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2 of 4 people found the following review helpful
5.0 out of 5 stars "Let Markets Work For Us", 19 Oct. 2013
This review is from: Making Capitalism Fit For Society (Paperback)
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Colin Crouch's new book follows on from his previous Post-democracy and The Strange Non-Death of Neo-Liberalism. The latter, in particular, analysed how Neoliberalism has managed to survive, indeed thrive, even in these times of financial crisis. It went on to propose how a defence could be mounted against the privations of this all-conquering 'One True Faith' but, as he acknowledges at the start of this book, his proposals lacked any real concrete agenda, relying on a rather nebulous 'civil society'. In this volume, not only does Professor Crouch strengthen and deepen his analysis of the global dominance of Neoliberalism, he also comes up with a much clearer set of pathways and objectives to finding a way between the Scylla and Charybdis of actually existing (and failed) state socialism and the total corporate dominance of the global agenda.

To start with, Professor Crouch identifies three forms of Neoliberals. These are:

'...[P]ure neoliberals, who believe that society will be at its best when the conditions of perfect markets can be achieved in all areas of life...This does not imply a weak state; it is strong in protecting property rights, extending the role of markets to ever further areas and guaranteeing competition.' (P23-4)

'...[T]hose who, while accepting the value and priority of markets in the economy, are aware of their limitations and deficiencies, in particular their inability to cope with externalities and public goods. They also believe that the market is not appropriate in some areas of life and wish to protect these from it.' (P24)

'...'actually existing' neoliberalism, which refers to the amalgam of corporate lobbying of governments and the deployment of corporate and other private wealth in politics that today usually accompanies introduction of the neoliberal agenda.' (P24)

The first sounds to me very much like classic Austrian or Hayekian neoliberalism.

The second, while accepting the basic tenets of Neoliberalism, see its almost viral-like spread as essentially corruptive - Michael Sandel's 'What Money Can't Buy: The Moral Limits of Markets' springs very much to mind, especially with its emphasis on 'moral limits'.

The third is, as Professor Crouch states, pretty much what we have got. It is perhaps at its most overt in the US (see, for example, Thomas Frank's excellent discussion of the power of corporate lobbyists in Washington. A current example would be the debacle over the 'Affordable Care Act', opposition to which has been largely funded by the Koch brothers).

Professor Crouch takes the second position. A free market is the best way yet devised to avoid the pitfalls of an over-arching and all-powerful state. However, an all-conquering free market almost by definition leads to the loss of competition, the emergence of cartels and (along with globalisation) corporatocracy, oligarchy, kleptocracy etc. It is only by the development of a strong social democratic movement can a balance be made between the demands of individual and corporate 'freedom'.

Clearly, this approach risks being seen as a 'middle way', New Labour's 'Third Way', as compromise, as essentially defensive. But Professor Crouch strongly rejects this defensive posture, instead developing his ideas into what he terms an 'assertive social democracy' - asserting the rights of those who work within, and who may fall victim to, a rigorous utilitarian free market (and its guiding 'invisible hand') and a burgeoning and manipulative corporate transnational Neoliberalism.

This is an almost wholly convincing approach. Somehow, he largely manages to avoid the vaguely religious/spiritual proselytising of writers such as Roberto Unger, the Skidelskys and Jeffrey Sachs in favour of a reformulation of social democracy as 'The Highest Form of Liberalism' (P134). He can, like Guy Standing, actually call for greater commoditisation as a way of getting employers to pay a true and fair price for labour, by putting a price on the negative externalities caused by industry and by enforcing the 'rules of the game'. But Professor Crouch does not following Standing in proposing a 'basic income', preferring instead the flawed but still suggestive 'flexicurity' systems developed in Denmark and the Netherlands - providing a high degree of income security and opportunities for personal development (training etc.) as a counter-balance to the employment 'flexibility' (read 'hire and fire') demanded by a fast-moving global free market. This does sound a bit like Roberto Unger's view that the European left:

'...has retreated to the last ditch defence of a high level of social entitlements giving up one by one many of its most distinctive traits, both good and bad. The ideologists of this retreat have tried to disguise it as a synthesis between European-style social protection and American-style economic flexibility.' (P172)

But Professor Crouch, by emphasising the 'assertive' nature of his social democratic model (and its roots in the very neoliberalism it proposes to both sustain and ameliorate) avoids, to my mind, both Unger's critique and the critique levelled at Unger by Zizek, in that Crouch is not denying the 'underlying Real of capitalism' but is seeking a way to couple this Real with the Real of the human social animal. As an aside, it has been pointed out by many that so much of the supposed inventiveness and innovation of the free market is based on the 'pure' research carried out, or at least paid for, by governments - the Internet, the World Wide Web, discovery of DNA, many pharmaceutical breakthroughs, IT and advances in microchips etc. etc. etc.

There are many, many dangers ahead. The current crisis is giving rise not just to greater pressure from corporate lobbyists, but to xenophobic and racist right-wing movements, from the Golden Dawn party in Greece, to the apparently more socially and politically acceptable face of UKIP in the U.K. Professor Crouch suggests that, in the case of these right-wing parties:

'...neoliberalism wants unfettered global markets; if mass populations are engaged in mutual suspicion and intolerance, they are also unlikely to accept the transnational regimes that are the only institutions that might regulate these markets.' (P4)

Apart from reading virtually like a definition of UKIP, this also points out the crucial importance of transnational organisations in the development of a new 'assertive social democracy'. As Professor Crouch later suggests, in relation to the EU:

'The most straightforward means of democratizing the EU and encouraging parties and governments to work constructively would be a formally very simple rule that said that the Commission should be elected by the European Parliament and not nominated by member states. That would transform the Commission into being a government of Europe and would lead parties of all kinds to develop serious cross-national programmes and to take elections seriously.' (P187)

Professor Crouch knows perfectly well that this is not going to happen as national governments are not going to give up their power to appoint commissioners, but, as he suggests, it is important to 'place the simple proposal on the agenda, as without that it will never even be debated.' (P187)

This short book is packed with ideas, with practical proposals, with clear insights and with a degree of theoretical underpinning which, although I do not agree with 100% (being a bit of an old Marxist), I am sufficiently a 'left libertarian' (whatever that is) to feel a huge amount of sympathy with. O.k. people - this is What Needs To Be Done - let's get on with it.
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Showing 1-5 of 5 posts in this discussion
Initial post: 20 Oct 2013 10:31:04 BDT
Diziet says:
Further reading/watching:

Democrat Senator Elizabeth Warren on 'why government matters':

Paul Krugman on the corporate kleptocrats:

Posted on 22 Oct 2013 14:02:35 BDT
E. L. Wisty says:
'...neoliberalism wants unfettered global markets; if mass populations are engaged in mutual suspicion and intolerance, they are also unlikely to accept the transnational regimes that are the only institutions that might regulate these markets.'

Yebbut I would argue the opposite, that in order to sell crap that people don't need to the largest possible market, the capitalist backstards would in fact rather have a culturally homogeneous world population. In this country when anyone even dares raise the idea of immigration limits, the loudest screams emanate not from the Grauniad reading liberal lefties but from the CBI.

In reply to an earlier post on 22 Oct 2013 14:23:58 BDT
Diziet says:
Yes, I agree - the CBI and other employer's organisations are all for immigration - as are US Republicans when it comes to cheap farm labourers etc. However, and Colin Crouch makes this clear and I should also have made it clearer too, that organisations such as UKIP are really just playing at demagoguery, knowing full well that the globalization of labour markets is a prerequisite of the globalization project anyway.

Posted on 22 Oct 2013 16:13:30 BDT
Last edited by the author on 22 Oct 2013 22:49:11 BDT
"A free market is the best way yet devised to avoid the pitfalls of an over-arching and all-powerful state."

Crouch makes this abundantly clear that in most cases, and particularly to do with social goods and services, the market is anything but free, and the industries involved are all too happy to keep it that way. A free market would have driven many banks into liquidation. The water companies are only too happy to sit on their local monopolies. Power companies are happy to split themselves into two, a provider and a consumer arm, then do deals to buy up supplies behind closed doors. (And isn't it funny that, despite them all buying up power in advance in a "global market" they all manage to put up prices at about the same time?)

As for social democrats being assertive, I am afraid the pigs have already deserted the other animals, and joined the humans. Who, in the US or Europe, gives a hoot about their fellow human beings? Not enough to vote in any election and get anything done. No, the imperfect market is undisputed champion of the world now, even when its market forces are minimal: as long as none of it is in public hands, of course.

What would Crouch make of a country that thinks nuclear power should be in private hands, so puts bids out to tender, and gets one bidder, that bidder being French state-owned EDF SA, backed by investors from what still considers itself as a communist state? :-)

In reply to an earlier post on 22 Oct 2013 17:34:17 BDT
Last edited by the author on 23 Oct 2013 18:25:10 BDT
Diziet says:
I agree with all your points bar your opinion on social democrats. I think for too long social democrats who have not deserted their constituency and 'joined the humans' have been running a largely defensive campaign in the way that Robert Unger describes. But i think that where Professor Crouch is different is that he is perhaps 'agnostic' when it comes to The Market. He rejects the One True Faith (as I think it was Paul Krugman described it), the touching faith in The Invisible Hand, which surely the corporate neolibs have also rejected in their search for a new form of feudalism. Instead, he seeks to use the market, 'to let the markets work for us'. It is inevitably an on-going balancing act, but by taking an 'assertive' (and even neolib) approach to social democracy, Professor Crouch can, I believe, shift the arena of debate back to a consideration not just of the 'negative externalities' produced by corporate transnationals, but to the 'positive externalities' produced by the social.

It's not going to be an easy fight, especially given the transnational nature of the corporates and the national nature of most social movements, but I am looking forward to reading Our Europe, Not Theirs.
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