One Less Bell to Answer: Further Thoughts on Neoliberalism By Way of Mike Konczal (and Burt Bachrach)
Mike Konczal has an excellent post on Mitt Romney’s proposal to replace unemployment benefits with unemployment savings accounts. The idea is: While you’re working, money would be automatically taken out of your paycheck and put into an individual account. When you’re unemployed, you could make withdrawals from it. As one of Konczal’s readers points out in the comments section, Romney’s proposal would merely add to the satchel of work-related accounts people already have—401k’s, IRA’s, education accounts, health care accounts, childcare accounts, and so on—and that weigh them down so much as it is. And that may be the point. But more on that in a minute.
Konczal uses Romney’s proposal to compare left-liberal approaches to the economy with the dominant neoliberal/capitalist model. Konczal offers five points of comparison, but his third is the most important:
The third is that it weakens the power of the unemployed. Unemployment insurance increases the time until the unemployed take their next job. Cutting-edge econometric research tells us that the majority of this is a “liquidity” effect as opposed to a work disincentive effect – people are taking the time they need in order to find the best job for themselves instead of taking the quickest job in order to make basic payments. This gives the unemployed more choices and, as Acemoglu and Shimer argued, can create a better economy with more output and productivity.
However what is good for the economy isn’t necessarily better for any individual employer, and by empowering the unemployed and giving them breathing space to search for the best job also enables them to search for the best wage to go with their job. Switching this system of unemployment insurance throws off this balance between workers and bosses in favor of the latter. It reduces aggregate labor bargaining at a time when it is precariously weak.
As I’ve argued in the Nation, conservatives often claim that they stand for freedom, especially freedom of choice, and too often the left has conceded that terrain to them. In actual fact, as Konczal shows, it is the left that offers men and women the far greater, and more robust, freedom of choice. Not just in the bedroom or in cultural life but also in the realm of the economy. The freedom to take or leave a job, to bargain for better pay and benefits, to say no to the boss.
That ideal of freedom is exactly what the right hates about the left. Not the left’s demand for equality, at least not as that demand is often understood, but its demand for freedom. “We are all agreed as to our own liberty,” declared Samuel Johnson. “But we are not agreed as to the liberty of others: for in proportion as we take, others must lose. I believe we hardly wish that the mob should have liberty to govern us.”
But Konczal’s post reminds me that there is a deeper, more substantive, case to be made for a left approach to the economy. In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives. That, in fact, is the openly declared goal: once we are made more cognizant of our money, where it comes from and where it goes, neoliberals believe we’ll be more responsible in spending and investing it. Of course, rich people have accountants, lawyers, personal assistants, and others to do this for them, so the argument doesn’t apply to them, but that’s another story for another day.
The dream is that we’d all have our gazillion individual accounts—one for retirement, one for sickness, one for unemployment, one for the kids, and so on, each connected to our employment, so that we understand that everything good in life depends upon our boss (and not the government)—and every day we’d check in to see how they’re doing, what needs attending to, what can be better invested elsewhere. It’s as if, in the neoliberal dream, we’re all retirees in Boca, with nothing better to do than to check in with our broker, except of course that we’re not. Indeed, if Republicans (and some Democrats) had their way, we’d never retire at all.
In real (or at least our preferred) life, we do have other, better things to do. We have books to read, children to raise, friends to meet, loved ones to care for, amusements to enjoy, drinks to drink, walks to take, webs to surf, couches to lie on, games to play, movies to see, protests to make, movements to build, marches to march, and more. Most days, we don’t have time to do any of that. We’re working way too many hours for too little pay, and in the remaining few hours (minutes) we have, after the kids are asleep, the dishes are washed, and the laundry is done, we have to haggle with insurance companies about doctor’s bills, deal with school officials needing forms signed, and more.
What’s so astounding about Romney’s proposal—and the neoliberal worldview more generally—is that it would just add to this immense, and incredibly shitty, hassle of everyday life. One more account to keep track of, one more bell to answer. Why would anyone want to live like that? I sure as hell don’t know, but I think that’s the goal of the neoliberals: not just so that we’re more responsible with our money, but also so that we’re more consumed by it: so that we don’t have time for anything else. Especially anything, like politics, that would upset the social order as it is.
I’ve called this the neoliberal rather than the conservative view because though it arose on the right, it has long since migrated to the left, or at least the liberal part of the left. We saw a version of it during the debate on Obama’s healthcare plan. I distinctly remember, though now I can’t find it, one of those healthcare whiz kids—maybe it was Ezra Klein—tittering on about the nifty economics and cool visuals of Obama’s plan: how you could go to the web, check out the exchange, compare this little interstice of one plan with that little interstice of another, and how great it all was because it was just so fucking complicated.
I thought to myself: you’re either very young or an academic. And since I’m an academic, and could only experience vertigo upon looking at all those blasted graphs and charts, I decided whoever it was, was very young. Only someone in their 20s—whipsmart enough to master an inordinately complicated law without having to make real use of it—could look up at that Everest of words and numbers and say: Yes! There’s freedom!
That’s what the neoliberal view reduces us to: men and women so confronted by the hassle of everyday life that we’re either forced to master it, like the wunderkinder of the blogosphere, or become its slaves. We’re either athletes of the market or the support staff who tend to the race.
That’s not what the left wants. We want to give people the chance to do something else with their lives, something besides merely tending to it, without having to take a 30-year detour on Wall Street to get there. The way to do that is not to immerse people even more in the ways and means of the market, but to give them time and space to get out of it. That’s what a good welfare state, real social democracy, does: rather than being consumed by life, it allows you to make your life. Freely. One less bell to answer, not one more.
Update (9:15 pm)
In talking with my wife Laura after I posted this, she commented that the whole neoliberal project was about outsourcing state functions onto the individual. Which reminded me of a realization I’ve only lately come to. When the left (and the right) uses the word “outsourcing” or “subcontracting” or “privatization”—I know they all mean different thing, but they belong to the same family—we often mean that the state is shunting off its powers and practices to private corporations. Where before the city picked up the garbage, now it has private companies do it. Things like that.
But there’s a whole dimension of outsourcing that gets lost in this discussion. And that is what Laura was referring to: all the time and energy we as individuals now have to devote to doing the things that the state used to do for us. The right thinks of that as freedom—they hear the words “state is doing for you” and they imagine patients etherized on a table—but I think of it as tyranny. In fact, one of my FB friends, Sumanth Gopinath, wrote tonight to say, in response to this post, “Freedom is, in part, freedom from the tyranny of choice (as imposed by the market).” Indeed.
A version of this notion came home to me not long ago when my wife’s employer announced that they were changing their healthcare coverage. It used to be that our entire family—my wife, daughter, and I—were covered under her plan, which provided great insurance for fairly low cost. Very old school. Then the employer announced that from now on any member of the family—i.e., me—who was eligible for coverage from their employer would have to use that insurance first. But, and here’s the kicker, if that insurance didn’t cover some particular procedure or doctor’s visit, then my wife’s insurance would cover it. So now, on certain procedures or visits, I have to submit two claims: one to my insurance, and then, once they refuse to provide coverage, one to my wife’s insurance. And then, because we have one of those health care accounts that makes the right so giddy, I can submit a third claim to that company (in the event that my wife’s insurance does not provide full coverage).
One procedure, three claims, all to get what, in more mature democracies, would be mine by right. That’s some freedom.
43 Comments
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Outstanding! For once we agree 100%. Love this post. I’ve long thought/felt this way, but feared is was just my ineptitude at juggling all those nifty accounts, options (=freedom!), etc., that my whip-smart students seem to gravitate to but which only predisposed me to not want to embrace any more of this befuddling, time-wasting “freedom” to haggle and hassle all day about uninteresting crap, just to try to not get ripped off. This analysis you’ve given here strikes me as richly revealing of a plethora of new forms if UNfreedom that everywhere appear framed as “choice” in today’s neoliberal (not conservative) ideology. Is it what Michael Hardt and Tony Negri call the increasing dominance of “immaterial labor” that makes it seem “natural” that after working all day on a computer one would come home to dither some more at the keyboard in one’s “free” time?
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Glad we agree!
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Excellent post. I would just highlight that appeals to homo economicus often shift between description and instruction, as if all of us do “think like an economist” because we must.
Oh, and the Econ 101 shtick as applied to health care “consumption” is vicious bullshit (see: Trudy Lieberman).
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Great post and you’re on vacation. Imagine that. Give a person some time off to really think and look what you can do. I can see the neoliberals will want to start vacation accounts now.
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Terrific post.
Rortybomb commenter here.
You know, the economically-minded consider mental accounting to be a pernicious cognitive bias. Codifying it seems like a bad idea. Besides, one bullshit account is too many.
401k accounts are complete disaster. I used to be active on a personal investing forum called bogleheads.org (named after Jack Bogle, inventor the index fund and a pretty good guy). The regulars are informed and intelligent. There’s a lot of great advice about diversification, keeping costs low and avoiding scams. But nobody can deal with the big questions: how much to save and what to invest in. Eventually I figured out they’re just unanswerable. Over the next 30 years nobody knows if stocks are going to return 6% or 2%. Unless you have some idea about that you have no idea how much to save.
The best people will point to real annuities (Zvi Bodie is the name here). But you can only buy a real annuity a year before payments start. You can’t buy them at age 25 (or 35, 45, or 55) to finance retirement at age 65. So what do you invest in during your working years? And besides, annuities are basically repackaged government debt. Inflation-adjusted annuities didn’t come along until TIPS did. The big point is, the free market provides no means to guarantee consumption years into the future (*see old dsquared post). Government debt itself is another program of the submerged state.
But in spite of the difficulties people have to keep trying to finance retirement. The best you can do is to massively oversave, which since you can’t take it with you, is pointless. Most fall into the usual traps: high expense funds, chasing returns, panicked market timing, etc. And for all the talk of diversification the market doesn’t diversify what matters most, market returns. If you retire and cash out at the end of a bull market you’ve done well. If you’ve invested in a long bad market, you’re boned. There’s no way to diversify what year you were born in.
(529s are the worst! The time is too short to invest in anything other than short-term bonds, but everybody buys stocks anyway.)
The genius of Social Security is that we take 4% of GDP every year and simply give it to old people. It works when the stock market is up or is down. It works during recessions and booms. It doesn’t matter when you were born (ok, it has, but it shouldn’t). People call it an entitlement as if that’s a bad thing. We could use a few more entitlements like Social Security.
* http://d-squareddigest.blogspot.com/2002/09/get-yer-money-for-nuthin-and-your.html
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Thanks, Chris. I love that line about not being able to diversify the year you were born. And the last graf is perfect.
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Corey, pretty good for an academic!
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One other thing related to your “Update” discussion: often those promoting the outsourcing to individuals aren’t concerned about ‘choice’ but are trying to bamboozle consumers into choosing a bad option (which is, of course, the consumer’s fault–it was his or her ‘choice’).
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Whence the label neoliberal? Not sure I like diluting the coin of the proressive realm. Offers solace to free market capitalists who would like to believe they are social democrats at heart.
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My apologies, Sam. It’s kind of a term of art which probably has a lot more resonance in Europe than here. As you probably know liberalism has a very different meaning in Europe than in the US. It arose in the 19th century and was very much allied with the free market and classical economics. Left-wing critics of the market in Europe took some variety of the socialist banner, and there were a fair number of critics on the right as well. So liberalism remained permanently allied with the idea of the free market there. Then when the free market got a new lease on life during the 1970s, it took the name neoliberal. It has an odd ring in the US, I realize, but it’s somewhat accurate if you’re trying to speak across the borders of one country. Because even in the US there was a movement in the 1970s of people called neoliberals who were members of the Democratic Party (Gary Hart, Bruce Babbitt, Robert Reich in fact) and were pushing the party to be more receptive to markets and less focused on the state. Some called them “Atari Democrats.” They were also critical in pushing for deregulation (in fact, Teddy Kennedy — along with Stephen Breyer, of Supreme Court fame, and Ralph Nader — pushed for deregulation in Congress as early as 1975). So the term is not completely unhelpful. Nice to see you around these parts!
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Excellent post that provides some welcome new perspectives. There are many things government can and should do that improve the quality of our lives. We tackle shared problems collectively through our governments rather than individually. Taking on government duties to the extreme, we end up hiring private security, paying for private schools, etc. Having government that takes many day to day burdens off our backs does increase our freedom; we have time to pursue our personal needs and priorities without devoting all our time to collective needs.
The attack on government where the explicit goal is to reduce government to virtually nothing, if successful, will result with us individually having less freedom, less time for individual priorities. A functioning government is what makes life in America so sweet and easy. If you do not believe our government functions, please visit me in Papua New Guinea one day. If you do not believe our lives are relatively sweet and easy, again please join me in Papua New Guinea.
This post really resonated with me because it captures the niggling thing in the back of my mind that bothers me about reducing government programs like Unemployment, Social Security, public education, etc. One result will be that we all end up slaving even more to our employers and with even less quality free time as we individually manage all the things that are more effectively managed collectively. We pay taxes to hire people (civil servants) to do things for us. It is that simple. When we eliminate them (taxes and the civil servants), we will have to do those things ourselves.
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«In talking with my wife Laura after I posted this, she commented that the whole neoliberal project was about outsourcing state functions onto the individual.»
Well, yes, because in that way you indeed have a lot less time and are a lot more stressed, and a lot more dependent on your boss.
But there is a wider idea, or ideology, and that comes from the misuses of the notion that the state is a group purchase scheme, and that part of its purchases are insurance.
The neoliberals, which is really a new name for the social darwinists, are afraid that in the group purchases, especially that of insurance, is hidden some income transfer from the virtuous and productive rich to the craven and parasitic poor who want to STEAL THEIR PROPERTY, and they regard this as an affront to social justice and the natural order of things, where each person has a right to the fruits of the sweat off their brow.
However note that even in the neoliberal view of the world nobody prevents you from radically simplifying your life by putting all your complications in a private group purchase scheme of all your various “accounts”, one which is joined only voluntarily by its members, and that therefore has no power to perform involuntary income transfer among members. That is indeed the goal of the neoliberals as to government: to move taxation to smaller levels than federal, so counties with mostly rich citizens can have low low tax rates, and counties with mostly poor citizens can have low low services.
BTW your arguments that you regret «all the time and energy we as individuals now have to devote to doing the things that the state used to do for us» is just ridiculous and proves to the neoliberals that you just want TO STEAL THEIR PROPERTY.
Because if it costs X to manage your affairs yourself, having them managed by the state must cost also around X (less than X if there are lots of economies of scale, more than X if there are intermediation fees), and if you feel that it costs less time and energy to your by having them managed by the state than by yourself, that means that you expect the state to STEAL THE PROPERTY of someone to pay for that.
The real argument against the neoliberals is that nobody is forced to join the state group purchase scheme if they think that other members use it to STEAL THEIR PROPERTY.
There are literally billions of people on earth who have not joined the USA group purchase schemes at all and don’t pay one dirty cent to the USA government, at any level, in taxes or fees.
All it takes if for anybody who thinks that they USA government is not good value for them to go to another country that offers a better deal and purchase membership into their state group purchase scheme.
There is a free market in government membership (also called “citizenship”) and if any USA taxpayers think that they want a better deal they can pay end-of-membership fees and penalties in their USA membership contract, and then purchase a membership somewhere else. Several of them have done so.
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“Because if it costs X to manage your affairs yourself, having them managed by the state must cost also around X (less than X if there are lots of economies…”
Having them managed by the state means they’re managed by professionals who by and large understand what they are trying to manage. Someone with little or no understanding of finance and the ramifications of their choices is liable to make mistakes and is at greater risk of being taken in by predators. Or maybe they’ll be flummoxed into inaction (I am reminded of the Advance Directive the doctor gave me to sign that sat on my dresser for nearly 10 years because I could barely get past the legalese on the first page).
What I really don’t get is why so many in our society cringe at the idea of caring for people.
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Excellent post. (Let’s not forget Bacharach’s lyricist co-writer, Hal David.)
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How could I?
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How does an average or non-sophisticated person deal with such a process for a simple insurance claim? Whom do they call for guidance? One company, two companies? Seems like the process costs both insurance companies more work, more expenses. Is this freedom?
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You actually have a secondary insurance account too if you spend enough (making four times you have to submit something). We shouldn’t complain too loudly given that we have insurance.
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Great post. For a terrific example of the “marketing” of often meaningless or counterproductive choice, check out the cute owl on this page:
“No one else is exactly like you. Let Joppel help you choose a Medicare plan based on your individual needs. It’s easy, and you can enroll online.”
The owl says volumes: The smart people use our service and save money. The dumb ones pick randomly and deserve their penury.
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So let me get this straight. Your idea of freedom is to have an army of state workers (I presume state workers given the thrust of your comments elsewhere) manage personal fasects of people’s lives so that said people can then have more time to go about livng their lives? Why stop there? Why not just have the state handel everything? Why not have people cook, clean, and do all of those other things that constitute, how do you put it again? Oh yes, this “immense, and incredibly shitty, hassle of everyday life.” Who gets to decide which aspects of my life this super state organization of yours monitors? Can I pick and choose? Do I have that freedom?
Also, I have to say that I was just about blinded by the cognative dissonence when you move from arguing for the above to saying “[o]nly someone in their 20s—whipsmart enough to master an inordinately complicated law without having to make real use of it” could possibly understand just….JUST!….the state’s intervention into healthcare. Really?! That doesn’t in the least make you say, “Gee. You know. If the state ran other people’s lives the way I think it should, we would probably have to have many more such laws wouldn’t we?”
By all means, live your life as you see fit…..but PLEASE, PLEASE stay far far away from mine!
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Such dizzying confusion is the burden of life!
So really what you want is not merely to enjoy the freedom of having someone else make your choices for you – which no one is preventing your from doing outside the state monopoly of deadly force. It isn’t enough that you still have the choice to let someone else run your life for you, you want someone to run *everyone’s* life, and eliminate all the choices that you find so confusing in your dotage, because naturally everyone else is *just like you*. Oh except those whippersnappers like Ezra Klein (gag that I am defending him), screw them.
I like my Linux with its limitless configurable possibilities. But you want me to have nothing but a boring Windows machine with a lock-down configuration and nothing but Solitaire and maybe Notepad during work hours, so you – *you* – can be relieved not just of the need to decide how to configure the Linux if you were to choose that one, but even the possibility of choosing possibilities.
May not all of us aspire to live the profoundly boring lives of heiresses and trust fund babies.
But here’s the deeper problem I have with you. And all people like you. You’re DRONES. Lifeless, uncreative, dull, DEAD DRONES.
You view the world as only drones can, a world not populated with individuals with individual values, but masses. Classes. Races. Groups. Blocs. All filled with lifeless replicas; rectangular blocks of clones stepping to some People’s – another drone term – glorious marching tune.
You want one brand on the shelf at the supermarket. You want one Party. One ideology. You probably have a closet with exactly seven gray Mao suits.
The reason you can’t understand why anyone would decide to make their own choices in life and configure it any way they choose is because – like a never-seen color – you cannot even *conceive* of it. Therefore it must be some plot to keep other drones from doing whatever it is drones enjoy, if such a sensation is possible in droneworld.
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And one more thing. Why do you have such a fascination with violence, and using it to impose a uniform set of values? There has to be, after all, a reason why you think the state – being nothing more than a concentrated monopoly on legal violence – is the perfect mechanism to execute your value system.
Everyone WILL have the freedom that comes from a world of zero choice. Otherwise go to jail or to the gallows.
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Listening to these propertarians, you’d think the only freedom in life is to choose how to spend your money. They view the world as only drones can, a world not populated with individuals with individual values, but a monolithic mass of Homo Economicus. Rectangular blocks of clones stepping to the Profit Motive’s glorious marching tune.
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dude, THIS is the post they should have freshly pressed! it’s waaayyyyyy more important to everyone than the one they chose today!