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On the Psychology of Neoliberalism

The claim of non-wage benefits was successfully stylized as social misuse, recipients of high incomes as achievers and unemployment with personal responsibility. The optimal conditions for gaining profits, according to this ideology, lead to prosperity for all.

By flatter

[This article published February 11, 2009 is translated from the German on the World Wide Web,  http://feynsinn.org/?p=1042.]

The term "neoliberalism" plays a central role in the global justice debate. It describes the ideology of the western market economy or contemporary capitalism. This ideology was formulated and institutionalized in Germany proto-typically. Think tanks like the "INSM," political mega-projects like "Agenda 2010" and the basic concept of German neoliberalism, the Lambsdorff paper, are examples. Since the end of the social-liberal coalition, a concept based on several simple basic assumptions became established and converted efficiently and aggressively. One important aspect of the conversion of the concept is the pressure to optimism, the emphasis on "upswing." First, let us consider the basic pillars of the concept. These are:

- Low wages
- Low costs for employers, lower non-wage benefits
- Low taxes, particularly for businesses
- Low state spending, "consolidation" of the public budget
- Deregulation
- Privatization
- Binding the term freedom to private property, inviolability of the latter
- Only positive communication of the economic situation


This basic concept was accompanied by a very differentiated and forced public communication. The claim of non-wage benefits was successfully stylized as "social misuse," recipients of high incomes as "achievers" and unemployment with "personal responsibility." The latter is a very successful combination that activates the unemployed by stressing their "personal responsibility" and makes them responsible for their situation. Structural conditions of unemployment or mass staff reductions despite exorbitant profits are faded out.

"Agenda 2010" consisting of the "Hartz law" (combining income support and unemployment assistance and drastically reducing the duration of benefits), liberalization of stock trading, tax favors for stock companies and other privatizations is a 1:1 conversion of the Lambsdorff paper. The Red-Green could radically carry out what the Kohl government did not believe possible because Kohl's voting clientele had rebelled against this. There was no great resistance since Schroeder promised a labor market miracle and started all kinds of fog machines. Since then the parliamentary opposition has consisted of a single party that can be informed on as leftist, as the grubby slovenly child of a dictatorial past.

An enlightened press has not existed and does not exist to the necessary extent. Democracy ceases to function when no critical opposition exists between the guidelines of the established parties. The "free press" proves to be a conglomerate of party-liners with firm bonds to the establishment. No great print publisher starts an argument. Rather on one side information is only passed on in esoteric circles from politics to the media. On the other side, publishers become corporations oriented in profit that strictly subordinates their enlightenment function to profit. The prepared, bite-sized, palatable "information" of the neoliberal think tanks seep into this structure like warm oil. "Inquiries" and "studies" of "institutes" adjust seamlessly. As a sad example, "demoscopy" often only spreads the opinion of an individual...

The serious economic core of this ideology consisted in the belief that the optimal conditions for gaining profits in a global economy lead to "prosperity for everyone." In this case, everyone "are only the Germans because nowhere else was it emphasized so mercilessly that the world serves us. We sent goods instead of troops and are "export world masters." This led to gigantic economic output in the past 25 years despite the "costs of reunification."

However two crucial economic aspects are ignored. "Prosperity" only benefits a few which leads immediately to a permanent paralysis of the domestic market. Deregulation has led to a fatal inflation of the financial sector. This led firstly to the enormously accelerated disparity in incomes and assets. Money was massively withdrawn from the circulation of the goods economy, production and consumption since much higher profits could be realized with speculation. These profits only benefit those with disposable money. But since profits can only be permanently realized when solvent customers buy something, this system must inevitably collapse since the high profit expectations were only satisfied through unreliable businesses. The credits given to American homebuilders insolvent from the first was the final symptom of this madness.


Now every detail of the neoliberal plundering gets its revenge. An economy left to itself establishes low wages, burdens private households with high costs for social security and energy and then profits from the interests paid by these households. Such an economy can only collapse. This insight first occurred with the banks and then with the real economy. Nothing happens any more; the money isn't there. Those who must go shopping have no money. Those who have money cannot buy what they need.

The invocation of the "upswing," blindness toward the sheer possibility of recession and rejection of every form of criticism of forced-optimism are symptomatic for the obsessional neurosis of profit maximization.

"One main cause for the weakness of the German economy for years is doubtlessly the widespread and growing skepticism in Germany. The stagnation continuing for over two years, the structural problems appearing again and again, the growing unemployment, the great number of bankruptcies, the growing consciousness of international interest dependence and the conflicts and uncertainty about the further course of economic-, financial- and social policy have led to resignation and future pessimism across the German economy." "In the past, overcoming the general pessimistic mood and improving expectations of the economic future did not succeed. A consolidation policy cannot awaken any new business initiatives. It can even trigger a more dangerous circulus vitiosus toward depression through the pessimism in the private economy made infectitious through state demand cuts."


Whoever followed the speeches of Steinbruck in the past months has witnessed this spectacle in its whole wretchedness. There were only a few steps from "crisis-what crisis" and "don't conjure the recession" to the "deepest abyss." "On and on" was proclaimed without any (self-) criticism.

The last battle of a reality-blind strategy is consistent and tragic. Right from the start this strategy screened all criticism and accepted every casualty. Neoliberalism can only think of itself as without alternative. The mockery, derision and accusation of the losers, the moving closer of those who consider themselves the "elite," and acceptance of all flagrant injustice on the way to the abyss were programs. The equation of "private property" with freedom does not even allow the question how people without assets can gain their "freedom." The necessity of making them personally responsible for their fate follows directly.

To ideologists, the destruction is obviously only a dumb little accident and responsibility is assigned to others - at the end to fate and wicked lone operators.

But one thing is clear today and for all times: there was and is no alternative.

Darmstaedter says:

"In today's society, only those are successful who submit to the rules of the game. Whoever is left-liberal will not try to play according to market-radical rules of the game and accordingly will not have success in the monetary sense. Therefore you will have to seek the rich, left-liberal patron or benefactor with a magnifying glass."


"Neoliberal Definitional Power": Interview with Oscar Lafontaine


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