One enduring if rarely stated principle of Neoliberal Democracy is that the single-minded pursuit of self-interest magically produces an equilibrium which serves everyone’s interests well enough to avoid the destabilization of rebellion or systemic collapse.
Let’s start by defining Neoliberal Democracy: neoliberalism sees markets as the only efficient, fair and durable method of organizing resource extraction and the social order: governance, employment, distribution of income, etc. Turning every social and economic function into a marketplace ensures that market forces provide the discipline and transparency participants need to make prudent choices and investments.
Democracy is a political marketplace in which votes replace investor and consumer decisions as the mechanisms that enforce discipline and transparency.
The melding of these two ideologies is clearly natural, as both see a transparent market as the best possible system for both governance and and the economy.
The key characteristic of a market is that all participants exclusively pursue their own self-interest. No one need sacrifice their own self-interest for the good of the whole system because by definition the system of competing interests naturally organizes itself to maximize the choices of each individual and the equilibrium of the system.
The transparency, fairness and stability offered by this ideological system is very compelling: the advantages of a system that transparently discovers the price of everything while offering roughly equal opportunity to all participants to seek self-fulfillment (i.e. the pursuit of happiness) via a dogged focus on self-interest are self-evident.
Looking out for Number One is thus the foundation not just of personal self-aggrandizement but of systemic stability and fairness.
But let’s move from ideological abstraction to the pragmatic–what happens in the real world? What we find in the real world is that participants seek to transfer their own risk to others while minimizing their productive work and maximizing their gain/skim.
Risk inevitably introduces the possibility of loss–both fair and unfair. Let’s say a participant in the market invests in a scheme to produce the Acme Brand widget.Â
Unfortunately, the widget fails to find a market and the enterprise closes its doors. The investors lose their investment: this is fair because any enterprise in a market is at risk of losing favor from changes in fashion or the emergence of more agile competitors.
