The End of Neoliberalism? Don't Bet On it

For as long as neoliberalism has been around we have been hearing about its imminent demise--because it has been so consistently disappointing, even by its own lights. (It is worth remembering, for example, that Margaret Thatcher and Ronald Reagan promised their policies would lead to the renewal of their countries' industrial bases. They delivered accelerated deindustrialization instead.) And if the comment and analysis, especially that accorded mainstream space, overwhelmingly consisted of cheerleading for that wave, there were people, even there, who called it as any sane person had to see it. In the wake of the early, yet severe, setbacks, for example, Lester Thurow's Dangerous Currents (1983) was so named because of how policymakers were navigating economic difficulties without a viable theory--because clearly the neoliberal theories were not that. Yet neoliberalism endured, such that a decade on in his bestseller Head to Head (1992) Thurow was declaring its death yet again on the grounds that the post-World War II General Agreement on Tariffs and Trade was giving way to a three-way neomercantilist competition between the U.S., Europe and Japan--and again, his call proved premature.

So did it go again in 1997, after the Asian financial crisis, and in 2000-2001 after the New Economy bubble burst and a raft of colossal financial scandals that in the U.S. had a Republican (!) President signing Sarbanes-Oxley and appointing a vigorous new SEC chief to crack down on Wall Street malfeasance. That mood didn't last, though, but soon enough when that same Republican was presiding over a still bigger financial train wreck there was more talk of "This can't go on" and "This time it's for realz!"--which in many minds was affirmed by the election of a new President--the first Northern, blue state Democrat since Kennedy, one might add--whose slogan, supposedly addressed to the change-minded, was "Yes we can." Instead what he really seemed to be saying was "Yes we can go on being neoliberal," and indeed he did for his eight years in office . . .

Of course, it was less clear than before that he was right about that--certainly where ignoring backlash was concerned, with the backlash from the right, which was to see Obama hand the office over not to his former Secretary of State Hillary Clinton, but to Donald Trump. Since then we have seen trade war, and pandemic, and a still worse economic crisis making the phrase "worst since the '30s" appear ever-more tired without its being at all untrue, and neomercantilist maneuvers in areas like microchip-making--but that hardly signals the end, as becomes clearer if we think about what neoliberalism really means. Neoliberalism, after all, is not just the rollback of the industrial development-welfare-macroeconomic management state (hence the tax cuts and privatizations and deregulation and union-busting and the rest), but a still broader way of running an economy, easier to understand when one looks beyond the official theorizing and the intellectual history to how things actually work.

One can explain the matter this way. Where at mid-century the prevailing growth model had been a "Keynesian Fordism" that leveraged the "propensity to consume," particularly by way of manufacturing, to expand the Gross Domestic Product, neoliberalism (or "Neoliberal Financialization") leverages the "propensity to invest," and centers on finance, making for the centrality of that speculation-minded, creditism-pumped, digitally-enabled, globalized financial sector that is the hallmark of the era. And far from stepping away from that economic model, governments the world over remain strongly committed to it (hence, along with the tax cuts, etc., also the ever-looser monetary policy, the quantitative easing, and the rest, to keep the gamblers on asset values at the casino table), to the point that alternatives are not even imagined by anyone pretending to mainstream respectability. So long as that remains the case, the most that might be imagined would be Keynesian patches to a Neoliberal system--and that is indeed the most we have seen to date, with the direction of a little corporate welfare to manufacturers, a little more money for social services, rather than even the slightest hint of a New Deal era-like change in model.