May 29, 2013, by Brigitte Nerlich

Neo-liberalism: a problem of social science and for society

This is a post by JOHN HOLMWOOD, sparked by some discussions on twitter and on our ‘Making Science Public’ internal discussion list.

A recent post by John Field has called neo-liberalism an ‘overworked concept’, much in use in the UK social science, but less frequently elsewhere. He implies that its use is largely normative, and that it lacks social scientific precision. In contrast, I shall suggest that it arises very precisely in social scientific discourse.

Crudely put, the idea of neo-liberalism is a utopia; that is, it is a ‘fiction’ in the epistemological sense attributed to ideal types as the form of theoretical construct deemed appropriate to the social sciences.  As such it is unrealisable and all empirical, concrete instantiations are understood as involving ‘deviations’ from it. The underlying argument goes back to the turn of the nineteenth and twentieth century and the ‘Methodenstreit’ in economics between analytical and historical-institutional economics (involving Weber and Menger ). Once concepts are given ideal typical status, they are held to be ‘logically coherent’, notwithstanding the fact that they are unrealisable in practice. Any empirical deviations are held not to call into question their analytical truths.

Any concept given this status can provide the basis for policy based upon its putative rationality – financialisation, marketisation, etc – neo-liberalism is made available as a policy prescription, designed to overcome irrational factors (whether these are attributed to social factors or power – usually designated as various monopolies, whether of capital or labour). In consequence, the defence of those factors (frictions of the real world) are always placed at odds with ‘rationality’.

This is what Polanyi first struggled with in his Great Transformation, published in 1944, and intended as a counter to laissez-faire (or neo-liberal ideas) such as those of Hayek in the Road to Serfdom published at the same time.  The analysis of the ‘fictive’ status of land, labour and capital as commodities is central to his critique of public policies of marketisation.  It is central to his advocacy of complex freedom, as against the simple freedom embedded in the idea of the self-equilibrating market, which he attributes to neo-liberalism.

The ‘hegemony’ of neo-liberalism, then, is achieved, in part, by its utilisation of a widely accepted epistemology of social science (that of ideal types, etc). We could instead take the unrealisable nature of the neo-liberal construct of the market as an index of its irrationality (rather than claim it to be rational but unreal). That we do not is because we remain committed to the social sciences it makes possible.

So, it is significant that the idea that neo-liberalism as a floating signifier arises in interdisciplinary fields (education, science studies, human geography). The ‘reality’ of deviations in practice is an opportunity for a plurality of ‘ethnographies’ of the ‘real’ variety of neo-liberalisms. In this way, what is also co-constructed is the ‘fertility’ of the idea and its extraordinary creativity and variety in practice. Of course, science studies, itself (especially actor network theory), is closely tied up in this unintended promotion of neo-liberalism as a consequence of their own practices. It is not simply that these constructions make possible the study of the ‘making of markets’, but that the very idea of markets as made is itself made in the conjunction of neo-liberalism and science studies.

John Field’s blog is odd in other ways.  At the very moment that neo-liberal finacialisation and marketisation are being applied to universities as a setting, and, more generally to science, a doubt is expressed about the meaning of the very category in whose name it is being done. A Marxist ‘fig leaf’ is offered for protection – where the use of the concept of neo-liberal obscures whether those using it are against capitalism, as such, or just one of its regimes – but this does not disguise the problem of what is being argued and its muddying of what is really at issue.

On the analysis offered by Polanyi, there is no capitalism as such – just a neo-liberal theory of capitalism and state action to implement it against various kinds of social resistances. This is one of the reasons why sociology after Polanyi articulated a distinction between capitalist economy and modern society. The distinction is an indication of the possibility of complex freedom and its institutionalisation in a society in which capitalist markets also operate; that is, it is an indication of the possibility of reform. Neo-liberalism is the reduction of society to capitalist economy.

Polonyi conducted his analysis in the context of globalisation – what he called the idea of the ‘planetary economy’ –  but also in the context of a world war to which the Great Depression of the 1930s had led. The anti-social nature of neo-liberal policy and the hollowing out of institutions in its name, in Polanyi’s view, was precisely what created the vacuum in which authoritarianism flourished. Resistance can take the form of authoritarianism or the embedding of complex freedoms.

We would do well to look inward at how social scientific epistemologies are sustaining dangerous public policies. For those blogging on the importance of making science public, we need to question the intersection of different ‘rationalities’ and the nature of our own epistemological claims. When our accepted epistemologies give the theory of capitalism the form of a critical theory of society, we are potentially rendered intellectually helpless when fascism stalks our streets.

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