Dead Ideas and Lifeless Old Beliefs

Britain and the Lies of Free Market Fundamentalism

“It’s all sorts of dead ideas, and lifeless old beliefs, and so forth. They have no vitality, but they cling to us all the same, and we can’t get rid of them.”

Penned by Norwegian playwright Henrik Ibsen in his 1881 play, ‘Ghosts’, this quote is timeless in its relevance and poignancy. Humans have a hard time letting go of lifeless old beliefs and dead ideas. In clinging to us, they retain their power over us. Part of the the reason that we can’t get rid of certain ideas and beliefs is that they muddle along devoid of vitality, never fully vindicated nor falsified, a theoretical purgatory for dead ideas. 

The tragic implication of ideological purgatory is that the final purge of dead ideas and beliefs is often a period of social convulsions. To purge monarchy and hereditary privilege, the Revolution plunged France into bloodshed and eventually, as all revolutions do, ate its children, before pulling the whole of Europe into its revolutionary throes. Soviet Russia in the 1980’s was a country living in an alternate reality of a dysfunctional, incoherent system within which the game was to pretend otherwise, all the way to the final implosion of the Soviet world.

The latter example is more instructive for the point of this essay, as it related to the death throes of a social order wrapped in an economic system. And in the past year, Britain has finally restored herself to her preeminent global position as the first country to fully convulse in the purges of a dead idea that yet clings to us: the economic catastrophe of free market fundamentalism. The souls that suffer in this purgatory are not the makers of the creed, however, but ordinary people at the brunt end of dead ideas and lifeless old beliefs.

It was possible, of course, prior to the past year to make a strong case that this economic ideology, lifeless as it is, deserved to pass through purgatory into the realm of dead ideas. Like its eerily similar ideological counterpart in communism, market fundamentalism is an ideology characterised as the deployment of radical economic means to disrupt the social order. But in the absence of sheer catastrophe and calamity, the Defenders of the Faith would always be in a position to hand-wave off any questioning of the creed as mere heresy, the capitalist equivalent of “but socialism has never been tried!”

What is it about the past year that has proved cataclysmic? The first event was the short-lived Liz Truss Experiment as Prime Minister and her “think-tank” approved mini-budget that sank the UK economy. The second has been the ongoing grotesque spectacle of corporations declaring windfall profits in a country that has plunged millions out of the middle class, and millions more from the working class into abject poverty. The two are related, as Truss was lodged into power on the backs of the high priests of this socio-economic religion, the very same fanatical libertarian market fundamentalist “think”-tanks that issue dogma as fact without, ironically, any signs of thinking. Nothing “trickles-down”, while the peculiar stupidity of blind faith trickles-up aplenty.

Let’s start with the spectacle of windfall corporate profits while society, or what is left of it, crumbles. The worm at the core of market fundamentalism, extant since the first holy scriptures of this model were inscribed by its deities, is the “duty to shareholders”. In this concept, the only duty on corporations is to maximise shareholder value, freed of any responsibility to society. And so while consumers are priced out of heating their homes, British Gas owner Centrica doubled its first-half profits in 2023 to £2.1-billion. And while train services have become a woefully dysfunctional shitshow of unreliability and irregularity, UK train companies paid ~£500-million to shareholders last year, while the CEOs of the six biggest train companies took home ~£5-million combined.

This “duty” to maximise shareholder value was described in 2009 by Jack Welch, former CEO of General Electrics in the U.S., as the “dumbest idea in the world”. As Welch stated, shareholder value was “a result, not a strategy...” Yet at this point in the ~40-year trajectory of British market fundamentalism, it is the raison d'être for corporations, to be pursued with ruthless disregard both for immediate employees and for the society from which the profits are milked. The origins of such a dogma can be traced to the “Chicago School” of economics that birthed market fundamentalism and found its political sponsons in Reaganomics and Thatcherism. The seminal scripture is considered to be a 1976 article published in the New York Times by Milton Friedman, the primary deity of this creed, entitled: “The Social Responsibility of Business Is to Increase Its Profits.”

In his article, Friedman argued that the duty of a corporation was:

“to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom...”

Therein lay the contradiction, acknowledging there is such thing as “society” and that it is governed by “rules”, while simultaneously arguing that corporations somehow have no social responsibilities beyond “making as much money as possible”. Within this conception also lay the social revolution aspect to this economic ideology, i.e., that the rules or laws would be amended, overturned, revoked, or plainly broken, in pursuit of the “make as much money as possible” part. The entire system would be rigged to achieve only the latter.

More recently, this dogma found expression in concept of “free market anti-socialisation” promoted by the market fundamentalists within the Tory party, e.g., that policies regarding poverty should not focus on social causes over simple matters of “choice” and “responsibility”. Any policies targeting economic inclusion or social cohesion were characterised by these hardliners as “anti-market socialisation”, and any issues that arise in the social sphere are viewed as having economic solutions. This updated conception of Friedman’s philosophy typifies the fatal flaw at the core of this creed: that it is impossible to simultaneously argue that corporations are somehow separate from the social world in which they operate.

This doctrine has been instrumental in shaping neoliberal capitalism in all its predatory excesses. It also falsifies other aspects of the market fundamentalist creed, both the “efficiency” myth and the political wing of market fundamentalism, the “small State” rhetoric. The omnipotent market is conceptually supposed to provide “efficiency”, achieved through competition. In reality, to maximise shareholder value requires that the operation of a business be stripped bare, with jobs and manufacturing offshored, workers rights gutted, wages cut, and now an increasing trend towards automation. But the actual service - what people once believed to be the duty of a business to provide - is trashed. The UK trains companies provide a case in point here, declaring windfall profits while operating hollowed out train services that are not even fit for purpose.

The political coupling of market fundamentalism to the “small State” concept is arguably the element of the overall ideology that so self-evidently repudiates itself, given the level of State intervention required to sustain it. It took the power of the State to smash organised labour, leave domestic industries open to ravishing effects of globalisation, deregulate finance, and cripple the welfare system. It took the power of the State to ensure that corporations are insulated in monopoly power, and the power of the State to ensure that financial institutions benefit from socialist, State-sponsored backing. And the irony, in turn, is that the power of the State in the UK now pales in comparison to the power of monopoly corporate power. What “small State” really means is that British governments are small, pathetic, and weak in the face of corporate power.

Which brings us back around to the first event; the Liz Truss Experiment, when an impoverished nation became an experiment for market fundamentalism at its most unrestrained zealotry. Under the advice of a (don’t)think-tank, the Institute of Economic Affairs, her government believed that an economic fantasyland of huge borrowing and radical tax cuts for Britain's wealthiest could end “the anti-growth coalition” and bring about economic growth. These moves were made with a country sitting at 10% inflation, soaring domestic energy prices, and the economic costs of Brexit all present. But no, ideology would prevail, the market unleashed to operate in all its omnipotent glory.

Yet ideology prevailing over reality revealed that markets are constrained, not “free”, and there is no “invisible hand” guiding markets, but a global economic order. And so the international markets responded, with a tanked Pound Sterling, the Bank of England forced to further raise interest rates, and further public debts heaped on to a crippled British taxpayer. This gamble laid bare the sheer incongruous idiocy of an ideology that gambles on private capital, then forces any debt consequences on to the public. Where is the “small State” now? Truss’s short-lived experiment sought to implement the full “re-neoliberalising” of the British economy, the complete deregulation of economic policy. It resulted in the shortest serving Prime Minister in British parliamentary history.

The Truss Experiment represented a repository of dead ideas, rattling around the head of an empty vessel devoid of any vitality or original thought. Advised by a “think”-tank filled with lifeless old beliefs, which combined to sound the death knell for Right-wing economic theory that has dominated the past 40yrs.

And it has taken Britain to fully reveal the lie at the core of market fundamentalist thinking; that the reason for any failures in the system were not that these theories were flawed in the first place, but that they hadn’t been tried hard enough.

More than anything, with the current geopolitical predicaments set against 40-years of calamitous economic policy, it has placed a magnifying glass over how incapable free market fundamentalist orthodoxy is for addressing the challenges of today’s societies.

Yet its cling to us all the same. And we can’t get rid of it.