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Neoliberalism Blames Individuals for Inequality

In neoliberal theories, social justice is not a meaningful category and social inequality is a necessary reality of market processes. Performance justice is a necessary illusion. Responsibility for underprivileged social positions, poverty and misery is often shifted to individuals for having the worst genes. The market and the market society are released from responsibility for social inequality.

By Patrick Schreiner

[This article "Hayek, Neoliberalism and Exclusionary Thinking" published on March 13, 2014 is translated from the German on the Internet,  http://www.annotazioni.de/post/1354.]

In neoliberal theories, social justice is not a meaningful and relevant category and social inequality is a necessary result of market processes. What is even more striking and astonishing is that neoliberal journalists and academics are absolutely possessed with finding concrete causes for this social inequality. They often argue in a dangerous way. The Frankfurter Allgemeiner Sunday newspaper recently offered several good examples of this.

Three articles that focused on questions of justice and social inequality highlighted the economics section of FAS on March 2, 2014. Another article in this context followed on March 9. All four presented academic studies and positions according to which individual human qualities were responsible for social inequality, not the market economy and market processes. This is a very encouraging and helpful "result" in neoliberal eyes.


Firstly, let us take a step back. Why is the question about causes of social inequality relevant for neoliberals\? A glance at the work of a classical neoliberal author Friedrich August von Hayek may help answer this question. He writes in volume 2 on "Law, Justice and Freedom":

"Uniform rules should be maintained for a process that greatly improves everyone's chances of need gratification at the price that all individuals and groups run the risk of an undeserved failure. When this process is accepted, the pay of different groups and individuals eludes conscious control."

The "process" about which Hayek speaks here is the market. Hayek starts from the idea - and this is a basic neoliberal assumption - that the market is the most effective procedure for organizing the economic life of a society. A serious problem is that a market or a market society cannot prevent individuals from failing undeserved.

Hayek writes that the "pay of different groups and individuals" cannot be consciously controlled and guided. A market constantly leads to the best-possible collective prosperity but only at the price of the - undeserved - exclusion of some individuals from that prosperity. Despite everything, people assumed differences in pay and differences in performance corresponded to each other. Thus performance is worthwhile. According to Hayek, this conviction drives to efficiency and effort but in no way corresponds to reality. Performance justice is a necessary illusion. This could trigger frustration and disappointment among those who do not share in collective prosperity despite great efforts. A dilemma exists here that Hayek openly recognizes. How far should a society make its members erroneously believe that personal effort leads to success - and how far should society honestly admit many will fail although they do not deserve to fail\?

This dilemma is unavoidable in market societies. At this point, Hayek is much more honest than many of his followers. In his eyes, the disproportion between performance and result - and ultimately social inequality and injustice - is the price that society has to pay for freedom (and prosperity).

In this sense, freedom is inseparable from remuneration which often have no relation to the merit or service that someone performs and therefore is often felt to be unjust.

Why do people accept a system that allows a failure of individuals - often despite enormous individual efforts\? The explanations that Hayek and other neoliberals offer, namely collective prosperity and economic freedom, remain abstract. These explanations may be unsatisfactory for persons who do not share or hardly share in prosperity. Persons in a constant under-privileged position can be assigned to social discrimination and social misery with the argument that the aggregate social welfare and private enterprise freedom are greater in market societies than in other social systems. Social inequality and social immobility can hardly be justified from the view of the non-privileged.

Neoliberal market societies have a legitimation problem and only one possibility of avoiding it. They must try to make the fairy-tale believable that performance is worthwhile. This fairy-tale becomes more credible the more credible underprivileged existence, poverty and misery can be referred back to individual non-achievement. For this reason, neoliberals are interested in causes of social inequality. This is the crucial point that assigns responsibility for individual underprivileged existence and collective inequality to individuals and their individual qualities, not to the market or society.


That is the theme of the four articles in the Frankfurter Allgemeiner Sunday newspaper.

(1) Rainer Hank begins the theme with an article "Those Above and We Below"...

All the dishwasher stories that touch our hearts like the little Oliver Twist from the poor house who gains middle-class respect and the littler Rene Obermann from the precariat who reaches the top of German Telecom were isolated cases, seen statistically, that communicate a false picture of equal opportunities. At best they satisfy our ideal of a fair world system.

The social immobility described by Hank appears as a human constant, not as a problem of specific forms of society.

Clark clearly sides with inherited gifts in the permanent conflict whether family gifts or the environment influence people more.

The responsibility for underprivileged social positions, poverty and misery is often shifted to individuals. They had the worst genes that were handed down in their families from generation to generation. Society, including the neoliberal market society, has no responsibility. That is the logical conclusion.

In view of these "facts," social inequality according to Hank can only be reduced through a greater social mixture, not through redistribution. "The lower class must marry into the upper class." He knows and writes that reality is very different. With disarming openness and directness, a reader of the FAZ website commented on these thoughts:

Why should an intelligent, academically-educated and culturally-interested woman with good manners and usually a high income want as man with a below-average education who sits in front of the idiot box with canned bear in hand, watches soccer and with whom a stimulating conversation about literature, theater or natural science is impossible\?

Aversion toward the "lower class' is expressed in these words so relations relativizing classes become an exception. In this antipathy, responsibility for their social position and for social inequality is ascribed to the underprivileged.

(2) In the second FAS articles titled "Is Growth Over\?," Philip Plickert takes up the supposed connection between individual performance and social inequality. The text is devoted to the current economic discussion whether industrial societies must manage with distinctly lower growth rates, not the question of social inequality. With other reflections of US economist Robert Gordon, Plickert makes a connection between growth and social inequality.

He finds the signs of social disintegration, the rising divorce rates and the large number of single mothers in the lower class alarming. Children from broken families receive less care and stimulation and consequently have less human capital. They will be less productive workers. Inequality increases because of this.

Unlike Hank, "less care and stimulation" for the children of the "lower class" and an allegedly resulting deficiency in "human capital" are named as reasons for social inequality, not genes, in a nutshell a failure of education, a failure of families. The argumentation pattern remains the same. The neoliberal market society is released here from responsibility; responsibility for social inequality is shifted to individuals.

(3) Johannes Pennekamp begins with families and children with his article "The Patient Land the Biggest Fish." He cites a book of the Austrian economist Matthias Sutter on the theme "impatience." Sutter gave three- to four-year old children the choice of immediately receiving an attractive object ("jelly bear or colorful sticker") or to receive several of the same objects at a later time. The extent of "patience and self-control" proven in this experiment, as Sutter is quoted by Pennekamp, has a "remarkable predictive power for the future life."

Pennekamp adds: "Researchers in Japan make a significant connection between impatience and the number of cigarettes a person smokes daily. Impatient students in Austria spend more money for alcohol than patient persons of the same age. In the United States, economists explain that impatience and overweight go together. In a long-term study in New Zealand, researchers established that more patient students do better in high schools on average. This affects later earning possibilities. Priority for the present is connected with the savings inclination of a person. Whoever is overly impatient is less concerned for old age and runs the risk of being poor later.

There seems to be a helpful study for every individualizing justification of social inequality. In these studies, there are repeated allusions to clichés and manifestations of social inequality. Cigarettes, alcohol and excessive eating are supposedly typical pleasures of the "lower class." "Earnings possibilities," "success" and old age poverty are connected with social inequality. Once again responsibility for social inequality is ascribed to the afflicted. Their impatience (whether innate or acquired in the first years of life remains open) later leads to an underprivileged social position.

(4) A week later Hank puts more coal on the fire with another article titled "The class society still celebrates." He repeats ideas of his article of the week before last and presents other ideas in detail. The basic theme of the article is to argue against redistribution.

Social classes are seemingly cemented everywhere for the left. Descent is apparently our fate. Then the left can devote itself all the more cheerfully to its favorite occupation, the struggle for "more redistribution."

Hank names two arguments against this redistribution of the "left." Firstly, he writes, there is a certain measure of social mobility - and thereby relativizes his statements of the week before last. Secondly, he proffers the old familiar neoliberal argument, redistribution de-motivates people and reduces everyone's prosperity.

In a passage at the beginning of the article, Hank summarizes the two most important causes of social inequality by referring to his earlier article.

In reality, the best strategy of becoming really rich is to seek out the right parents. Origin cannot be covered up or transferred. What counts is the family. [... ] This does not have to be interpreted only biologistically. In the upper class, the cultural values and behavior patterns are passed down, not only upper class genes.


Hank, Pickert and Pennekamp refer back social inequality, poverty and impoverishment to these two bundles of causes named by Hank. One consists of individual qualities that are innate and the other individual qualities that are acquired. The assumption of the authors is that both bundles of causes result directly or indirectly in higher or lower efficiency or readiness to perform and are responsible for better or worse social positioning of persons. Thus the market and market society are acquitted from responsibility for social inequality.

Such an argumentation does not come from anywhere. Individualization of responsibility is necessary from the neoliberal perspective because neoliberals know that market regulations cannot guarantee the correspondence of performance and fruits. The faith that constitutes market societies that performance is rewarding can only be maintained when responsibility for underprivileged existence is shifted to individuals.

But the step to a racist or culturalist argumentation is very small when the social status of persons is systematically referred back to their individual qualities and these again systematically to genetics or education. Racist or culturalist arguments do not occur in the FAS articles. Quite the contrary, the described phenomena are seen as overarching society and generations. This is emphasized in different passages. The described ways of thinking are and remain susceptible for racist and culturalist exclusion. If negative individual characteristics that lead to bad social and economic positions are innate and genetically conditioned, why should not "race," "people" or "ethnic group" be relevant categories since these are based on the idea of common derivation and genes\? If these negative qualities are acquired, why should not "culture," "society" or "ethnic groups" be relevant categories since these rest on the idea of common values, ways of looking at things and behavior patterns mediated by education\?

Useful argumentative examples suggest membership to certain "peoples," "ethnic groups," "cultures" or "societies" sometimes goes along with membership in certain social sectors. The question whether this correlation may reflect hardened social inequality and exclusionary discrimination is then faded out - which legitimates and reproduces this social inequality and this discrimination.

Only a small step is necessary from the neoliberal search for individual causes for social inequality to this legitimating argumentative recourse to "ethnic groups" or "culture." Thilo Sarrazin's publications demonstrate this. Hardly surprisingly, the two argumentative models emerge: genetics and education.

Human gifts are partly socially conditioned and in another part however are hereditary. Intelligent achievers continuously fall for demographic reasons.

All this refers to the "lower class" and "migrants" in an exclusionary sense.

The "lower class" and "migrants" inherit 1. the intellectual equipment of their parents according to the Mendelsonian law and are 2. discriminated against through their distance to education. The problems of a fortified lower class not sufficiently integrated in the production cycle are superimposed with the unsolved integration problems of a large part of the migrants from Turkey, Africa and the Middle East.

Patrick Schreiner is a unionist and journalist from Bielefeld/ Hannover. His main work areas are neoliberalism criticism, migration, distribution and political theory.

COMMENTARIES - Anonymous X - May 16, 2014

The initial promise of liberalism is that prosperity for everyone arises when everyone participates unhindered in market transactions. Consequently everyone who does not attain prosperity must have done something wrong. That the problem could lie in the doctrine of liberalism itself, that something is not right in the premises, is not considered. The basic error of liberalism is that it assumes an equality of market actors where de facto no equality exists and can exist. Those who profit most from free markets have the best and cheapest production conditions. That the weaker should be helped to their feet does not occur to the prophets of liberalism or neoliberalism. Maybe insulting the lazy Greeks or the sleepy Spaniards and mercilessly carrying out one's business thanks to consumer credit is more convenient. Liberalism means: whoever does not join in is himself responsible. Still not joining in is vital.

Andreas Magdefrau - May 9, 2014

A great number of persons in capitalist society work day after day in many work shifts with enormous physical or intellectual effort for the "success" of a few capitalists who themselves do not work but drive Lamborghinis in the promenade...

Who supplies the service\? Who only exploits the service\?

Who is the parasite here - the one who sits before the idiot box after finishing the shift with a canned beer or the one who decadently goes shopping in boutiques for expensive trinkets for the lady with undeserved money

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