Neoliberalism

Neoliberalism

Neoliberalism intellectually derives from (and is often conflated with) capitalist libertarianism;[1] in terms of anarchist theory, neither neoliberalism nor capitalist libertarianism seriously object to economic power over others while both object to political power over others. Neoliberalism seems to be what happens when capitalist libertarians attain economic or political power, especially when they ‘capture’ government, and dispense with the pretense that the labor market is or should be a level playing field.

In classic terms, neoliberalism seeks to diminish worker power to demand higher wages or better working conditions in the name of fighting inflation.[2] Also in the name of fighting inflation, it seeks to restrain government spending, especially on the poor, but rarely on the military, purportedly to “balance the budget,”[3] relying on a widely held, intuitive, and therefore politically palatable, but naïve understanding of money,[4] ostensibly to prevent government spending from competing with private spending. And it seeks to reduce or eliminate government regulation so that allegedly “efficient” markets,[5] which inherently privilege, to compounding effect, whomever has the greater ability to say no,[6] may govern all economic decision-making.

It was a neoliberal’s nightmare—and yet between 1950 and 1973 the world [gross domestic product] grew at the fastest rate in history. The United States and Western Europe experienced remarkably high rates of growth and low levels of wealth inequality—in fact, the lowest anywhere at any time. In 1959, the poverty rate in the United States was twenty-two per cent; in 1973, it was eleven per cent. It was also a period of “liberation.” People felt free, acted out their freedom, and wanted more of it. They weren’t supposed to feel that way. They were supposed to be passive and dependent. It would not have seemed a propitious time [for Milton Friedman] to write a full-out assault on government [The Age of Keynes].[7]

The “free market” ideology—when encountering the word “free,” always ask who is “free” to do what to whom, at whose expense—leads to so-called “free trade,” which frees capitalists to layoff U.S. workers and locate their facilities wherever they find the lowest wages and the least regulation, obviously at the expense of U.S. workers, who, if they have found replacement jobs at all, generally face far lower wages, often in big box stores that specialize in importing cheap foreign goods formerly made in the U.S.[8] Those workers have often turned rightward politically,[9] and so Republican Donald Trump withdrew the U.S. from Democrat Barack Obama’s TransPacific Partnership, as promised, by executive order on his first day in office.[10]

Neoconservatives consider neoliberalism a moral imperative[11] in their mandate to preserve the economic and political system of the United States, even when to do so can be used as an excuse to invade other countries, as with Iraq and Afghanistan.

Neoliberalism has been thoroughly discredited intellectually.[12] But because mainstream U.S. politicians interpreted the fall of the Berlin Wall as affirmation of the U.S. system[13]—it was the Soviet system of authoritarian socialism that was collapsing, not any other—neoconservatism, with its embrace of neoliberalism, is now the bipartisan “Washington Consensus,” imposed on the rest of the world through institutions like the International Monetary Fund and World Bank, and is a governing paradigm domestically.[14]

See also:

Louis Menand, “The Rise and Fall of Neoliberalism,”review of The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, by Naomi Oreskes and Erik M. Conway, New Yorker, July 17, 2023, https://www.newyorker.com/magazine/2023/07/24/the-rise-and-fall-of-neoliberalism

Rogé Karma, “The 1970s Economic Theory That Needs to Die,” Atlantic, October 20, 2023, https://www.theatlantic.com/ideas/archive/2023/10/america-recession-disinflation-fed/675700/

Patrick Iber, “The End of Milton Friedman’s Reign,” review of Milton Friedman: The Last Conservative by Jennifer Burns, New Republic, November 13, 2023, https://newrepublic.com/article/175932/milton-friedman-chicagonomics-end-reign

Ed Kilgore, “Joe Lieberman and the Center That Did Not Hold,” New York, March 28, 2024, https://nymag.com/intelligencer/article/joe-lieberman-obituary.html

  1. [1]Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, NJ: Princeton University, 2012).
  2. [2]Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, NJ: Princeton University, 2012).
  3. [3]Mark Blyth, Austerity: The History of a Dangerous Idea (Oxford, UK: Oxford University, 2013).
  4. [4]Stephanie Kelton, The Deficit Myth (New York: Public Affairs, 2021).
  5. [5]Michael Hudson, J is for Junk Economics (Dresden: Islet, 2017).
  6. [6]Max Weber, “Class, Status, Party,” in Social Theory, ed. Charles Lemert, 6th ed. (Boulder, CO: Westview, 2017), 94-101.
  7. [7]Louis Menand, “The Rise and Fall of Neoliberalism,”review of The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, by Naomi Oreskes and Erik M. Conway, New Yorker, July 17, 2023, https://www.newyorker.com/magazine/2023/07/24/the-rise-and-fall-of-neoliberalism
  8. [8]Scott Sernau, Worlds Apart, 2nd ed. (Thousand Oaks, CA, Pine Forge, 2006).
  9. [9]Thomas Frank, What’s the Matter with Kansas? (New York: Henry Holt, 2004); Thomas Frank, Pity the Billionaire (New York: Metropolitan, 2012).
  10. [10]British Broadcasting Corporation, “Trump: US to quit TPP trade deal on first day in office,” November 21, 2016, http://www.bbc.co.uk/news/world-us-canada-38059623; Mireya Solís, “Trump withdrawing from the Trans-Pacific Partnership,” Brookings Institute, March 24, 2017, https://www.brookings.edu/blog/unpacked/2017/03/24/trump-withdrawing-from-the-trans-pacific-partnership/
  11. [11]Gertrude Himmelfarb, “Irving Kristol’s Neoconservative Persuasion,” Commentary, February 2011, 25-29.
  12. [12]Mark Blyth, Austerity: The History of a Dangerous Idea (Oxford, UK: Oxford University, 2013); David Fickling, “The Gig Economy Compromised Our Immune System,” Yahoo!, July 25, 2020, https://finance.yahoo.com/news/gig-economy-compromised-immune-system-000048670.html; Amir Fleischmann, “The Myth of the Fiscal Conservative,” Jacobin, March 5, 2017, https://jacobinmag.com/2017/03/fiscal-conservative-social-services-austerity-save-money; Jason Hickel, “Progress and its discontents,” New Internationalist, August 7, 2019, https://newint.org/features/2019/07/01/long-read-progress-and-its-discontents; Patrick Iber, “The End of Milton Friedman’s Reign,” review of Milton Friedman: The Last Conservative by Jennifer Burns, New Republic, November 13, 2023, https://newrepublic.com/article/175932/milton-friedman-chicagonomics-end-reign; Daniel Stedman Jones, Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (Princeton, NJ: Princeton University, 2012); Stephanie Kelton, The Deficit Myth (New York: Public Affairs, 2021); Rogé Karma, “The 1970s Economic Theory That Needs to Die,” Atlantic, October 20, 2023, https://www.theatlantic.com/ideas/archive/2023/10/america-recession-disinflation-fed/675700/; Robert Kuttner, “Austerity never works: Deficit hawks are amoral — and wrong,” Salon, May 5, 2013, http://www.salon.com/2013/05/05/austerity_never_works_deficit_hawks_are_amoral_and_wrong/; Eric Levitz, “Neoliberalism Died of COVID. Long Live Neoliberalism!” Review of Shutdown, by Adam Tooze, New York, October 14, 2021, https://nymag.com/intelligencer/2021/10/neoliberalism-died-of-covid-long-live-neoliberalism.html; Dennis Loo, Globalization and the Demolition of Society (Glendale, CA: Larkmead, 2011); Louis Menand, “The Rise and Fall of Neoliberalism,”review of The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, by Naomi Oreskes and Erik M. Conway, New Yorker, July 17, 2023, https://www.newyorker.com/magazine/2023/07/24/the-rise-and-fall-of-neoliberalism; Thomas Piketty, Jeffrey Sachs, Heiner Flassbeck, Dani Rodrik and Simon Wren-Lewis, “Austerity Has Failed: An Open Letter From Thomas Piketty to Angela Merkel,” Nation, July 6, 2015, http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-thomas-piketty-to-angela-merkel/; John Quiggin, “Austerity Has Been Tested, and It Failed,” Chronicle of Higher Education, May 20, 2013, http://chronicle.com/article/Austerity-Has-Been-Tested-and/139255/; David Stuckler and Sanjay Basu, “How Austerity Kills,” New York Times, May 12, 2013, http://www.nytimes.com/2013/05/13/opinion/how-austerity-kills.html; David Stuckler and Sanjay Basu, “Paul Krugman’s right: Austerity kills,” Salon, May 19, 2013, http://www.salon.com/2013/05/19/paul_krugmans_right_austerity_kills/
  13. [13]Melvyn P. Leffler, “The Free Market Did Not Bring Down the Berlin Wall,” Foreign Policy, November 7, 2014, http://www.foreignpolicy.com/articles/2014/11/07/berlin_wall_fall_25_anniversary_reagan_bush_germany_merkel_cold_war_free_market_capitalism
  14. [14]David Benfell, “Conservative Views on Undocumented Migration” (doctoral dissertation, Saybrook, 2016). ProQuest (1765416126).