THE NEOLIBERAL IDEOLOGY, ITS CONTRADICTIONS, THE CONSEQUENCES AND CHALLENGES FOR SOCIAL WORK

Abstract

The article shows the influence of neoliberalism on social work and tries to give answers following the International Federation of Social Work (IFSW) Code of Ethics (4.2.4 social justice Challenging unjust policies and practices). Neoliberalism can be described as an economic-political project of capitalist elites which involves the following: economization of all areas of life, privatization, economic globalization and deregulation. The article will give a short historical overview of the development of neoliberalism, the myths and tenets of the new neoliberal ideology and the »manufacturing of consent« (Herman and Chomsky, 1994). Additionally, the article will describe the consequences for social policy and social work, which include the reduction of the welfare state and a development that can be outlined with the following key terms: economization of social work, work-fare instead of welfare. Finally the article will describe the reaction of social work on this development. Some necessary anti-strategies will also be discussed. 1 Professor Christian Stark, Ph.D., social worker, e-mail: christian.stark@fh-linz.at Ljetopis socijalnog rada 2018., 25 (1), 39-63. 40 articles INTRODUCTION Since the fall of the Iron Curtain and against the background of a dominant neoliberal ideology, the market has increasingly become the organizational principle for governments and societies. In this context, even social work has been economized and subjected to the logic of market and profit. This is connected to strengthened methods and concepts of business management – the idea of running social work as a private business has made its entry into the field with promises of more effectiveness and efficiency and a more visible improvement of quality in social work. In the analysis of the economic processes within the social work profession since the 1990s, too little attention has been paid to the fact that the focus of efforts is not the wellbeing of the client or an improvement in the quality of the social work, but rather the preservation of resources. The economization of social work is a kind of Trojan horse. Professional social work has been made to follow objectives inimical to the profession: cost saving instead of providing help by promoting conditions of life conducive to the welfare of human beings. Strict housekeeping and costs not a professional diagnosis predominantly determine what is considered to be useful, efficient and feasible; as a rule, making successful savings is placed above success in providing help. In a hermeneutic and descriptive analysis this article highlights the influence of neoliberalism on social work and describes how social workers are reacting to this process. THE HISTORICAL DEVELOPMENT AND POLITICAL IMPLEMENTATION OF NEOLIBERALISM The term neoliberalism often serves as a political catchphrase with different meanings such as an ideological movement, the imperialist expansion of the U.S. or the general trend towards the economization of society. Neoliberalism means literally a new liberalism. The old economic liberalism emerged in the Anglo-Saxon countries towards the end of the 18th century and beginning of the 19th century. It acquired its theoretical foundation and made its breakthrough with Adam Smith and his book »An Inquiry into the Nature and Causes of the Wealth of Nations«. Smith enhanced the abolition of government intervention in economic matters and free market as the best way for a nation’s economy to develop. Smith’s central thesis is that the engine of all economic activities is the self-interest of human beings. The principle of supply and demand and the so-called invisible hand of the market are the regulatory principles which lead to success and wealth (Smith, 1976). This is the reference frame for neoliberalism. In demarcation to this old liberalism C. Stark: The neoliberal ideology, its contradictions, the consequences and challenges for social... articles 41 neoliberal economists criticize the deficient institutional protection and framing of the free market by the state and transform market economy to a market society. The Great Depression of 1929 and the following world economic crises in the 1930s marked the end of the liberal era. Considering the crisis, the idea of self-regulation of the market was not to be upheld. In 1936, John Maynard Keynes in his »General Theory of Employment, Interest and Money« designed a theory that challenged liberalism as the best economic policy. Keynes stated that the deficits of capitalism were in the inability of the market to set up an effective production and distribution system which would ensure security for the entire population. In view of this inability, complementary intervention in the market by the state was necessary (Wilke, 2002: 30-126). Keynes’ theory gave a new direction to economic policy over the next 30 years and became famous as Keynesianism. This fundamental defeat of the economic liberalism simultaneously marked the birth of neoliberalism as a counter-movement to Keynesianism. As a reaction to the growing Keynesianism, market-radical economists formed an international movement. The birth hour was an international conference in Paris 1938 organized by Walter Lippmann: the so-called »Walter Lippmann Colloquium«. It was the first international meeting of market-radical economists and gathered the most prominent of them, such as Friedrich A. von Hayek, Ludwig Mises, Wilhelm Röpke and Walter Eucken. It was there that the term neoliberalism was coined and neoliberalism, formally designed as an economic policy counter-concept to Keynesianism (Hennecke, 2000: 137-139; Harvey, 2007: 16-21). After World War II, in 1948, the Mont-Pelerin-Society was founded under Hayek ́s direction to establish an international network of foundations, institutes, research centers, journals and public-relations-agencies to support and spread neoliberal thinking. The Mont-Pelerin-Society became the most important network with currently 1000 members and 100 networked think tanks. Its scientific breakthrough succeeded with a series of awards of the Nobel Prize for Economic Sciences for neoliberal economists (e.g. Friedrich A. v. Hayek 1974 and M. Friedman 1976). With the writings of Hayek and Friedman and the lobbying activities of the think tanks, the neoliberal doctrine became more and more dominant at universities, occupied the Economic Sciences and influenced more and more experts. It permeated the structures of institutes, corporations, international organizations and governments and thereby received definitive power. Its most crucial political establishment succeeded in the late 1970s and early 1980s, the decisive factor being the economic crisis of 1973, which signified the end of economic growth and gave neoliberal thinkers the possibility to accuse state economic policy for economic failure. The first experimental field for neoliberal economic policy was Chile after the CIA-supported coup against the popularly elected Allende regime in 1973. Since Ljetopis socijalnog rada 2018., 25 (1), 39-63. 42 articles 1975 the representatives of the Chicago School under the direction of Milton Friedman have subjected Chile to a neoliberal restructuring, starting with the support of the military regime of Pinochet. Under Prime Minister Margret Thatcher in 1979 and the presidency of Ronald Reagan in 1980, the political implementation moved from the periphery to the center. People started to speak about Reaganomics and Thatcherism. With the dismantling of the Iron Curtain and the end of communism in the Soviet Union in 1989, neoliberalism became the predominant economic doctrine – so much so that Margret Thatcher stated, »There is no alternative« – this was later called the TINA-Syndrome. The main measures of the governments were privatization of public institutions, tax incentives for corporations, cutbacks in social benefits and the busting of trade unions (Harvey, 2007: 25; 32-42). Another important step was the end of the Bretton Woods system: the end of reined in currency exchange rates with the US dollar as a base and the tie of the currency to the gold standard. This meant the sweeping deregulation and globalization of the finance market in the 1990s and led to the so-called Casino-capitalism. THEORETICAL PRINCIPLES OF THE NEOLIBERAL DOCTRINE Neoliberalism is an economic policy concept. It is an ensemble of economic theories, state policies and concern strategies. There is no cohesive neoliberal theory. There are different academic streams such as the Austrian School with its main representatives Ludwig von Mises and Friedrich A. Hayek, the monetarism of the Chicago School around Milton Friedman, the rational choice approach of Gary Becker or the public choice approach of James Buchanan (Butterwegge, Lösch and Ptak, 2008: 24-26). All of them share the aspects that are going to be presented. Universal claim: Market society The claim of neoliberalism is universal. The market serves as a universal model of organization and all areas of life are subjected to the logic of the market: the market economy turns any given society into a market society. There must be nothing which is not regulated by market logic. Altvater (1981: 15) refers to the imperialism of the economy. The ultimate goal of neoliberalism is a human society in which every action between human beings is a market transaction, conducted in competition with other human beings. Therefore, the market metaphor is applied to regions, nations, cities and individuals. They are seen as business firms positioning C. Stark: The neoliberal ideology, its contradictions, the consequences and challenges for social... articles 43 themselves as possible investments in a national and global marketplace. From this point-of-view, the Deutschland GmbH competes with Great Britain Ltd, USA Inc., etc. On a personal level, the general neoliberal vision is that each human being is an entrepreneur managing their