Red Tory: The Ghosts of Neoliberalism

Writing in his most recent detailed article in Prospect magazine, Blond opines that “My ideas and recommendations find full and serious expression in both Cameron’s concept of a ‘big society’, and the policy ideas within the Conservatives’ manifesto. Cameron’s big society vision is the most transformative the public have been offered in a generation”. Since the fate of the Red Tory project rests somewhat upon the outcome of today’s election I thought it appropriate to post a bit about the book, even though I have a very long review in the pipes (which is part of my PhD also).

Reading Blond’s work one is struck by the manner in which he establishes his theses, a formula that can be reduced, if one is being harsh, to statement, barrages of statistics, conclusion. Between the statement and the barrage of facts there is a real explanatory gap, a gap that Blond clearly considers he has bridged, but serious scrutiny reveals this to be spurious. In the most part his statistics establish that something is wrong, but they rarely give an indication of its causes directly or why we should accept Blond’s account of these rather than other competing accounts – the two are adrift of each other. There is a breach of the basic standards of social science not at the level of statistical precision but at the vaguer levels of argumentative rigour are absent, for example, that correlation does not establish causation. Similarly, there appears to be no sifting of sources and interrogation of their validity. Blond clearly has a pre-existing story to tell and has located the sources that establish it, which is a reasonable technique, but he has not recognised if the various sources fit together coherently or if they can be trusted.

An example is in his consideration of the financial crisis. Writing about the level of public debt, Blond says that public debt is problematic because it needs to be paid for with tax revenue which will in turn ‘choke off’ the private sector recovery, decreasing tax and hence deepen the crisis. Increases in tax rates depreciate the growth of the economy as a whole, with “the standard GDP loss per tax dollar raised variously calculated at 30-50%” (54). It is difficult to establish precisely what Blond means by this statement, but the citation makes it clearer per tax dollar raised there is an economic cost of 20 to 60 cents of GDP. Two reports are cited: Wheels of Fortune: Self-funding Infrastructure and the Free Market Case for Land Tax by Fred Harrison and Living With Leviathan: Public Spending, Taxes and Economic Performance by David B. Smith (here the citation is wrong, and should be for Smith quoting Lightfoot, in addition there is an estimation of the loss of GDP to taxation in UK that is performed by in an unacceptable geographic transferal from figures established in the US to the UK), both of which are the Institute of Economic Affairs. The IEA is well know for being the most important neoliberal think tank in the United Kingdom, one whose influence on Thatcherite policy is well documented, and who gained the personal seal of approval of Friedrich Hayek and Milton Friedman. The ideological basis is quite clear when one considers the quotation from Fred Harrison’s work, which is clearly attempting to increase the costs of taxation at every stage, appealing to ‘recent’ (not good, or neccesarily correct) work in a ploy to increase the damage of taxation to the economy, and thus present a forceful case for the IEA and neoliberalism’s commitment to low taxes at all costs.

The Treasury favours a cautious 30p/£ ratio, but other economists have suggested estimates ranging from 50p to £1.50 for every £1 raised by bad taxes. If we split the difference and assume that the loss is £1 […] According to the most recent research, by Professor Nicolaus Tideman, tax-induced losses are potentially as high as £2 for every £1 raised with the aid of ‘bad’ taxes.

Taxes are always bad, and the effect of them is pushed to an absurd level, exaggerated out of all proportion. Blond is therefore deploying a hugely neoliberal and biased source to prove his case, one that has a very particular agenda and an unacceptable bias. This is the case with many other of the sources that seek to firm up his thesis, many of which are produced in the partisan thinktank echo chamber. The point here is not academic nitpicking but a microcosm of the most serious problem in Blond’s thesis – his complete inability to correctly identify neoliberalism and his eclectic mix of sources which often includes very strongly neoliberal figures.

Let me continue with a few examples of this tendency. Blond writes “What we have at present, after thirty years of letting the market rip, would not be recognised by even the great liberal conservative economist Friedrich Hayek as a free economy” (33). Of course the description of Hayek as a “great liberal conservative economist” is remarkable, considering that Hayek wrote an essay called ‘Why I Am Not A Conservative’ where he described why he was not a conservative and claimed to an “old Whig”. Yet it is what comes next that is so surprising. It is Milton Friedman’s “bastard laissez faire inversion of it [the free economy] in which power and wealth flow upwards to the centralisers of capital” that is the problem (Blond calls New Labour a ‘the bastard child’ of Thatcherism two pages earlier – a lot of bastards about). This statement is remarkable, driving a wedge between Hayek and Friedman in order to suggest one it the purveyor of “true free markets” and the other is the creator of a heterodox form is utterly unjustified and creates monopoly. In the early 1940s, The Volker Fund, impressed with his Europe-centric The Road To Serfdom commissioned Friedrich Hayek to work on an American version. Hayek was unsure if he could conduct the project himself considering that he was at the time still in Austria, so he asked that Aaron Director take charge the Free Market Project which formed the basis on the later Chicago School of Economics and Law. Although the aptly named Director was to lead the project, the young Milton Friedman was also to be invited to take part on the personal recommendation of Hayek. In 1947, Friedman attended the first meeting of Hayek’s attempt to refound liberalism in the Mont Pelerin Society. Later Friedman was instrumental in gaining Hayek a place at the University of Chicago, despite the fact most of the department, unlike Friedman, did not take his work seriously as economics. Moreover, it was Hayek’s arguments that convinced Friedman to abandon any concept of socialism, just as von Mises arguments in his private seminars convinced Hayek a generation of economists before.The idea that the politics or policy recommendations of Hayek and Friedman diverged significantly is simply false. Their economics in terms of methodology may have, but their politics that apply it to the real world did not. Hayek himself said “[Friedman] is on most things, general market problems, sound. I want him on my side”. Hayek’s own biographer notes that “The person most influenced by Hayek who has himself most significantly influenced public opinion and policy is Milton Friedman”. Hayek is a significant blind-spot in the book. This is particularly clear during the exposition of the influence of his work on Thatcherism (122-125) the again, astounding claim that Hayek broke with “both classical economics and rebuking neoliberalism in advance”. This would have been surprising for Hayek, for whom the revival of the liberal project that was termed neoliberalism by Alexander Rustow was the central moral task of his time, indeed, there is no figure more important to the development of neoliberalism than Hayek and his Mont Pelerin, IEA chums – he is the central intellectual hub of the complex network that developed neoliberalism and brought it into reality. Thus when Blond explains that his critique to the contemporary economy draws upon Catholic and Anglician social teaching alongside the distributists and “elements of the ordoliberal and Austrian school traditions” one has to take pause. Both ordoliberalism and Austrian schools were serious contributed to the neoliberal project, despite a number of difference between the two schools. Indeed, in a later post I will show how close Blond’s vision is to ordoliberalism, even down to a specific form of theology both adopt.

If Blond can’t distinguish between neoliberalism and his own project, what hope is there for the Tories supposed new direction? Of course, the Tories project is neoliberal through and through.

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17 Responses to “Red Tory: The Ghosts of Neoliberalism”

  1. Hill Says:

    To be fair, your arguments equating Blond’s project with neoliberalism (a project which seems to be something of a fetish for you) are about as convincing as some of Blond’s arguments you critique. This doesn’t require a value judgment of either project to recognize. You seem to be driving at some sort of guilt by association wherein if Blond’s intellectual forebears were somehow associated with what historically has come to be called neoliberalism (which is obviously bad), he is therefore hoist upon his own petard. I don’t see the point of this. Like I said, if your argument is ultimately “Blond’s position is really just the neoliberal position” there are much more straightforward ways to make this point, namely some sort of side by side comparison. However, you’d probably have a harder time doing it, since it seems to not be the case in at least some significant ways.

    I should note that I’m forced to view British politics through the lens of the American analogs to a significant extent (due to lack of familiarity) which likely colors my impression of this sort of thing.

  2. Adam Kotsko Says:

    Isn’t it even a bit much to imply that the Conservatives will actually implement Blond’s project (granting for the moment that it is non-self-contradictory enough to actually be “implemented” in real life)? It seems more economical to say, “Blond is just providing window dressing for a party that remains neoliberal.” Pushing into how Blond himself is nothing but a neoliberal seems like a stretch. I’m no fan of Radical Orthodoxy, as you know, but I acknowledge it’s not the same as neoliberalism.

  3. Alex Says:

    Hill

    Adam is basically right, and I find it weird you have read me otherwise – I was point out that Blond doesn’t understand neoliberalism and its components, rather than Philip’s project is neoliberal, which I don’t believe it is, and I don’t believe he would want it to be. However, the fact that he is unable to correctly identify neoliberalism and seems to believe that Hayek, an absolutely central neoliberal figure by any rubric, is opposed to neoliberalism, indeed has refuted it, and is hence unable to describe his position accurately, speaks rather badly of his project. Not to be too much of a dick, but I have studied neoliberalism for two years now, so I am pretty sure I know what I am talking about. As to whether I could have made a side by side comparison, I actually could with regard to how close what he is saying is to the ordoliberal position, a position that is part of the family of neoliberal positions, and he admits is in proximity to his own. For example, the critique of laissez faire Manchester liberalism, combined with a critique of collectivism and a concern for monopolies would demonstrate this. Yet this is not my point here, but may be included in subsequent posts, but the fact that Blond cannot identify which movements and figures are materially elements of the neoliberalism project speaks of the weakness of is position.

    And no Blond’s project is not a fetish for me, but the fate of my fucking country is. As I have alluded to I actually know Philip tolerably well and we have had a fair amount of sparing sessions, which I think we have both enjoyed. But the fact is last time the Tories were in inequality and poverty skyrocketed when it had decreased for almost a century and they crushed the unions and the working class (a fact that Blond admits!). Any person providing ideological cover for them is considered an enemy, even if that enemy is one in a democratic sense. You say you don’t understand British politics, and I assure you you don’t.

  4. Anthony Paul Smith Says:

    Hill,

    Seriously, you’re on notice.

  5. Hill Says:

    Anthony,

    Can’t tell if you are kidding or not.

  6. Hill Says:

    I took Adam to be saying something akin to what I did?

  7. Rob L Says:

    a) I also took Adam to be roughly saying something similar to Hill, and that therefore Alex mistakenly opposes them.
    b) I also wasn’t sure if Anthony was kidding. It could be jocular faux-seriousness… or he could be actually serious, in which case it’s rather precious.

  8. Anthony Paul Smith Says:

    Hill,

    I’m tired of all the motivation-begging (the fetish comment) and consider it a violation of the comment policy. With regards to Alex, his project is on economics and religion. Why wouldn’t he look at Red Toryism? Especially as it tries to integrate aspects of CST while having some kind of weird place with the contemporary conservative party.

    I take Alex’s point to be rather simple: the Tories are a neoliberal party and Blond is blind to this (while providing mood music) because he lacks a very coherent analysis of the neoliberal phenomenon. You should also know that Blond has gone very pro-market (though he wants it reconstructed, of course) over the course of this election, which you would know if you had been paying attention.

  9. Alex Says:

    “I take Alex’s point to be rather simple: the Tories are a neoliberal party and Blond is blind to this (while providing mood music) because he lacks a very coherent analysis of the neoliberal phenomenon.”

    Yes, that is what I’m saying, which is shown in the fact he is making such strange claims – ordoliberalism is something distinct, Hayek refuted neoliberalism etc.

  10. Adam Kotsko Says:

    I’m not sure what I was saying, actually. I think I partially misunderstood Alex’s point, filtered through Hill’s comment, at a time when actual thought was not a serious option (having taught two classes and done a mountain of grading immediately before). Sorry to bother everyone!

  11. Hill Says:

    I’m waiting for one of you Brits or American ex-pats in Britain to explain to me (us) what is going on over there after the election. Seriously, I’d love to hear your thoughts. I can’t make heads or tails of it.

  12. Alex Says:

    Shitstorm. Neoliberal shitstorm in essence.

  13. Hill Says:

    So you are saying it’s a perfect neoliberal shitstorm, to invoke a Kotsko coinage. I look forward to continued analysis as our worst fears continue to actualize.

  14. Alex Says:

    Basically that is the situation.

  15. Adam Kotsko Says:

    I can’t wait to see how the bond markets govern.

  16. AUFS 2010 Wrap-up « An und für sich Says:

    [...] Red Tory: The Ghosts of Neoliberalism by Alex — Along those same lines is Alex’s response to Red Tory by Phillip Blond, the untrustworthy snake that is now the court theologian for the ConDem coalition. Here Alex shows how the Red Tory programme is fully in line with neoliberalism of the past. A prognosis that has been borne out by the recent cuts in the UK. [...]

  17. David Cameron is impressive | TMP Online Says:

    [...] Cameron’s “Big Society” idea sounded impressive but was found to be inconsistent. No wonder as it was part of the [...]


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