GRITTY INTELLECT ~ MONEY BLOG: Get to Know Neoliberalism

The dismantling of neoliberalism could create a bridge between workers, writers, labor and justice activists, environmentalists, and scholars. The efforts could lead to new lobbying groups and policy proposals just as the dismantling of the New Deal and Great Society spawned neoliberalism. Two problems stand in the way: the word “liberal” appears and pushes many Americans into a knee-jerk rage, and even experts have not defined the ideology.

So, many working people express frustration and anxieties about the current economy. Scholars and experts with similar concerns critique neoliberalism. And we need a bridge between these two conversations.

In August 2017, Nathan Heller of the New Yorker called neoliberalism “a fashionable bugaboo.” But neoliberalism is not a made-up fear. It is a recognizable and persistent set of practices from the past 35 years whether we call it by that name or not. Anyone interested in economic equity must translate neoliberalism into a vernacular and pull apart the knot of economic exploitation swirled with inspirational rhetoric.

In America, we have to address the word “liberal.” When I teach twentieth-century history, at some point I bring in “liberalism.” I know the intricate scholarly debates about what I outline here in accessible strokes. But I want to keep it smart and plain.

Imagine the words liberal, classical liberalism, regulatory liberalism, and neoliberalism on a whiteboard. I put a red X through “liberal” because we are not using the American pop media meaning. Since the 1970s, the word has become tied to ideas of generic leftists, the Democratic Party, and certain political-social groups like civil rights, tree-huggers, and feminists—easier if we remove it.

Let’s keep it simple and agree “liberalism” is a philosophy of the late 1800s that emphasized individual rights, individual votes, individual contracts, deeded property rights, capitalism, market mechanisms, and commercial trade as the correct way to organize society. Many indigenous, nomadic, and communal societies did not organize this way.

Socialists, communists, fascists, and others did not support liberalism. When they pushed hard against it during the massive depression of the 1920s-1930s, the U.S. government under President Franklin Roosevelt proposed innovative policies that became “regulatory liberalism,” with increased government interventions in capitalism and its markets (also New Deal liberalism, embedded liberalism).

Its approach, which some complained went way too far, was often contrasted to good-ole “classical liberalism.” But a return to that was not acceptable to some U.S. and European men—major corporate families like the DuPonts, conservative economists, and finance executives. Shrinking 50 years of complex history into a summary: they began meeting in the late 1930s to replace regulatory liberalism and articulated an extreme ideology called “neoliberalism.” In the 1980s, neoliberal politicians and economists came to dominate U.S. and British governments.

This is neoliberal ideology: the individual and the market are the moral and most productive centers of rights and responsibilities. Therefore, all political and economic policies should get out of the way of “the individual” and “the market” and maximize conditions for their “free” operation. In idealistic form, the individual is a neutral person, free to make limitless choices in the market.

Neoliberalism has profound emotional appeal because it’s basically the inspirational hero narrative, beloved in American culture, set in economic terms.

In practice, neoliberalism appears as deregulation, austerity, privatization, “free trade,” and “flexible” employment. Any collective public efforts on behalf of workers, consumers, or shared natural resources as a whole are not welcome.

There are irreconcilable contradictions, like the market does not exist as a natural force, like gravity. The market is people making government policies, laws, rates, agreements, and prices mixed with human behaviors often driven by envy, fear, and prejudice. And workers seem to bear the “risks and rewards” of an “efficient economy” driven “purely by the market,” but investment bankers only bear the rewards because in losses they are protected as a group by layers of complicated financial products.

The utopian neoliberal ideology also ignores basic historic conditions: ethnic, religious, and racial bigotry; patriarchal arrangements; discriminatory practices like nepotism and cronyism; unflagging corruption; centuries of wealth accumulation by certain groups; colonialism; the advantage of legacies like affluent relatives who attended prestigious universities, secret societies, private clubs, and fundraisers.

So the results of actual neoliberal economics include a perpetual distribution of both income and wealth upward to the elite via regressive income taxes, cuts to capital gains and other wealth taxes, deregulation of investment banking, the dismantling of protections for worker organizing, a disinterest in innovative labor policies to address expanding contingent employment (from Uber and Starbucks to adjunct professors and freelance IT professionals), and the “opening of developing countries” to foreign investment. Neoliberalism in practice has had no proven results in improving conditions for working people or stabilizing the middle class.

Yet neoliberalism has dominated since 1980. Its utopian ideology, infused with the hero narrative, has buoyed its practices despite the clear losses and instability they generate for most working people. Permeated with upbeat cultural lines, neoliberal policies appeal because advocates use words like individual, liberty, choice, freedom, efficiency, and entrepreneur. Sounds fantastic! But the enchanting cultural lines obscure plain-old, predictable exploitation. It’s not a conspiratorial trick. Notions of the individual, choice, and freedom have always been part of American society. They then fused with and helped to foster neoliberalism in practice.

I suggest a healthy skepticism, questions like freedom for who, choice of what, efficiency for what benefit, flexibility for what purpose, and what percentage of Americans become millionaire entrepreneurs? Talking heads that critique “Wall Street” do little to puncture the neoliberal cultural lines. Who doesn’t love the idea of a plucky hero working his or her way to glorious financial success? We have to pull out the neoliberal cultural lines to get at the economic and political parts and start a shared conversation between frustrated working people, activists, and scholarly critics of neoliberalism.