What, if anything, is neoliberalism? (crosspost from Crooked Timber, repost from this blog 2002)

The comments thread on my WTO post raises the much-argued question of whether the term “neoliberalism” has any useful content, or whether it is simply an all-purpose pejorative to be applied to anything rightwing. O

In this 2002 post from the pre-Cambrian era of blogging, at a time when I aspired to write a book along the lines of Raymond Williams’ Keywords, I claim that neoliberalism is a meaningful and useful term, which isn’t to deny that it’s often used sloppily, like all political terms.

Some thoughts seventeen years later

First, this definition refers to the standard international use of the term, what I’ve susequently called “hard neoliberalism”, represented in the US by the Republican Party. I subsequently drew a distinction with “soft neoliberalism”, which corresponds to US usage where the term is typically applied to centrist Democrats like the Clintons. I’d also apply this to Blair’s New Labour, although, as stated in the post, there were points at which Blair and Brown drifted back in the direction of traditional social democracy.

Second, the discussion of how the right (in Europe and Australia) is shifting away from neoliberalism towards “the older and more fertile ground of law and order and xenophobia” seems as if it could have been written today. These processes take a long time to work themselves through.

As a corollary, the idea of Trump as a radical break with the past is unsustainable. There’s been a qualitative change with Trump and the various mini-Trumps, but the process was well underway before this new stage.

Finally, my characteristic overoptimism shows up in various places.

Neoliberalism and Failure: Some definitions

One obvious problem with my claim that neoliberalism has failed is that I haven’t provided a definition of either ‘neoliberalism’ or ‘failure’. Taking the second point first, there are several ways in which a political ideology may be a failure.

First, it may never attract sufficient support to have a serious influence on political outcomes. In this sense, ideologies like libertarianism and guild socialism may be regarded as failures.

Second, an ideology may be adopted and implemented, then discredited and discarded, or superseded by some new idea. This is the eventual fate of most political ideologies. Communism is the most recent example of a failure of this kind.

Third, an ideology may fail to deliver the promised outcomes. This is much more a matter of judgement, since promises are never delivered in full and failures are rarely complete.

It is important to remember that failure is never final. Democracy, for example, seemed like a failure until at least 1800. Although many democratic governments arose before that time, all had either collapsed in anarchy, given rise to demagogues who made themselves tyrants or decayed into oligarchy. The United States was the first country to establish a sustainable democracy, and there were plenty who opposed it there. Abraham Lincoln was not engaging in hyperbole when he said at Gettysburg that the outcome of the Civil War would determine whether government ‘of the people, by the people for the people’ could be sustained.

Now for a definition of neoliberalism. As the name implies, neoliberalism is a descendant of classical liberalism, defined by the fact that it is a reaction against social democracy, which also draws heavily on the liberal tradition. The US use of ‘liberal’ to mean ‘social democrat’ reflects the latter point.

Because it is primarily based on a critique of social democracy, neoliberalism places much more weight on economic freedom than on personal freedom or civil liberties, reversing the emphasis of classical liberalism. Indeed, it is fair to say that on matters of personal freedom, neoliberalism is basically agnostic, encompassing a range of views from repressive traditionalism to libertarianism.

In terms of economic policy, neoliberalism is constrained by the need to compete with the achievements of social democracy. Hence, it is inconsistent with the kind of dogmatic libertarianism that would leave the poor to starvation or private charity, and would leave education to parents. Neoliberalism seeks to cut back the role of the state as much as possible while maintaining public guarantees of access to basic health, education and income security.
The core of the neoliberal program is
(i) to remove the state altogether from ‘non-core’ functions such as the provision of infrastructure services
(ii) to minimise the state role in core functions (health, education, income security) through contracting out, voucher schemes and so on
(iii) to reject redistribution of income except insofar as it is implied by the provision of a basic ‘safety net’.

With this definition, a reasonably pure form of neoliberalism (except for some subsidies to favored businesses) is embodied in the program of the US Republican Party, and particularly the Contract with America proposed by Gingrich in 1994. The ACT Party in New Zealand also takes a fairly clear neoliberal stance, as do the more ideologically consistent elements of the British Conservative Party and the Australian Liberal Party.

My claim that neoliberalism has failed therefore uses several different meanings of the term ‘failure’. In Europe, apart from Britain, neoliberalism has mostly failed in sense (i). The EU is inherently social democratic in its structure and attempts by poltical groups in some Eastern European countries (notably the Czech Republic and Estonia) to pursue a free market line have failed in the light of the superior attractions of the EU. It is true that the European social democracies have given some ground, notably with respect to privatisation, but no genuinely neoliberal party has arisen or seems likely to. The political right has moved back to the older and more fertile ground of law and order and xenophobia.

In Britain, neoliberalism has failed in sense (ii). The Conservative party is hovering on the edge of extinction and, as I have arged previously, the ‘New Labour’ government has shifted steadily away from neoliberalism and towards a mildly modernised form of social democracy. The same is true in New Zealand, where the advocates of neoliberalism, once dominant, are now completely marginalised.

Although the Australian government started out with a clearly neoliberal framework it has gradually dropped it in favor of the kind of law and order/xenophobia/militarist position that characterises the traditional right. The repeated resort to ad hoc levies as fixes for industry-specific problems is indicative of a government that has lost its economic bearings. Moreover, the Liberals look like being in semi-permanent opposition in most of the states and the Howard government is unlikely to survive the end of the housing bubble (although given the quality of Federal Labor, anything could happen).

Finally, in the US, neoliberalism remains the dominant ideology but is increasingly failing in sense (iii). Three years ago, American pundits could seriously predict a never-ending economic boom. The combination of continued prosperity and ‘the end of welfare as we know it’ seemed to be on the verge of eliminating crime and unemployment. Now the most charitable assessment of US economic performance is ‘better than average’ and even this cannot be sustained of the current recession/stagnation drags on much longer. The basic problem is that, given high levels of inequality, very strong economic performance is required to match the levels of economic security and social services delivered under social democracy even with mediocre growth outcomes.

13 thoughts on “What, if anything, is neoliberalism? (crosspost from Crooked Timber, repost from this blog 2002)

  1. The Marxians at the Monthly Review understand this stuff better than anyone else.

    “The main political issue before us at present is the question of unity on the revolutionary left. The universal threats facing us are clear for those with their eyes wide open, and increasingly intertwined: (1) neoliberalism (threatening universal exploitation/expropriation), (2) neofascism (threatening state terrorism), (3) fossil capital (threatening planetary omnicide), and (4) permanent imperialism, militarism, and war (threatening the demolition of societies and nuclear oblivion).

    In the circumstances before us, there cannot be any compromising with capitalism or neoliberalism. A popular front with neoliberalism against the rise of neofascism would not work, given the close relation of these two reactionary capitalist political movements. Rather, we are facing today the prospect of what David Harvey has referred to as a neoliberal-neofascist alliance. Nor is there a basis for any compromise on the issue of fossil capital, as demanded by the system. The only answer then is to turn to the popular bases of revolutionary action, which, despite everything, have been warrening themselves through society, a kind of labyrinth beneath capitalism. All the struggles against imperialism, racial capitalism, global patriarchy, and ecocide, and for LGBTQ rights, indigenous rights, ecosocialism, and equality of condition, are really struggles against the logic of capitalist valorization.” – John Bellamy Foster

    Capitalism is intrinsically anti-democratic. Neoliberalism is the vanguard of neofascism.

  2. The Koch brothers get a lot of flack for sponsoring the people behind this neoliberalism. They get too much of the blame really. Early on I would have thought their influence was helpful. Later benign and pretty harmless. But the kind of thinking they have crafted is getting more and more toxic. Its that Cato Institute form of capitalism. That form of free enterprise where you conveniently forget to clamp down on financial sector subsidies, where you fail to pump up royalties and you fail to phase to Georgism with a threshold.

    Everyone else has to walk against the cold wind of international competition but the bankers and their lowest risk clients are being subsidised on a daily basis. Then they pick winners so they don’t have to work for a living. They funnel all the cheaper loanable funds to real estate and people who cannot go broke. They capture all the networking benefits under one winner. Its a winner take all form of capitalism and its got to be taken down and taken out, before we wind up with a new era of communism.

    This form of capitalism is beginning to make Marx retrospectively right about everything, at least on the surface. And Marx was definitely an economics sophisticate (unlike Keynes in my view.) Every day the winners above a certain thresh-hold are hoovering all the value into their own lap. They cannot do that with higher royalties, Georgism with a threshold, and the phase-out of fractional reserve.

  3. Koch Brothers harmless with respect to the delay of measures to prevent, slow down and mitigate the effects of CO2, CH4 etc. on global temperature? I take it you’re joking?

  4. Or, as a Chilean protester put it: Neoliberalism was born in Chile and this is where it will die.

  5. It won’t die. Neo-liberalism will go into a mostly dormant phase. The body of theory behind neoliberalism is actually very sophisticated and strong. But when the bigshots go to actually put it into practice they always pervert it and make it a bait and switch. So they will just replace it with another bait and switch for awhile.

    I was neo-liberal. But then I found that the people in my camp didn’t want to apply these concepts to finance (and therefore indirectly real estate and big business) and the medical mafia. The concepts would have naturally lent themselves to a purge of middle management and a flattening to the hierarchies in big business. Instead we saw pressure on welfare recipients and front-line low-paid workers. All of a sudden nurses had to work twice as hard while management staff grew more numerous and higher paid. So it seems to come in as this horrific bait and switch. They get away with this for about 30 years than the bigshots will swing back towards socialism and pervert that spending flow as well.

    Whether we have free enterprise thinking or welfare state thinking, these things can be ruined by the imbalance of influence in society.

  6. Brilliantly prescient and perceptive John. (I’m not sure most readers are aware that most of this post – the bit under the heading ‘Neoliberalism and Failure: Some definitions’, is a repost from 2002). And although the alliance of neo-liberalism and neo-fascism in the last 17 years has kept them with their hands of many of the levers of power, the fact that objectively they have failed to deliver significant benefits to the broader populace, will I think catch up with them. Maybe its my optimism, but I think if you keep delivering shit the populace will eventually revolt and take control.

  7. Here is former French President Valery Giscard d’Estaing:

    “The most scientific form of modern economic thought is that of liberalism. [ . . . ] It contains very original ideas such as the theory of continuous growth and the theory of the quest for equilibrium at a certain economic level. It is thus a very advanced and new theory. Hence, in my opinion, the need to give it a new name: neoliberalism.”

    Quoted in Pierre Bourdieu (1976), “Encyclopaedia of accepted ideas and commonplaces used in neutral spaces” in Actes de la Recherche en Sciences Socialies 2/3, 1976..

  8. Evangelical Christianity seems to be the favored religion of Neo-Liberalism despite the fact that the bible warns against greed and excessive wealth over 2000 times. Scott Morrison’s deeply held and harsh religious beliefs are not irrelevant ,but the consensus is that he deserves a free pass on that.

  9. JQ said of Europe & Australia “from neoliberalism towards “the older and more fertile ground of law and order and xenophobia”.

    Ikon said “Neoliberalism is the vanguard of neofascism.”

    The Freedom House report on “Freedom on the ‘Net” highlights the crisis of social media, and I share those concerns. Let’s make sure “that the internet does not become a Trojan horse for tyranny and oppression”. 

    New Daily… (haven’t seen this in other msn? Have you)
    “Surveillance and censorship are putting the squeeze on online freedom: Report

    ” Our future freedoms hinge on our ability to fix social media, the report found.”

    ” Worrying legal changes including court decisions “expanding the country’s punitive defamation standards, an injunction silencing digital media coverage of a high-profile trial, and a problematic law that undermines encryption” also “shrunk the space for free online expression in Australia”, the report said.”

    “Freedom on the Net 2019
    “The Crisis of Social Media

    “There is no more time to waste. Emerging technologies such as advanced biometrics, artificial intelligence, and fifth-generation mobile networks will provide new opportunities for human development, but they will also undoubtedly present a new array of human rights challenges. Strong protections for democratic freedoms are necessary to ensure that the internet does not become a Trojan horse for tyranny and oppression.”

    Stay vigilant.

  10. So there I was VIGILANTLY reading the comments to the post about boarding schools in England (or UK?) that was posted on Crooked Timber. I was silently reviewing the comments through a sniper scope from a position that was invisible observation from any enemy forces. I was looking for any useful comment that might be of future use in a conversation which would help me to protect the REPUBLICAN freedoms which are neccessary to ensure that the internet does not become a TROJAN for Tyranny and or oppression.
    Then I started to laugh.

    The comment that made me laugh was one that asked if Corbyn had ever been to a boarding school.
    The commentator said the Corbyn seems like a nice guy. I have never seen Corbyn so I certianly can not say if he seems like a nice guy. I imagine he must seem that way to many people though considering that he is the leader of the Labor Party.

    I do know one thing about Corbyn though. He is the leader of a party that has propossed that the top tax rate in England be raised to 50% on incomes over 120,000. Was this his own proposal that the party rubber stamped. Or was it the idea of someone else in the party that he approved of?
    In either case I really would never call anyone a nice guy who can not propose a 100% tax rate for some level of income. And if there is some rate that should be 100% there has to be a lower level for 90 and 80 and 70 and 60%. To set the top level of income tax at 50% is flat out treason.

    But it is quite obvious that the world does not see things that away anymore. But the central committee that I serve and channel is not part of the world of manipulation. Who do you want to make happy? Whose respect do you want to earn? What do you love?

  11. RE: my comment above
    I love the Lotus. I love drawing attention to myself, not for my sake. But to show what retards the “loyal” opposition is. A 50% top tax rate is not loyalty it is treason. So whether or not Clinton or Corbyn is a nice guy is totally irrelevent. Of course someone like me could never win an election under current conditions. But to me that just proves why bullets are at this point more legitimate than ballots.
    Of course making bullets more legitimate than ballots does not give me much of a chance of winning either. But it gives me a second chance.
    American Christian Fundamentalist (literary literaiists) love the stories of people who were given second chances. I guess that they should because Christian literalists are always fuckkng up.

  12. Museum of Neoliberalism.

    “The Museum’s inspiration was “the official and sycophantic ‘Margaret Thatcher Centre and Library'” — Cullen and Grindon want to rival it with an anti-Thatcher museum that rebuts the idiotic slogan, “There is no alternative.”

    Play the PFI Game – supply the NHS a padlock – rentier price of £242,or a lightglobe for £333. 

    “… you can see examples of actual prices charged to the NHS by private contractors for individual items. The total build cost for NHS PFI hospitals was £11.4bn. The final price we will pay is projected to be over £79bn. “Neoliberal policy has also gifted these companies with generous tax cuts. They regularly hold their gains in offshore tax havens. NHS Trusts are often unable to afford the high repayments. …, PFIs have ensured you a longer wait to be seen by a doctor and a drastically reduced treatment service. “The PFI debt is four times the size of the budget deficit used to justify austerity.” Play the video PFI Game on youtube.

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