Neoliberal economics has been a wonderful driving
force for progress and material prosperity—but it cannot be the single
ruling principle of our lives, of our government, or of our society.
If we allow the profit motive to be the only motive, then we and our society are doomed.
We are already seeing the shape of that doom, in our health care, our government, and our industry.
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Isn’t this blasphemous?
Dear God, is this us??? |
So this morning, I woke up to a piece by Michael “Mish” Shedlock—a piece
that, being a fellow middle-aged man, scared the ever-living shit out
of me.
Mish opens his piece describing how last October 2012,
he took a standard prostate cancer test and came up positive. What
follows is his no-nonsense journey of beating his cancer. The whole
piece is a must-read;
here is the link.
(Refreshingly, Mish doesn’t inflict the needless emotional bullshit on
us. I’m sure he felt scared out of his wits, and I’m sure he had quite a
few dark-nights-of-the-soul, especially as he had only recently lost
his wife. I have nothing but compassion for him as a human being—but as a
reader, I’m so glad he didn’t roll around in the emotional muck, which
is such the fashion today.)
The thing that struck me about
Mish’s piece was how one of his doctors, the surgeon who performed the
initial biopsy, wanted to do surgery right away. Mish adopted a
wait-and-see approach, coupled with a cocktail of drugs, to see if this
counteracted the cancer. And rather than another biopsy, Mish wanted
more and more-frequent blood tests. The surgeon, “Dr. G.”, insisted on
biopsies instead of blood tests—he wanted to perform surgery so badly
that he effectively gave Mish an ultimatum: My way (biopsies/surgery) or
the highway.
Mish walked on Dr. G.,
concluding that Dr. G. was interested in the fat fees he would receive
for performing biopsies and eventual surgery.
Mish was
right—but then again, Dr. G. was being exceptionally rational, according
to our current Neoliberal paradigm: It paid him (and rather well at
that) to perform surgery, regardless of whether there were other options
for his patients. And it was a drain on his resources to have a patient
such as Mish on his client list: Mish was wary of losing his prostate,
which well might mean losing his ability to perform sexually, as well as
possible urinary incontinence. Hence Mish’s reluctance to dive right
into surgery without exploring all the other options. Such a patient,
for Dr. G., was a waste of time, and time is his main resource.
So his ultimatum to Mish was ruthlessly “efficient” in the paradigm of
Neoliberal economics: If Mish stayed with Dr. G., then Dr. G. would make
money through the surgery. If Mish walked, Dr. G. would be unburdened
from having to spend time on a non-performing patient; “non-performing”
in the sense of not being a billable client.
Of course, this
flies in the face of what a doctor ought to be: A healer. A professional
whose interest is to cure his patients of their disease, howsoever that
cure may come about, be it surgery, drug cocktails, or whatever other
treatment is available and scientifically reasonable.
Yet Dr.
G., far from being a weird outlier of a greedy surgeon hungry for fees,
was being the ultimate Neoliberal Man: Rationally prioritizing profits
over care. He is in fact a common exemplar of the medical-insurance
business. He’s the norm, not the exception.
Now for something completely different:
Newsweek magazine
ran a piece
a few days ago, where it reported a study carried out by Paul C. Light
and others, which concluded that the Federal government overspends
$300 billion a year on private contractors. The money-quote:
In theory, these contractors are supposed to save taxpayer
money, as efficient, bottom-line-oriented corporate behemoths. In
reality, they end up costing twice as much as civil servants[.]
According to the Neoliberal paradigm, the private sector is supposed to
be ruthlessly efficient—yet this “ruthless efficiency” was bilking the
government—ultimately bilking us, the taxpayers—of
$300 billion a year: Roughly $1,000 a year for every man, woman, and child in America.
Could
you
have used an extra $1,000 last year? Me, I wouldn’t have minded getting
an extra grand. But I didn’t get this extra money. It went instead to
an “efficient” private contractor that bilked the government.
The Neoliberal paradigm might sell the illusion that it’s all about
“ruthless efficiency”—but it’s not. Neoliberal economics is in fact all
about the pursuit of Return On Investment (ROI): Profits as a ratio of
income to capital. That’s it. That’s all Neoliberal economics really is,
at its core: Maximizing ROI, and creating the social conditions where
that maximization might occur with the least amount of societal or
governmental interference.
There are essentially three ways to improve ROI:
- Sell more units than previously.
- Sell each unit at a higher price (or lower cost) than previously.
- Reduce your capital while maintaining your sales.
Neoliberal economics—and its cheerleaders—claim as a matter of faith
that it is “ruthlessly efficient”. But it’s not. Its efficiency comes as
a very welcome
byproduct of its pursuit of profits—but Neoliberalism is
not inherently more efficient.
There’s nothing wrong with pursuing profits. Quite the contrary, our
very modern existence is a byproduct of this relentless pursuit of ROI.
Think of the computer you are using to read this very
essay—infinitesimally cheap and light-years better than the computer
made a mere twenty years ago, or even ten years ago. The second way of
improving ROI—lowering the cost of each unit sold—is in fact the great
efficiency engine of Neoliberalism from which we have all benefitted.
Efficiency and progress is a byproduct of Neoliberalism’s pursuit of
ROI—and a very welcome one at that.
But to apply the Neoliberalist Paradigm to
all facets of our lives and our society is creating the mess we have today.
Look at how our government is being bilked—because the Neoliberalist Paradigm is
not
“efficient”: It’s just looking to maximize ROI, that’s all.
Contractors, when selling to the government, will maximize their ROI not
by being “efficient”, but by selling
more to the government. And if they can’t sell more to the government, then they will sell more
expensively:
$250 hammers, trillion-dollar planes—whatever it takes to maximize ROI.
Thus why private contractors are being rational per the Neoliberalist
Paradigm—and thus why private contractors are a complete
disaster when working for the government, ultimately forcing us taxpayers to foot the bill for these “efficiencies”.
Likewise with other industries, and other sectors of our society: The
Neoliberal Paradigm is being implemented where it has no business being
implemented. And far from improving our lives, it is making our society
more
inefficient.
Consider health care, and the
example of Mish Shedlock: ROI is being relentlessly pursued by all the
participants in the disastrous American health care system. Insurers,
Big Pharma, doctors, the big health care providers: If you analyze each
and every one of the participants in the health care nightmare, as I
analyzed Dr. G. above, you will find that each and every one of them is
rationally chasing ROI—and the result is a complete mess. For obvious
political reasons—if only to prove that they are trying to help
people—the government is (inefficiently, ineffectively) sticking its
nose in this tussle, creating even
more inefficiencies, ultimately hurting the people even more.
I wrote about the results of the health care inefficiencies brought about by the Neoliberal Economic Paradigm
here.
It pissed off a lot of people, but no one refuted the data. The data
can’t be refuted because it’s true. The data shows how the health care
nightmare
actively hurts the American people.
Apart
from government and health care, the Neoliberal Economic Paradigm is
being aplied to all sectors of our society—and its effects have been the
same: High ROI which benefits the few, while destroying industries
which benefit us all.
After all, it was the Neoliberal Economic Paradigm which destroyed American industry, in the guise of “globalization”.
It sounded so wonderful—“globalization” this and “globalization”
that—but what it ultimately was was closing American factories and
exporting manufacturing jobs for the sake of improving ROI, and leaving
the American economy a hollow shell.
The whole
point
of “globalization” was the improvement of ROI by way of reducing
capital, and/or reducing production costs. How was capital reduced and
production costs lowered? By closing factories in America, and exporting
whole industries to Third World and developing countries so as to
exploit the cheap labor there.
Today, there is no healthy
civilian manufacturing in America. The only heavy industries that are
thriving are the defense industries—which by law
have to be in
America. All other manufacturing jobs? Gone—globalization took ‘em all.
The third driver of ROI maximization took ‘em away. The only jobs left
for the American working classes are low-paying, low-skill
service-related occupations—especially health care.
This
shit’s still going on, by the way: It’s no accident that the last five
years have experienced anemic—not to say non-existent—growth. Profits?
Oh they’re up—just ask the banksters or the health care industry.
They’re ROI has been outstanding, as they cut and cut and cut
costs—jobs.
Outstanding last five years.
But real, honest-to-goodness, meat-and-potatoes
growth? Crickets.
There won’t be any real growth in America—not if we continue
indiscriminately applying the Neoliberal Economic Paradigm. We have to
realize that Neoliberalism is a
tool—just like a lever, a gun, or a power drill: A
great tool, but highly specialized, useful for only certain tasks, and very dangerous if misapplied to all tasks.
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A great and noble tool—
but would you use it
to caulk tile? |
Just in case it needs mentioning, economically, I’m a die-hard,
hard-core conservative. Anti-bailouts, anti-progressive tax,
anti-government subsidies, anti-targeted tax breaks, anti-free trade
agreements—and as to the banks,
fuck ‘em if they go broke: Arrest every last motherfucking one of the banksters’ sorry asses if they lose so much as a
penny
of depositors’ money. (As to social conservative issues, I’m cheerfully
to the right of Attila the Hun: Anti-abortion, anti-gay rights,
anti-affimative action. The only big social issue with which I differ
from my conservative brethren is the death penalty, of which I have
written about
here; and I’m not opposed to the death penalty on principle, but rather in practice.)
Yet I recognize that the profit motive cannot be the
only
motive for a thriving, healthy society. In fact, the profit motive
should be a subordinate goal, both for individuals and for society as a
whole.
For individuals, satisfaction and happiness in life
ought to be achieved through personal relationships, leisure, and
work—not merely money. Money ought to be the byproduct of work, not the
end in itself.
For a society, industries should be harnessed
for the common good, not let loose like wild horses, fingers crossed and
hoping for the best. Wild horses cannot pull a stagecoach—they might
have the energy, but they certainly do not have the organization. This
isn’t to say we should have
managed industries—but we most
definitely should have a coherent industrial policy, whose aim is to
provide us with goals that we as a society can all agree upon.
As a conservative—as someone looking to live in a stable society with a
reduced government, where extreme poverty is anathema, and yet where
anyone can achieve their maximum potential irrespective of their birth
or station—we should be reëvaluating our common good. Reëvaluating those
things which Americans all agree are important, and worth protecting:
Freedom of speech, freedom of worship, freedom from fear, freedom from
want.
Unrestricted Neoliberalism is hollowing out the United
States. We have a chance to turn it around—but we as a nation have to
wake up to what Neoliberalism is, and is not: It’s a great
tool—but it is not and cannot be an end in itself, and it cannot be applied to every situation.
If we do not put the reins on Neoliberalism—and put those reins on
soon—then we as a society are doomed. And it will be reflected first in
our economy—as we are seeing now.
In case you haven’t heard, I’m giving a web seminar on Thursday, December 19, at 8pm EST, called “What A Recession In 2014 Will Look Like”. Click on the link to check it out and sign up. —GL
Jaguar XJ220
Mercedes-Benz SL-Class W113
