With the increasing socioeconomic inequality, we recognize the need for change. An interpretative framework for analysis is social constructivist thought – knowledge is not passively accumulated, but rather, is the result of active learning by the individual. In attempting to make sense of the social world, social constructivists view knowledge as constructed as opposed to created. This is an adaptive process that functions to make an individual’s behavior more viable given a particular environment. A social construct is an idea or notion that appears to be natural and obvious to people who accept it but may or may not represent reality, so it remains largely an invention or artifice of a given society. Analysis through a social constructivist lens allows an overview of the political aspect of globalization discourse by emphasizing the potential for change rather than the inevitability of global processes.
Neoliberalism is mindset that many people and institutions accept as a starting point – growth is always a good thing, and it will help everyone over time, without ever challenging whether the foundational basis are actually true. Neoliberal economists promote these concepts as ‘common sense’ and a necessary responsibility, and by-and-large we have allowed these to enter our everyday language with little analysis of their underlying impact. This activity includes switch our values from the ‘public good’ and ‘community’ to a value system based on the rule of the market and individual responsibility for their success, while corporate expansion is good for all. The neoliberal worldview has been embedded in contemporary culture to such an extent and now is so pervasive that countervailing evidence serves only to convince people of its ultimate truth. On the other hand, social constructivists develop their own particular meanings that correspond to their experience.
Neoliberalism failed to predict the end of the Cold War. The neoliberal commitment to individualism and materialism meant they could not grasp what appeared to reside at the heart of this stunning development: the revolutionary impact of ideas to transform the organization of world politics. The so-called competitive advantage of neoliberalism did not appear to be in play. Social constructivism however, provides an explanation for change and transformation. Social constructionism means that our realities are shaped through our experiences and our interactions with others. Neoliberalism sees competition as the defining characteristic of human relations. The political and social domination of the upper classes are presented as normal outcomes of the functioning free market. The contrast is the taken-for-granted of many globalization discourses while constructivism emphasizes the potential for change rather than the inevitability of global processes.
How does inequality becomes systematically structured in economic, social, and political life? As we live in a society that emphasizes the individual, that is, individual effort, individual morality, individual choice, individual responsibility, individual talent often makes it difficult to see the way in which life chances are socially structured. The dominant ideological presumption about social inequality is that everyone has an equal chance of success. However, systemic inequalities based on group membership, class, gender, ethnicity, and other variables that structure access to rewards and status determine who gets the opportunities to develop their abilities and their talents. Neoliberals believe individual effort, responsibility and talent determine how life chances are socially structured. Social inequality describes the unequal distribution of valued resources, rewards, and positions in society. The privileged position of the middle class has steadily been eroded by growing inequalities of wealth and income. The middle class is becoming more and more indistinguishable from the wage-earning working-class.
When class, gender, race puts people in a position in which they can claim a greater share of resources or services, then social differentiation becomes the basis of social inequality. Neoliberals preach that well-being is tied to economic freedom and the inclination to act in one’s own interest. Thus, every decision and choice can be conceived as a market decision, a finely-honed calculation of the benefits and costs of every action we take. All happiness and dissatisfaction are reduced to a lack of positive attitude. Since social class is no longer relevant everybody ends up with the social economic position they deserve. This produces a chronic sense of self-blame, anxiety and self-recrimination, with individuals having nobody to blame but themselves for not being famous, very rich or more attractive. This neoliberal social construction hides the truth that factors like wealth, income and power, contribute significantly to the success of any individual.
F. A. Hayek observed that social orders emerge from an aggregate of individuals or choices, then proposes laws are to protect the liberty of the individual in order to create a decentralized ‘bottom up’ actions on the part of individuals, knowing full well it created a system with built-in inequality. To assuage this deficit Milton Friedman developed the theory of trickle-down economics – claiming benefits for the wealthy like tax cuts on business, high income earners, capital gains and dividends helps poor people by the trickle-down effect in which economic growth flows from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. This claim to knowledge that investors, savers, and company owners are the real drivers of economic growth is supported by the reality of a social construct that is actually based on subjective criteria rather than objective realities.
When a particular definition of reality supports elites, it may be called an ideology. Ideology controls the masses – ideologies conceal essential aspects of social and political reality and prevent change. The concealing aspects of ideology are not accidental (i.e. not simply errors) but relate systematically to a set of social and cognitive interests of the elites. Today neoliberal ideology defines the social relationships of poor people and the attitude towards them that supports an economic system that creates inequality. The political and social domination of the upper classes are presented as normal outcomes of the functioning free market. Postmodernism is a 1980s movement characterized by broad skepticism, subjectivism, or relativism; a general suspicion of reason; and an acute sensitivity to the role of ideology in asserting and maintaining political and economic power. Supporters believe knowledge and truth are products of social, historical and political discourses or interpretations, and therefore contextual or socially constructed.
The International Monetary Fund (IMF) social construction of ‘sound’ economic policy includes how far debt and debt reduction should be a priority over boosting aggregate demand and supporting economic growth. For years IMF fiscal thinking has emphasized prudent fiscal policy leading to deficit bias and fiscal sustainability concerns, advising countries to build up fiscal buffers. Following the 2008 crash there has been a shift in fiscal policy thinking – fiscal policy was a more powerful counter-cyclical tool than hitherto had been appreciated. A 2016 IMF research article identified austerity can do more harm than good: “It turns out, however, that the cost could be large – much larger than the benefit. The reason is that, to get to a lower debt level, taxes that distort economic behaviour need to be raised temporarily or productive spending needs to be cut – or both. The costs of the tax increases or expenditure cuts required to bring down the debt may be much larger than the reduced crisis risk engendered by the lower debt.”1
Neoliberals have always known that their vision of the good society will triumph only if it becomes reconciled to the fact that the conditions for its existence must be socially constructed, and will not come about “naturally” in the absence of concerted political effort and organization. Neoliberals regard inequality of economic resources and political rights not as an unfortunate by-product of capitalism, but a necessary functional characteristic of their ideal market system. With its redefinition of the individual as data, classless, and without self-interest objectives rational or otherwise, it sought to overcome all opposition based on individual rights, class, property, and public good. It sought on the one hand to create change by breaking down the apparent democratic appeal to government, while on the other hand extoling the virtues of the free-market as the promethean struggle against the regulation of the inefficient state. Freedom has nothing to do with democracy or speech or individual rights: for the neoliberal it is about the freedom of the market and the elites who control those markets.
Under the cultural trope of ‘individual responsibility’ welfare for the poor is cut and restructured to make welfare recipients more responsible for their economic status. This takes the focus from the inherit inequality in the system and focuses on the distribution, specifically its disproportionate effect on the excluded – such as the unemployed, minorities and immigrants.2 A consequence of this neoliberal change is the reconfiguration of class relations in a society where the explosion of inequality and economic instability has profoundly dismantled the working-class. IMF researchers claim: “Increased inequality, in turn, hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects.” Today neoliberal ideology defines the social relationships of poor people and the attitude towards them that supports an economic system that creates inequality.
Societies that are economically unequal have higher levels of poverty. It is not about the amount of wealth, rather it is about its distribution. Thirty years of lower taxes and deregulation created a system with increasing inequality between the wealthy and the rest of society. The 2016 Brexit referendum and the Trump election highlight social crises as unhappy voters rejected the establishment, demanding change. Donald Trump tapped into a wide and growing optimism gap that opened between the white middle class and the poor. A 2016 IMF research report declared rising inequality was bad for growth and that governments should use controls to cope with destabilizing capital flows. Social constructivism asserts that individuals cannot be separated from their social context, and that social context is dynamic and constantly changing. For change, it is not necessary to define equality, rather just decrease economic inequality between the rich and the rest of society.
1 Larry Elliot. Austerity Policies do more harm than good, IMF study concludes (26 May 2016) https://www.theguardian.com/business/2016/may/27/austerity-policies-do-more-harm-than-good-imf-study-concludes
2 Ideas Have Consequences: The Explosion of Inequality (01 Oct 2017) http://questioningandskepticism.com/ideas-consequences-explosion-inequality/