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Beyond Zombie Management?

Austerity only makes any sense at all if viewed as a strategy for sustaining the financial status quo; the zombie economy is premised on the notion that society itself is dependent on safeguarding its existing monetary architecture.

Will Davies
16 June 2016
Tor_Johnson.jpg

Zombie, Plan 9 From Outer Space/Wikimedia

There is now a cottage industry of academic research dedicated to the question of ‘how neoliberalism survived the financial crisis’, a phrase echoed in the subtitle of Philip Mirowski’s book on the topic.

Many of the answers are now well-established. The emergency introduction of low or negative interest rates, followed up by the policy of ‘quantitative easing’, meant that failed institutions and bad debts were allowed to survive when they would otherwise have been written off. The reliance on advice from the same coterie of technocrats in Washington DC, Brussels and London meant that policy remained in the same tramlines as the pre-2008 world.

Were there alternative paths of action? Undoubtedly there were some which would have been even more dramatic, though perhaps liberating in the long-term. Letting the existing system collapse would have meant that a different financial future would have emerged at some point. In his text Austerity: The History of a Dangerous Idea (2013) Mark Blyth made this case succinctly:

There are 311 million people in the United States. Of these, 64 per cent are aged 16 or over; about 158 million people work. Seventy-two percent of the working population live paycheck to paycheck, have few if any savings, and would have trouble raising $2,000 at short notice. There are, as far as we can tell, about 70 million handguns in the United States. So what would happen if there was no money in the ATMs and no paychecks were being paid out?

When we criticise today’s ‘zombie economy’, it is always worth recognising the realpolitik of the situation. Finance now plays a critical role in the fundamental, Hobbesian state task of sustaining social peace. This is partly why its grip is so difficult to shake off.

Austerity only makes any sense at all if viewed as a strategy for sustaining the financial status quo. It clearly doesn’t create jobs, growth or productivity enhancements. Indeed, it appears to be very bad for people, as public health statisticians have demonstrated. Whether this is interpreted as ‘class war’ or as a genuine fear of moral hazard and inflation (or some combination of the two), the zombie economy is premised on the notion that society itself is dependent on safeguarding its existing monetary architecture.

What is less commonly discussed are the other dimensions of neoliberalism, less directly related to the issuing of money, but no less significant in how we go about our day-to-day lives. When we speak of neoliberal policy reforms in cases such as Britain, this is typically a reference to privatisation and introduction of quasi-markets into public services. This is the agenda that was invented under Margaret Thatcher, and by which Tony Blair hoped to be judged. While austerity means the indefinite sustenance of neoliberalism as a macro-economic project, we should not lose sight of this other strand, namely neoliberalism as a managerial project. 

Clearly new public management and privatisation have never encountered a crisis on the scale of the financial crisis. The dogmatic faith in competition, as the cure-all for public sector sluggishness, has never been as dramatically falsified as the dogmatic faith in the ‘efficient market’s hypothesis’, which justified banking deregulation.

However, ‘new public management’ needs to be seen as one of the more damaging ‘zombie ideologies’ of our post-2008 world. It has two core tenets. Firstly, it rests on the idea that only rivalry can incentivise people to deliver value. This means league tables everywhere, ushering in ‘new entrants’ into areas like higher education, and compulsory competitive tendering. Secondly, it rests on the idea that only explicit representations of value matter. A school or hospital is only valuable to the extent that it delivers a measureable output for an identifiable ‘user’ or ‘customer’. The result is the explosion of testing and inspection, dubbed the ‘audit society’ by Michael Power.

The failure of this paradigm is most apparent in the morale and mental health of public sector workers. The number of doctors and teachers wanting to leave their professions, or take their skills overseas, should register as an indicator of failure. Yet within this zombie ideology, satisfaction is a zero-sum game: the only way to deliver value to the ‘customer’ is if the provider is made to sweat harder. The problem of stress and anxiety in schools – engulfing children and teachers alike – is evidence that this is not the case.

The failure to challenge austerity since 2008 has not been for want of ideas and policy suggestions. The case for a fiscal stimulus has been made by economists across the spectrum, including by figures such as Martin Wolf and institutions such as the IMF. It is clear that getting money into people’s pockets – by ‘people’s quantitative easing’ if necessary – would be a better way to achieve progress, than simply sustaining the financial status quo at all costs. The ideas are there, it’s just that the politics has so far been unsuccessful.

But the Left has shown far less appetite for identifying alternative models of governance and management. The hold that neoliberal ideas have over the NHS and education policy does not stem from a political commitment to rescuing the financial sector (although PFI clearly plays a role). For that reason, it is potentially easier to challenge and represents a site of potential modernisation, in a different sense from that meant by Tony Blair. A paper by Jeremy Gilbert and Mark Fisher argued for just a project, but it’s not yet clear that the energy is there to pursue it. 

Radically different ways of distributing power, reward and decision-making within organisations have been explored within heterodox traditions of management in the past. This potentially leads to small pay differentials at the same time. Yet the critique of neoliberalism rarely considers the politics that lie within organisations, preferring to focus on larger-scale questions of the role of the state and balance of power between capital and labour.

This derives from a bias within a Marxist mindset, which – perhaps ironically – sometimes looks too favourably on capitalism. Marx was in awe of capitalism’s capacity for modernisation. Lenin wanted to seize the capacities of modern management, and put them in the service of the state. The problem, from this perspective, is not that management is harmful, but that it serves private rather than public interests. In that particular sense, Blairism did have resonances with Marxism, just as conservatives such as Roger Scruton have argued.

We tend to think of the ‘zombie economy’ as a macroeconomic problem. But that also implies that the problem in question is simply one of stagnation, as if a return to 3% growth would make everything fine again. Challenging the monolithic vision of public sector management, audit and governance is no less important. But for that, we need ideas, experiments and a critical ethos that questions the premise that working life is simply a quest for more and more output, overseen by highly-paid expert strategists.

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