood as a ‘human rights profession’ as Staub-Bernasconi calls it.[25]
Pierre Bourdieu offers the view that in this context social work is a
refutation of the ‘neoliberal invasion’ oriented towards social justice.[26]
Conclusions
Peter Drucker, one of the most renowned management gurus,
defined the difference between effectiveness and efficiency as follows: ‘To be effective is to work on the right
things; to be efficient is to do the things right; to be efficient and
effective means doing the right things, right’.[27] Drawing on
this definition, I would like to ask the proponents of the neoliberal economy
the following questions:
- How
effective and efficient is the world economy dominated by neoliberal
ideology when 18,000 children starve every day, while at the same time
food surpluses are destroyed?[28]
- How
effective and/or efficient is an economy which sees to the production and
export of huge amounts of food in Third World countries as feed for
European livestock while the local populations vegetate below subsistence
level and to some extent starve?
- How
effective is a global economy which is destroying the environment and
ruthlessly exploits labour in the interests of profit maximization and
which is also responsible for 186 million children working in conditions
not far from slavery to increase the profits of multinational companies?[29]
Other examples of how efficiently labour
is exploited, the environment ravaged and public goods privatized can be found
in detail in The Black Book –
Privatization or Company Brands.[30] Almost daily
we are informed, often by the media, how money is efficiently and effectively squandered
by various companies. Is it really necessary for social work to orientate
itself to these standards and lower itself to the level of neoliberal efficiency
and effectiveness which is contemptuous of mankind? Social work should always raise
the question of whether it is doing the right things and whether it is doing
them right, and is should also reflect on and evaluate them in a scientific and
professional manner. Yet this should not be under the overall control of
managers and business management fetishists for whom efficiency means profit maximization
and effectiveness means only to ‘do the job as economically as possible’.
The logic of social work is not the logic
of the market and profit. Whether or not someone receives the means to lead a
life fit to be lived must not be decided by the market. Social work is not a
service with the same character as saleable goods, but the result of the collective
effort of all involved – social worker and client – in a
simultaneous arrangement and management of circumstances which make the success
of the endeavours more likely. Business management is at most a complementary
science and must not be allowed to become the science leading social work.
Social work as an integral part of social
policy must be understood as more than a repair company for the amelioration of
negative social and economic consequences. For social work this means that in
the context of the analysis of causes of social problems and their solution social
workers must direct their attention towards structural social factors,
publicize them, and propagate them in current socio-political debates, and
thereby construct a critical, alternative public domain. A better-integrated
network of social workers and social institutions could generate pressure on
responsible politicians so that social workers’ concerns are noted and taken
seriously. A central aim of social work must be the capacity to resist any further
worsening of the basic social conditions in the form of cuts in social
services.[31]
For the IFSW (International Federation of Social Work), this is also a central
task of the professional operation of social work:
Social
workers have the duty to draw the attention of their clients, decision makers,
politicians and the public to situations in which resources are inadequate or
the distribution of resources standards and practices is oppressive, unjust or
damaging.
[32]
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