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The Totalitarianism of the Market

by Sebastian Mueller Monday, Jul. 11, 2016 at 7:53 AM

Neoliberalism demands reeducation for its implementation like command socialism. The neoliberal view of the person is exemplified by the figure of the Homo Oeconomicus and is the antipole of the socialist person. All persons are entrepreneurs of themseves.


By Sebastian Mueller

[This article published on 6/12/2016 is translated from the German on the Internet, https://makroskop.eu/2016/06/der-totalitarismus-des-freien-marktes/.]

The threat of freedom by state socialism, Marxism or rightwing populism is a discourse of yesterday. This has slowly dawned on people. Today freedom is threatened by those propagating it the loudest.

Economic and political freedoms are inseparably connected. This connection is postulated in the title of Milton Friedman’s bestseller “Capitalism and Freedom.” Whoever relativizes this statement by pointing out a functioning market economy needs social regulation, that the production of certain goods by profit-oriented businesses is inefficient or that competition is not always conducive to promoting the public interest follows the “road to serfdom,” the title of Friedrich August von Hayek’s politically influential work. The untiring repetition of this core statement of neoliberalism made it the core of middle class education.

In her 2007 book “The Shock Doctrine,” journalist Naomi Klein commits that heresy by claiming the exact opposite for many parts of the world. Klein shows the inseparability between the political terror of South American military juntas in the 1970s and 1980s when thousands of persons “disappeared,” were tortured or pinned in camps and deregulation and privatization were simultaneously radically speeded up. In its extreme consequence, this policy uses the same methods as Stalin with his Gulag.


This comparison is not inappropriate since neoliberalism demands reeducation for its implementation – like command socialism. The neoliberal view of the person is exemplified by the figure of the Homo Oeconomicus and is the antipole of the “socialist person.” All persons are entrepreneurs of themselves. Everything important for persons is acquired through the market. To survive in the competition with others, constant self-optimization is necessary. Relations with others only serve purely economic, utilitarian calculations.

Like that utopia of the “socialist person,” this utopia needs a preceding tabula rasa of the social and economic structures. As the “revolution of the proletariat” had the goal of the radical suspension and new order of the old power- and property relations, the South American juntas had the goal of absolute change with brutal force. To prepare the ground for laissez-faire capitalism, traditions and path dependencies had to be destroyed like the developmental policy influenced by Gunnar Myrdal and practiced very successfully in Latin America.

That Myrdal, the great theoretician of the welfare state, was awarded the 1974 Nobel Prize for economics together with Hayek has a strange symbolism in retrospect. The completely opposite ideological orientation of the two economists was manifest in the concrete political conflicts of 1974. Hayek like Friedman publically supported Pinochet’s military dictatorship as an anti-democrat.


Hayek and Friedman knew about the human rights violations and that the shock treatments made profiteers out of a kleptocratic minority. Public property and state enterprises whose profits financed South American states were privatized at cheap prices. Processes of a corrupt predator economy should be repeated similar to the privatization of DDR (East German) enterprises by the oligarchs in Russia under the influence of the Chicago Boys, after the Second Gulf War in Iraq or now in Greece.

The double truth of neoliberalism according to Philip Mirowski was that it ultimately represents “the exact opposite of libertarian anarchism.” Its “main characteristics are proposals and programs for influencing, taking over and transforming a strong state to bring about the perfect society committed to the peculiar neoliberal ideal of pure freedom.”

In 1976 Orlando Letelier wrote that there was “an inner harmony” between the “free market” and boundless state terror. Letelier was Salvador Allendi’s ambassador in Washington. This terror in which Letelier was killed by a car bomb was carried out in South America under the name “Operation Condor” and long supported by the US. The murder of 50,000 and the torture of 100,000 to 150,000 people were the consequences. As the actual and alleged opponents of the revolution were persecuted and killed in Leninist and Stalinist Russia, the same thing happened in South America with the political and cultural left. The Spanish judge Baltazar Garzion described this systematic eradication as genocide.


While human rights violations under Pinochet’s dictatorship were bravely criticized, Chile was simultaneously praised for its free enterprise reforms initiated by the Chicago Boys that supposedly helped the country to an “economic miracle.” A narrative that mocks the truth is spread by conservative and neoliberal camps and can be read again and again when the corporate media discusses the Pinochet theme.

The shock therapy prescribed by no one less than Milton Friedman in personal correspondence with Pinochet led to a socio-economic tragedy right after the coup that first ended when Pinochet finally changed the political-economic course at the end of the 1980s. Public spending was cut 27% in 1975 in one blow and by 1980 amounted to half of the state spending under Allende. Alongside nearly 500 state businesses, social security and the public education system were privatized and trade barriers dismantled. 177,000 jobs in Chilean industry were lost between 1973 and 1983.

At that time, the share of production in the total economy fell to the level during the Second World War. In the year of the shock therapy, the Chilean economy shriveled 15%. The unemployment that amounted to only 3% under Allende reached 20%, an unparalleled number for Chile. A hyper-inflation occurred in 1982 when budget consolidation and monetarist combating of inflation were central political-economic goals. Unemployment grew to the historical 30% record.

This version of the history of South American neoliberalism that occurred similarly all over the world where the laboratories of the Chicago Boys arose is largely forgotten today in Germany. While the atrocities of the Khmer Rouge in Cambodia were followed with great attention in the West, very few knew of the massacres of General Haji Mohammed Suharto. Suharto carried out a coup in 1965 in Indonesia and flanked his liberal economic policy with the murder of 400,000 to a million communists and anti-government students. But his open policy for international capital was much more important for western heads of government and brought him state visits from Helmut Kohl (lifelong friendship) and Richard Nixon and a good press.


The brutal and direct violence often applied to enforce market radical “reforms” against the will of the populations is only one side of the coin that carries out the supposed anti-totalitarian nature of unfettered capitalism ad absurdum. It is manifest more subtly by being sold under the label “freedom.” The entrepreneurial subject, the human capitalist who sells himself should understand his conduct as self-realization and not as a program. “The ideal neoliberal self,” Mirowski writes, “does not even need to know that it is neoliberal.” However only the freedom of market participation and self-exploitation is included under this freedom, as the philosopher Byung-Chul Han showed.

A new form of subjugation appears attractive and is hardly seen as subjugation because it is not enforced with direct force and oppression in western industrial states (if the increasing bureaucratic repressions of work agencies are ignored). It is milder because the advancing economizing of society is slowed down and cushioned by democratic, legal- and welfare state institutions. But it has occurred in a continuous insidious process in Europe since 1974, a year after the coup in Chile. The planned investor protection in the TTIP and CETA free trade agreements is only one example. The face of an authoritarian capitalism has also become clearer since the financial crisis.

That “capitalism” per se is seen as more humane than “socialism” lies in the more attractive packaging of a product that is only owed to western European welfare states achieved by workers’ movements. A consensus arose out of the social reason of the postwar era in Western Europe in a mixed, state-interventionist economy or “organized capitalism.” …


Capitalist mechanisms of rule and oppression are not potentially less repressive than those mechanisms in command socialism. The evolutionary order of the market postulated by Hayek and the demanded submission under its alleged laws of nature is not limited to the oxymoron of “market-conforming democracy.” …

Such a “natural” and self-destructive order can ultimately only be forced on the affected with physical force. This force is then manifest when the erosion of those civil society and democratic forms of regulation incompatible with neoliberalism exceed a certain degree.

Neither socialism nor the free market economy is the guardian of a democratic constitutional state. On the contrary, the implementation of their corresponding extremes, the promise of absolute equality on one side and the complete freedom of capital on the other side cannot be compatible with democracy and separation of powers.

The free market of a Hayek and Friedman contradicts and does not imply political freedom. Both economists recognized this with amazing openness… Hayek’s interpretation of freedom published in the British “Times” in 1978 is typical in this context: “More recently I have not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than under Allende.”

For Hayek, the dictatorship was a necessary transition period on the way to realizing freedom. The road to serfdom, the danger of totalitarianism, is scented everywhere by Hayek and his followers wherever fragments of a social state exist…


Rainer Mausfeld, “Neoliberal Indoctrination,” January 2016,

Rainer Mausfeld, “Propaganda: Making Alternatives Disappear,” April 2016,
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