Illustrating the nature of neo-liberalism (i.e. economic rationalism).
The essence of neo-liberalism is well illustrated by its contrast with the following account of the Maleny town bank (i.e., credit union.)
Neo-liberalism makes profit maximisation the supreme and usually the only consideration. However the following description of the Maleny Credit Union makes clear that it has a number of goals other than maximising profits. It often does things that are good for people and the community and the local environment but which reduce the profits it could have made.
A generation ago newspapers, banks, etc., often took pride in, good journalism, helping town development and public service. Their first concern would have been to make money, but often they would also put much effort into achieving other social goals. To do this is to reduce the effort going into making as much money as possible. This is the notion of "cross-subsidisation"; money made in more profitable sectors was in effect used to pay for other projects that the organisation wanted to support. For example a small publishing house might decide to publish a manuscript it thought was specially valuable but unlikely to sell well. But now the big publishing corporations have driven most of the small publishers out of business and will only publish those books likely to maximise sales and profits. If a normal bank took over the Maleny Credit Union it would drop all the community enriching activities and continue only those activities making most money…or close the branch entirely.
Consider shipping pilots. Australia is one of only two countries in the world in which the pilots
who guide ships into port work for private companies. The pilots should give
much weight to public safety and ecological considerations, e.g., when guiding
an oil tanker through the Great Barrier Reef.
When activities like this are in private hands there is a strong incentive to cut costs on safety, such as the use of the most effective equipment, and on staff. Secondly often situations are uncertain and judgments about the appropriate course of action must be taken, so there is a temptation to err on the side of the shipowner who hired the pilot, i.e., to take an option that will save time and fuel. If a pilot from one of the firms competing for piloting business is very cautious his firm might not be hired by the shipowner next time. Often the public interest clashes with the interests of the shipowners. Obviously a major purpose for establishing public agencies is to enable things to be done in the public interest, which private interests can’t be trusted to do impartially.
The same principle applies to many other areas involving safety, health standards, pollution levels, railway track and rolling stock inspections, air traffic controllers, water quality monitoring, sanitation… In may areas the job should be carried out as a public service, organised and controlled by public institutions of some kind. However neo-liberalism is pushing for reduced regulation by the state, and for functions previously carried out by the state to be transferred to private corporations.
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The Simpler Way:Analyses of global problems (environment,
limits to growth, Third World...)and the sustainable alternative
society (...simpler lifestyles, self-sufficient and cooperative
communities, and a new economy.) Organised by Ted Trainer. http://www.socialsciences.arts.unsw.edu.au/tsw/