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Konczal on Neoliberalism

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I am dismayed to see many commenters now dismissing the entire use of the term “neoliberal” as meaningless jargon. This is horrible. Neoliberalism is a very real thing that has transformed our economy and our society. It’s really an entire state of living that affects us all, as it has not only economic facets but social and cultural as we think of ourselves through market-based terms. In fact, I’d go as far as to at least suggest that Chapo Trap House is a product of neoliberalism rather than an opponent of it, building brand identity, market share, and internal cliques instead of focusing on building the solidarity and working on the organizing necessary for a better future.

Yes, the left has turned the word into a pejorative to lay the groundwork for this and that’s a big problem. In fact, identifying this was the only useful part of Chait’s article. It is a big problem. But turning around and dismissing it as meaningless, as Chait does, not only is just as damaging, but it ignores a whole history of neoliberals braying about the new world they were creating, both inside and outside the Democratic Party. I was going to write a long response to Chait, but then decided that it was not worth my time. That’s fine because Mike Konczal has a definitive and thorough response. He identifies three different facets of neoliberalism and you must read it. Here’s the conclusion:

Another place we can see a break in the Democratic Party is in its view of full employment. Between 1944 and 1988, the phrase “full employment” was found in every Democratic Party platform and was commonly mentioned in Democratic State of the Union addresses. As an excellent new report by the Center for Economic and Policy Research, a group called Fed Up, and the Center for Popular Democracy underscores, full employment was also a core demand of the civil rights movement. Then it disappeared, and was only put back in the platform for the 2016 election.

This reflects different views of how the economy works. If it generally works for everyday people, then the most important thing is focusing on education and access. There’s generally no role for government action, outside technocratic tweaks, in making sure we are at full employment. The side that views the economy as underperforming for everyone, no matter what their skill set looks like, would emphasize macroeconomic structural factors more, as Democrats did before 1989.

Or take the general stance toward the business community. Another policy concern that has entered, and departed, the Democratic platform over time is the antitrust agenda — worries about the concentration of big business. The 2016 Democratic platform said: “Large corporations have concentrated their control over markets to a greater degree than Americans have seen in decades” and that Democrats “will make competition policy and antitrust stronger and more responsive.” Again, that marked a return of language that was prevalent in the mid-century period but that disappeared after 1988.

Another change that “neoliberal” Democrats brought to the party was a less skeptical attitude toward the financial industry. Once in favor of keeping financiers in check, Democrats became much more deferential to the industry. An influential 1997 book by Bob Litan and Jonathan Rauch, American Finance for the 21st Century, argued that the New Deal approach was dated and that Congress should place “a greater reliance on more targeted interventions to achieve policy goals rather than broad measures, such as flat prohibitions on certain activities.” We still live with this battle.

We can leave it to the historians to piece together why and how Democrats made the decision to shift course in the 1980s, emphasizing means testing, privatization of key government services, education as a cure-all, and a trusting attitude toward large business. But they did, and we have to figure out what comes next. We need a full break with what happened before, both because the times are different and because the recent solutions — whatever word you use to describe them — aren’t cutting it anymore.

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