To explore this more fully we should position Hackgate as the latest in a series of scandals that have engulfed Britain’s ruling institutions over the last four or five years. In this sense, despite the unprecedented nature of recent events, there is still a certain sense of familiarity to proceedings. We have seen similar scenes around MPs expenses and, of course, with the public outrage directed towards bankers following the financial crisis. In addition we have witnessed not one but two media feeding frenzies around the repression of protestors. The first followed the police attack on the G20 protests and the murder of Ian Tomlinson, with the second erupting around the outing of Mark Kennedy, leading to the unprecedented unmasking of another five undercover police officers acting within the protest movement. The refusal of the Metropolitan Police to investigate the full extent of phone hacking is, then, the third scandal revealing the political character of contemporary policing.

The phone hacking scandal, and particularly the web of complicity revealed in its cover up, is undoubtedly more significant than some of these other scandals but positioning it amongst this series allows us to raises a question that has rarely been posed: Why now? Why are these serial scandals erupting now?

In answer to this question some have pointed to certain technological changes such as the popularity of camera phones or the advent of social media. In fact Paul Mason argues this position in a blogpost titled, Murdoch: The network defeats the hierarchy. There are some attractions to this argument but it seems totally inadequate to me. There is something much more epochal going on. It seems patently obvious that these scandals are part of a more general social and economic crisis sparked by the credit crunch of 2007-8. But while that much seems obvious the exact nature of the relation and so the political significance of the scandals is less clear.

To think through this question of “why now?” I want to raise the example of the Italian Mani Pulite or Clean Hands affair of the early 1990s. This political corruption scandal brought down the existing political system in Italy and destroyed every mainstream political party. The odd thing about the affair is that there had long been incredible levels of political corruption in Italy. Graft was endemic, mainstream parties such as the Christian Democrats and the Socialist Party had well-established links to the Mafia and the secret service had worked closely with neo-fascist terrorists to bomb their own citizens. This had all been an open secret since at least the Second World War. So why did the arrangement fall apart at that point in history? There are of course specificities to the events but broadly speaking we can attribute it to the collapse of the Soviet Union and the consequent collapse of the Italian Communist Party. The whole of post-war Italian politics is only understandable as a settlement arranged to prevent the Communist Party taking power. As soon as its raison d’être was removed the whole arrangement began to lose coherence. Practices that seemed tolerable as part of a wider settlement suddenly appeared as intolerable corruption.

In similar fashion Hackgate reveals the precise mechanisms of a network of corruption whose broad outlines were already understood. What we see, however, is not a distortion of an otherwise functional system but one instantiation of a system that can only operate through such corrupt mechanisms. What we are seeing, through its moment of decomposition, are the parochial arrangements through which neoliberalism was established in the UK.

Neoliberal governance has traits that are common right across the world yet its instantiation in each individual country has been shaped by the specificities of that country’s history. In each country a different (re)arrangement emerged between sections of the ruling class that would enable the imposition of neoliberal policies on populations that, on the whole, didn’t want them. Rupert Murdoch, and the tabloid culture he helped to establish, was central to this process in the UK, not least with the defeat of the print unions at Wapping. Other elements of that compact include a Thatcherite Conservative Party and a neoliberalised Labour Party, a highly politicised police force and, especially after the 1986 Big Bang deregulation of the stock market, the dominance of finance capital. It is no coincidence that each of these elements has been racked with scandal since the economic crash of 2008.

Neoliberalism, however, is more than the parochial arrangements of a specific national ruling class. Each semi-stable form of capitalism also needs some sort of settlement with the wider population, or at least a decisive section of it. As we have previously argued, in distinction to the post-war settlement that contained an explicit deal linking rising real wages to rising productivity, neoliberalism contained an implicit deal based on access to cheap credit. Despite the stagnation or decline of real wages since the late 1970s, the mechanisms of debt allowed living standards to be maintained. An accompaniment to this deal was the necessary abandonment of any pretence to collective control over the conditions of your life. It meant the end of democracy in any meaningful form and the reduction of politics to technocratic rule. The financial crisis broke the central component of this deal, access to cheap credit. Living standards can no longer be maintained and without it the parochial ruling arrangements in the UK have started to lose coherence.

Rather than a symptom of renewal, however, we should read these scandals as a symptom of neoliberalism’s undead zombie-like status. As we put it in Turbulence:

Neoliberalism is dead but it doesn’t seem to realise it. Although the project no longer ‘makes sense’, its logic keeps stumbling on, like a zombie in a 1970s splatter movie: ugly, persistent and dangerous. If no new middle ground is able to cohere sufficiently to replace it, this situation could last a while… all the major crises – economic, climate, food, energy – will remain unresolved; stagnation and long-term drift will set in (recall that the crisis of Fordism took longer than an entire decade, the 1970s, to be resolved). Such is the ‘unlife’ of a zombie, a body stripped of its goals, unable to adjust itself to the future, unable to make plans. A zombie can only act habitually, continuing to operate even as it decomposes. Isn’t this where we find ourselves today, in the world of zombie-liberalism? The body of neoliberalism staggers on, but without direction or teleology.

The scandals represent the zombie’s body decomposing even as it continues its habitual operation. The example of the Clean Hands scandal, however, shows that exposure of corruption is not enough to produce something better. A crisis can remain unresolved and that situation can settle down into a new semi-stable state. In Italy the collapse of the Christian Democrats and the Socialists lead to the emergence of the racist Northern League and Berlusconi’s Forza Italia. Italian politics since the scandal has been subordinated to Berlusconi’s attempts to escape the corruption charges arising from that time. A huge new compact of corruption has been established to achieve that goal.

The only way to avoid a similar outcome to our present situation is to spark mass political action such as that glimpsed in Greece, Spain, and the Maghreb, as well as the student movement in the UK. Any prospect of this reaching the level of social force needed to finish off neoliberalism is predicated on the hope that the embrace of tabloid and celebrity culture is a symptom of the powerless position neoliberalism places us in and not its cause. The collapse of neoliberal ideology and the revelation of the corrupt nature of contemporary policing and politics must be taken into account in any new invocation of the fairy dust that can spark social movements. But left on its own it is just as likely to collapse back into the sense of passive impotence that pervades our contemporary situation.

What do I mean by this? Well the first thing to say is the crisis doesn’t, on its own, mean the end of capitalism, it is, however, an interruption in the general direction in which global society has been pushed over the last thirty years. That is to say it does seem to be a fundamental crisis for the neo-liberal mode of capital accumulation. Central to this assessment is the way the crisis has broken the implicit neo-liberal deal of compensating for stagnant wages through access to cheap debt. We have talked about this deal elsewhere but it was also outlined with surprising accuracy in a recent article in the Financial Times titled: Debt is capitalism’s dirty little secret.

The FT article goes as far as admitting that neo-liberalism is fundamentally about the transfer of wealth from the poor to the rich and argues that cheap debt was the only thing that prevented revolution. This seems like a vindication of David Harvey argument that neo-liberalism is based on ‘accumulation by dispossession’ and of course this process hasn’t ended with the crisis. The bank bailouts are a huge and naked transfer of wealth to the wealthy. Indeed some have argued that the bailouts in the global north are playing the role that Structural Adjustment Programmes have played in the global south. There is a lot of truth to this. The bailouts are a neo-liberal solution to the crisis in neo-liberalism, in this sense they are just neo-liberalism intensified. But it is this degree of intensity that indicates it is more than neo-liberalism in normal operation. After all it’s when a system enters a crisis situation; when it is far from equilibrium, that we can see most clearly the intensive processes that make it up. The socialisation of risk to defend the privatisation of profits follows neo-liberal logic but destroys neo-liberal ideology. It is for this reason that the underlying processes of neo-liberalism have become apparent not just to us but to the Financial Times. Neo-liberalism has been stripped of the fetishisms that would normal disguise it and this has caused a real, ongoing ideological crisis. At the very least there’s been a significant wobble, if not a total collapse, in the religious hokum of the invisible hand of the market magically producing the common good. The ideas and practices that have formed the middle ground of society are ceasing to make sense, even on their own terms.

Of course this raises the question of what happens now?

One common assumption is that when the middle ground of society is in crisis then a new middle ground will have to emerge; a new deal will have to be struck. There is an expectation that some version of Keynesianism must follow, a New, New Deal or perhaps a Green New Deal. There are however several serious obstacles to this scenario, not least amongst them is that the world still has a fundamentally neo-liberal composition. The common sense of society, how we understand the world and ourselves, (within which the political middle ground develops) has been fundamentally transformed by thirty years of neo-liberal governance (although this is true to greater or lesser degree in different parts of the world).

One important point we should recognise is that neo-liberalism has only a limited role for its own ideological argument. Such argument is used to create neo-liberal ideologues and activists but this isn’t how it transforms wider subjectivity or our common sense understandings of what is possible. These changes are brought about more operationally than ideologically. That is to say that neo-liberal common sense is actively brought about by interventions into class composition rather than through ideological argument. Neo-liberalism re-organises material processes, it intervenes into society to try and bring about the social reality that its ideology claims already exists. It actively tries to create its own presuppositions.

Instead of being persuaded by the power of argument, people are trained to view themselves as homo-economicus by being forced to engage in markets. It is in this way that people come to view themselves as human capital; that is as little enterprises locked in competition with others. Indeed this is increasingly true not just in our economic activities but throughout our whole lives. Thus we have the imposition of markets into more and more areas of life, which mean increasingly huge bureaucracies and more and more corruptive systems of measure. This is the Market Stalinism has taken hold in the public services.

Foucault, in his lectures on neo-liberalism, talks about changes in Governmentality, that is the manner or mentality through which people are governed and govern themselves.
Governmentality is multi-scalar; it isn’t just about global governance or how to govern states but also about the management of individuals. It is about how you should live. It sets up a model of life and then establishes mechanisms whereby you are shepherded towards ‘freely’ choosing that manner of living. If you want to participate in society you are force to behave as homo-economicus. The markets are rigged to make certain actions make more sense and other actions less sense. The dice are loaded.

Of course, despite the circularity of its self-fulfilling and self-affirming prophecy, there have always been large areas of life that haven’t accorded with neo-liberalism. However held in place by the neo-liberal deal it has seemed quite stabile for a long time. Access to cheap credit was essential for neo-liberalism to solve the problem of effective demand, to make sense on its own terms and to disguise the huge transfers of wealth and power that were taking place. This manner of living is now in real crisis and many of the things that were previously rigged to make sense, no longer do. A couple of years ago in the UK you were acting irrationally if you rented a house when you could afford to buy, now the reverse is true.

Neo-liberalism no longer ‘makes sense’, yet its logic keeps stumbling on zombie style. Just look at PFI schemes in the UK, where private finance is supposed to supply the money for government infrastructural spending, with the state renting back infrastructure for vast sums over a thirty-year period. Except now there is no private finance so the government has to lend banks the money to lend to private firms to build infrastructure, which it will then rent back to the state that lent the money in the first place. At every stage huge sums are skimmed off in to private hands. It doesn’t make sense yet the scheme is still being rolled out at the same rate it was before the crisis. There isn’t another logic or common sense to guide policy so neo-liberal logic is twisted through amazing contortions just to keep it all going.

Any new common sense, any new middle ground for politics, has lots of problems to overcome. It would have to operate in a similar multi-scalar fashion to neo-liberalism, that is, it would have to be tied to a new manner of living. It would also have the difficulty of starting from the composition we have now, with large parts of the world’s population still in the grip of neo-liberal common sense and modes of living. This is one of the greatest problems facing those advocating a New, New Deal. We aren’t talking about a few changes in elite thinking or some dabbling with government spending but the global re-composition of society.

Neo-liberalism is in crisis ideologically, it no longer ‘adds up’ on its own terms, yet it doesn’t seem to know it is dead. I could imagine it stumbling on for a considerable period, as no new middle ground is able to cohere and replace it. We face zombie-liberalism. This raises the prospect of no resolution being found for the crisis as we end up stuck in a long 10 or 20-year period of stagnation and drift. Even in its heyday neo-liberalism could actually be seen as a period of stagnation, it never reached anything like the growth levels of the post-war settlement years, but it still had its modernist side, the idea that neo-liberalism would solve the worlds problems. Without an overarching project we might just get a series of phoney recoveries, repeated crashes and a slow fragmentation, with some fractions of capital seeking to extend neo-liberalism and others trying to replace it but with nobody really succeeding.