NEOLIBERALISM is dying. At least that’s the growing consensus among left-of-center commentators in the US and UK. Publications of the bipartisan center have joined outposts of the left in proclaiming the Biden agenda a historic repudiation of the pro-free market orthodoxy that has dominated US and global politics for more than four decades. In Foreign Policy—hardly a hotbed of radicalism—Adam Tooze announces, “Biden’s Stimulus is the Dawn of a New Economic Era.” In the avowedly Marxist New Left Review, Cédric Durand claims that the current moment is parallel to the breakdown of the postwar political-economic order that led to the installation of neoliberalism in the first place. Meanwhile, The New Republic, which in recent years has been firmly left of center, published an article by Zachary Carter, asserting that the Biden stimulus means that the bipartisan consensus in favor of the ideas of the radical free-market theorist Milton Friedman is over.
As a critic of neoliberalism, I want them to be correct. But I remain skeptical, because this is not the first time we have been told that neoliberalism is dying. I am old enough to remember when the global financial crisis was trumpeted as the decisive discrediting of neoliberalism, as its policy prescription of deregulating financial markets led directly to economic carnage unseen since the Great Depression. Yet aside from a stimulus bill (which was initially heralded as a return to the postwar Keynesian economic model), there was precious little to distinguish the Obama administration from the neoliberal Clinton administration. After all, most of his top advisors were drawn from the Clinton brain trust. Commentators quickly shifted from declaring the death of neoliberalism to puzzling over the question of how neoliberalism had maintained such a stranglehold even after such a catastrophic event.
During the 2016 US presidential primaries, many saw the rise of Donald Trump and Bernie Sanders as proof that the neoliberal consensus was (again) breaking down. Leftist philosopher Slavoj Žižek even went so far as to endorse Trump over Clinton, citing the possibility of a break with the neoliberal status quo. Yet Hillary Clinton—the very embodiment of centrist neoliberalism—won the Democratic primary and the popular vote, although she did not become president due to America’s unjust and illegitimate electoral system. And while Trump broke with many presidential norms and certain neoliberal “best practices” around free trade, his administration followed closely in Ronald Reagan’s pro-market footsteps, delivering tax cuts, de-regulations, and conservative judges.
Getting Neoliberalism Wrong
Where did these predictions of the death of neoliberalism go wrong? In some cases, it was due to a narrow or simplistic view of what neoliberalism is. Many commentators fall into the trap of judging the political-economic order that has reshaped the world since the late 1970s by the clichés of dorm-room libertarianism. For instance, neoliberalism favors the free market, hence any increase in government spending—especially deficit spending that increases the national debt—must be contrary to neoliberal “best practices.” This logic seems to guide the view that Biden’s infrastructure plans or the Covid-19 relief bills are anti-neoliberal. Yet no actual-existing neoliberal government has ever fully entrusted either infrastructure or emergency response to the free market, which is obviously ill-suited for those tasks.
The pandemic relief funds for individuals and families are admittedly very generous and some measures, like the monthly child credits, could be transformative if they were extended beyond the emergency circumstances of the pandemic. Yet the Democrats have shown no appetite for continuing any of these programs beyond the extraordinary conditions of a global pandemic. In fact, just last weekend, they allowed an eviction moratorium to lapse even amid growing Covid case numbers and high shares of families without sufficient rent money, food, or employment. The administration was subsequently cajoled into extending it via an executive fiat of dubious legality.
However the legal battle winds up playing out, one thing is clear: If Democrats were willing to entrain letting crucial protections expire even while they are still necessary, that should be a clue that the aid was never meant to restructure the economy, but to keep the economy moving in some way until everything can get “back to normal.”
Premature proclamations of neoliberalism’s death are rooted in a problem that goes deeper than a misunderstanding of its tenets. Commentators who think that some deficit spending or public welfare measures (much less empty aspirational rhetoric that will almost certainly never translate into policy, such as Biden’s pro-union gestures) are enough to displace neoliberalism are making a profound mistake about the kind of thing it is. Neoliberalism is more than a laundry list of policies and “best practices.” It is a holistic ethos and vision for society, one that aims to remake as many areas of life as possible on the model of market competition. This ambition extends from the global level down to the most intimate recesses of our self-image and self-worth—every country, every institution, every individual human being must be refashioned into a self-branding, self-promoting market competitor.
“Neoliberalism is more than a laundry list of policies and ‘best practices.’ It is a holistic ethos and vision for society, one that aims to remake as many areas of life as possible on the model of market competition.”
How does neoliberalism justify such quasi-totalitarian aims? In the same way that every social order justifies itself: by presenting itself as a moral order that reflects unassailable moral values. Laws and policies and money and police officers are the source of any social order’s power, but its moral values are the source of its legitimacy. In the case of neoliberalism, the central value is freedom. Market competition is the best way to organize society in the neoliberal view because the market is all about people voluntarily coming together to freely choose between goods and services. Governments, labor unions, and collective politics are untrustworthy because they apply one-size-fits-all policies that don’t respect individual freedom.
Freedom doesn’t just ground the legitimacy of the neoliberal order, it also provides a way for it to answer challenges to its legitimacy. One thing that hurts the legitimacy of the social order is if people are suffering for no good reason—for instance, a peasant in a developing nation paying off a microloan that didn’t work out or an American college drop-out paying off their student loans. In both cases, the neoliberal order can answer that the bad outcome was a risk that the individual freely took on when they accepted the loan. In the neoliberal view, respecting their freedom to fail is more important than making sure everyone enjoys a positive outcome.
Neoliberalism certainly gives us plenty of freedom to fail—in fact, it sometimes seems like it gives us nothing but that. It gives us just enough freedom that it can blame us for our own problems, but not enough freedom to really change our circumstances. Further, the system gets us to blame ourselves for our problems, to focus on our own choices rather than asking why we only had those choices in the first place.
Instead of asking why microloans are the only form of aid to start a business in many developing countries, borrowers blame themselves for choosing to take out the loan or not choosing a different line of business. Instead of asking why the state doesn’t provide free universities, borrowers blame themselves for choosing the wrong school or the wrong field of study. And when we blame ourselves, we implicitly endorse the legitimacy of the system, because we acknowledge that the outcome was justified.
In some ways, this strategy of getting people to blame themselves for the outcome of forced choices is a strange one, relying as it does on guilt and shame rather than more positive emotions—but it is also a powerful one. Just as people raised in certain religious traditions continue to experience patterns of self-undermining or excessive guilt long after they leave the faith, so too do neoliberal subjects fall into the trap of blaming themselves rather than the system even when they are well aware of the strategy of the forced choice. (I include myself here, and I literally wrote an entire book about the reliance of neoliberalism on forced choices.) Neoliberalism digs its way into our emotions and our self-image in a way that is very difficult to dislodge.
The connection with religion is more than just an analogy. In Neoliberalism’s Demons, I argue that one reason the trap of forced choices is so effective, at least in Western countries, is that it taps into some of the deepest cultural patterns inherited from Christianity. In traditional Christianity as well, we have free will, but only on condition that we choose rightly. Anything that we choose independently of God—anything that is truly free in the sense of not being determined by someone else—is by definition a sin. This of course raises the question of why God would give us freedom that can only harm us, and the answer is that he needs sin in the universe so that he has something to redeem. It is much more glorious and impressive to pull good out of evil than for everything to go right in the first place.
Hence, some Christian theologians suggest, one of God’s first acts was to make sure there was a rebellious and sinful element in his creation that he could overcome. According to Augustine, when God created the angels to be his spiritual helpers, he immediately commanded them to submit to him unconditionally. Those who hesitated were branded as demons and condemned with no possibility of forgiveness. While Augustine’s emphasis is on the demons’ moral depravity, over the course of his argument it becomes clear that their rebellion is a feature not a bug—the demons need to exist so that God will always have evil foes to overcome.
Far from being a one-off occurrence at the dawn of time, this process of converting creatures into demons happens all the time, especially under neoliberalism. Countries that take IMF loans are forced to adopt policies that will keep them in an economically dependent position, meaning that they will “fail” and be forced to seek loans again. In the US, Black and other minority communities are patrolled and harassed more heavily by police, meaning that the police inevitably arrest and charge more of them. Since those who have been in prison can seldom find legitimate jobs, more and more people are forced into illegal pursuits to survive—which provides the justification for sending more police into those communities, repeating the cycle.
“The neoliberal system doesn’t only force us to choose the ‘right’ thing—often, perhaps even most of the time, it forces us to choose the ‘wrong’ thing.”
In short, the neoliberal system doesn’t only force us to choose the “right” thing—often, perhaps even most of the time, it forces us to choose the “wrong” thing. The reason for this is that it needs a ready supply of scapegoats to blame for social problems. In recognition that the system is acting like God did when he trapped the fallen angels into acting as his foes, I call this dynamic of setting people up to fail “demonization.” Even though certain countries, groups, and individuals are more exposed to it than others, under neoliberalism everyone is in danger of being demonized. In other words, any of us could find ourselves presented with a forced choice in which we are compelled to choose “wrong” and then, like the demons within the traditional theological system, are scapegoated for doing exactly what the system wanted us to do.
Biden’s Reboot of Neoliberalism
To return to the false predictions of a post-neoliberal era, this strategy of scapegoating was absolutely central to shoring up the legitimacy of the neoliberal order. New strategies of demonization were urgently needed in the case of the global financial crisis, which was obviously a system-wide failure brought on by elite policies and business practices that led to immiseration on a mass scale. Surely everyone couldn’t have made bad choices that justified this indiscriminate punishment, right?
Yet almost immediately after the crash, conservative commentators claimed that the real culprit was not the big banks or deregulation, but irresponsible homebuyers who had taken on loans they could not afford—and priority number one was making sure that those losers suffered for what they did. The Tea Party movement coalesced around the demand that no undeserving homeowner should be bailed out with public funds. And the Obama administration obliged them, never using a single cent of the money that Congress set aside to help individual households.
As always, conservatives refused to take yes for an answer and pushed their conspiracy theories further. Inevitably, they took on a racial tinge, with many falsely claiming that measures meant to help Black people purchase homes had forced the banks to lend to less creditworthy households. Anti-immigrant rhetoric also steadily increased, as conservatives blamed mass unemployment on Latin American immigrants who were supposedly “stealing our jobs.” In some ways, this trend to scapegoat foreigners for self-inflicted economic problems led to departures from neoliberalism—as in Trump’s demonization of international agreements, which led to the failure of the Trans-Pacific Partnership.
Yet the scapegoating itself remained deeply neoliberal. Just as economic migrants were being blamed for responding to economic signals sent by US employers, so too were foreign countries being chastised for competing effectively within an international order US corporations had shaped in their own interests.
In the case of the pandemic, demonization alone was not sufficient to shore up the neoliberal order’s legitimacy. The attempt to blame individuals for their fate during the pandemic could only go so far—after all, there’s no way to blame individuals for losing their job when the government is forcing businesses to shut down and people to stay home. And as already noted, in recognition of this fact, the government has provided massive monetary aid throughout the pandemic—under both Trump and Biden, whether Congress was divided between the two parties or controlled solely by the Democrats. Since these policies appear to be such a repudiation of neoliberal austerity politics, they have naturally been the focus of those who claim the pandemic is bringing an end to neoliberalism.
But even here, the departure is not as radical as it may seem. While the unconditional stimulus checks got the most attention, the bulk of the support for individuals came in the form of expanded unemployment benefits, in some cases replacing 100% or more of people’s income. This kind of generosity was unexpected after years of neoliberal austerity, but we should note that the aid was still tied to labor market participation. As Melinda Cooper has demonstrated, the hallmark of neoliberal welfare programs has been to force beneficiaries back onto the labor market as quickly as possible.
And sure enough, even at the earliest stages of the pandemic, many Republicans and some Democrats worried that the unemployment benefits were too generous and would discourage people from seeking work. Now, as vaccination rates rise and most states have removed Covid restrictions, individual states are ending the extra benefits. Even President Biden has publicly stated that no one should expect to receive further cash support if a suitable job is available. In other words, the very real departure from neoliberal norms was structured in a way that allowed for a relatively seamless return to individual responsibility—and individual blame for individual failure.
When it comes to dealing with the pandemic itself, however, neoliberal individualism has prevailed ever since the end of the initial shelter-in-place orders. Conflicting Covid information and rules coming from government agencies, businesses, and news sources meant that individual Americans were largely left to decide the best way to respond to the pandemic on their own—a trend that, like the pandemic aid, has remained consistent under both Trump and Biden. Even the choice whether to be vaccinated has been left up to the individual, with the predictable result that huge numbers of Americans are “freely choosing” to endanger their own health and that of their communities.
Biden himself has announced that the slow uptake of vaccination is a national crisis, and yet, aside from implementing a mandate for federal employees, he has mostly limited himself to chastising individuals for failing to get vaccinated. States, municipalities, and employers have been left to formulate their own guidelines. Inevitably, some are refusing, leading to the demonization of anti-vaxxers, Red States, and conservative employers. I share the frustration with people who are making foolish—or, in the case of anti-vaxxing politicians, dangerously nihilistic—choices that affect us all.
“Our collective obsession with the evil anti-vaxxers has kept us from asking a more fundamental question: why on earth is the choice to vaccinate being left up to individuals at all?”
This is another way neoliberalism “hooks” us, by offering us the pleasure of castigating the demons we “love to hate.” Tempting as it is to paint all the unvaccinated as malicious idiots, though, the fact is that many, especially in Black and other minority communities, are victims of misinformation and lack of resources. In our rush to castigate those who have chosen wrongly, we ignore the powerful systems that have decided in advance the narrow range of options they will enjoy—though in this case, the problem is not a paucity of options, but something more like the theological paradox of freedom that can only be used wrongly. In other words, our collective obsession with the evil anti-vaxxers and what it might take to get them to finally make the right choice has kept us from asking a more fundamental question: why on earth is the choice to vaccinate being left up to individuals at all?
Though the CDC director recently claimed that a federal vaccine mandate is being investigated, Biden Press Secretary Jen Psaki later clarified that such a measure is not on the table. There are good reasons to be skeptical of a vaccine mandate. For instance, its reliance on racist police power for enforcement and the likelihood that it will provoke violent backlash in some quarters. But the fact that a direct and straightforward society-wide solution to a society-wide problem is so radically absent from US political debate—that we are apparently collectively willing to sacrifice people’s lives and health to an illusory freedom and to reserve our ire for private individuals rather than powerful systems—shows that neoliberalism is alive and well, not only in the White House but in our own individual hearts.
Dislodging it will take more than some temporary deficit spending. It will require unlearning destructive patterns of individualism and self-blame and rediscovering habits of collective action and responsibility—two tasks that our society’s astounding failure in the face of a once-in-a-lifetime collective emergency has shown to be more urgent than ever.
Adam Kotsko teaches in the Shimer Great Books School of North Central College. He is the author, most recently, of Neoliberalism’s Demons: On the Political Theology of Late Capital.