The rise of ‘market fundamentalism’

Back in 2001, I wrote an article for Quadrant titled ‘Naming the Right’ (pdf) which tracked the changing terminology used to describe the free-market right. It argued that ‘New Right’ had largely gone out of fashion, and that though ‘neoliberalism’ was on the rise, ‘economic rationalism’ was the still the most common label. Re-reading it now there is a striking omission: ‘market fundamentalism’, which has attracted recent attention from Kevin Rudd’s use of it in his Monthly article and his CIS lecture (pdf), along with critical commentary from Jason Soon in the blogosphere and Tony Abbott in the SMH.

Market opponents have long used religious allusions in describing market supporters, branding them ‘zealots’ believing in an ‘orthodoxy’ of ‘sacrosanct’ markets as a ‘path to salvation’, including using the phrase ‘economic fundamentalism’ (these are all from a paper on economic rationalism I wrote in the early 1990s). But I am pretty sure that in omitting ‘market fundamentalism’ in my 2001 article I was not making a lexicographical blunder. It just hadn’t caught on then.

These days put ‘market fundamentalism’ in and you will still be going with new examples tens of Google’s pages later. I found only one use, from 1999, that pre-dated my Quadrant piece, though search engines are not ideal for research stretching back into the days before putting things on the web was standard practice. The 1999 link referred to zillionaire speculator and would-be public intellectual George Soros who is fond of using the term; it was also popularised by the poorer but academically far superior Joseph Stiglitz.

As others have pointed out, the term itself cannot withstand much scrutiny in the way Rudd uses it. What interests me here is the sharp shift in the connotations attached to the labels for free-marketeers. We have gone straight from a term that alludes to the anti-religious forces of reason, ‘economic rationalism’, to one that alludes to the irrational dogmatism of religion, ‘market fundamentalism’.

Why the change in language? It may not always be deliberate. When looking for a way to describe their opponents, lefties often seem to just press ‘go’ on a random right-wing label generator and use whatever comes out – ‘neoconservative’, ‘neoliberal’, ‘economic rationalist’, ‘market fundamentalist’, it’s all the same to them. If ‘market fundamentalist’ is put in the mix it is going to be selected sometimes.

But I can see some strategic sense to it. ‘Economic rationalist’ is hard for the punters to understand, and to the extent that it is understood it is associated with Labor’s market reformist phase of 1983-96 as well as the Right. For someone like Rudd, this is why he has to distinguish his support for markets from Howard’s – Adam Smith versus Friedrich Hayek, as he implausibly argued in his CIS lecture. The use of ‘fundamentalist’ is also an attempt to make the link between character and argument. Especially in irreligious, moderate and pragmatic Australia, ‘fundamentalism’ is not a good thing. Labor MPs try to work the words ‘extreme’ and ‘ideological’ into every sentence referring to the Howard government for the same reason.

Like ‘political correctness’ on the Right, ‘market fundamentalism’ is a critique of a phantom. Since nobody ever says that they are politically correct or a market fundamentalist, there is nobody to concede defeat and so the war can go on forever. Or at least until the next and more politically convenient label.

17 thoughts on “The rise of ‘market fundamentalism’

  1. I have heard people say “political correctness is a good thing”.

    I think market fundamentalism has been chosen simply because fundamentalism is bad. But while I think it’s a joke to attribute such tendencies to John Howard, I would say that some people deserve that term. These are people who think market will solve ALL human problems. These people BELIEVE in this.

    I can also define a human rights fundamentalist. That is someone who thinks that puts human rights above everything else, with total disregard for the circumstances.

    I think the term market fundamentalism is used by the left solely as a slogan, but it is possible, in my view, to restrict the use of “fundamentalism” to its dictionary definition.


  2. Andrew, I still find it surprising in Australia that the “right” seems to be far more gentle with the “left” in the use of language than what you will encounter in the US. However I would argue that it is a lot easier to find a follower of political correctness in the Federal Parliament at present than a market fundamentalist!


  3. Boris – I have myself argued that what people mean by ‘political correctness’ can be a good thing, as I would also argue that what people mean by ‘market fundamentalism’ can be a good thing. But the labels themselves are just polemical, designed to discredit by aligning them with an attribute that it not integral to the underlying ideas.

    Matt – That Australia has largely resisted the over-heated political language of the US can only be counted as something in our favour.


  4. This sort of name calling is not limited to left or right (though Matt’s correct that the US right is probably the worst offender). It’s not that people holding the caricatured views do not exist – they do – but that they’re rare and that these sort of terms (“market fundamentalist”, “latte left”, etc) lump together a lot of disparate (and often nuanced) positions.

    More than anything its intellectual laziness; you can dismiss an opponent without considering his or her actual views.


  5. The thing that intrigues me about the silly name calling by many leftwing critics of “market fundamentalism” and cognates, is that they mostly have some claim to education, intelligence, interest in public affairs, even scholarship and willingness to undertake critical thinking. How have they managed to maintain for years and years such a limited view of economic rationalism and classical liberalism?

    After all that Andrew and I have done to explain these things in simple and humanitarian terms.

    Someone please explain.


  6. Boris – please name someone, who is not made of straw, who thinks that the “market will solve ALL human problems”. As an economist, I know of no-one among my peers who holds such a belief.


  7. I think there are also elements of a fundamental misunderstanding of all of the labels used for classical pro-market positions. The left sees pro-market policies, and their advocates, as being on a mission to entrench the power of the evil wealthy and the nasty corporate sector, at the expense of the dignified, striving worker. In fact, “market fundamentalists” or economic rationalists recognise only that the market is an unstoppable force – which is why measures such as rent control ultimately have such disasterous effects. Indeed “market fundamentalists” seek to deny the evil wealthy and the nasty corporate sector of their natural tendency to collude and rent seek. The economic rationalists (or whatever) are thus the true friend of the worker !


  8. I think critics use the term ‘market fundamentalism’ because it implies an irrational faith in markets as the solution to all social and economic problems.

    The idea is that fundamentalists are dogmatic and can’t be reasoned with. Their opponents see themselves as reasonable people whose policy positions respond to evidence and argument.

    The label has been used since the 1980s (at least). Here are a few examples (sorry… I couldn’t resist):

    “The Alliance is the softer, more acceptable face of capitalism and, as such, in keeping with the British taste for understatement; far more so than Mrs. Thatcher’s strident, free-market fundamentalism.”

    Peregrine Worsthorne. Wall Street Journal. (Eastern edition). New York, N.Y.: May 22, 1987.

    “If Spain could become more like Germany or the Netherlands, say, that would be enough of a triumph, without any need for the free-market fundamentalism that Mr Gonzalez dislikes so much.”

    The Economist. London: Dec 14, 1996. Vol.341, Iss. 7996

    “A belief that capitalism had been finally domesticated sustained Marquand in his unwearying struggles with Labour’s left fundamentalists from the late 1960s throughout the 1970s.

    “This conviction was shaken, and seems now to have been shattered, by the experience of triumphant market fundamentalism throughout the 1980s and much of the 1990s. ”

    John Gray. New Statesman. London: Nov 7, 1997.Vol.10, Iss. 478


  9. Don – It is interesting that all these citations are from British writers, suggesting perhaps that perceptions of market supporters were very much bound up with the personality of Margaret Thatcher (‘the lady’s not for turning’). There has been no equivalent personality in Australia, though there has perhaps been an equivalent situation – Keating continuing with reform during the early 1990s recession as Thatcher had during the early 1980s recession in Britain.

    Despite Thatcher’s personality, generally reform in Britain was (as here) more cautious and gradual than many in hindsight believe, further complicated in Australia by the federal structure. And in both countries, there were major areas where little or no reform of any great consequence occurred (education, health), and neither made any serious inroad into high government spending.


  10. Andrew,

    Can you clarify what you mean by “market opponents”, “lefties”, “random right-wing label generator”, “them” and “punters”?

    Are these labels “politically convenient”?


  11. Lyn – They are generalisations, but except for the label generator they are free of pejorative intent. Convenient, rather than ‘politically convenient’.


  12. I thought that ‘market fundamentalism’ was abroad earlier than Andrew nominated but I was not prepared to argue and it is clear from Don’s examples that the term was used in UK earlier than here. Google would not tend to reach back that far [actually that is wrong for certain kinds of scientific literature, I googled up some technical terms from soil science and found abstracts of articles that I read in 1966/67].

    Here is a sample of abuse from the mid 1980s, but market undamentalism did not get a gurnsey in this collection.

    “Clock-stoppers pining for the good old days”. Phillip Adams in The Weekend Australian 14 December 1985. “As you read the outpourings of the neo-conservatives you realise that youre dealing with the politics of hate…our conservatives are the most implaccable of people, proud to be cold of eye and hard of heart. There is venom and vitriol in their collective voice and the only thing they’ll be sentimental about is the wretched flag. Never the wretched of the community”.

    “Members of New Right called fascist” The Australian, 2 Oct 1986. ‘A
    leading employer representative has labelled some members of the New Right “classic fascists” for trying to influence Liberal Party policy on
    industrial relations. The controversey comes after the release of a book of
    papers delivered to the inaugural meeting of the H R Nichols Society earlier this year…Mr Brian Powell, the chief executive of the Australian Council of Manufacturers said “some fascists are trying to force the extremes of Thatcherism on the Liberal Party”.’

    “New Right ready to take over Libs: Walsh”. The Australian 22 Sept 1986.
    “The Federal Government yesterday intensified its counter-attacks on the New Right, claiming right-wing extremists were on the brink of taking over the Liberal Party and the leader of the Opposition, Mr Howard, was to weak to resist them”.

    “Now the name of the game is HATE” The Sun 5 September 1986. “Words like ‘troglodyte’, ‘lunatics’ and ‘treasonable behaviour’ dot the
    landscape…Those terms, aimed at the New Right, come courtesy of Bob Hawke and his trade minister John Dawkins”.

    “All not quite Right with John Howard”. The Sun-Herald, 31 August 1986. “Mr Howard and his cohorts are scrambling to keep up with the more extreme positions of the New Right…Mr Hawke has yet to formulate a comprehensive, intelligent response, relying instead on increasingly strident language.
    ‘Lunatics, political troglodytes, crazies’… The mildly sinister H R Nichols Society provides the philosophical framework. The society is a collection of individuals in positions of power and influence answerable only to themselves, unfettered by electoral responsibilities and unconcerned
    about the disadvantaged”.

    “Usworth’s sights set on the New Right”. SMH 25 Oct 1986. “We are dealing
    with a group of people who are prepared to declare war on Australian
    workers, who are prepared, irrespective of the public interest, to close
    down manufacturing activities”.


  13. I didn’t say the term wasn’t used beforehand – I cited similar terms being used prior to 2001 – but did not think it was common, and therefore I did not make a mistake in not including it in my article. People have found ‘economic rationalism’ being used as far back as the mid-1970s, but it probably wasn’t until a decade later that it became common.


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