Getting Neoliberalism Wrong

I recently had something to say of the debate about the salience of "neoliberalism" as a descriptor for the character of economic life in most of the world, and not least the U.S. and Britain, these past fifty years--and how those determined to deny that salience made the most of the limitations of particular observers in describing the concept. Treating it as a matter of market fundamentalist--"libertarian"--ideology and a package of particular reforms (deregulate, privatize, redistribute taxation and spending in a manner more congenial to the direct needs of business, etc.) they failed to give neoliberalism its due as a full-fledged economic model, one whose real-life realization, one may add, has been unthinkable without colossal state support, they necessarily fail to reconcile with the ideological libertarianism. Connected with this they often failed to recognize the centrality of financialization to the model.

In themselves these have been major weaknesses, which have contributed greatly to the muddying of the dialogue, but they fall far short of exhausting the limit of failings, not least the tendency to overgeneralize from one part of the neoliberal experience to the rest, Those going by the experience of the early '80s were prone to make much of tight money policies--for example, the conduct of a Paul Volcker--and pay too little attention to the loose money policies that have prevailed since (in the U.S., from Alan Greenspan forward), and the purpose they serve, holding interest rates down with "war on savers" fanaticism not for the sake of old-fashioned Keynesian investment and job creation in the "real economy" (much as its supporters constantly give Keynesian excuses for their actions), but rather keeping speculators in cheap money, in keeping with that aforementioned financialization that has, to use Keynes' words, seen us go from a situation in which speculation comprises "bubbles on a steady stream of enterprise" to one in which enterprise is "the bubble on a whirlpool of speculation," and "development of the country . . . a by-product of the activities of the casino," such that their idea of development is keeping the roulette wheels spinning in the hope of more "by-product." This may be especially the case where observers lay stress on secondary features of the phenomenon. For example, those particularly attentive to the British experience (not unnatural given that the matter of neoliberalism is likely more discussed in Britain than in the U.S.) sometimes argue that neoliberalism has tended to go with centralization of government functions, because this is indeed what happened under Margaret Thatcher, whose government took the authority to set taxation, and decision making about privatization, out of local government's hands. However in America the opposite has been the case, with the Federal government delegating regulatory and welfare functions to the states in the expectation that their conduct will be more in line with neoliberal ideals--this relatively secondary feature an adaptation of the program's implementation to local conditions, even though the larger means and ends of the program (privatization, deregulation, etc., and the financialized model resulting) are the same. Meanwhile they have missed other features of far greater importance, like the interconnection of economics and technology, not least the nexus between finance and an age of "information technology," and the stagnation of technology in other areas, certainly as compared with the progress seen in a more manufacturing-centered era--as well as how neoliberalism has been linked with the ideology of an "information age" relentlessly used to promote it, not least by way of the cults of "innovation," "entrepreneurship," the "startup," and of course, much-ballyhooed "Silicon Valley."

A still more fundamental weakness, however, may be how so many observers have stressed ideas above interests in understanding neoliberalism, a factor certainly in their failure to cope with the seeming contradiction between libertarian ideology and statist policy (and its obvious explanation that the game was not about making the state go away but reorienting the state's functioning at working people's expense). It has also factored in their failure to explain how the neoliberal turn happened--writing as if the persuasiveness of the associated schools of economic thought to "society" at large were decisive. However, the evidence overwhelmingly seems to be that neoliberal thought aligned with the business elite's more practical objects rather than shifting elite thinking--let alone the thinking of the broader public. Certainly the effort to "sell" neoliberalism to the broader public, in spite of being helped immensely by the fact that those predisposed to sympathy to neoliberal economics dominated the relevant corners of the academic and media establishments from the outset, they never came close to making a majority of the electorate supporters of the obviously elitist and anti-popular program. Rather neoliberal politicians got elected by pretending to a greater moderation on the campaign trail than they would display when they got into office (as one sees considering both Thatcher and Reagan), that these were also the beneficiaries of an anti-incumbent mood that had come about because the incumbents had already angered the public by embarking on the neoliberal path (as some regard Callaghan as having done, and one may still more regard Carter as having done), and by changing the subject away from economics (as seen in the extreme attentiveness to the culture wars, and rally-round-the-flag foreign policy crises). It was also increasingly the case that the public did not have a non-neoliberal choice on the ballot at election time the major contenders were all committed to such a program (as seen in the "Neo-Liberal" capture of the U.S. Democratic Party, and Britain's "New Labour"), with said capture proving exceedingly resilient with these years. Thus is it the case that today a Democratic Party which has suffered defeat after defeat because of its commitment to neoliberalism, remains committed to it, such that after a half century of neoliberal policies that consistently caused immense pain while failing to "deliver the goods" (deindustrialization, long-declining living standards, etc.) attempts to sell the public on the solution to the problems neoliberalism caused being . . . more neoliberalism under the banner of the "Abundance" agenda. Indeed, those looking at the rather sorry spectacle will not see in it any reason to doubt that when push comes to shove public opinion has no effect whatsoever on policy, all as the Democratic Party, true to the essential nature of the centrism for which it has historically been the standard-bearer, shows itself to be much more concerned with deflecting even the mildest of progressive pressures than competing with those to its right, for all the grandstanding and theatrics we see in the news as given us by addicts of politics-rather-than-policy.