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Neoliberalism’s 90s Triumph


The New York Review of Books has been publishing a lot of articles recently covering a broad array of American history written by real American historians, i.e., people with training as opposed to the latest David McCullough or whatever. The NYRB always has had some interest in these issues; most notably a lot of the public debates over the historiography of slavery in the 80s went through its pages. But a lot of it is just letting Gordon Wood blather on about the political history of the Revolution in between refusing to admit that his female colleagues at Brown exist (I have heard this from multiple people over the years with ties to the Brown history department) and engaging in an unholy alliance with the Trots to discredit the 1619 Project. So this has been refreshing.

More specifically, Robert Kuttner provides a long if not entirely positive review of Gary Gerstle’s new book on the triumph of neoliberalism in the 90s. The whole thing is well worth reading, but I think it’s also critical here to reinforce the role of neoliberalism in our politics. That’s necessary for two reasons. First, it became a pejorative by some leftists that means “anything Democrats do that I don’t like.” Second, that then spawned a counter-repsonse, one often seen in LGM comments over the years that neoliberalism doesn’t actually exist and instead is something made up by the left. This is even worse because it denies the key sociopolitical trend of recent decades. In fact, I sometimes post at another prominent liberal site and when I talked about globalization in a post, I was asked to take it out because according to the site rules, the word “neoliberalism” is a joke. I was not pleased and didn’t do it.

Importantly, Kuttner spends a lot of time providing a real definition of neoliberalism and its influence over our politics and life. Here’s a piece of that:

What differentiates neoliberalism from the older ideal of laissez-faire is the recognition that a free market will not reemerge if the government simply gets out of the way. The neoliberal perspective, as first articulated in the 1930s by the Austrian economist Friedrich Hayek and by Henry Simons of the University of Chicago, holds that if we want entrepreneurs, financiers, and ordinary citizens to be liberated from state regulation, strong government rules must protect the market from the state. Milton Friedman, in a 1951 essay titled “Neo-Liberalism and Its Prospects,” agreed that this project went well beyond laissez-faire. Gerstle writes, “This strategy was built on a paradox: namely, that government intervention was necessary to free individuals from the encroachments of government.” The historian Quinn Slobodian, in his authoritative intellectual history of neoliberalism, Globalists (2018), goes further: “The neoliberal project was focused on designing institutions—not to liberate markets but to encase them, to inoculate capitalism against the threat of democracy.”

Leftist theorists had long appreciated the role of the state in defining the market. As Karl Polanyi famously wrote, relishing the paradox, “laissez-faire was planned.” And indeed it was. To function at all, even “free” markets require extensive rules defining property itself, the terms of credit and debt, contracts, corporations, bankruptcy, rights and obligations of labor, and so on. The difference between the New Deal or social-democratic view of markets and the neoliberal ideal is that progressives want the government’s rules to act as democratic counterweights to the abuses of capitalism, while neoliberals want them to protect market freedoms. But both accept that capitalism requires rules.

As a dissenting remnant of pre-Keynesian economics, neoliberalism languished until the New Deal model faltered in the 1970s with the improbable combination of inflation and stagnation. Classical economic liberals like Friedman, who had been politically marginal, got a fresh hearing. Carter, never much of a Roosevelt liberal and facing political fallout from stagflation, hoped that deregulation and market competition might restrain prices. Reduced government intervention was congenial to the business elites who were again ascendant during the Reagan presidency. Neoliberalism became the ideological underpinning of a relentless turning away from a managed form of capitalism.

Gerstle explains how the cultural left also found the libertarian and antibureaucratic aspects of neoliberalism appealing, weakening the New Deal order and its political coalition in yet another way. In the culture wars of the 1960s, the New Left rejected corporate cold war liberalism and unresponsive big government in favor of a wished-for “participatory democracy.” Some of this entailed challenging public institutions. “Both left and right, in their new incarnations, shared a deep conviction,” Gerstle writes, that the bureaucratized system “was suffocating the human spirit.” A few years later, Ralph Nader became convinced that several regulatory agencies had become hopelessly captured by the industries that they regulated and helped persuade Carter that the remedy was deregulation.

Despite neoliberals’ embrace of economic liberties, they can be cavalier about political liberties. As theorists such as Isaiah Berlin appreciated, people depend on positive as well as negative rights. The freedom to get an education or receive medical care regardless of one’s income exists in the realm of citizenship. These are freedoms that markets don’t provide and that proponents of neoliberalism ignore. When the dictator Augusto Pinochet needed advice on privatizing and deregulating the Chilean economy, he turned to “los Chicago Boys,” who assisted him without embarrassment. Ironically, neoliberalism undermines liberalism in its oldest sense—the human liberties of the Enlightenment.

There’s a few things I’d like to highlight.

First, as Kuttner explores later in the essay, both Bill Clinton and Barack Obama were committed neoliberals, if because they saw no other way forward if not from ideological precursors. It’s important to note the incredible damage this caused, whether it was Clinton’s welfare politics or the effective indifference to the decline of industrialized communities that have then turned hard-right or it’s Obama letting the bankers off the hook in 2009.

Second, and another point Kuttner explores, is the cultural side of this. We are all brands now. Trust in the state remains extremely low. Of course, this is very much a Republican political project, but it builds on neoliberalism’s fundamental values that the private individual has more value than the state and should be promoted as such. We see this as much on the left as on the right. Anti-statism on the left is a very real thing, with so much more interest in anarchism that Large S Socialism on the contemporary left. The impact of an extreme individualism, where I wear my politics like my new sleeve tattoo and if said politician doesn’t tick off every box I’m not going to vote for them, is an extreme problem, probably the biggest on the left as I see it. This certainly exists in the left-center world as well, but with less force. What this really means is that the entire idea of solidarity becomes about you supporting whatever I want versus us working together even if we don’t agree on everything.

We also saw the impact of this with the pandemic, where the cult of the extreme individual led so many people to reject basic science and medicine in favor of thinking of their own bodies as temples in which only they can make decisions about it. Now, to be clear, while this is very much a neoliberal move, it’s far more than that. Neoliberalism and its impacts are only one contributing factor of something that has other roots in, say, the rejection of expertise over environments and bodies going back to the 60s and 70s (much of which was justified) or the rise of right-wing hate media. But it is part of the story and one we ignore at our peril.

Third, and Kuttner does not explore this, is that thinking about this goes quite a way toward explaining some of the tensions within the Democratic Party. In short, with a few exceptions like Personal Lord and Savior Manchin and whatever the hell Sinema is, Democrats today fall into two general camps, to be overly broad for the purposes of this post. The first is the Bernie type, which, to be shallow about it, tries to bring back the old class politics and often gives social issues short shrift. This is probably a lot more common among rank-and-file white Democrats than it is with the politicians themselves, though Fetterman is having some success in using this rhetoric. The critique of this approach is that a Democratic Party relying on herrenvolk policies is a nonstarter and those who want us to accept the racism of white working class people are off base to the say the least.

Well, I don’t per se disagree with this, though losing the entire white working class to fascism is, to say the least, a problem. But what we talk about a lot less is the other side of this–the child of neoliberalism at the very least. That is the more common Democratic politician who is quite good on individual social issues–strongly pro-choice, pro-gay marriage, pro-trans rights, pro a lot of things that we hold dear. But they are often actually pretty crappy on class-based issues. They support some form of better health care and the like, and I’m not downplaying this. But on the actual class-based politics themselves, the ones that talk about unions, they are often disinterested to hostile. That was true of both Clintons, it was true of Gore, it was pretty much true of Kerry and Dukakis, it was quite true of Obama, but it is not true of Biden in part because Biden comes from Scranton and in part because he’s always been in the center of the party and it’s pulled back to the left at the grassroots on class issues. But the now aging gerontocracy of the Party? Not so great. So many of these Democrats are deeply connected to corporations and are ultimately supporters of corporate power over worker power. As someone mentioned in the thread yesterday where I made fun of the gerontocracy civil war in New York City, if Nadler loses, Zoe Lofgren takes over his committee chair and she’s a bought and sold Google hack. Meanwhile, she’s fine on all the individual expression issues.

This might seem to be getting a touch far afield here, but I don’t think so. That’s because we have so deifying the issues of individual expression over those of class-based expression that we don’t have the conversations about why this is a problem. And it is a problem! As for me, I don’t see why we don’t demand that our leaders are good on abortion and queer issues AND are awesome on class issues at the same time. But we actually don’t do this too much. Look at how little critique environmentalism gets today from being completely friendly with corporate power and talking about green capitalism as the future. Meanwhile, those green capitalists hate unions as much as U.S. Steel or Amazon! This is part of the power of neoliberalism as well. It even changes the functional meaning of solidarity in political culture to what we can call ally culture, which is fine, over older forms of solidarity culture based around unions and class. The individual rules the day. Read the political tattoos on my arm.

Fourth, and Kuttner gets after Gerstle for shortchanging this, is globalization. I have increasingly come to the belief that the entire modern slippage in democratic values are responses to globalization and the indifference to the social, cultural, and economic upheavals this caused. I think it’s true here, I think it’s true in Japan (especially after the many conversations I had with scholars about contemporary Japan when I was over there), I think it’s true in Brazil, I definitely think it is true in England and France. I actually may write a thought piece book about this after I turn in my organizing book draft at the end of the year (fingers crossed, chickens sacrificed to the Book Gods, etc). Such a thing would build on Out of Sight in useful ways, which I’ve wanted to do for years now but didn’t know what else to say on the topic yet. The destabilizing of the gains workers had made globally, whether auto workers in Detroit or the centralized water systems of Cochabamba, at the same time that the state’s power was destabilized had a tremendous impact on the world and not in a good way if you care about stability. Globally, this was replaced by corporate power (giving Bechtel the Cochabamba water rights is what allowed Evo Morales to win power in Bolivia for instance) that again prioritized the individual brand over the collective good, whether in the economy or in society. It throws workers off balance and then offers them the chance to make good as Uber drivers.

I’m working through a bunch of ideas here and I haven’t read Gerstle’s book (but I will soon). But I think that if anything, we vastly undersell the power of neoliberalism in reshaping the contemporary world, largely because doing so forces us to reckon with a lot of contemporary political issues we’d rather not discuss. So it becomes easier to use it as a catch-all on the left or deny its existence from the left-center. Neither is accurate, neither is acceptable.

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