Everyone hates Neoliberalism – But We’ll Still Miss It When It’s Gone

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.

H. L. Mencken

Neoliberalism is doomed because everyone hates it. They are mostly wrong about the reasons they think they have for hating it. But explaining what neoliberalism actually is - classical liberalism updated for the era of big centralised government - only presents new and clearer reasons to hate it. For liberalism itself has always been a minority view: most people have always viscerally rejected the idea that other people - the wrong people - deserve freedom and rights. Its influence came not from convincing the majority of its principles, but from offering the arena within which more powerful political doctrines and cabals could safely compete with blunted weapons for a reduced prize. Now the political tides have turned back against moderation, and liberalism’s gift of proceduralist constraints has itself become the target of our rage.

I. Neoliberalism is not what you think you hate about it

The term ‘neoliberalism’ was successfully expropriated by the left shortly after its coining and now functions in public, political, and academic discourse as an exonym: “a term for another group, which signals that the speaker does not belong to it” (Moira Weigel, quoted out of context). The left’s success here has been so great that almost the only people talking about neoliberalism these days are those trying to explain why they hate it.

On the one hand this means that there is near universal agreement that neoliberalism is terrible and should be overthrown. On the other hand, there is rather less agreement about what neoliberalism means and hence what needs overthrowing - except that it has something to do with capitalism and controls the world somehow. (The conspiratorial tendency is baked in to the politics of the left, and the right too: how else to manage the cognitive dissonance of the political failure of their great Moral Truth?) In the absence of opponents willing to call themselves ‘neoliberal’, everyone is free to make up their own version of neoliberalism to hate. Leftist activists and academics have created dozens to hundreds of different theories of neoliberalism as projections of their particular theories about what’s wrong with the world and their disagreements with other leftists.

Naturally these theories contradict each other. After all, they aren’t about the same thing. Some identify neoliberalism with globalisation, or with US ‘imperialism’ in particular (David Harvey) Others say neoliberalism is really selfishness masquerading as meritocracy (George Monbiot). Some say it has to do with how neoclassical economics looks at the world (e.g. Michel Foucault). Others identify it genealogically, as a conspiracy by a small group of economists against the world (e.g. Philip Mirowski)

The degree of variation and bizarreness in these theories of neoliberalism loosely correlates with how long it has been since the people complaining about neoliberalism have felt any need to read what someone calling themself that has written. (Foucault’s 1978/9 lectures, for example, are relatively interesting and engage seriously with original self-proclaimed neoliberals.) However, once enough people have spent enough decades writing and discussing their opinions on something, an infinitely persisting scholarship machine is created that will never run out of material and need never check back in with reality. This is the kind of hermeneutic cul de sac that the humanities have always been prone to.

So anyway, the main way in which you will have heard of neoliberalism is to call out things that people don’t like about modern capitalism, or want to blame it for, like inequality, global poverty, climate change, biodiversity collapse, social media, AI, Elon Musk, Donald Trump (basically all US politics), the WTO, intellectual property, house prices, free trade (and also, when trade isn’t free), Gulf War II, etc. It is also widely used in combination with other toxic exonyms like colonialism, racism and sexism. Any rational person faced with such a wall of universal if inchoate condemnation would think they should hate neoliberalism too.

II. Neoliberalism is just liberalism revamped

After what I just said, attempting to revive the term ‘neoliberalism’ may seem rather quixotic. But I am going to have a go anyway because I think the original idea was important and it has been influential in creating and sustaining the modern world. I will, however, skip over the millions of pages that humanities scholars have ‘contributed’ to the understanding of neoliberalism over the past decades and jump straight to what seem to me the core ideas of its original proponents. Friedrich Hayek and Milton Friedman were concerned with reasserting classical liberal principles, particularly the priority of individual freedom, in the context of the 20th century development of large centralised governments and their collectivist ‘common good’ tendencies.

Hayek’s particular focus was on the rule of law: the simple idea that the government should also obey the law, and that this also applies in its dealing with civil society organisations like corporations. In other words, people - and the organisations they create - should be able to do what they think best so long as they stay within the boundaries created by the laws. Citizens in a free society do not work for the government: we do not have to do what the government tells us just because the government says so. The rule of law ensures not only the security and predictability that citizens need to successfully go about our own lives and projects, but also that the tremendous concentrated power of government is itself constrained by the mild but nevertheless significant requirement to consistently follow the rules it itself makes up.

Friedman’s particular focus was on the separation of the political and economic spheres. Very like America’s classic separation of church and state, this was necessary to protect the integrity and proper functioning of both.

Friedman thought that business people and intellectuals were the greatest threats to a free and prosperous society. Business people want to coopt the government’s powers to free them from the exhausting, relentless, and existential competition of free markets, forced to compete against each other to better serve consumers. When business people persuade the state to meddle in the economy to benefit political insiders, the economy always suffers and so too will the ordinary people and eventually even the insiders too. Neoliberalism is pro-markets, not pro-businesses.

Intellectuals are a threat because they mostly despise both individual liberty and material prosperity - the two amazingly valuable things that a liberal market society provides its people. Intellectuals tend instead to have a collectivist impulse towards a nebulous ‘common good’ (which they believe they have a special ability to discern by talking to people very similar to themselves); and a control fetish - an inordinate belief in the powers of government, if ruled by them, to make better use of society’s resources than ordinary people would. Think of Degrowthers’ charming vision of determining and meeting our basic needs by in kind public provision: buses not cars; libraries not bookshops; don’t even think about eating meat or having a pet! So many choices we won’t have to make for ourselves anymore. So much more time for social relationships when productive work is banned. So much happiness!

Placing a firewall between the political and economic domains greatly reduces the damage that business people and intellectuals can do to ordinary people’s lives and freedoms.

Put together these two simple points nevertheless add up to a distinctive proposition, and one that was indeed influential in mainstream politics in richer countries from the mid-1970s (though never triumphant). Specific policies followed, such as the privatisation of national airlines and utilities, the re-institutionalisation of free trade, and the move to managing the economy by arms lengths rules rather than government chivvying. The particular merits of these policies, in theory and execution, can be debated on a case by case basis. But the plausibility of neoliberalism as a principled position that puts freedom first does not stand or fail on particular cases.

Unfortunately, most people don’t really care about freedom - certainly, not equality of freedom for those they disapprove of. Fortunately neoliberalism is also a recipe for economic success. It has presided over a doubling of rich country economies and even faster growth of many less rich countries. World average per capita GDP is now higher than the UK’s in 1970.

III. The real objection to neoliberalism is the constraints it places on power

As I said, the reason people think they hate neoliberalism is that leftists took over the word and throw everything they doesn’t like about capitalism into it. However, a great many of the particular things that neoliberalism is blamed for are ones that actual neoliberals would oppose, such as corporate lobbying for government subsidies and special privileges.

A particularly obnoxious complaint is that neoliberalism is in favour of deregulation: letting businesses to whatever they want to people and the environment in the name of maximising profits. Neoliberalism is in fact committed to the regulatory state approach to managing the economy as part of its commitment to the rule of law. Governments should not be permitted to manage the economy directly (by waving executive orders around), but rather must pass and enforce general laws (such as carbon taxes) calculated to induce businesses to make choices that create social value rather than harm. Again, one can always question particular rules, or their need for updating to changed circumstances (such as to allow affordable housing to be built again at scale!), but it is simply ridiculous to claim that regulation of the economy has gone down since the 1970s.

Does all this mean that once neoliberalism is properly understood people will see that they were wrong to hate it?

Unfortunately not. At most they will see that their real reason for hating it is something else. For actual neoliberalism is directly at odds both with both the left and right of the political spectrum, and with the populist fury of our times.

Both the left and the right are instinctive collectivists (allowing the honourable exception of anarchists/libertarians, whose delusions lie in the opposite direction). Most wish to collapse the fragile experiment of diversity of life and values permitted by liberal democracy into harmonious, organism-like community in which we will be free to live only the kind of lives they think people should want to live. JD Vance, for example, the last intellectual of the MAGA coalition, appears to be a proponent of post-liberalism - a species of ‘common-good’ fantasising about restoring a lost Eden of social harmony and homogeneous Christian values that thrives on the Catholic right. (Yes, that should remind you of Iran’s theocratic experiment, and its tremendous success.)

In terms of political economy, both the left and the right believe that the whole society’s resources should be deployed to serve the ‘common good’ (as they interpret it), with an unconstrained government as society’s executive. So obviously they do not like the idea that people and the organisations they form can have rights against the government, rights - rather than magnanimously granted privileges - to use their time and resources for the things they want to do within the limits created by impartially administered laws. There is no need for, nor space for, ‘civil society’ in such utopias, where diversity and independence from the state are considered a problem to be overcome. The CCP for example routinely quashes any group that tries to organise outside its control, whether that be around LGBT or women’s rights, environmentalism, memorialising China’s history (including the CCP’s own previous versions of that history), or even the study of Marxist thought. Lawyers who dare to cite China’s own laws and constitution are imprisoned. Billionaires who achieve a high profile disappear.

Then there is populism. Populism was long a scourge of poorer democracies, keeping them unstable and hence poor and unfree. It is now overwhelming much richer countries with no such excuses. The central claim of populism is that the institutions that claim to be serving us are actually the cause of all our problems and the main block on solving them. Even the idea of counting votes and reporting the numbers accurately has been reconceived as an outrage against the True People’s will. The rule of law and separation of economy and politics are central targets for such movements, both on the right and the left.

What does the fall of neoliberalism look like in practise?

In America, in under 2 years and with the baffling support of the Supreme Court, Trump 2.0 has effectively suspended the rule of law and is instead attempting to rule by law, using the government’s powers to terrify businesses and other organisations into submitting to his will. Examples include leveraging the FCC to ‘persuade’ media companies to be more favourable to him or lose their licenses (that Melania movie!); launching criminal investigations of political opponents; threatening the Ivy League universities with a revision of the tax rules for endowments (haven’t they gone quiet lately); and punishing the AI company Anthropic for trying to respect US laws and constitutional protections in its military contracts.

Most liberal democracies are just as vulnerable to political take over by rightist populists who would like to do for their countries what Trump has done to American constitutionalism. More power for the government must mean that the country will be greater too, that it will finally be able to do everything the people want. That’s just math. Every election has become an opportunity for the rejection of the very idea of democracy under constraints. It seems inevitable that majorities of voters in many more countries will make that choice.

Whether you knew what neoliberalism really meant or not, the world will still be a very different place without it. And not a better one.

Note: An earlier version of this essay appeared on 3 Quarks Daily

The Extinction of the Human Species Won't Matter

All things come to an end eventually, including the human species. From the perspective of the universe it won't matter, and so it also shouldn't matter to us now. The discontinuance of a taxonomic unit is not particularly interesting or important, especially since no one will be around to notice.

My basic point is the same as Epicurus' philosophical medicine against the fear of death:

Death should not concern us because as long as we exist, death is not here, and when death is here, we are not.

The Post-Westphalian World: Reflections on Trump 2.0's Military Adventurism

The weak are meat, and the strong do eat

(Cloud Atlas)

The international rules based order sets normative expectations, deters transgressions, and manages conflicts. It does so via a host of treaties and institutions mostly introduced soon after WWII, from the Universal Declaration of Human Rights to the UN and its many affiliated organisations and treaties (WTO, UNLCOS, ICJ, World Bank, NPT, etc) to private members' clubs like the G7, EU, OECD, and NATO. 

Like all institutional orders, it is maintained by and for the powerful actors in whose interests it was designed, especially the USA, the most powerful of all. This obvious fact is often willfully misinterpreted. 

First, an order instituted by the powerful to protect and advance their own interests need not come at the expense of the less powerful, when compared to a situation without any such order. To the contrary, by constraining all it is often of even more value to the weak - who have no other source of protection - than it is to the strong. Merely because an international order can be judged as lacking compared to some hypothetical ideal ('fairness') does not mean that any rational state would prefer a world without it. 

Eating The Rich Won’t Fix Climate Change

The world’s richest 1% have more purchasing power, and hence more command over what the economy produces than ordinary people. They can afford a more extravagant lifestyle - at the extreme including multiple yachts, mansions, and private jets. 

One may reasonably quibble with the way activists like Oxfam produce their numbers (e.g. in their enthusiasm to generate the most outrageously large numbers, they include the emissions of companies rich people hold shares in). But it is obviously true that the average 1 percenter has a far greater climate impact than the median person in a rich country, let alone the world. What a waste! What a crime against the planet! How can it be allowed to continue?

Oxfam, Guardian readers, an unfortunate number of my academic colleagues, and many others are confusing questions of fairness (whether huge economic inequality can be justified) with questions of harm (whether inequality speeds up climate change). Specifically, it can be true that

1. Per person, rich people do enormously more harm to the climate than ordinary people, and

2. It is unfair that the rich consume such a high share of the world’s economic output

Without it being true that

Redistributing rich people’s wealth would result in less harm to the climate

Deepfake porn is not going away. Recognising that is the first step to dealing with it

In a world in which anyone can create fake sexually explicit images of anyone else, we should not be surprised when it happens, and we should not get especially upset if it happens to us.

Incentivising War Crimes: The High Cost of International Humanitarianism

Wars have never been the concern only of their combatants. Other states pay close attention to the geo-political implications and opportunities created by armed conflict, and interfere directly or indirectly when their cynical calculations suggest that would advance their interests.  For example, various countries - the UAE, Iran, Egypt, Turkey, Saudi Arabia, Russia and Qatar - have been involving themselves in Sudan's ghastly civil war, apparently looking to pick up geopolitical advantages - especially access to Red Sea ports that would allow them to threaten international shipping via the Suez Canal, or to prevent other states from doing so. When extended to material support to favoured factions this increases the resources of the combatants, increasing the ambition of their respective war goals and so extending the war by reducing the scope for a mutually acceptable peace deal.

Such amoral realpolitik in international relations is as old as war itself, together with its unfortunate consequences for human lives. What is somewhat more recent is the rise of international moral concern for the lives of civilians threatened by war, expressed through the increased influence of civil society. At least since the Greeks' 1820's war of independence, states have also been interfering in other people's wars out of humanitarian concerns to reduce civilian suffering.

The problem is that although each individual humanitarian intervention may be sincerely morally motivated - and even sometimes succeed in its goal of reducing suffering - the practise of morally motivated interference would seem actually to increase the amount of civilian suffering due to war. It makes civil wars more likely to start and harder to end, while incentivising crimes against civilians.

If Climate Change Is As Bad As Activists Say, Their Demand Should Be 'Geoengineering Now'!

Some climate activists claim to believe that climate change is an existential threat to humanity, if not the entire biosphere. This is the justification for groups like Extinction Rebellion and Just Stop Oil to engage not only in demonstrations and civil disobedience to raise awareness of their concerns and persuade fellow citizens to demand government action, but also blocking and disruptive actions aimed at coercing governments and businesses to speed up the transition to net zero.

Blocking public transport systems, vandalising art, offices, SUVs, pipelines, and so on are attempts to impose direct and indirect costs on society that will continue and escalate until we comply with the activists’ demands. It is a Mafia-esque strategy of extortion by a small minority that is clearly directly opposed to liberal democratic principles and values - especially, the idea that decisions should be made in a way that respects the equal moral reality of other people (by counting up opinions) rather than by consulting your own feelings of righteousness. Moreover, its logic is clearly escalatory, since a rational government will only concede when the costs of compliance (several percentage points of GDP per year) are lower than the costs activists can impose.

Yet many people who do not themselves feel the call to join such coercive actions remain sympathetic to the reasoning of those who do. From a distance these activists may even be mistaken for heroes. The human mind’s innate attraction to story book reasoning (previously) makes us easily slip into assuming that those taking extraordinary actions to oppose an extraordinary challenge must be the good guys, the heroes of the story of climate change.

But that reasoning is flawed. It is not enough that the cause be worthy of heroic action. The action itself must be worthy of the cause.