Some people say it doesn’t even exist – that it’s “meaningless”, or even “a term of abuse”. But from the 2008 financial crisis to the vote for Brexit in 2016, from the rise of the alt-right to the Covid-19 pandemic, there is no way of properly grasping our world without thinking about how neoliberalism informs our politics and economy.
But what is it? Broadly speaking, neoliberalism can be defined as the raft of policies and overarching political ethos that enabled governments in the late-1970s to turn away from state-directed economic planning, towards an economic model that extended competitive markets into every sphere of human activity and initiated the reign of finance capital (the kind dreamed up in the City of London and Wall Street) by removing constraints on capital mobility.
Importantly, neoliberalism is not merely a policy agenda but also a moral framework that teaches individuals to conceive of themselves not as, say, wage earners but rather as risk-taking entrepreneurs who should expect to shoulder the financial risks of their participation in higher education, the credit system and deregulated labour markets.
First implemented as an economic programme in the UK and the United States by the Thatcher government and the Reagan administration, its principles continued to underwrite the third way politics of New Labour and Clintonite Democrats. Although centre-left politicians reject the applicability of the term to their politics, a wealth of scholarship produced by economists, sociologists and historians demonstrates how third-way politicians advanced the neoliberal project.
So, where does the ideology stand today? Some are calling time on the neoliberal age. In the early days of the Covid-19 pandemic, Paul Mason declared that the exigencies of the crisis would mean that, in short order, the UK’s political class would soon consist entirely of either “enthusiastic” or “reluctant socialists” – progressive state intervention was inevitably back on the agenda. However, claims of this sort should be treated with caution, not least because similar predictions were made following the financial crisis, and after the Brexit vote and the election of Donald Trump as US president. And those predictions turned out to be seriously awry.
For instance, at the height of the financial crisis, the Nobel prize-winning economist Joseph Stiglitz announced, “Neoliberalism … is dead.” Yet it soon became abundantly clear that this was premature. It is true that the crisis seemed to pose a serious threat to the veneration of markets, as governments were forced to bail out the financial sector. But, as scholars such as Philip Mirowski have shown, neoliberals have long understood that their project requires state intervention to create and maintain markets. Rather than thinking of the crisis-fighting of governments in 2008 as a repudiation of market-friendly policy, it’s more useful to think of it as an extreme instance of pro-business government intervention that aimed to maintain the long-term primacy of the market.
On the face of it, the vote for Brexit and the election of Trump appeared to more plausibly represent a break with neoliberalism. But that diagnosis arose from a failure to understand how neoliberalism can adaptively recombine with elements of other ideologies.
While the Brexiteers may loathe the European Union (an institution that neoliberal intellectuals have long disagreed about) they remain committed to the core of neoliberal ideology. For example, the Australian points-based immigration system – so beloved by the Brexiteers – is perfectly congruent with the neoliberals’ view of human beings as bundles of assets (of greater or lesser value). The post-Brexit immigrant’s educational background, work experience and connections are redefined as forms of capital that may or may not be worth investing in (by letting them in) in order to secure a future return on that investment for the national economy. Points-based immigration systems, in other words, do not represent a straightforward shift away from neoliberal, free-market orthodoxy towards rightwing protectionism.
If neither the crises of 2008 nor 2016 signalled the end of neoliberalism, what about Covid-19? Today, as in 2008, politicians such as Rishi Sunak have been forced to implement policies that seem to contradict their adherence to market supremacy, but the intention is again to do so in order to swiftly return to “normal” and wean the public off their “addiction” to state support. The government’s frustrated desire to curtail the furlough scheme, and the clear opposition to implementing a universal basic income, indicate a commitment to maintaining the core of neoliberal welfare policy. This means opposing generous, non-means-tested payments, which neoliberals view as detrimental to fostering entrepreneurial activity and disciplining the workforce.
More disturbingly, in the context of pandemic and the climate crisis, the persistence of the neoliberal view of individuals as human capital raises the possibility of governments treating populations of “low value” as disposable. Increased state intervention to protect incomes is welcome, but could be used by governments to implement a kind of economic triage, with populations deemed not worth “bailing out” excluded from state support. As Michel Feher has shown, there are milder precedents for this in welfare reforms carried out by mainstream political parties in Ireland and Portugal, which reduced benefits for younger cohorts in order to encourage emigration and, in the case of Portugal, to swap young, relatively poor Portuguese for wealthier retirees from abroad. In a context of ballooning national debt, where migrant populations are being treated as vectors of disease, it’s not difficult to see how an exclusionary neoliberal politics that supports investment in certain populations and disinvestment in others could gain traction.
All of this is not to deny that the Covid-19 crisis poses a real threat to neoliberal orthodoxy. Physical distancing and enforced quarantine have disrupted the labour market, potentially shifting the balance of power between labour and capital in favour of workers. The increase in wildcat strikes and the emergence of mutual aid groups are certainly encouraging. And the furlough scheme has temporarily revealed the artificiality of government spending constraints. But given the persistence and adaptability of neoliberal ideology over the past 10 years, any sober assessment of the current situation needs to be attuned to the possibility of its survival (or successful mutation), as well as its possible demise.
• Alex Doherty is the host of the Politics Theory Other podcast