The Rise of Neo-liberalism PDF Print E-mail

David Miller and William Dinan, 13 March 2008

Image Neo-liberalism was not introduced in the US and UK by accident or as a result only of the much vaunted hidden hand of the market.  It had to be argued for, written about, and put into place by concrete actions.  These involved the political figureheads of Thatcher and Reagan (and later Clinton and Blair) but the impetus, the planning and the action came from corporate interests and their hirelings.  In our new book – A Century of Spin - we tell the story of the rise of neo-liberalism, or as we prefer to describe it, the progressive abolition of even the limited gains of ‘bourgeois democracy’.  The story is a long one and it is not pretty.  The roots of neo-liberalism go back a long way and they do not consist simply of winning the battle of hearts and minds.  Although we argue that ideas are more important in moving history than some on the left have credited, we emphasise that this does not happen in isolation from concrete actions legitimated by and able to put in place both market reform and official repression. 

In the book we examine the history of corporate propaganda. The conventional wisdom is that it was invented in the early part of the 20th century in the United States to transform the image of ‘robber barons’ like Rockefeller and J.P. Morgan into captains of industry, and promote consumerism. In fact corporate propaganda emerged roughly a century ago in the UK in parallel to its development in the US but this has been mostly airbrushed from the historical record. The British business class faced the same challenge from the labour movement and democracy as their US counterparts, and similar tactics were adopted to see off the threat from democratic reforms.

In the UK the first class-wide propaganda agency was created in 1919.  The organization was called National Propaganda, an indication of the unselfconscious nature of the class interest at the time.  One of the founders of National Propaganda was the midlands industrialist Dudley Docker, a stalwart defender of capitalism founding President of the Federation of British Industries in 1916.  Before World War I Docker had set up a series of ‘Business leagues’ to promote business rule.  ‘If our league spreads’ Docker wrote in 1911 ‘politics would be done for.  This is my object’.  

From then until the first key neo-liberal political victories in the US and UK in 1979/80 business engaged in three waves of activism, in each case resisting the extension of popular democracy and in the end turning the tide with the election of Thatcher and Reagan.  They did this by conscious planning to end Keynesian approaches and to turn back social democracy.  In 1942 they set up Aims of Industry to fight plans to extend public ownership including the setting up of the NHS. For the neoliberals issuing from the Mont Pelerin Society (created in 1947) and the subsequent global wave of pro market think tanks from the 1950s onwards capitalism needed to reject compromise and to win the battle of ideas – in other words to re-establish the hegemony of the market.

The propaganda war was not only waged in the media, but crucially also at the factory gates and on the picket lines. The violent repression of a strike at the Remington Rand typewriter factory New York State in the 1930s led to the development of the Mohawk Valley Formula (a strike-breaking model using intimidation, force, co-option and misinformation- in short - all the tools of propaganda). This became the template for the crushing of the1984/5 miners strike in the UK half a century later.

The campaign to abolish even limited democratic reforms has borne fruit in the dismal political choices now served up by the ‘democratic’ system.  All the big parties are neo-liberal - pursuing polices favoured by big business.  It is important that we understand that this occurred not as a result just of the need for capitalism to restructure but also as a consequence of the ideological dominance of the market in a society in which even the limited democratic reforms of the past century have been deliberately undermined or abolished.  It is also important to recognize that this was done in the teeth of opposition from ordinary people and that the vast bulk of the population has consistently opposed neo-liberal reforms.  The victory of big business has been that structures of democratic control have been so weakened that pressure from public opinion makes little difference unless it is mobilized into broad and effective campaigns and movements.

David Miller & William Dinan are authors of A Century of Spin: How Public Relations Became the cutting Edge of Corporate Power (published by Pluto) and on the editorial board of www.Spinwatch.org.   A Century of Spin is available from the Spinwatch bookshop for the reduced price of £10

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