Published September 20, 2010

In the fall of 2008 there was no shortage of proclamations that the implosion of the global financial system meant that the laissez faire et laissez passer economic policies that had been pursued on both sides of the Atlantic were dead. That Neoliberalism itself, with its overemphasis on market solutions to all human problems, its disdain for government in any shape, size or form, would finally be put to rest. There was talk of a “new” New Deal in the US and here in Iceland a historic “pure” left wing government promised to reinvigorate the welfare state with Scandinavian social democratic principles and to defend the working families—literally to raise a “wall of shields around the homes”. Hooray!

Well, not so fast. Not only have governments on either side of the Atlantic failed to resurrect either the New Deal or the social democratic Welfare states of the Post-War period, their overriding concern seem to be balanced budgets. While there is much talk about the State being back in, IMF prescribed Neo-Hooverism appears to be on the rise. In the fall of 2008, we were told neoliberalism had been completely discredited as an ideology, but we have yet to see anyone articulate a coherent alternative vision. And now Icelandic leftists are generally of the opinion that it is only a matter of years before neoliberalism reigns supreme yet again.

It is therefore interesting to see that those who have been the most tireless spokespeople of neoliberal economic policies in Iceland all claim that there is no such thing as neoliberalism, that there never was, and that any claim to the opposite is some kind of slander. Hannes Hólmsteinn Gissurarson, professor of political science, and probably the most vocal free market ideologue in Iceland, has made this argument on his blog.

The anger of Hannes Hólmsteinn is directed at the “neo-“ prefix: In Icelandic neoliberalism has been translated as ný-frjálshyggja, where the word frjálshyggja in Icelandic refers to either liberalism or libertarianism. Hannes argues that there is only one true liberalism, based on the love of freedom and limited government, and this ideology has not changed in any meaningful way since the time of Locke and Hume. The neo- prefix is really a cuss word, invented by left wing enemies of libertarians and defenders of free markets: When people use the word they are deliberately trying to insult libertarians, that using the word is in fact some kind of hate-speech.

This has in fact been a reoccurring theme on right wing blogs in Iceland. Last July, The Federation of Young Conservatives declared that any talk of neoliberalism was utter nonsense, since “there is no such thing”.

Never mind the fact that neoliberalism is a widely accepted term referring to the ideological project of privatisation, deregulation and free markets reforms carried out by politicians and ideologues who have sought their inspiration in the writings of Friedrich von Hayek and Milton Friedman. Never mind that the ideology of free market liberals of the past 20–30 years is dramatically different from that of free marketers of the 19th century or the early 20th century in its utopian vision and belief in revolutionary transformation of society. No. According to right wing bloggers and ideologues there is no such thing.

But this is not the end of the Sophism of Icelandic neoliberals, because they have simultaneously argued that there is such a thing as neoliberalism! In February 2009, the Libertarian Society of Iceland sent out a press release “celebrating the death of the so-called neoliberalism”, arguing that the economic policy followed by most western governments, including the Icelandic government, was indeed neoliberalism. According to the libertarian society this awful policy was characterised by a growing state apparatus and regulatory industries and government interference in private business. According to the right wing blog “Birdwhispers” at AMX, neoliberalism is simply a different name for “third way” mixed economy popular with Social Democrats since the 1990s.

So, the neoliberalism we thought we knew never ever existed, and there is no reason to blame the most ardent followers of neoliberal policies, professor Hannes Hólmsteinn, the utopian free marketers of the Libertarian Society or the Federation of Young Conservatives for anything this alleged neoliberalism wrought.

When you think about it this is a clever strategy: By objecting to the words used to denominate your ideology you can divert the discussion away from the results of your ideology when put into practice and force your critics to conduct the conversation on your terms.