NEOLIBERALISM has been called, provocatively, an ideology at the root of all problems. Critics say it has played a major role in social and political crises such as the rise of Donald Trump. What is it, exactly?
Monash University Malaysia’s Department of Psychology lecturer, Dr. Karim Bettache, and Dean of Social Science at the Chinese University of Hong Kong Prof. Chi-Yue Chiu, describe the characteristics of neoliberalism and its influence upon society and psychology.
The doctor and professor wish to shed light on this ideology which often goes unnamed, yet is pervasive and “has transformed our society, science and its applications, as well as people’s lives”.
What is neoliberalism?
In one definition, neoliberalism is an ideology that favours free-market capitalism and laissez-faire economics. It believes that continued economic growth, driven by competitive markets, will lead to human progress.
There are generally three neoliberal assumptions: that humans universally desire freedom from interference and that economic inequality inspires people to improve themselves; that free choice and self-governance are sacred values; and that individual freedom should be preserved through competitive markets and minimal government interference.
These manifest themselves in policies that reduce state welfare and government intervention in economic affairs. Neoliberalism also promotes privatisation of public sectors such as healthcare, public transport and education. It tends to propose the competitive free market as a solution to almost any problem.
Neoliberal policy is most famously associated with the Margaret Thatcher and Ronald Reagan governments of the 1980s. Both cut income taxes (which benefited the wealthy) and relaxed regulations on the financial sector, labour and the natural environment.
Criticisms of neoliberalism
Neoliberalism has been criticised for justifying capitalist dominance, eroding governments’ commitments to protect their people through welfare policies, and thus increasing social inequality. In the US, for instance, although the economy and business have prospered, the income of the average American worker and family has remained largely stagnant. In contrast, the upper 1% of the rich have seen their wealth grow at tremendous rates.
These issues, however, are not confined to the US as neoliberalism has spread throughout the world.
The failure of neoliberal policies to address growing inequality has fuelled the rise of right-wing populism and Donald Trump. Paradoxically, Trump has since spearheaded neoliberal policy, such as decreased taxation of the rich, at historic speeds. And populism—which appeals to “the people” and pits them against “the elite”— unfairly blames immigrants and minority groups for the economic problems created by the wealthy.
Neoliberal views are also criticised for assuming the market as a level-playing field which rewards individuals primarily on their merits, and that each person’s failure is the result of not trying hard enough.
This perspective discourages government-sponsored programe that seek to address racial inequality, for example. Indeed, those who profit from such views tend to be the “Euro-White elites” who have had a head start in the economic race. Colonialism made them rich, and neoliberalism makes them even richer, hence the issue of “white-supremacy” which remains a global problem.
Research on neoliberalism
Bettache and Chiu recently served as editors for the Journal of Social Issues (2019, Vol 75 No 1), calling for articles to “break social psychologists’ silence on issues related to neoliberalism”.
In response, they highlighted and published several studies which were conducted by leading international psychologists and scholars from related disciplines. One revealed that Americans who subscribe to neoliberal beliefs also tend to be ethnocentric and apathetic towards protecting asylum seekers. Another found that Americans with a favourable attitude toward Trump, tend to deny climate change; partly because neoliberalism is averse to the idea of wealth redistribution, which Trump also opposes. And since the left-wing is sympathetic to the redistribution of wealth, Trump supporters are sceptical of other left-wing concerns such as climate change.
Different people agree with neoliberal ideology according to different extents. The way the ideology expresses itself also varies between countries, eg. between the US and India. While Americans who subscribe to neoliberal beliefs “tend to be more narrowly self-interested and consistently strive to raise their socioeconomic standing and dominance”, this connection is not yet seen in Indian culture, which emphasises community and social relationships.
An invisible hand in psychology
Neoliberalism is an invisible hand at work in society and academia, influencing even psychological practices and assumptions. The ideology encourages universities to operate like businesses where competitive profit models are used to guide university policies, and “productivity” is rewarded through tenure and promotion.
Meanwhile, within the field of psychology itself, neoliberal biases are present—for example, in emphasising self-governance. Mental illness is seen as a biological condition curable by psychoactive drugs, and patients are expected to self-govern their drug consumption and lead independent, productive lives. Belief in self-governance requires citizens to be responsible for their own well-being and contribute to the market economy.
However, if citizens are solely responsible for their well-being, societal factors may be ignored—factors beyond the individual which contribute to problems such as poverty, gender or race. A recent study on rape counselling illustrates the point. It is not enough to focus on eliminating symptoms in a rape victim; we must understand the social factors contributing to rape in order to end sexual violence itself.
In other words, it is necessary to work toward social change, not just hold individuals responsible for fixing their own problems.
Thus, Bettache and Chiu press on and call for critical examination of how neoliberalism influences thought and practices around the world. They also challenge scholars to question how academic research can be made socially relevant and contribute to a better society.
The article, courtesy of Monash University Malaysia, features findings from both Dr. Karim Bettache and Prof. Chi-Yue Chiu. Visit monash.edu.my for information on Monash University’s psychology courses.
