Neoliberalism and Society

• Margaret Thatcher, the Prime Minister of the UK (1979-1990), stated, "There is no such thing as society; there are individual men and women and there are families"

Individuality and Responsibility

• Emphasizing individuality requires individuals to take responsibility for themselves

Lecture Overview: Key Topics

• Examination of the Welfare State
• Neoliberal perspective attacking the idea of society, involving figures like Hayek, von Mises, and Friedman
• The 1970s are looked at as a period of crisis
• A transformation of neoliberalism in Aotearoa (New Zealand)
• Neoliberalism as a broad social project
• Questioning the study of sociology when society is denied

Early 20th Century: A Time of Societal Crisis

• World War I (1914–1918)
• Russian Revolution (1917)
• Wall Street Crash (1929), leading to the collapse of the New York Stock Exchange
• The Great Depression (1929–1939)
• World War II (1939–1945)

The Welfare State: Its Emergence

• Aimed to ensure citizens' basic needs are met
• Established social institutions, including free public healthcare, free education (including university), and social housing
• Provided unemployment and sickness benefits
• Formed a social safety net

Compromise in New Zealand (1935–1984)

• The First Labour Government (1935–1949) implemented economic management using the Keynesian model to regulate the economy
• The welfare state was established with social housing, free healthcare/education, and unemployment benefits
• Significant improvements in working conditions included a 40-hour, 5-day work week and public holidays
• Compulsory unionisation
• Growth of the public sector to administer the welfare state

Sociology's Role in Government

• Sociology offered governments ways to alleviate poverty and maintain social cohesion
• Offered alternatives to traditional solutions like religion and charity for addressing social issues
• Sociology assisted governments to use this information

Neoliberal Critique on Society

• Neoliberalism views society as a "deity" people complain to when expectations aren't met
• Social justice is seen as a mirage and a threat to freedom
• Government should reduce its involvement in the economy, promoting a free market
• The belief in society is viewed as a myth

1970s: A Decisive Decade of Crisis

• The 1973 oil crisis and 1979 energy crisis caused Western economic recession
• High inflation and widespread unemployment
• Aotearoa NZ faced challenges as Britain joined the European Economic Community in 1973, impacting its export market
• Governments in the West, including Aotearoa NZ, shifted towards neoliberal ideas

Neoliberalism Defined

• Promotes a "free" market economy where the government doesn't intervene in economic relations and businesses compete globally
• Deregulation of financial markets involves removing controls on foreign exchange
• Privatisation includes selling social housing to private individuals and making people pay for healthcare and education
• Aims to decrease labor costs by attacking labor unions and workers' rights, and outsourcing labor to the Global South
• Uses institutions and international law to protect the global economy from government intervention

The State's New Function

• The state doesn't interfere with the market or citizens' market activities
• Instead the state uses its power to ensure actions preserve and smoothly operate the market economy

Neoliberal Shift in Aotearoa NZ

• New Zealand underwent significant economic reform between 1984 and 1993
• There was a move from a protected, regulated, and state-dominated system to an open, competitive, free-market system

Fourth Labour Government (1984–1990): Neoliberalism in Action

• "Rogernomics" was led by Roger Douglas, Minister of Finance
• Shift from state intervention to a competitive free market
• State companies and assets were sold off
• Top tax rates were slashed
• GST was introduced
• Focus shifted from mass production to finance and property speculation
• The "FIRE" economy emerged that included Finance, Insurance, and Real Estate
• The 1989 Education Act introduced university fees and student loan schemes
• University education became a commodity

"The Mother of All Budgets" (1991)

• Under the Fourth National Government (1990–1999), the 1991 Budget by Ruth Richardson obliterated the welfare state
• Significant cuts were made to unemployment, sickness, and family benefits
• User pay requirements were introduced for healthcare and education
• The Employment Contracts Act 1991 made union membership voluntary
• Income-related rents were removed

Perspectives on NZ's Economic Reforms

• Some viewed New Zealand's economic reforms as a success
• Others believed New Zealand could be an example to the world
• Others called it "a paradise for free marketers"
• Others criticized the transformation

The Results of Neoliberalism

• The economy shrank 1% between 1985 and 1992, while the rest of the OECD grew by 20%
• New Zealand had the largest growth in inequalities in the OECD between 1980 and 2000
• Unemployment reached unprecedented levels
• The number of people living below the poverty line rose 35% between 1989 and 1992
• By 1993, 1 in 6 people lived in poverty, that meant a huge rise in child poverty
• Māori and Pasifika (women) were over-represented in poverty statistics

Impact on Future Generations

• Increasing cost of buying a house due to factors like rising debt and an unsustainable housing market
• Localized shops are now part of a global market, causing food prices to boom
• The ability for people to go overseas was affected
• The changes had effects on life chances and impacted levels of social mobility

Neoliberalism's Core

• Neoliberalism is a social project

Neoliberalism as a Social Project

• The object is to change the heart and soul
• Neoliberalism goes beyond destructing rules, institutions, and rights
• It shapes social relations and ways of living
• It influences how people conduct themselves, relate to others, and view themselves

Societal Effects

• Competition over social solidarity
• Dismantling collective organizations like trade unions
• Encouraging citizens to compete by acquiring skills, education, and money
• Extends personal responsibility by shifting it from the state to the individual

Human Capital Theory

• We are not human beings we are human capital
• Associated with neoliberal economics (Gary Becker)
• Involves knowledge, skills, and attributes that contribute to personal, social, and economic well-being
• Education is transformed from a social right to a personal investment

Critique of Human Capital

• Human capital reduces equality
• A democracy based on human capital creates winners and losers
• We study things that make sense, but it is known that society exsists

Society's Reality

• Society consists of individuals and families oriented by markets and morals
• If society did not exsist, neither would social power, hierarchies, exclusion, or violence
• Society is vital for justice, shaping histories and hierarchies
• It cannot deny the existence of society

Lecture Recap Summary

• Key talking points include:
  • The welfare state and social welfare
  • Ideas against society: Hayek, and von Mises
  • The 1970s and the welfare state crises
  • Rogernomics and "The Mother of All Budgets" (1991)
  • Neoliberalism is an more than just economics
  • Personal responsibility, competition, human capital