'The Callous Credit Nexus': Ideology and Compulsion in the Crisis of Neoliberalism

by Alex Law
University of Abertay Dundee

Sociological Research Online 14(4)5

Received: 11 May 2009     Accepted: 19 Jul 2009    Published: 31 Aug 2009


Many accounts of the rise and decline of neoliberalism forefront its ideological nature and capacity for hegemonic leadership. In contrast, I argue that outside of elite groups neoliberalism did not become hegemonic in Gramsci's sense of a 'national-popular' force. Neoliberalism is a convenient term to describe a two-stage process of 'purifying' the coercive nature of the capital relation through what Gramsci broadly called 'a war of movement' in the 1970s and 1980s and 'a war of position' in the 1990s and 2000s. This double-movement compelled credit-worthy individuals to routinely market, sell, purchase and perform for money-wages. New techniques of the self were perfected in the marketised war of position to service the credit-led financialisation of everyday life. Social positionings dependent on financialisation are now subject to a 'crisis of authority'.

Keywords: Gramsci; Ideology; Neoliberalism; Financialisation; Transformismo; War of Position; Crisis; Hegemony

‘The crisis consists precisely in the fact that the old is dying and the new cannot be born; into the interregnum a great variety of morbid symptoms appear’. (Gramsci, 1971: 276).


1.1 For some the ‘credit crunch’ and deepening recession spells the death knell of neoliberalism as a definite set of ideological assumptions for organising social life. Martin Jacques (2009: 13), for instance, argues that neoliberalism represented a ‘decisive shift in the centre of gravity of power in society: from the state to the market, from society to the individual, from relatively egalitarian values to the embrace of inequality’. Neoliberalism has now ‘imploded’, dislodged not by an alternative ideology but by the blind force of ‘events’. Alongside sociology luminaries like Stuart Hall, Jacques pioneered the analysis of Thatcherism in the 1980s as a hegemonic force essential for the consumer-led modernisation of Ukania and the forced realignment of an ‘obsolete’ labour movement (Hall and Jacques, 1983, 1989). This argument was developed most insistently in Marxism Today, the now defunct magazine of the now defunct Communist Party of Great Britain, which Jacques edited from 1977 to 1991. Returning to his Gramscian cradle, Jacques (2009: 13) claims that as neoliberalism became hegemonic as an ideology over the past three decades it ‘acquired such dominance at all levels of society, from the person in the street to the man at No 10 – to the point where it has acquired the force of common sense’.

1.2 Underpinning Jacques’ vision of neoliberalism’s totalising hegemony is an assumption about the clean passage of internally consistent, formal ideological systems like neoliberalism into lived, everyday consciousness. Once ensconced in everyday life, ideology structures and reproduces the cognitive inertia of social agents through what Jacques calls ‘the mind’s natural conservatism’. The social world is pictured as being formed by a clash of distinct political ideologies, one of which becomes dominant and eventually makes its way through all levels of social life to ingratiate itself deep inside the heart and soul of individual subjects. Ideologies sink to the level of taken for granted routines, habits and reflexes that are not easily relinquished, even where coherent ideological alternatives are available. In the current crisis, Jacques laments the fact that no coherent intellectual alternative has appeared in Britain, certainly not from within the ranks of New Labour that so firmly nailed its fate to neoliberal apologetics. Without a hint of irony, Jacques (2009: 13) lambasts the intellectual dearth at the heart of the New Labour fixation with neoliberalism that he personally did so much to stimulate: ‘New Labour itself came largely from Thatcherism, and the critique of Old Labour and understanding of Thatcherism from my old magazine, Marxism Today’.

1.3 Hence the current crisis comes to be understood as primarily a question of ideological agility and cognitive inertia. But far from evincing ‘the mind’s natural conservatism’ ideological themes are embedded in practice as contradictory dilemmas and tensions, something to be argued over in socially structured space rather than simply internalised in predetermined ways (see Billig, 1991). By privileging the enunciated tenets of political ideology over the phenomenal structuring of the social world ‘things of logic’ are conflated with the ‘logic of things’, as Bourdieu (2000) was fond of paraphrasing Marx. It inverts the relationship between formal ideologies and everyday practices: ‘One must therefore distinguish between historically organic ideologies – that is, ideologies that are necessary to a given structure – and arbitrary, rationalistic, “willed” ideologies’ (Gramsci, 2007: 171). In his famous account of the need to wager on the existence of God, Pascal (1995: 156) argued that ‘organic ideology’ becomes effective mainly through being acted out in institutionally prescribed ways, say taking holy water and having masses said, as if celebrants already believed in what they were doing. Once individuals and groups are practically committed, Pascal’s as if story of ideology becomes a self-confirming necessity (Gramsci, 2007: 375). Depending on where neoliberalism is situated in social space, it operates as an organic ideology for reconstituting capital-state relations but may appear to organised labour or welfare claimants as a ‘willed’ ideology arbitrarily justifying the forced imposition of competitive individualism.

1.4 So while neoliberalism operates as a more or less coherent elite ideology, it is a category mistake to conflate marketised practices with its ideological legitimations. Certainly marketised practices may have produced illusory forms of credit-driven consumption, but they lack the kind of hegemonic power described by Gramsci (1971: 421ff) as a great ‘national-popular collective will’. To understand the present relationship between the credit crisis, increasingly an accumulation crisis, and ideology, Gramsci’s historical sociology continues to provide a useful if sketchy framework. Here I briefly review some of the claims for the specifically ideological power of neoliberalism before considering the disciplining effects of ‘the callous credit nexus’.

The ideological bases of neoliberalism

2.1 Although ‘neoliberalism’ is becoming more central to the concerns of economic sociology (ESA, 2009), as a concept it is by no means at the core of mainstream British sociology. For instance, a content search of articles in the discipline’s leading journal Sociology between January 1989 and May 2009 reveals that the term ‘neoliberalism’ was used in a mere 14 articles out of a total of 2565 pieces. This contrasts with sociology in France where Pierre Bourdieu (2008) amongst others attempted to connect with European and national social movements contesting neoliberal priorities. Accounts of neoliberalism like Bourdieu’s emphasise the power of neoliberal ideology to impose its priorities - ‘deregulation’, ‘flexibility’, ‘employability’, ‘shareholder value’ - on the rest of society. Others like Luc Boltanski and Eve Chiapello (2005) claim that the paradigm shift to the ‘new spirit of capitalism’ depends on shared ideological representations and justifications. For them, the liberatory discourses of the social movements of 1968 have been harnessed to a dominant managerial ideology widely accepted as self-evidently necessary and desirable. More speculatively, Dany-Robert Dufour’s (2008) The Art of Shrinking Heads similarly views neoliberalism as a nihilistic ideological movement recuperating the transgressive demands of 1968. Demands for freedom and emancipation are now placed in the service of a primal form of domination by, contra Foucault, dismantling the old paternalist institutions contested by radicals since the 1960s. In the Anglophone world, critical accounts such as David Harvey’s (2005) A Brief History of Neoliberalism and Naomi Klein’s (2007) The Shock Doctrine argue that free-market ideology derived from Hayek and Friedman has enforced a ‘counter-revolutionary’ transfer of resources to capital through the weakening of organised labour’s ideological and structural position.

2.2 In such accounts, ideology tends to lead to a changed reality. Similarly, for the UK Jamie Peck and Adam Tickell (2007) delineate an ideological mobilisation by ‘organic intellectuals’ from Hayek and Friedman through free-market think tanks to execute a two-stage process of ‘actually-existing’ neoliberalism. Crucially, this ideological campaign was focused on elite opinion rather than public support (see also Miller and Dinan, 2008). First, ‘roll-back neoliberalism’, popularised as Thatcherism or Reaganism after its leading protagonists in the 1980s, refers to the first wave of destructive and deregulatory attacks on the state and the liberalisation of ‘free’ markets as the solution to crisis conditions. Second, ‘roll-out neoliberalism’ of the 1990s and 2000s consolidated and deepened the liberalisation of markets, including credit markets, culminating in the New Labour pragmatism of the Third Way (Giddens, 1998). This double movement of anti-state deregulation and pro-market re-regulation is not especially unique to neoliberalism but repeats a signature theme of capitalism from its earliest days (Polanyi, 1944).

2.3 This broad convergence in the programmes of political parties historically divided into Left and Right recalls the process characterised by Gramsci (1971: 58) as ‘transformismo’.[1] Gramsci identifies a two stage process of transformismo in the ‘passive revolution’ of the Italian Risorgimento. First, ‘molecular’ transformismo occurs where formally radical individual politicians are incorporated into a merely dominating conservative political class and, second, an ‘organic’ transformismo arises where entire layers of formerly radical political elites are absorbed en bloc by a hegemonic ruling political formation. This remains a ‘passive revolution’ since it does not engage wider groups, primarily subaltern social classes, in the national population. It is a process confined mainly to the ideological reconfiguration of elite groups, impoverishing and trivialising political culture and intellectual life (Gramsci, 1996: 106). All that is left for political elites to struggle over are the petty issues of personalities and cliques rather than fundamental philosophical divisions. A passive revolution is largely indifferent to winning popular consent or approval, attempting instead to reduce subaltern groups to a ‘passive citizenry’, inert objects to be manipulated from above. Large swathes of the population neither absorb the dominating ideology of the day into their routine dispositions nor identify strongly with the ideological leadership of the political class.

2.4 In Gramsci’s analysis of Italian history, molecular transformismo corresponds to a ‘war of manoeuvre or movement’ while organic transformismo is related to a ‘war of position’. Such military metaphors were adopted by Gramsci (1971: 108-110, 229-235, 238-239, passim) to explain the shifting bases of hegemonic struggles.[2] A war of movement occurs where a rapid direct assault destroys enemy forces. A war of position emerges as a longer-term strategy, as when a colonial army occupies on a more permanent basis the conquered territory after dispersing vanquished military enemies. A war of position will tend to characterise societies that develop complex intermediate institutions of civil society. Individual nations must be reconnoitred in terms of the defensive fortresses of civil society (Gramsci, 1971: 238).

2.5 In actual socio-political struggles this neat demarcation is more messy and confused than the metaphor suggests. Nevertheless, a war of movement roughly corresponds with Peck and Tickell’s first phase of ‘roll-back neoliberalism’ and a war of position with the ‘roll-out’ stage. In the UK, the machinery of state and mass communications was mobilised as a ‘catharsis machine’ to break-up and demoralise the enemy, specifically organised labour and public services, through the shock tactics of dramatic one-off set-piece struggles to assert one’s domination of the field. In the 1980s the war of manoeuvre included the use of the state apparatus to break the counter-force of organised labour, culminating in the Miners Strike, but also to privatise public utilities, sell council housing, deregulate financial institutions, through to the introduction of the Poll Tax. While this unfolded pragmatically enough on a tactical assessment of contending forces and while ‘willed’ ideological appeals were made for a ‘popular capitalism’, the main thrust of Conservative government from the second term to the Poll Tax debacle (1983-1990) was to dominate the political field through rapid, determined manoeuvres directed from the centre. Such movement was less concerned with popular hegemony than with subjugating opponents to accept neoliberal realities.

2.6 This stage was pervaded by a continual ‘crisis of authority’ as political elites, especially social democratic elites, disentangled themselves from their traditional ideologies in the course of transformismo (Gramsci, 1971: 211). At the level of political elites, first, a layer of right-wing labourist politicians broke from the Labour Party, some to form the Social Democratic Party, in an effort to enter the emerging neoliberal coalition. Later, an increasingly successful ideology of ‘new realism’ was propounded by Labour leaders from Neil Kinnock to Tony Blair. In the sub-Gramscian discourse of the time ideological ‘realignment’ became necessary among elites to form a new political bloc that endorsed the fundamental tenets of market neoliberalism and, in the process, marginalised their own ‘obsolete’ left-wing opponents. The ultimate coup de grâce for many rightwards moving labourist politicians was the collapse of the Stalinist regimes in 1989. New Labour embraced the neoliberal convergence around fundamentalist market ideology, with the competing petty personalities jostling for position becoming the sole marker of distinction between political brands.

Neoliberalism as a war of position

3.1 Following the mass resistance to the Poll Tax a shift to a war of position becomes evident. Working on the intermediate institutions of civil society to supplement coercive state authority, a sustained attempt was made to consolidate, deepen and entrench market fetishism as an abstract form of social compulsion (Mészáros, 1995). Inside the workplace, labour is disciplined by abstract controls alongside more direct hierarchical ones, directed by information technologies, numerical targets, internal competition, bonus culture, performance management, and stringent accounting measurements (Mooney and Law, 2007). Outside the workplace, abstract control operates through the credit-based financialisation of everyday life, which reciprocally conditions practices within workplaces. Where the value of wages is degraded relative to the costs of social reproduction, goods and services essential to a culturally tolerable style of life are made available on the basis of personal creditworthiness. In the phase of roll-out neoliberalism, record levels of personal indebtedness were enforced through mortgages, personal loans, credit cards, mail-order catalogue accounts, and so on (Law and Mooney, forthcoming).

3.2 More so than ideology per se, coercive commodification accounts for the neoliberal repositioning of agents in social space. How neoliberal commodification alters the network of social relations is therefore of primary significance. The coercive logic of capital was deepened by exposing greater swathes of society to commodification through the credit-led re-construction of ‘market forces’ and its managerialist surrogates in the workplace. Financialisation as a style of life was rooted in the value structure of political elites, corporate boardrooms and the higher strata of the new middle class, strikingly different from the ascetic morality of the traditional petty bourgeoisie or the post-war corporate reorganisation of the propertied classes. Manager-entrepreneurs were rewarded not only with substantial salaries but also, increasingly, financialised incentives like financial performance-related pay and stock options. Shareholder fundamentalism conspired to demand that organisational and personal change become a way of life through the ‘spontaneous’ regulation of the self as a flexible, adaptable and available neoliberal subject.

3.3 As a newly revived form of social compulsion, neoliberalism recalls the often forgotten distinction made by Marx (1867) between capital and capitalism. Marx called his famous book Capital and not Capitalism precisely because capital is the dominating metabolic power of society. It only emerges in its fully capitalist form under certain historical conditions. Capital is not a material entity, a thing, but an abstract relation of compulsion. Coercive abstraction is not derived primarily from ideology or cognition but from the structuring of social space by commodity exchange, what Alfred Sohn-Rethel (1978) calls ‘the exchange abstraction’. Abstract exchange separates in time and space the commodity from direct use or function in the here and now. In the market, on rows of shelves, in shop windows, in catalogues, in adverts, the commodity thing is frozen in time and space, holding its breath waiting to be sold. Its sole purpose is to change owners at a profit to the seller.

3.4 Sohn-Rethel (1978) makes the further point that corresponding to the split between abstract exchange and deferred use is the split between thought and action. Under conditions where exchange predominates, use-value is confined to an imagined relationship to the commodity until the exchange transaction is completed. Customers may already have a tactile relationship to the commodity, trying it on or touching it, but any use function is banished from the action of exchange itself. Whatever any individual consumer privately thinks about their purchase, the public action of exchange remains abstract where it is forcibly suspended from the sensuous world of use-value. Imagining the use of the possessed thing is a purely private affair, while the public act of exchange in the market is founded on a universal abstraction.

3.5 The abstract nature of exchange, at once concealed by the privatised imaginary of the consumer, took on an even more hallucinatory form with neoliberalism. While governed by cultural conventions (O’Connell, 2009), the credit exchange helps release the commodity for immediate use only at the expense of strengthening the exchange abstraction. The credit explosion unlocked commodities in the here and now through an advance of immediate purchasing power against the future perfect, a constantly deferred moment of final repayment and legal ownership of the object. But, by that time, its use-value will be spent through cultural obsolescence or disrepair. Repressed from consciousness by the exchange abstraction, paid employment under neoliberalism came to be experienced as a deeply coercive logic to finance personal indebtedness. A Sisyphean circuit allows immediate possession of the commodity so that production may continue, so that wage labour continues to work, so that wages cover the next scheduled repayment (Baudrillard, 2005). Individuals mortgaged their future in a master-stroke of abstract exchange – the over-exposed neoliberal consumer is alienated from her other self as waged labour.


4.1 Today the crisis threatening the dissolution of neoliberalism is also a crisis of the social relations of compulsion. As the recapitalisation of the banks on 13 October 2008 shows, every effort will be made to cure structural contradictions within inherited limits ‘since no social formation will ever admit that it has been superseded’ (Gramsci, 1971: 178). A crisis does not automatically provoke a war of movement. Previously occupied positions are not readily abandoned, even if, like neoliberalism’s deregulated financial architecture, it stands in ruins (Gramsci, 1971: 235). After all, transfers of revenue through the financialisation and commodification of social goods has had a disciplining effect on organised labour, weakening its collective power as a counter-force to the structuring of social and economic life by capital (Daniels and McIlroy, 2008).

4.2 Credit’s spectral presence, the exchange abstraction, seemed to stave off the crisis of capital accumulation for a while. However, Sohn-Rethel’s one-sided focus on exchange neglects the mediating role played by labour in capitalism (Postone, 1993: 177-9). Any gain made in a war of position has historically proved vulnerable to internal dissolution and counter-attack by labour on a global scale (Silver, 2003). If the ideology of neoliberalism has been much less important than the financialisation of everyday life as a dull compulsion much depends on the active response of organised labour and the social movements to the present crisis (Annetts, et al, 2009; Harvey, 2009).


1 Translated into English as ‘transformism’ doesn’t quite convey the dramatic convergence among elites that Gramsci describes.

2 For Gramsci (1971: 232) military analogies cannot be translated directly into social and political strategies: ‘to fix one’s mind on the military model is the mark of a fool: politics, here too, must have priority over its military aspect, and only politics creates the possibility for manoeuvre and movement’.


ANNETTS, J., LAW, A., McNEISH, W. and MOONEY, G. (2009) Understanding Social Welfare Movements, Bristol: Policy Press.

BAUDRILLARD, J. (2005) The System of Objects, London: Verso.

BILLIG, M. (1991) Ideology and Opinions: Studies in Rhetorical Psychology, London: Sage.

BOLTANSKI, L. and CHIAPELLO, E. (2005) The New Spirit of Capitalism, London: Verso.

BOURDIEU, P. (2000) Pascalian Meditations, Cambridge: Polity Press.

BOURDIEU, P. (2008) Political Interventions: Social Science and Political Action, London: Verso.

DANIELS, G. and MacILROY, J. (2008) Trade Unions in a Neo-Liberal World: British Trade Unions Under New Labour, London: Routledge.

DUFOUR, D-R. (2008) The Art of Shrinking Heads: On the New Servitude of the Liberated in the Age of Total Capitalism, Cambridge: Polity Press.

ECONOMIC SOCIOLOGY (ES) (2009) Economic Sociology_The European Electronic Newsletter, 10.2, March. <http://econsoc.mpifg.de/archive/econ_soc_10-2.pdf> .

GIDDENS, A. (1998) The Third Way: Renewal of Social Democracy, Cambridge: Polity Press.

GRAMSCI, A. (2007) Prison Notebooks, Volume III, New York: Columbia University Press.

GRAMSCI, A. (1996) Prison Notebooks, Volume II, New York: Columbia University Press.

GRAMSCI, A. (1971) Selections from the Prison Notebooks of Antonio Gramsci, London: Lawrence and Wishart.

HALL, S. and JACQUES, M. (1983) The Politics of Thatcherism, London: Lawrence and Wishart/Marxism Today

HALL, S. and JACQUES, M. (1989) New Times: Changing Face of Politics in the 1990s, London: Lawrence and Wishart.

HARVEY, D. (2005) A Brief History of Neoliberalism, Oxford: Oxford University Press.

HARVEY, D. (2009) ‘Is this really the end of neoliberalism? The crisis and the consolidation of class power’, Counterpunch, March 13/15, <http://www.counterpunch.org/harvey03132009.html >

JACQUES, M. (2009) ‘Thinking the crisis: The hunger for renewal’, New Statesman, 13 April, p.13.

KLEIN, N. (2007) The Shock Doctrine: The Rise of Disaster Capitalism, London: Allen Lane.

LAW, A. AND MOONEY, G. (forthcoming) ‘Financialisation and proletarianisation: Changing class landscapes of neoliberal Scotland’, in N. DAVIDSON, P. McCAFFERTY, P. and D. MILLER (eds.) Neoliberal Scotland, Cambridge: Cambridge Scholars Press.

MARX, K. (1867) Capital: A Critique of Political Economy, Volume 1, Harmondsworth: Penguin (1976).

MÉSZÁROS, I. (1995) Beyond Capital: Towards a Theory of Transition, London: Merlin Press.

MILLER, D. and DINAN, W. (2008) A Century of Spin: How Public Relations Became the Cutting Edge of Corporate Power, London: Pluto Press.

MOONEY, G. and Law, A. (eds) (2007) New Labour/Hard Labour? Restructuring and Resistance Inside the Welfare Industry, Bristol: Policy Press.

O’CONNELL, S. (2009) Credit and Community: Working Class Debt in the UK Since 1880, Oxford: Oxford University Press.

PASCAL, B. (1995) Pensées and Other Writings, Oxford: Oxford University Press.

PECK, J. AND TICKELL, A. (2007) ‘Conceptualizing neoliberalism, Thinking Thatcherism’, in H. LEITNER, J. PECK and E.S. SHEPPARD (editors.) Contesting Neoliberalism: Urban Frontiers, New York: The Guildford Press.

POLANYI, M. (1944) The Great Transformation: The Political and Economic Origins of Our Time, Boston: Beacon Press (2002 edition).

POSTONE, M. (1993) Time, Labor and Social Domination: A Reinterpretation of Marx’s Critical Theory, New York: Cambridge University Press. [doi:10.1017/CBO9780511570926]

SILVER, B. (2003) Forces of Labor: Workers’ Movements and Globalization Since 1870, New York: Cambridge University Press. [doi:10.1017/CBO9780511615702]

SOHN-RETHEL, A. (1978) Intellectual and Manual Labour: A Critique of Epistemology, London: Macmillan.