A good crowd turned out last night in Melbourne to hear Richard Denniss (in conversation with Don Watson) talking about his new Quarterly Essay, “Dead Right: How Neoliberalism Ate Itself and What Comes Next.” I’ve only skimmed the essay itself so far (I might write more when I’ve read it properly), but Denniss is a fine speaker and most of what he had to say was very sensible.

But if you’ve followed my previous thoughts on “neoliberalism” (see here and here for examples), you’ll have guessed that I’m not on board with his central idea.

It seems to me that the debate about neoliberalism has reached a stage that’s similar in important ways to the long-running debate about socialism. Opponents of socialism point, for example, to the experience of the Soviet Union, where the socialist attempt to realise democracy and equality led in practice to massive oppression and inequality. Similarly, opponents of economic liberalism point to the way that the attempt to realise free markets and consumer sovereignty in countries like Australia actually led to a cartelised economy and grossly distorted markets.

In each case there’s a fairly obvious response. Lenin and Stalin, it is said, were not really aiming at democracy and equality at all; they were aiming at dictatorial power for themselves. They were not socialists in the sense that Marx understood the term.

Similarly, it can be pointed out that the likes of Jeff Kennett and John Howard were not really trying to implement free markets and consumer sovereignty; they were waging a culture war and trying to deliver favors to their mates in the big end of town. They were not economic liberals in a sense that Friedman or Hayek would have recognised.

The difference is that while the first response is well known and can be intelligently argued about, the second response is rarely heard and poorly understood. And one reason for that is the construct of “neoliberalism”, which allows its user’s meaning to slide from market liberalism to crony capitalism, so that a key step (perhaps the key step) in the argument passes by definitional fiat rather than by any sort of evidence.

At least sometimes there is a productive dialogue about socialism between different points of view. Non-socialists can say, “Well, if the Soviet Union isn’t your ideal, what’s an example of the sort of thing you have in mind?” Bernie Sanders and others can point to Denmark, which invites the response that it is actually one of the world’s least socialist countries (the Economic Freedom Index puts it only three places behind the United States). As Steven Horwitz remarks, it and its neighbors “are not examples of the success of socialism but rather examples of what we can afford when we choose markets over socialism.”

But we’re not getting this debate at all about economic liberalism. Instead we have “neoliberalism”, which as a term (whatever its other problems) suffers from the fatal defect that it’s been constructed purely by its opponents, so it has almost no explicit defenders.

Denniss, a perceptive observer, knows and points out that the modern leaders of the right are in no way economic liberals. But he still seems to think that their failings count against the market, rather than against anti-market authoritariansm.

Richard Holden and Rosalind Dixon, replying to Denniss today in the Conversation, make the same point:

Being pro-market is not the same as being pro-business. In many areas the pendulum has swung too far toward business rather than markets … The answer, however, is for Australia to regulate the role of big business in politics, and not to move away from market-based approaches to a range of issues.

I’m not saying that the economic liberals have no case to answer; you can build an argument that pro-market policies created the rhetorical space that conservatives then hijacked for their own purposes. But that requires some work. And it may be that Denniss does that work somewhere – I’ll report back if I find it.

But most anti-market thinkers don’t, because their own rhetorical coinage has blinded them to the need for it.

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