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Neoliberalism’s cleverest trick

Among the more peculiar claims of groups like Just Stop Oil and Extinction Rebellion is the one that says the government haven’t done anything to address climate change.  This is odd, because with just one exception – abolishing itself – the government has agreed to all of their demands.  Within just a few months of Extinction Rebellion demanding that they declare a “climate emergency” (whatever that is) government and opposition parties were climbing over each other to be the first to do so.  More practically, they passed legislation to halt diversity loss and to reduce greenhouse gas emissions to net-zero by 2035 (the opposition Labour Party claim they will achieve this by 2030… popcorn anyone?).  Only government by citizens’ assembly – which translates into Russian as “soviet” – was not fully conceded, although a series of climate assemblies were run to test public opinion at the time.  After this, they established the Committee on Climate Change to use legislation to hold the government to account.

Set aside for now, the fact that the proposed net-zero breaks the laws of physics and that it requires some 10,000 Earths worth of mineral resources to achieve.  Instead, let us examine the equally insane belief that a neoliberal government might have delivered anything other than what it has done.  Unlike the governments of the post-Second World War era, neoliberal governments don’t do anything.  That is, in the post-war era governments inherited a wartime economy in which the government directly operated critical industries like railways, mining, and steel working, while indirectly controlling and regulating the wider economy through various arms-length bodies which set production and price quotas.  All of this has been wiped away during five decades of neoliberalism (which began not with Thatcher, but with Callaghan’s Labour government).  Today, government is done by consultants… usually co-opted from the Big Four accountancy firms.  These tell the government what to think and then get awarded huge contracts to (usually fail to) put that thinking into action.

This transition is also reflected in the social class of members of parliament.  The private school figures demonstrate conclusively that the system is rigged in favour of the elite.  For example, after the 2019 election, 23 of the Tory Cabinet went to private boarding schools which cater to just 0.7 percent of the population.  A further 11 attended private day schools, with just three attending state schools.  Across parliament as a whole, 44% of Tories, 38% of LibDems, and 19% of Labour MPs attended fee-paying schools.  And while the number of women and minority ethnic MPs has risen, this has not altered the elitist bias within parliament.  Indeed, whereas in 1979, 15.8% of MPs had been manual workers, by 2015 this had fallen to just three percent – ironically, because of their unexpected gains in the “red wall” in 2019, the Tories accidentally brought a few more working-class MPs into parliament.

Business representation has remained consistent since 1979.  Given the massive changes in the nature of British business over the same period, however, this has left us with far fewer MPs with direct experience of meeting wage bills and project deadlines.  Surprisingly, given the preponderance of lawyers in Blair’s governments, the number of barrister MPs has fallen (although the smaller number of solicitors has risen slightly).  The broader “professional” – in the old sense of the term – representation, although still high at 31% of MPs, has fallen steadily from 45% in 1979.

The big winners over the period were what I refer to as the “professional-managerial class,” whose numbers rose from 17% of MPs in 1979 to 35% in 2015.  Within this cohort – as I lamented in my book The Death Cult – by far the biggest winners are political organisers and special advisors, who had risen from 3.4% of MPs in 1979 to 17.1% in 2015.

Put simply, in the course of the neoliberal revolution, Parliament ceased being representative either of capital or labour (whose representation was never widespread).  Today’s parliaments are primarily comprised of people who are merely specialists at getting themselves elected.  Promising bread and circuses at elections but delivering shit-filled rivers and crumbling public infrastructure and services thereafter.

Which raises an important question – why would any sane person imagine that this craven institution is capable of delivering anything?  In recent years we’ve had a health minister whose mother had sewn his name into his coat and had mittens on a string threaded through the sleeves, a foreign secretary who thought that Ukrania was an Island in the Baltic, and a prime minister who seemed to think that homeless people were running Britain’s businesses.  Most MPs, one suspects, would struggle to change their socks.  So why anyone would imagine they are going to bring about an energy transition is beyond me.

This though, is the greatest neoliberal trick.  Because at the same time that the state has been neutralised and parliament hollowed out, the activist – “left” and “right” (whatever that means) – minorities within the wider population have been increasingly conditioned to regard themselves as children in relation to a technocratic state which pretends to act as a surrogate parent.  This sets up a symbiotic dynamic in which the activists get to play the role of perpetually outraged victims in relation to governments and states which mouth words which can never be delivered.

This, of course, serves the interests of corporate power which, in the west, operates at the supranational level through the various acronym bodies – IMF, G7, WEF, WHO, EU, ECHR, etc., etc., – which Micheal Gove famously criticised on the eve of the Brexit referendum… although most people forget the second part of the quote:

“I think the people of this country have had enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrong.”

To be clear, this is as much an issue for those who self-identify as “right” as it is for those who regard themselves as “left.”  Indeed, in the present moment, it is right-wing activists who are the most exercised because of the obvious failure of a majority Tory government to deliver on their agenda.  Any self-respecting conservative who favours lower taxes, less government intervention, reduced immigration, and support for “family values” can only be horrified at the product of 14 years of Tory government.  Meanwhile, even before Labour have taken office, left-wing activists are already leaving the party in droves as Starmer and Reeves are increasingly touting their Thatcherite credentials to their wealthy donors, City of London spivs, and a (not really that) hostile establishment media.

This though, raises a more profound issue.  The unspoken assumption among activists – again left and right – is that if they can win over a majority of the electorate to their cause, this will allow them to form, or at least shape, a friendly government which will then deliver their policy programme.  But if, as is surely obvious to anyone with a pulse at this point, the state is incapable of delivering anything other than the corporate agenda imposed by the supranational acronym bodies, what’s the point?  The old post-war claims by each of the parties to be able to manage the system better than the others breaks down in a neoliberal system in which elections amount to little more than changing the seating arrangements in a Palace of Westminster which will be submerged beneath several fathoms of sewage-laden estuarial water in the not too distant future (don’t let anyone tell you that there are no benefits to sea level rise).

Beyond establishment parties are two levels of alternatives which will likely see their support rise as contempt for the two neoliberal parties grows.  The first alternative bases its position around the belief that the system might be made to deliver if only it could be made more representative of the people.  These include the LibDems, the Green Party, and Reform UK, which each place some version of proportional representation at the heart of their manifesto offering.  No doubt there is considerable self-interest in this.  Despite gaining millions of votes between them, the Greens have just one seat in parliament while Reform (and its Brexit Party predecessor) failed to win a single seat in 2019.  Nevertheless, PR would mean that millions of de facto disenfranchised voters will finally have their votes counted, while millions more can vote for the party they like best rather than the one they detest least.

Given that the main argument against proportional representation is that the current system leads to more decisive government, and since this has demonstrably failed, support for proportional representation may well increase.  But is the more profound argument – that a proportionally elected government will be able to deliver where first-past-the-post governments have failed – correct?  Or, more likely, will proportional representation merely change the way we elect ineffective and impotent governments?

If so, then we are forced to look beyond this form of opposition to something which seeks far more sweeping change.  Since there is no credible right-wing movement in this space at present, the two variations of this appear to be the revolutionary left and the nationalists.  Both argue that the system itself is rotten and thus must be removed and replaced with something else.  This is, perhaps, easier for nationalist parties which can point to successful national liberation struggles elsewhere in the world.  Moreover, since they require merely independence from the perceived imperial oppressor, they have no need of a general revolution.  The revolutionary left has a harder task precisely because it required the destruction of the existing arrangements and their replacement with something new – a process that, in the real world, has always failed and usually at the cost of millions of lives.  This may, of course, be excused by claiming that all of these revolutions failed to deliver proper socialism, and that the states which emerged were “state capitalist” or “deformed worker’s states,” but the experience is unlikely to ever win more than minority support.

In any case, the more immediate problem facing both nationalists and socialists (and any right-wing equivalent which may emerge) is that before the revolution can occur, they must first form or be a part of a government within the existing arrangements.  Which presents the fundamental contradiction within the approach – that to win in the current system you have to claim to be able to make it work while simultaneously pointing out that its intrinsic nature means that it never can.  And this being the case, then a violent seizure of power – with all of the destruction and misery that that entails – is the only credible route to power.

Meanwhile, of course, humanity in general and the developed western states in particular are probably already out of time.  Not, or at least not solely, because of the climate change which agitates the Just Stop Oil and Extinction Rebellion people (who suffer badly with carbon tunnel syndrome) but because there are a host of overshoot crises which have already begun to pull the rug out from beneath industrial civilisation in general and its kleptocratic western variant in particular.  Least mentioned but most important is energy decline, since an economy – whether local or global – is literally the use of energy to transform materials for human use.  Without energy, there can be no economy of any kind.  Energy decline though, comes in two forms.  The most obvious of these, which has only begun recently, is absolute decline.  Although by adding “natural gas liquids” – which are used for cigarette lighters and plastic bags – to the figures for oil production, it appears that global oil production has returned to its pre-pandemic level.  But heavier distillates – including the diesel fuel that is the lifeblood of the industrial economy – have been declining steadily since the end of 2018.  And since production of the other two fossil fuels – coal and gas – requires massive volumes of diesel, then the peak of their production can only be a matter of years away.

This is simple enough to understand.  If there is less energy today than there was yesterday, then we are going to have to cease doing things that we used to do.  Fortunately, there is enough waste and frivolity within western economies that, for the moment at least, we might still persuade ourselves that the fact that things are already breaking down might be reversed.  There is though, a more insidious form of energy decline which has been metastasising like a cancer for several decades now.  This is the “energy cost of energy (ECoE).”  Put simply, we have to use energy to obtain energy.  And through a combined process of working from the most to the least available resources, coupled to technological improvement and economies of scale, each new energy source begins with a lowering ECoE up to the point at which technology and economies of scale are overtaken by both their own limits and by having to extract increasingly difficult (smaller and more energy-expensive) deposits.  So that, even while the total amount of energy is growing, the amount available to be converted into useful work is in decline.  In the modern, oil age, the period of falling ECoE was between the last years of the Second World War and the oil shocks of the 1970s.  Thereafter, the ECoE began to slow, taking prosperity with it (which is why the oil shocks, and the related currency crisis, coincide with the inflection point where workers pay ceased growing with output.

It was only really with the peak of world conventional oil production in 2005, that these combined energy declines began to pull the rug from beneath the western economies where a huge amount of energy consumption is discretionary.  That is, in the west, $200-per-barrel oil would likely cause millions of people to give up driving, as the perceived inconvenience of public transport begins to outweigh the cost of motoring.  But even at that price, a third world farmer who currently takes his produce to market on a bicycle, might still find investing in a motorbike worthwhile.

Just as in 1927, a spike in the price of coal at the end of the coal age was the “pin” which burst the financial bubble of the “roaring twenties,” so the spike in the price of oil after 2005 exploded the mountain of financially engineered derivatives which almost crippled the global banking and financial system in 2008… a problem which has yet to be resolved, and which is likely to come back to haunt us following the oil price spikes either side of the pandemic.

The financial economy which, because we’ve been using fiat currencies since 1971, is debt-based, operates on the assumption that energetic and material growth in the real economy will rise faster than the average rate of interest.  It was the failure to do so in the late-1920s and again in the years prior to the 2008 crash, which brought the house down.  Since until recently, however, some real economic growth was maintained, it had been possible to start another period of debt-based growth.

The neoliberal revolution was designed precisely to achieve this by maintaining corporate and professional managerial class income growth at the expense of the majority in the western economies.  The offshoring of production, the use of equalities legislation to create pools of surplus workers, and the extension of credit were all designed to extract prosperity from the majority and transfer it to the minority at the top.  In this final stage of neoliberalism though, there is little more to be extracted from the majority… although everyone is still trying to.  Corporations are attempting to price gouge their way to continued income growth.  Governments – national and local – are attempting the same through higher taxes and lower public spending.  Everyone else, from your landlord to the guy who runs the local chip shop is desperately trying to recover their increasing costs through price rises.  Meanwhile, jo and joe public – including seven and a half million of the poorest – are being crushed under the weight of this “Great Taking.”

The fact that across the western economies there are now tens – if not hundreds in “shadow banking – of trillions of dollars of debt based upon mere billions of dollars – and declining – of real, material wealth, means that a massive collapse is inevitable… it is only a matter of time.  And the idea that those at the top can somehow hang onto financial wealth which is little more than numbers in a computer datacentre is fanciful at best (again, don’t let anyone tell you there are no positive sides to collapse).

There is a third – although tangential – energy-based crisis facing us.  A large part of our built environment was constructed at the height of the oil age when energy was relatively cheap and resources plentiful.  However, and in part because of this, much of that environment – especially our critical infrastructure – is reaching the age when it must either be replaced or undergo ever more expensive patching up.  In the exuberant and optimistic post-war decades, for example, planners simply assumed that clever people in the future would be able to replace concrete structures which were known to have 40, 50, or 60-year lifespans.  But cleverness in that sense is also a product of abundant energy, and far from knowing how to easily replace our crumbling buildings, we haven’t even figured out how to recognise the internal spoiling before the structure begins to disintegrate.

No doubt kleptocratic behaviour played a large part in this.  London’s (growing lack of) water infrastructure, for example, is as much due to irresponsible robbing by its managers as to the natural decay of the network of pipes and pumping stations.  But even where investment has occurred, it is often in a losing race to build the new before the old breaks down.  The UK’s nuclear power stations, for example, are being closed far faster than new capacity can be built – and the gap isn’t being closed by wind and solar capacity (even ignoring the attendant intermittency issues) either.

While the majority – including the political activists – still treat the government as a surrogate parent who can be petitioned to provide free lollipops if only they are so minded, and while even the most radical activists offer the prospect of things improving only if we add people who wear green, orange and purple ties to those with red and blue ties in parliament, my own view is that the impact of the state is entirely negative at this point.

Insofar as there is any prospect of mitigating the unfolding process of decline, it is in dispensing with the state entirely.  As John Michael Greer wrote recently, the neoliberal state has become a “lenocracy” – a government of pimps in which unproductive middlemen have inserted themselves into every aspect of life.  This, too, is a consequence of the infantilisation of the activists, since every “problem” that the activists have asked their surrogate parent to address, has been met with the imposition of a new pimp – a regulator, a committee, a licensing authority, a mandatory training provider, etc., ad nauseum.  In an age of growth, there was enough surplus energy, and thus enough surplus wealth, to afford this unproductive army of parasitic occupations without undermining general prosperity.  But today they are a growing drain which, unless removed, will kill the host.

Consider just one – climate and energy related – potential mitigation to the coming collapse… organic farming.  At present, the population of western economies is only alive because of technologies which convert fossil fuels into food.  Without petrochemical fertilisers and pesticides, our long since depleted soils could not yield enough food to keep us all alive.  Nor could sufficient food be provided without diesel-powered machinery to grow and harvest the food and transport it to the consumer – something which, in the UK’s case, involves shipping more than half of it from abroad.  But this cannot be a long-term – and perhaps not even a short-term – means of feeding ourselves because, as we have seen, the key middle distillates of oil (which power the machinery) are in sharp decline, and the remaining fossil fuels (which provide the petrochemicals) will soon follow.  One way or another then, organic farming is the future.  But, as opponents will quickly – and correctly – point out, organic farming yields are a fraction of those of industrial farming.  It will take years, if not decades to build yields to anything like current levels without industrial inputs.  So that, if industrial farming disappeared, millions of us would starve.  Given this, we might expect a state which mouths soothing words about the environment to provide incentives to promote organic farming – particularly that which uses regenerative approaches to restore soil health.  But, along with farming more generally, the western states are hostile to farming of any kind, but with potential organic farmers facing a lenocratic army of licensing bodies, inspectors, and regulators put in place by corporate agribusiness precisely to prevent organic farming from ever being profitable.

North Korea and Cuba provide us with two very different examples of states responding to a sudden energetic collapse as their supply of fossil fuels was cut.  Following the collapse of the Soviet Union, both countries, which were subject to western sanctions, had to respond to a collapse of fossil fuel imports.  In North Korea, the state acted as a surrogate parent on steroids – imposing rationing and attempting to control every aspect of agricultural and industrial production.  The result was a horrendous famine.  In Cuba, things weren’t good.  But because the Cuban state acted as an enabler rather than a surrogate parent – allowing people to plant and harvest food on any uncultivated land they could find – starvation was avoided.

This is likely the real choice for western populations once we get through the anger caused by state and corporate complicity in collapsing the economy.  Our current path is clearly and decisively in the North Korean direction (which is one reason why I have little time for political activists of all stripes).  Whether a Cuban direction is possible, we shall have to wait and see.  At present there is no strong movement in favour of a genuine rolling back of the state (rather than the confidence trick sold by Thatcher) a return to common law[1], and which treats us as responsible adults rather than spoiled children… but should one emerge, I will give it my support and my vote (for whatever that is worth).

[1] In the pre-neoliberal common law system that operated in the English-speaking states, broadly, everything was allowed unless it was explicitly forbidden.  In contrast, the Napoleonic code operated across Europe – and favoured by corporate power – holds that everything is forbidden unless the state explicitly allows it.

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