Sacred Headwaters #30: What is Neoliberalism?

The term "neoliberalism" is increasingly common even in mainstream discourse (and in this newsletter). What exactly does it refer to, and how did it grow into the global framework that it is today?

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Issue #30: What is Neoliberalism?

The term “neoliberalism” seems to be increasingly part of public discourse, but it’s not a new term, nor is it simply an umbrella term deployed by leftists to encompass everything they hate about the status quo (though it’s often used that way). I use it somewhat regularly in this newsletter — most recently, in the last issue — and a reader asked me to define it, at which point I realized that even my working definition of it was not precise, so I figured we ought to dive into what it really means, where it came from, and how it evolved to be a defining global paradigm that manifests in everything from international and intranational policy to the culture of individualism to the very meaning and basis of moral values. The term is most often used in a critical context — including here — but it’s not just a generic bogeyman of modernity, nor is it strictly synonymous with capitalism. It is a school of thought with an academic lineage and progressive history of adoption in global policy-making and ideology; critics are the ones to name it because they’re the ones calling for change, not because there’s nothing there to name. That said, as we’ll read below, it’s used in a variety of ways by different people and there is not a clear consensus on what it is today, in part because it has evolved as it has spread geographically.

In this issue, we’re going to read about the space of what is considered neoliberalism, how it developed, how it influences our lives today across multiple scales, and how we might move beyond it. For better or for worse, we will not be leaving this newsletter with an exact definition of neoliberalism, but we will hopefully have a more precise understanding of the terrain the term occupies. Here, I’ll briefly introduce some of the ways it is commonly used, some of the ways I’ve used it in this newsletter, and explain why I think that understanding its scope is so important for building a resilient and sustainable society.

While we’re going to expand beyond this over the course of this issue, I think it’s valuable to introduce a relatively concise (though not particularly precise) definition of the term from The Handbook of Neoliberalism before we dive in:

At a very base level we can say that when we make a reference to ‘neoliberalism’, we are generally referring to the new political, economic, and social arrangements within society that emphasize market relations, re-tasking the role of the state, and individual responsibility. Most scholars tend to agree that neoliberalism is broadly defined as the extension of competitive markets into all areas of life, including the economy, politics, and society.

In my anecdotally informed opinion, it is most frequently — in the public sphere — used to represent a suite of policies focused on privatization, deregulation, and the free global flow of capital. This is what we read about in Issue #29: the IMF and World Bank have been using their position as global lenders to coercively propagate the neoliberal project throughout the world, in the technocratic, financial liberation sense of the word. The package of economic policies that they have applied is known as the Washington Consensus and it represents what is probably the most concrete application of the term “neoliberalism:” a set of macroeconomic policy prescriptions that facilitate the global flow of capital.

The more nebulous side of neoliberalism — and of course, it simultaneously is produced by and produces the economic policies of neoliberalism — is an ideological one that occurs across all scales, right down to our own individual cognitive frameworks or ways of being. This is the neoliberalism I talked about when we read about abolition and racial capitalism. It is what Ruth Wilson Gilmore characterized as the “antirelationality” of capitalism; the degradation of collective identities and the individualization of responsibility. (If you want to read more about neoliberalism in the context of the carceral state, “Conceptualizing the Carceral Turn: Neoliberalism, Racism, and Violation” is a great paper by Noah De Lissovoy). As we’ll read below, the response to the pandemic in countries like the US, the UK, and Canada provides an excellent example of this: viral spread due to failed public health responses has been cast as the result of individual choices and moral failings. The same rhetorical logic is applied across the board, to homelessness, poverty, addiction, and other social problems: instead of being collective problems that we work to solve, they’re cast as individual problems caused by moral failure. Perhaps the most nefarious piece of it is that these frames aren’t just rhetorical, they’re internalized. I have no doubt that we’ve all experienced self-flagellation along these lines, whether related to housing or otherwise: “What’s wrong with me that I can’t afford to buy a house? I guess I need to work harder, spend smarter, or I just don’t deserve to live here. It was probably all the avocado toast.” Never mind the fact that home prices have skyrocketed while wages have stagnated, etc. etc.

This, to me, is why this is important. Neoliberalism has constrained the scope of what we believe is possible. The millennial generation — and those younger than us — have grown up knowing nothing else. The neoliberal project began to spread during our childhoods and had achieved global hegemony by the time we entered the labor market (a term which itself is a rhetorical manifestation of the conversion of human beings to human capital). We’ve never known anything different, but prior to the late 1970s, everything was different. Identifying and naming the way that neoliberalism lives in and controls our minds is a key step in being able to free ourselves from its chains. Whether that’s the end-goal or not is another question — could a non-neoliberal global capitalist order, more like what we saw in the post-war era, prevent climate and ecological collapse? And could that even come to exist again, or is neoliberalism an unavoidable step in the evolution of capitalism?

The Handbook of Neoliberalism — Introduction (15 minutes)

You can read the whole thing, but starting halfway through page 4, it begins cataloguing the essays that make up the rest of the book. It’s interesting and you may be enticed to read some of those essays, but it’s not critically important for the overall understanding of the academic space of neoliberalism that you get from the first 3.5 pages.

This is the introduction to a collection of essays from a variety of academic disciplines about the many facets of neoliberalism. It attempts to provide a comprehensive picture of the state of academic research into neoliberalism, while maintaining a critical perspective and asking whether the considering neoliberalism itself is genuinely valuable when striving for change. This short essay, while a bit academic, provides an overview of the scholarly origins of neoliberalism (Hayek, Friedman, etc.), the practical development of the geographically diverse forms of neoliberalism as it achieved global hegemony, and the ideological components that have been attributed to neoliberalism by researchers and critics over the years. I found this quote at the end particularly compelling, and I hope it speaks to why I’m writing this newsletter issue about neoliberalism:

By presenting a comprehensive examination of the field, we hope that you will find this edited volume useful as you explore the difficult questions of neoliberalism and its multifarious effects, but most of all we hope it inspires you to find the courage to live differently, to speak out, to chart a new path, to resist, to organize, to refuse, and to always remember that there most definitely are alternatives. We must allow our political imaginations to dream beyond the confines of neoliberalism, to embrace the very real possibility of meaningful transformation and lasting change.

How Neoliberalism Created a Society of Individuals (10 minutes)

What's irritated me about the whole direction of politics in the last 30 years is that it's always been towards the collectivist society…Economics are the method; the object is to change the heart and soul.

Margaret Thatcher, 1981

This probably too-short piece attempts to give a “total view” of the development of neoliberalism politically and ideologically and to explore how it manifests in our relationships with each other, with ourselves, and with our government. It necessarily glosses over some things and doesn’t go into a lot of detail, but at the same time, it paints a relatively complete picture of the timeline and scope of neoliberalism. A few interesting notes: Blakeley brings up consumer debt as a tool of subjugation, something we’ve read about here, and ties it in nicely with neoliberal ideology. Widespread indebtedness itself is not necessarily an example of neoliberalism, but the overwhelming narrative of individual responsibility, shame, and moral failing that is associated with it very much is. In the US, for example, our student debt crisis is framed as a crisis of individual failure instead of a collective failure (“maybe they shouldn’t have spent so much money on a useless degree”), despite education being widely understood as a social good. She also points out how the UK response to COVID — and they’re not alone, this is accurate across the English-speaking world if not beyond — has been an emblematic microcosm of the neoliberal turn: governments built a narrative of individual responsibility as they simultaneously abdicated their own responsibility, leaving public health responses in disarray and encouraging citizens to blame each other for disobeying vague guidelines instead of blaming the state.

Podcast: Ruins of Neoliberalism with Wendy Brown (2 hours)

The Dig Radio has another podcast on neoliberalism with Quinn Slobodian that I would also recommend. Slobodian gives a more historical look at the origins of neoliberalism as a political theory, seeings its origins in the technocratic approach of ordoliberalism and tracing its development through Hayek and Friedman through to its global spread under Reagan and Thatcher.

This interview with Wendy Brown, the author of In the Ruins of Neoliberalism, covers a broad range of topics, including a brief introduction to the idea of neoliberalism and its history, but it focuses primarily on how neoliberalism’s economic and ideological effects are driving the turn towards far-right authoritarianism that is plaguing much of the western world today, from Trump to Marie Le Pen to Jair Bolsonaro, and even to QAnon. How did an ideology that was, for its creators, rooted in the fundamental importance of traditional morality and individual freedom lead to a growing coercive state and, ultimately, a popular movement towards authoritarianism? Brown goes through a lot in this two hour interview and I won’t pretend to summarize it here, but her focus is primarily on how the combination of material economic conditions caused by neoliberalism, the atomization of the individual, and the marketization of morality has driven us into what she calls a Nietzchean nihilism. The “foundations” of our value structures have collapsed, leaving us in a situation where morality is simply another object to be monetized. Unfortunately, she doesn’t really speak to a way out of this situation in this podcast, which is one of the fundamental questions of our time: it’s one thing to build a more equitable and sustainable society through technocratic policy. It’s a whole nother thing to rebuild the fabric of collectivism and our capacity for meaningful relationality. Interestingly, when she talks about Bernie Sanders, it brought to mind what I perceived as a key difference between Warren and Sanders during the primary: Warren’s policies are about fixing neoliberalism, returning it to a state more akin to what its creators, Hayek, Friedman, et al, had in mind. Sanders, while supportive of many of the same policies, has a bigger picture project in mind: re-democratizing the public sphere. Though as Brown points out: even if we had President Sanders today, what could he really be achieving towards such a transformative project within the constraints of our government as it is right now?

What Is Neoliberalism? (15 minutes)

David Harvey is a Marxist geographer who brings a somewhat different perspective to the question of neoliberalism. He wrote A Brief History of Neoliberalism in 2005. In this interview, he argues that neoliberalism was not a political ideology that grew out of the political theories of Hayek and Friedman, but rather a class-based reaction to the growing power of the working class in the 1960s and 1970s. He thinks it spread because the “corporate capitalist class” began to feel threatened, both locally in the US and globally, and formed a cohesive political unit that used their power to implement a series of reforms designed to eliminate labor power. The connection with the scholarly work of Hayek and Friedman was either an afterthought or a sort of retroactive justification for the changes they were making in the global order. This might seem like an unimportant distinction, but it informs the path forward for anyone calling for radical change: if neoliberalism was simply a class reaction to growing labor power in a capitalist environment, then it is a manifestation or result of capitalism, not something independent. For Harvey, perhaps analogously to my point comparing Warren and Sanders above, this means that our efforts are better spent being anticapitalist than anti-neoliberal, because anti-neoliberal action is doomed to only achieve marginal benefits.

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Margaret Thatcher, from “Yes, neoliberalism is a thing. Don’t let economists tell you otherwise”