The terrible case which … socialists are able to make out against the present economic order of society demands a full consideration of all means by which the ownership of property may be … made to work in a manner beneficial to that large portion of society which at present enjoys the least share of its direct benefits.(John Stuart Mill – Essays on Economics – 1824
I recall an old anarchist cartoon which was in the form of a pyramid. The top stratum consisted of Kings and Queens, millionaires, billionaires, high-ranking politicians, the military, ministers and statesmen and various other high-falutin’ members of the ruling elite: the adjacent caption read – “We rule you.” The next tier down, consisted of the Pope, cardinals, archbishops, priests and other members of the clergy: the caption read – “We fool you.” Beneath that there were soldiers and militia and police: the caption read – “We shoot you.” And the lowest, broader and most populous layer was – us, the ordinary folk, the caption read: – “we support you”
In modern times legitimation of the ancien regime is a function of a sophisticated propaganda apparatus which is both ubiquitous and omnipresent. This configuration consists of academics, politicians, journalists, economists, think tanks, and so forth, among what is a huge army of other specialists in psychological warfare and thought control. My choice of economists may seem arbitrary but in fact it is of crucial importance. Economics, or political economy as it was called during the first half of the 19th century, played a pivotal ideological role in the ongoing conflict between classes. What started as an attempt at a disinterested analysis into ‘’An Inquiry into the Nature and Causes of the Wealth of Nations’’ to quote Adam Smith, ended up as a tool of vested interests which sought to solidify and consolidate the dominant position of the ruling class.
In Marx’s words:
In France and England, the bourgeoisie had conquered political power. Thenceforth, the class struggle, practically as well as theoretically, took on more and more outspoken and threatening forms. It sounded the death knell of scientific bourgeois economy. It was thenceforth no longer a question, whether this theorem or that was true, but whether it was useful to capital or harmful, expedient or inexpedient, politically dangerous or not. In place of disinterested enquirers, there were hired prize fighters; in place of genuine scientific research the bad conscience and bad intent of the apologist.”
This was the first ideological counter-revolution in economics.
Prior to this had been the British classical school of political economy. Adam Smith, David Ricardo, and John Stuart Mill were in a restricted sense disinterested enquirer but, in addition, they were also political and social reformers, champions of a class struggle of the rising industrial bourgeoisie against the land-owning aristocracy. Ricardo’s part in the repeal of the Corn Laws, and Mill’s championing of the poor and dispossessed which included the extension of suffrage to women, Irish reform, and the prosecution of Governor Eyre for atrocities committed during his administration of Jamaica cast them as significant political agitators against the regime. The prevalent hegemony of the rentier class was a formidable impediment to economic development, and the aforementioned trio were on the right side of history in both normative and political senses.
Notwithstanding their progressive beliefs these proponents of nascent capitalism had, as Marx was to point out, their theoretical limitations; their political economy reached its apogee with Mill’s classical reformist liberalism (in the true sense an meaning of the word) but was superseded by the altogether more reactionary and openly class orientation of the neo-classicists, Jevons, Walras and Marshall who provided the theoretical underpinnings and rationale of capitalist rule. This new ‘scientific economics’ was essentially a doctrine of pseudo-scientific twaddle whose axioms were taken to be self-evident.
The appearance of this ideological counter-revolution presaged a grotesque stalling in the capitalist system which has lasted to this day; the bourgeois revolution was never completed in the UK, and industry has always played second fiddle to finance and landed property. This rent-seeking, rentier economy has been complemented with political anachronisms such as the monarchy, with the monarch as head of state, and a non-elected second chamber (The House of Lords) as well as an unwritten (i.e., non-existent) constitution. Britain has been described as ‘Banana Monarchy’ which is not far from being an accurate description.
Neo-liberalism, as opposed to 19th century reform liberalism, has been the direct descendent of the neo-classical school and subsequently the dominant ideological vehicle for the last 150 years, particularly in the Anglo-American world. (As an appendage, a watered-down version of Keynesianism was added on during the post WW2 period 1945-1975).
Such changes in economic, political and social structures always presuppose and are accompanied by changes in the existing status quo and general weltgeist. The post-war boom which lasted from circa 1945-1970 was to founder of the rocks of the US trade deficit, the costs of the Vietnam war and Johnson’s Great Society, the oil crisis which in fact was the function of the dollar’s devaluation, the outflow of gold from the US to Europe, the industrial catch-up and recovery of Japan and Germany and a prolonged stagflation of the early 1970s. The whole system needed rebooting and capital needed to reassert if poll position if it was to regain its vitality and profitability.
Enter the second counter-revolution initiated by the Chicago school, Milton Freidman and ‘monetarism’ a ‘theory’ which was taken up with alacrity by the political establishment in the shape of Mrs Thatcher and Ronald Reagan; albeit in a crude, populist form, and which has shaped economic policy ever since. Suffice it to say this second counter-revolution was to all intents and purposes a restatement of the first counter-revolution, but with moderate Keynesianism purged out.
From the outset this was a political project; the policy was one of altering the balance of economic and political power between the many and the few; but of course, this was never and could never be openly stated. The movement which began in the early 70s initially carried all before it, subsuming not only the traditional conservative right, but also most gallingly, the clueless and supine social-democratic centre-left – Blair and Blairism in the UK and Clinton in the US who emerged as proponents of a reactionary centrism and confirming the disappearance of the centre left into the black hole of an imaginary ‘Third Way’ where it has remained ever since.
In political and philosophical terms liberal doctrine itself is predicated upon a set of beliefs and values which celebrate the virtues of a militant individualism and an unremitting hostility to any form of welfarism, collectivism and communalism. Another important facet of this project was a type of globalist utopianism envisaging a monocultural world without borders, sovereignty, or democracy which was to be administered by an all-knowing technocratic and unelected elite. A flavour of this type of thinking is to be found in the writings of someone like Ayn Rand, to wit: “Civilization is the is the progress toward a society of privacy. The savage’s whole existence is public ruled by laws of his tribe. Civilization is the process of setting free man from men.”
Or in a cruder form: “There is no such thing as society.” (Mrs Thatcher). Or best of all the French President Emanuel Macron’s contribution to western civilization, to wit: “There is no such thing as French culture.” (sic!)
So, writers like, Camus, Sartre, De Beauvoir, Stendahl, Zola, Balzac, Flaubert had little or nothing to say? How about philosophers? Descartes, Bastiat, Merleau-Ponty, Althusser, Foucault et al, had little of value to say. Composers? Bizet, Debussy, Berlioz, Ravel. Saint-Saens were equally bereft of any identifiable talent? Let’s not even get on to the painters. But I digress. Compare Mill’s view of unrestricted capitalist development with the above mountebanks.
I confess that I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that of trampling, crushing, elbowing and treading on one another’s heels are the most desirable lot for human kind or for any of the disagreeable symptoms of one of the phases of industrial progress.”
Could the difference be starker?
In economic terms the neoliberal paradigm consists of a number of key postulates. It is taken as being axiomatic that always and everywhere markets know best; they are the infallible means whereby economic end goals are realised.
An unrestrained capitalism – that is, a system without any public goods, deregulated and flexible product and labour markets, minimal legislation (if any) designed to curtail market failures (negative externalities such as pollution, depletion of natural resources) are all seen as market ‘distortions’ which interrupt the inner mechanisms of a free market* – of course there never has been, isn’t and never will be such an economic arrangement that could be recognised as a ‘free-market’, all markets are regulated, controlled, and organized to a large extent by public authority; the state and the economy are not antipodes, they are twins – and prevent its natural movement towards equilibrium and the maximisation of social welfare. And so, on and so forth.
All of these are simply a type of religious beliefs, utterly remote from scientific methodology. Not to put too fine a point on it – it is mostly claptrap, and was debunked quite easily even by bourgeois scholars like Veblen and Schumpeter.
This, however, doesn’t stop it being trumpeted from on high by academic economists, financial journalists, Central Banks and Treasury Departments around the world, and, in addition by institutions such as the IMF, World Bank, World Trade Organization, and publications such as the Wall Street Journal, The Financial Times and the Economist.
The current stage of the globalist project – austerity – is embarrassingly transparent in its class loyalties and overall effects.
Austerity packages, which are often more eloquently branded as “structural reforms”, are nothing but mechanisms to transfer wealth from labour to capital, with an underlying logic that profits are private, and losses are socialised. When salaries and pensions are cut, when healthcare and education budgets are shrunk, when public services are dismantled, when thousands of workers are laid off, in order to pay back creditors, the people are being sacrificed to safeguard the interests of a handful of shareholders, be they national or foreign.
This transfer of wealth also occurs under the form of privatisations. These can be blatant or hidden under the pretext of the inefficiency of public management, but bailouts and structural adjustment plans have always been tremendous opportunities for capitalists. In the Greek case, important state assets, such as airports or the port of Piraeus, one of the biggest in the Mediterranean, ended up in private hands.
Furthermore, the activities of academic economists have become (perhaps it always was the case – see Marx above) a type of totally opaque, Jesuitical nonsense. Here’s an interesting quote from a hard-nosed business journalist, it’s worth reading.
Academic economics has become a disaster and a disgrace … Not only did most academic economists fail to see the great implosion of 2008 coming, but they weren’t even looking in the right direction. And having been surprised by its arrival they have little to say about its implications…
Although there are shining exceptions, most academic economists, whilst clinging to the idea that the subject is relevant and of interest to the wider world, in fact practice a modern form of medieval scholasticism – of no use to man or beast. The output of this activity consists of articles entombed in ‘scholarly’ journals usually about questions of startling irrelevance, badly thought out, and appallingly badly written, littered with jargon, and liberally dosed with mathematics, destined to be read by no-one outside of a narrow coterie of specialists, and increasingly not even by them.” 
Mr Bootle is entirely correct of course, but one is entitled to ask: cui bono? Who gains from such asinine verbiage. I don’t think we have to look very far for the answer. The current economic paradigm is little more than ideology; a rationale articulated and disseminated by the hirelings of the ruling stratum – a stratum which will defend that will defend and justify the power and privileges by all means possible, including economics, both in theory and practice.
To paraphrase Henry Ford – Economics is Bunk.
-  K. Marx – Afterword to the Second German Edition of Capital – 1873
-  John Stuart Mill – Principles of Political Economy, Book IV Chapter 6 p.748. first Published in 1848.
-  Ricardo Vaz – Argentina’s Crisis – 2018
-  Roger Bootle – The Trouble with Markets – 2009