Breadlines, empty shelves, price gouging – these are things which, according to capitalists, only happen under communism. Yet amid the covid-19 outbreak, these scenes have been sprouting up all over Hong Kong, the world’s freest capitalist economy. It’s failures like these under neoliberalism which make it clear that the insistence on free market economics simply doesn’t make sense.
Neoliberalism dominates our lives. Writer George Monbiot best described it as a form of ideology that “redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency.”
In practice, neoliberalism is defined by policies such as the privatisation of public services, the removal of industry regulations, and low government spending. These policies aim to diminish the role of the government in favour of the free market. According to champions of neoliberalism, these policies should benefit society, as profit-motivated companies are incentivised to reduce costs and inefficiency wherever possible.
In the 40 years since neoliberalism became the world’s leading economic ideology, it has become clear that putting private profit before public benefit doesn’t help us meet the world’s needs. The 2017 Grenfell Tower fire in Britain is one example of how private incentives can lead to the loss of life. Public housing was put in the hands of a private company, which used fire-prone building materials to save money. The additional lowering of safety standards left major fire hazards unchecked.
Here in Hong Kong, the government has for years been cutting costs and delegating public needs to the private sector. This has overwhelmed public hospitals, created a never-ending housing crisis, and sparked growing discontent among young people. Rather than making citizens happier, neoliberal economics has created more social instability than ever before.
Despite being a tragic time for the world, the covid-19 outbreak has illustrated why state intervention in necessities is essential for any developed society. While Hong Kong struggled to get adequate supplies of masks and tissue paper, Beijing was able to order factories back to work and protect producers by offering to buy any excess stock. Price limits on masks and export controls also ensured that ordinary citizens could get the supplies they needed. While private incentives might be great in serving our wants, it is only public control that can ensure equal and efficient access when it comes to our needs.
Ultimately, the problem with neoliberalism is not its encouragement of private sector activities, but the incorrect balance it sets between public and private responsibilities. “Letting the market decide” is simply not the right approach when it comes to things which are essential for human life.