Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Missing Topic In #EUref: Neo-liberalism Gone Too Far

Vivien Schmidt 22nd June 2016

Vivien Schmidt

Vivien Schmidt

As the referendum campaign nears its end, one central issue is remarkable for its absence, despite the fact that it has been a major contributor to the anger that lends support to the Brexit camp:  neo-liberalism.  The revolt against the political parties, the rejection of the experts, the distrust of the elites more generally: all of this has to do with neo-liberalism—as does the venting by working and middle class people against the worsening of their life chances due to stagnant wages, growing inequality, and the increasing difficulty for the young to get a foot on the real estate ladder, or a steady well-paying job.

And yet the real cause of these concerns is never addressed.  Instead, the EU and immigration are blamed for all of Britain’s ills.  But whether the decision on June 23 is Leave or Remain, neither Britain’s problems nor citizens’ dissatisfaction will go away.

Neo-liberalism has been so resilient in the UK as well as in the EU that it receives barely a mention in the mainstream press or in public debates.  It is so pervasive that it is hardly recognized as a major source of the disenchantment that lends support to the Leave campaign.  Better to blame the outsiders (i.e., immigrants and Eurocrats) than to recognize that the problem comes from the inside, from the policies of British governments.

Democratically elected British governments beginning in the 1980s sought to transform the UK economy based on a neo-liberal economic philosophy.  It touted the market as the solution, the state as the problem; denigrated politicians and civil servants as rent-seekers not to be trusted; believed that financial market players were rational actors who deserved little or at most ‘light touch’ regulation; and promoted a growth model focused on debt-based real estate speculation rather than rising wages, and on service industries in place of manufacturing.  It should be no wonder, following the financial crisis of 2008 with the concomitant rise in job insecurity and poverty, in the face of no change in neo-liberal discourse let alone policies, that working people would have lost faith in their politicians, and expect some alternative.  But, surprisingly, there is no mainstream alternative, just the sirens of the populists blaming immigration and the EU.

But if the problem really is neo-liberalism, then who will introduce a critique of it into the campaign—say, to press for ‘another’ Britain as well as another EU?  Who will help the UK move away from the radical neo-liberalism that the people are revolting against in perverse ways such as through support for populist anti-immigrant views that won’t change the actual sources of their discontent?

It is unlikely to be the current leaders of the mainstream parties.  The centre-right introduced neo-liberal ideas beginning with Thatcher in the 1980s, with the rallying cry of ‘less state to free up the markets’, and has maintained a rhetoric of neo-liberalism ever since, even if the reality has been more pragmatic.  The centre-left enhanced neo-liberal ideas with the cry of ‘more state to make the markets work better’ with Blair in the 1990s.  The problem for Britain is that mainstream parties remain stuck in their past support for a doctrine that cannot solve today’s problems, and have therefore lost the confidence of the people.

As for the EU, don’t just blame Germany’s home grown neo-liberalism (ordo-liberalism) for the austerity-based macroeconomic policies that have generated slower growth for the Eurozone as a whole, let alone the tragedy of the Greek (non) bailout.  Why not recognize that the UK has had a hand in how the EU has developed.  As an integral partner in EU decision-making, British governments regularly approved EU policies in the Council, including the austerity policies for all of the EU.

Moreover, the UK was a key promoter of the Single Market that, in addition to providing for the free movement of goods, capital, and services, also provides for the free movement of peoples.  Note that the UK has also opted out of the policies the British find most objectionable, including the Euro and Schengen immigration policy (which means it is under no legal obligation to take Syrian refugees).

So one has to wonder why the UK is so angry with the EU, and why it blames it for immigration.  My argument here is that the EU and immigration have ended up as scapegoats for the real problems of the UK.  Neo-liberalism, once seen as the way to save the UK from imminent decline, has produced a country in danger of imminent implosion.  Rather than leaving the EU, the UK should begin to confront its real problem:  a neo-liberalism that has gone too far.

This post first appeared at the Cambridge Blog

Vivien Schmidt
Vivien Schmidt

Vivien A Schmidt is Jean Monnet professor of European integration in the Pardee School at Boston University and honorary professor at LUISS Guido Carli University in Rome. Her latest book is Europe’s Crisis of Legitimacy: Governing by Rules and Ruling by Numbers in the Eurozone (Oxford University Press).

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u421983c824 240f 477c bc69 697bf625cb93 1 Mind the Gap: Can Europe Afford Its Green and Digital Future?Viktor Skyrman
u421983467b5 5df0 44d2 96fc ba344a10b546 0 Finland’s Austerity Gamble: Tax Cuts for the Rich, Pain for the PoorJussi Systä
u421983467 3f8a 4cbb 9da1 1db7f099aad7 0 The Enduring Appeal of the Hybrid WorkplaceJorge Cabrita
u421983ae 3b0caff337bf 0 Europe’s Euro Ambition: A Risky Bid for “Exorbitant Privilege”Peter Bofinger
u4219834676b2eb11 1 Trump’s Attacks on Academia: Is the U.S. University System Itself to Blame?Bo Rothstein

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

S&D Group in the European Parliament advertisement

Cohesion Policy

S&D Position Paper on Cohesion Policy post-2027: a resilient future for European territorial equity”,

Cohesion Policy aims to promote harmonious development and reduce economic, social and territorial disparities between the regions of the Union, and the backwardness of the least favoured regions with a particular focus on rural areas, areas affected by industrial transition and regions suffering from severe and permanent natural or demographic handicaps, such as outermost regions, regions with very low population density, islands, cross-border and mountain regions.

READ THE FULL POSITION PAPER HERE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641