Democracy Against Capitalism: Neoliberalism

I’m writing Ellen Meiksins Wood’s book Democracy Against Capitalism as part of my general project of understanding the origins of neoliberalism and its sudden takeover as the sole way of understanding the economy and society. Marxists use the metaphor of base and superstructure, the production base, and the cultural, ideological, legal superstructure. See this post, which defines these and other terms used in this post. Neoliberalism is an ideology, a set of ideas that we use to understand the world. Therefore it is part of the superstructure.

Wood says that no system is pure capitalism because there are always other modes of production in every society. We say we live in a capitalist society because the capitalist mode of production is the most widespread. I use the definition from Wikipedia:

The capitalist mode of production is characterized by private ownership of the means of production, extraction of surplus value by the owning class for the purpose of capital accumulation, wage-based labour and—at least as far as commodities are concerned—being market-based.

This article is very much worth reading. Wood explains the relevance of Marxism today:

… we’re living in a moment when, for the first time, capitalism has become a truly universal system. It’s universal not only in the sense that it’s global, not only in the sense that just about every economic actor in the world today is operating according to the logic of capitalism, and even those on the outermost periphery of the capitalist economy are, in one way or another, subject to that logic. Capitalism is universal also in the sense that its logic—the logic of accumulation, commodification, profit-maximization, competition—has penetrated just about every aspect of human life and nature itself, in ways that weren’t even true of so-called advanced capitalist countries as recently as two or three decades ago. So Marx is more relevant than ever, because he, more effectively than any other human being then or now, devoted his life to explaining the systemic logic of capitalism.

For me, at least, the bold-face sentence sounds exactly like a brief description of neoliberalism. The capitalist mode of production is driven by the logic of accumulation, commodification, profit-maximization and competition. We are at an historic high for those forces, which today reach farther into our lives than ever before.

Wood points out that earlier Marxists confronted societies where the capitalist mode of production had not taken over, as in the Russian Revolution, where there were masses of peasants living in a pre-industrial mode of production. The same situation confronted Mao in China. Marx, she points out, studied an early form of capitalism in England where it had suddenly become the most widespread mode of production but where there were still large pockets of other modes of production. She argues that as capitalism matured in England, it depended on imperialism and colonialism, which operated in non-capitalist forms. This argument is also made by Polanyi in The Great Transformation and Arendt in The Origins of Totalitarianism in great detail (I discussed these here and here.) That is not the case any more. Capitalism is everywhere.

This explanation helps answer the question about the rise of neoliberalism. It’s not a new thing, it’s simply the form of capitalism that arises from the logical working out of capitalism in historical terms. In this view, the ideology comes into being to justify the form into which capitalism is evolving.

This isn’t to deny agency to the people creating the ideology and pushing it to its dominant position or to the people driving the changes in capitalism. There are always choices, choices to replace capitalism or to control it.

Wood says ideology changes in response to the changes in the social relations created by the capitalist mode of production, which is the way Marxists typically understand the relation between base and superstructure. She puts less emphasis on the individuals who create the ideology, and little emphasis on the people who create the changes in the economic base. She says that something like the current form of capitalism was bound to happen whether the ideology changed or not, and irrespective of who was in the capitalist class.

Wood says that no society is pure, so that the capitalist mode of production is just one of several modes of production. Even in more mature capitalist societies, some workers are not separated from the means of production; they own their own tools, or have a small capital, or a trade that is independent of large pools of capital. They and some others produce goods and services not just for money but also for for other reasons. In its early stages, capitalism can expand into other societies which have not adopted the capitalist mode of production. More recently, those avenues are closing off, and capitalism is expanding by assimilating more and more of those who have until now avoided it. As an example, look at doctors. For decades they owned their own practices and their own tools and offices. Now they are being sucked into the medical industrial form in which they own nothing but their labor, just like factory workers. That changes the social relations between doctors and patients, and the relations between people and the medical system.

Nobody resists. The rich and powerful benefit. Social structures change. A new ideology, neoliberalism, arises to explain and justify this new set of social relations, and to justify further change. The capitalists merge and consolidate, they buy up more small artisans and producers, they acquire dominance over formerly independent professionals, they set up institutions to replace socially owned and controlled sectors like hospitals, jails and schools, and begin to replace government whenever possible. This is a form of domination we used to describe with perjoratives, but now most of our elites are on board.

In this post I discuss the rise of neoliberalism from the perspective gained reading Culture and Power: The Sociology of Pierre Bourdier. In my telling, Bourdieu emphasizes the role of the rich and powerful in the rise of neoliberalism. The important factor is a relatively small number of members of the dominant class, the group which benefits most from exploitation, domination and appropriation. They are able to impose their views on the producers through what Bourdieu calls symbolic violence; a term that is probably more rhetorical than descriptive. Following Page and Winter on oligarchy in democracy, we can add that most members of the dominant class do not interfere with those who move to effectuate their common purposes of wealth protection, wealth enhancement and absolute freedom to deploy their wealth.

The difference is that in Wood’s telling, the current form of capitalism is a logical evolution from prior forms, while in my telling, neoliberalism is imposed from above. Both Wood and Bourdieu are trying to understand how society has changed with a view to helping activists identify ways to effect change. For Wood, the problem is centered on the capitalist mode of production. Social change will come from changing to some other mode of production. For Bourdieu, the problem is the rich and powerful people who are able to dominate the discourse and impose on the rest of us. For him a primary direction for change is to reduce their power to dominate.

Or, we could do both.

26 replies
      • Rayne says:

        He’s talking about the economist Richard Wolff and the co-op Mondragon (see Wikipedia entry Instead of a corporate structure in which profits after tax go to shareholders, the co-op profits are shared across the co-op members who are also employees. There’s video on the internet of Wolff speaking about Mondragon; Wolff has been characterized as a ‘Marxist economist’.

        • earlofhuntingdon says:

          Wolff appears occasionally on nakedcapitalism.

          The cooperative association, such as the older form of Savings or Building & Loan (like the one in Bedford Falls), used to be common.

          It might be more familiar today in such uses as food co-op, like the one in Ocean Beach.  REI, the outdoor equipment supplier is another.  The term is also used anecdotally, as in baby-sitting co-op.

        • earlofhuntingdon says:

          One of the problems with nesting comments is unintended associations.

          I had the impression you knew exactly what it was.  But this blog attracts a wide readership, and those whose familiarity with it is a passing reference from It’s A Wonderful Life might not.  Just as only former hippies like bmaz might remember what a Free Clinic was.

        • Watson says:

          Speaking of cooperative associations, the limited dividend corporation is another time-tested economic organization that can be socially responsible. It is suitable for managing essential services that have a guaranteed market, e.g., energy, housing, health care, mass transit, telecommunications, and banking.

  1. Godfree Roberts says:

    The intention of neoliberalism was to create a global capital market beyond the power of states to interfere with it: “Lawyers at the GATT hoped to create the beginnings of a global constitutional order to restrain the ambitions of nation states and electoral takeovers by developing countries, further strengthening states against internal forces of populism. Binding rules would protect national sovereignty against internal erosion by the paradoxical means of subjection to the forces of the world market. Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism.

  2. Desider says:

    It might be useful to look at the East India Tea Company and other almost supernational global conglomerates as an example of the Google/Exxon-Mobil type behemoth, not that the microcapitalism movements aren’t effecting and effected in other ways.
    I’m guessing we haven’t accounted yet for the 80’s-90’s China and post-wall East Eurorussian labor surge, which tarnished as demand has become, has still weakened labor’s power.
    I’m also thinking a re-read of Martin Wolff’s 15-year-old treatise “Why Globalisation Works” would be useful for thinking about both why/how what seemed to be going well has been gamed, as well as the contemplation of the late 1800s when globalization *was much greater than today*, perhaps in understanding better how that optimism led to a new round of robber barons and WWI.

  3. earlofhuntingdon says:

    Wood spends a lot of time talking about the extent to which capitalism has ingratiated itself into all aspects of society, not just economics. Culturally, its aim is to remove all other perspectives.  It seeks to penetrate the culture and to dominate political decision-making, from which all else follows.  Easier to win when only one team takes the field.

    In the US, an especially aggressive form of capitalism – neoliberalism – has become the lens through which so many people see all of society and human interaction.  That marks a considerable shift and a major success for the political program that Mirowski describes as the neoliberal thought collective, or NTC.

    An example I heard recently is about a tutorial for graduating seniors styled, in effect, as

    “Self-marketing: A tool for selling your greatest asset.” 

    Orwell might have translated that as, “tips for job interviews.”  The NTC starts young.

    • Desider says:

      You guys do protest too much. “Self-marketing” or however you want to call it has existed for eons. Patton’s gruff talk, McArthur’s pipe, Churchill’s cigar, Sinatra’s brat pack… Don Kirshner specialized in molding and marketing these aspiring kids – with strong session musicians so they wouldn’t screw it up, though biz school Jagger knew how to do it on his own. Warhol, Twiggy, yippies, Nicholson, Hefner & Howard Hughes before – self-marketing is right in their with self-help as part of our postwar ethos. Hunter Thompson perfected the modern branded journalist, though Hemingway was much smoother. The same stuff went on with new marketing houses and Wall Street 70 years ago and just kept growing. The only thing that much changed is DIY websites so it’s faster and easier and democratized – kids now don’t need a $100k marketing budget to get noticed. But then again, they’re also all working mostly crappy rate gigs to compete by clicks rather than salaries, so I’m none too jealous. “Get noticed & monetize it or die” could be another Orwellian way of putting it. Get your McLuhan 15 mins or perish.

      • earlofhuntingdon says:

        Lots of good examples there.  Megalomaniacal Doug MacArthur.  Relentless, stubborn self-promoters Churchill and Kushner.  Narcissistic self-indulgent Hefner.  The self-indulgent, manliness obsessed, paranoid leaning and depressive Hemingway. The stage persona of angry rebel Mick Jagger, the guy who studied economics and government at the bourgeois London School of Economics. And the execrable and mentally ill Howard Hughes.

        “Job tips” puts the seminar is humanistic perspective.  Presentation skills are just that, one set of tools that helps get a job done.  Calling the seminar “Self-marketing, blah, blah, blah” heightens the status of the seminar promoter and reduces the individual’s worth and purpose to a set of assets to be monetized. Even the Rotarian code demands more.

        • Desider says:

          Yeah, he just finished a European tour weeks before turning 75, and he’s not doing Rod Stewart crooning.

        • earlofhuntingdon says:

          I’m glad you like his music and performance art.  His isn’t the kind of self-promotion I would recommend to the average high schooler or college senior prepping for a job interview.  He’s running a business, selling his musical talent and performance art, which are, you might say, a tad beyond the norm.

          The LSE part might come out in how the Stones run their business.  Cash on the barrel head used to be the norm.  The gate receipts were counted and the Stones’ bag men took their cut before the concert started.  I was at one university when that was still their practice.  Good concert, though.


        • Trip says:

          I like that Warhol was incredibly honest in his marketing on marketing, (like Campbell’s soup). And churning out art in a ‘factory’. It was all so meta. The best comment, after being asked how an artist becomes successful was his reply, “Hang around with rich people”. Then one has to question if he was branding for branding-sake, or if the work really was high art, as a political statement on branding. Maybe both.

    • Bruce Olsen says:

      I think you’re missing the point about self-marketing.

      It used to be about job-hunting tips, but that’s not what’s going on today.

      Desider mentions it in passing but it’s the next logical extension of capitalism; to eliminate employees (with all the messy obligations they bring) and transform them into independent contractors. Whether it makes sense or not, it’s encouraged by the entire power structure.

      So job-search tips have turned into “branding” and “self-marketing” as contract employees have to de-commoditize themselves in order to land the next crappy gig.


  4. earlofhuntingdon says:

    Wood talks about enclosure, the taking over by capital of older forms of economic activity.  Slobodian gives a fuller history of the enclosure of the commons.  It is relevant to arguments that neoliberals (Mirowski’s neoliberal thought collective, NTC) make today about taking over government, whether outright or through such tools as the public/private partnership [sic].

    An example, discussed yesterday in the “links” column at nakedcapitalism, was a Columbia business school professor’s proposal to close public libraries as an anachronistic “waste” and replace them with Amazon.

    The article, in Forbes, was so quickly and roundly condemned that Forbes withdrew it.  It will be back.  Converting public schools and community resources to private ownership and control is a longterm objective of the NTC.

    The arguments the NTC uses to persuade us to privatize government were the ones made to justify expropriating lands from their original inhabitants everywhere and from English peasants during the enclosure of the commons:  Efficiency, necessity, greater accountability, market responsiveness, not an appropriate use of government resources, the private sector always does it better.

    The new enclosure of the commons is the NTC’s assault on government.  Like the great early national parks, these are pristine areas ripe for exploitation.  Government – not coincidentally – is also the only institution capable of resisting the NTC assault.

    Outsourcing libraries to a for-profit digital bookseller and operator of foodhalls is one example.  The licensing, sale or leaseback of Chicago’s street parking monopoly, the Indiana tollway, the Arizona state capital’s principal government buildings are others.

    Predatory financing is another way that the NTC extracts profits and bankrupts governments.  The infamous rural Jefferson County, Alabama, sewage treatment plant, whose refinancing ended up costing well over a billion dollars, comes to mind.

    Another recurrent example is the NTC’s attempts to close public schools (and privatize universities) and replace them with more “efficient and accountable” charter schools.  Never mind the latter’s high failure rate, high fees, cherry picking of students, frequent poor test results, and surprise closures.

    As with so many things about the NTC’s aims, this is not about money, efficiency, or better services for the tax dollar (as commonly argued).  It is about political control and cultural dominance – and wealth extraction, at whatever the cost.

    • earlofhuntingdon says:

      About that Amazon replacing public libraries article by the business prof, the article was a paid advert.

      According to Felix Salmon, Forbes sold space to the guy for twelve articles for $1400.  Pretty low rate for such expensive MSM real estate.  Presumably, the money came ultimately from Amazon.  But the average reader would not know that.

      One wag said that the average suburban taxpayer would save more money by Not subscribing to Forbes than by not paying the average annual tax cost of her local library.

  5. earlofhuntingdon says:

    Where is Donald Trump getting the latest 150 million pounds (about US$200 million) for further investment in one of his Scottish golf resorts?

    The hundreds of millions he has already invested in Scotland have no clear source either.

  6. Bruce Olsen says:

    Thanks for this series, Ed. You’re helping some of us understand some of the underpinnings of we’ve observed empirically over the years.


  7. orionATL says:

    if one is interested, as i am, in seeing that corporations become “good citizens” in our society, which, after all,  allows them to prosper, then it is important to keep in mind  two aspects of the current economic environment in which corporate needs and wants are placed above the needs and wants of individual citizens, and even, e. g., in the case of environmental matters, above the needs of the society of which the corporations are a part and on which they depend. i digress at this  point to point out that in this regard, corporations can become a form of parasite that damages its host (society) .


    1..major corporations are part of a special market we call “stock markets”. these entities allow many millions of citizens not directly associated with any corporation to share in the corporation’s financial success. those individuals may prove politically resistant to restrictions on (regulations) or changes in corporations, e. g., establishing a rule that requires  corporations to act foremost in the interests of the society of which they are a part. their resistance has to do with their economic wellbeing, e. g., their pension funds or their individial stock portfolios. this hidden support makes change more difficult and educating citizens more important.


    2. the second major consideration in an effort to change corporate staus and corporate ethos in a society is that it seems very likely that we will continue to have individual entities very like the present corporation make decisions on using labor, machinery, and raw materials, based on what they see as their corporate needs – how much sheet steel, cement, trucks, robot machines, workers, etc.  we are unlikely ever to go back to some central decision maming (government control) over these entities of production simply because central control does not seem to work well in large societies. this generates a second source of political resistance. hence the need for laws leading in time to accepted customs of corporate behavior that insist that corporations consider the needs of our society in making their  individual production decisions. 

    both morally and economically, we need to insist on change in the behavior of corporations to insure that they meet society’s needs while making production decisions, and not act in ways that harm our society or unfairly disadvantage their own workers. 



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