1. July 2016 Y F Kwong

2. Neoliberalism: Oversold? A report produced in June 2016 by the International Monetary Fund (IMF): http://www.imf.org/external/pubs/ft/fandd/2016/06/o stry.htm http://www.imf.org/external/pubs/ft/fandd/2016/06/o stry.htm Criticism of neoliberal policies such as ‘the free movement of capital across countries’ (global capitalism) and ‘the austerity measures’ (the market as a social model).

3. Three findings from the IMF report: 1. No significant benefits gained from increased growth in economic performance; 2. The costs of increased inequality is prominent; 3. Increased inequality hurts the level and sustainability of growth

4. Examples of Neoliberalism in Hong Kong The Link Real Estate Investment Trust  the privatisation of shopping areas and car parks of public housing estates since 2004. The Hospital Authority; or the recent Government’s proposal of the Medical Registration (Amendment) Bill 2016; The current situation of the higher education; The recent introduction of premium taxis by the government

5. Two questions… What is neoliberalism, and how does it come into being? What is the implication of neoliberalism for ethics and social policy making?

6. Source of Neoliberalism: (1) Utilitarianism Utility = Use value, a measure of pleasure John Stuart Mill, Utilitarianism (1863): The Greatest Happiness Principle: ‘Actions are right in proportion as they tend to promote happiness; wrong as they tend to promote the reverse of happiness.’

7. Francis Hutcheson, An Inquiry into the Original of Our Ideas of Beauty and Virtue (1725): An action is the best if it produces the greatest happiness for the greatest number of people.

8. Source of Neoliberalism: (2) Liberalism John Locke, Second Treatise of Government (1690): ‘Liberalism advocates that the function of government is the protection of the natural rights, which are the same among all human beings.’

9. Liberalism and the natural rights The natural rights, which are derived from the sovereign (God), include: The right to life The right to liberty The right to property

10. Liberal ethics ‘Am I governing too much?’  the birth of liberalism  the principle of non-interference:  in order to maximise one’s potential, individuals should be left alone.  the individual as the bearer of rights.

11. Classical liberalism in economics Classical liberalism is a philosophy committed to the ideal of limited government and liberty of individuals including freedom of religion, speech, press, assembly, and free markets. (Cf. John Locke and Adam Smith) Belief in laissez-faire economic liberalism—let the market take care of itself. Economic freedom is a key and crucial part of human and individual freedom.

12. The emergence of the modern market According to Michel Foucault, The Birth of Biopolitics (1979): The market existed long before the 18 th century. The market then was regulated by sets of rules and regulations. Selling prices ought to be ‘fair’ and reflected the labour in the final product.

13. But since the 18 th century, price has no longer been about fairness. It reflects the demand, the cost, the truth value. The market underwent a transformation from being a place of jurisdiction to being a place for truth formation.  to become an object of truth, subject to the analysis by scientific laws

14. Why the 18 th century? The rise of modern science as the most legitimate form of knowledge The rise of finance capitalism (banking system)

15. Utilitarianism and governance Utilitarianism makes us realise that human nature is no more than a relentless desire to seek happiness. Therefore, in order to govern, the government must take individual desire into account.

16. How best to govern is no longer a question of the morality of the subject, but about how to maximise private happiness and to manage competing interests. In other words, good governance is understood not in the moral sense, but in the scientific sense.  the more efficient, the better

17. The rise of Neoliberalism Neoliberalism as a solution to the Great Depression (1930s). That is, as an answer to the failure of classical liberalism. Since 1920s, the Austrian School (Ludwig von Mises, Friedrich Hayek)  London School of Economics  New York University  University of Chicago (the Chicago School, Milton Friedman, Gary Becker) British Prime Minister Margaret Thatcher and U. S. President Ronald Reagan (1980s)

18. Hayek, The Road to Serfdom (1944): ‘Any form of interventionism will lead to totalitarianism, to the elimination of freedom.’

19. Neoliberalism In addition to classical liberal ideas, neoliberalism emphasises the efficiency of private enterprises and free markets, and competitiveness of industries. It does not encourage welfare, as welfare will reduce individual motivation to work and develop dependency on the government.

20. The smaller the government, the more freedom one can enjoy. The use of the language of markets, efficiency, privatisation, consumer choice, transactional thinking and individual responsibility to shift risk from governments and corporations onto individuals, and to extend this kind of market logic into the realm of social and affective relationships.

21. The market logic individuals are motivated by self-interest; the harder you work, the greater the rewards you will get; the freer the people are, the more rational they will be; market as the measure of truth; private enterprise as a model for the state as well as for individuals.

22. Consequences of Neoliberalism 1. The market as the model for the state. 2. Under neoliberalism, the economic order is the competitive order: The shift from the market of ‘exchange’ (equilibrium) to the market of ‘competition’ (inequality). 3. The formation of the entrepreneurial self: The self who is expected to live life in a prudent, calculating and self-managing way, and to be ever-vigilant of risks.

23. 4. Morality of the neoliberal society = morality of the market 5. Neoliberalism reduces the burden of the state, and opens up the managerial questions of what to do to businessmen and a wider set of experts. 6. The role of the state is to reconfigure society so as to facilitate competition and the provision of information.

24. A summary Neoliberalism is the result of the conflation of such ethical thoughts as liberalism and utilitarianism, and is motivated by the cult of scientism and by market worship. It is the inevitable consequence of blindly believing in science as the sole criterion of truth and overstating the market as the site for truth formation. Under neoliberalism, the market operates with the disinterestedness of instrumental rationality (quantitative processes) and the authority of scientism, with the aim of facilitating the pursuit of individual happiness and freedom in a competitive environment. The market therefore assumes the role of a judge to define what is the most ethical, efficient and effective not only for traders but also for the society in general. Market values, in this regard, are equal to truth values as well as moral values. Tragedy follows.