In 1947, Milton Friedman and Friedrich Hayek of the Chicago School of Economics and other contemporary economists formed the Mont Pelerin Society. The society’s members consisted not only of economists but also of free-market thinkers, including billionaires. They were highly sceptical about the role of government in the economy. Their idea was to lobby in favour of market fundamentalism and to combat all forms of totalitarianism.
The society’s theories, which seemed dormant for a few years, found fertile ground in the 1980s when Ronald Reagan and Margaret Thatcher took office. Both were flanked by members of the Mont Pelerin Society and both introduced a raft of neoliberal policies. In essence, this meant drastic cuts to higher tax rates and deregulation of industry.
These policies have become widely accepted and, so far, the legacy of Friedman and like-minded economists continues to thrive.
The end result was not the specific policies but an aversion towards the role of the government, a contempt for the poor who depended on the government for income support, the disregard to the health of our planet and that the rich shed their moral responsibilities towards the rest of society. The archaic notion that wealth means talent and hard work and that poverty comes from indolence has been rekindled.
Against this backdrop, the poor, who have been deprived of resources and means to generate economic wealth, are seen as a burden. Instead of restoring the balance that existed in ecosystems, the defenders of the free market want to be able to continue to exploit the resources of our planet without barriers or limits.
It is also hoped that, in the budget, the government will introduce measures aimed at reducing inequality
Solidarity has no role to play: why should we bother whether the African continent is getting sufficient supplies of COVID-19 vaccines when we are already talking of a third jab in the developed world?
In the encyclical Fratelli tutti, Pope Francis contends that, if we want to build a true community based on solidarity, we must change the idea of a person rooted in the free market model of the economy that has dominated in recent years. Considerations such as human dignity, the common good and the environment are seen as secondary in value compared to what we can create and consume.
Economist Luigino Bruni in his book Capitalismo infelice defines the lack of solidarity that has enveloped our societies as “individualistic capitalism”. Bruni states that “meritocracy and incentives have become a dogma and we are customers of this religion”. These new ideologies that value merit rather than necessity, have removed many forms of gratuity from our relationships.
The modern world finds it difficult to integrate and treat immigrants with dignity. Paying lower salaries to foreign nationals is justified by the argument that providing them with employment is already a significant benefit. After exploiting these foreign workers to their limits when the going was good and laying them off during the lockdown, many employers now complain that they are not able to find enough workers.
Economist and philosopher Amartya Sen, in his book Development as Freedom, argues that economics should also be concerned with “the quality of life… and not just the resources or income that a person commands”. He adds that this is not a novel approach to economics but is in tune with ideas advocated by Aristotle and Adam Smith, father of modern economics.
Today’s societies, which are more concerned with material things, pay less attention to spiritual or human values and instead solace in economic progress as measured by gross domestic product (GDP). Governments, including ours, have become fixated on this measure of economic performance. Its own creator, Simon Kuznets, had admitted that “the welfare of a nation can scarcely be inferred from a measure of national income”.
One hopes that our decision makers and the government will not continue to be blinkered and devote all their resources to growing the economy without concern for building a caring society. It is also hoped that, in the next budget, the government will introduce measures aimed at reducing inequality and promoting the common good and implement rigorous policies that truly protect the environment for the benefit of our present and future generations.