Some neoliberal economists like former Reserve Bank Governor Dr Don Brash made the jumps to politics; others continued the masquerade. Photo: NZPA

In a crisis, who do you believe? Epidemiology is a real science. Neoliberal economics is just political ideology in disguise.

The Covid-19 pandemic has raised questions about the relationship between science and politics, as governments everywhere seek to control the spread of the virus.

This relationship has received little explicit public attention over the years, even though we’re all deeply affected by it in multiple ways. It raises many questions, often unaddressed, unanswered, or both.

Consider a classic case in Aotearoa New Zealand in the 1980s and 90s. Then, the radical economic reforms named Rogernomics, after their primary political sponsor, Roger Douglas, were promoted by a small mini-elite of economists who believed in markets largely unfettered by government “intervention”, smaller government, and individual responsibility.

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After years of Robert Muldoon’s overtly political style of economic management, they argued their neoliberal policies would ensure the rising tide of liberated economic performance would “lift all boats”, while the benefits would ‘trickle down’ from the wealth-producers to the people at large.

Because their policies were said to be based on sound economic principles, they believed there was no alternative to doing what rationality demanded.

From the standpoint of 2021, it’s fair to say these apparently noble aspirations have largely failed. The country now faces more urgent social and economic difficulties than at any time during the past 30 years, except for the global financial crisis of 2007–08, which – unsurprisingly – few economists predicted.

The hackneyed term ‘financial markets’ is a euphemism for those with plenty of money to invest (rich people), ‘labour market flexibility’ disguises the political quest to reduce the power of unions, ‘human resources’ is dehumanising, and ‘essential central bank independence’ provides a spurious justification for excessive technocratic power. 

So we may ask: did the economists who designed and promoted these neoliberal policies really believe their training in economics had schooled them in a science that enabled them to provide answers in the national interest uncontaminated by the push and pull of (mere) politics?

What hard evidence did they use in support of the theoretical propositions they espoused, based on their training in economics? And what evidence to the contrary did they choose to ignore?

Was the so-called scientific knowledge and theories on which they acted, as economists, grounded firmly – if not indisputably – in dispassionate scientific inquiry rather than underlying ideological views?

If it were the former, we would have expected to have seen over the past 20 years an admission by some if not all of these experts that somehow they got it wrong, and that their theories turned out to be flawed and therefore in need of revision.

Instead, they have generally argued their scientifically derived theories were in practice subverted by opportunistic politics. They have claimed the scientific high ground to lord it over the political lowlands.

Which leaves another question: do they believe sharply increasing wealth inequality was an unintended consequence of their policies, and do they regard it as an undesirable consequence?

If they do, I assume they must now be in favour of public policies that will focus on how wealth and income inequality can be effectively addressed.

But I don’t hear these economists advocating such policies.

Nor have I seen any evidence the promoters of these neoliberal policies were themselves personally disadvantaged by them, in the public interest. Rather, the opposite was generally the case.

All of which suggests these economic “scientists” were in fact just politicians themselves. Some of them, to their credit, eventually threw away their technocratic guises and came out of their political closets to seek elected public office.

Before that, they’d learned the art of politics, disguising their political arguments with language that hinted at some detached scientific authority.

For example, the hackneyed term “financial markets” is a euphemism for those with plenty of money to invest (rich people); “labour market flexibility” disguises the political quest to reduce the power of unions; “human resources” is dehumanising; and “essential central bank independence” provides a spurious justification for excessive technocratic power.

Fortunately, during the current pandemic (a scourge analogous to the neoliberalism that swept the world 30 years ago?) we have been able to rely on epidemiological knowledge.

Contested as this knowledge can be – a process highly laudable in itself – lay people can be assured it’s based on genuine science and not on political beliefs masquerading as science.

Emeritus Professor Bob Gregory is in the Wellington School of Business and Government at Te Herenga Waka - Victoria University of Wellington.

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