Politics and markets and public intellectuals
The President of Ireland, Michael D. Higgins, this week used the occasion of a speech delivered at the London School of Economics to develop a little more his theme of a society that has lost its way, and of an academic profession that should accept the responsibility of restoring it to intellectual health. His starting point, which he had already given an outing a few weeks ago when conferred with an honorary doctorate by the National University of Ireland, is that a political orthodoxy of unfettered markets took hold of public discourse and policy and led to the recent economic disaster. He attributes this movement largely to to the late Austrian economist Friedrich von Hayek, whom he credits with the view that markets are necessarily rational and that they should be ‘unregulated’. The President continued:
‘We have, as a consequence, been living through a period of extreme individualism, a period where the concept of society itself has been questioned. The public space in so many countries of the EU has been commodified, and it is as calculating rational choice maximizers, rather than as citizens, we have been invited to view our neighbours. That is the mark of our times, the hegemonic version, by which it is suggested, we live our lives together. Our existence is assumed to be, is defined as, competing individual actors at times neurotic in our insatiable anxieties for consumption…’
In fact what President Higgins attributes to Hayek could be questioned. In his seminal book The Road to Serfdom, Hayek confirmed his preference for as little state regulation as possible, but also stated that where markets are distorted or abused state intervention is necessary. And in Law, Legislation and Liberty, Hayek argued not that markets are rational, but that people and organisations experiencing fully competitive markets – i.e. with proper levels of competition – will tend to behave rationally. Hayek was indeed the high priest of neoliberalism, but his views were a little more nuanced than suggested in the President’s speech.
As for society, it was indeed questioned, in particular in the famous (or infamous) statement by Margaret Thatcher that there is no such thing; but whether it was forced to give way to a set of purely commodified relationships is much more questionable.
As I have mentioned before, the desire on the part of President Higgins to stimulate debate and encourage academic leadership in this debate is wholly to be welcomed. The issues he raises and the questions he asks are good ones. He is justified in encouraging debate about the nature and purpose of society. And he is right to highlight the role of the public intellectual, and thus of the academic community.
I am less persuaded by his own analysis of these issues. His thesis, that we are all the victims of a fashion for unregulated markets, is perhaps questionable. As neoliberal policies took root from the 1980s, markets were opened up but were then subjected to significant regulation; indeed the levels of regulation increased substantially after the Enron and WorldCom disasters of the last decade. Whether this regulation was appropriate or good is another matter; there is actually one school of thought that there was too much of it, meaning that some of it had become too complex to be effective. Another view is that there was adequate regulation, but that it was inadequately enforced.
All of this is open to debate, and academics should indeed seek to lead it. But that debate will be better if its basic assumptions are not too simplistic. President Higgins has a significant opportunity to prompt a national and even international dialogue. I would hope that his own contribution takes account of the considerable complexities that got us where we are, and from where we want to escape.