How to kill a zombie or the strange persistence of neoliberalism

Neoliberalism is dead…again. It died the first time in the aftermath of the Great Depression and Second World War, in the heady days of the Marsh Papers, Beveridge Report and New Deal, when it seemed that profit and high wages could coexist, that endless growth would benefit just about everybody. It stayed dead for several decades, during which democracy flourished, inequality declined, but came back in full vigour after the economic upheavals of the 1980s.

Neoliberalism was again pronounced dead after the Dotcom bubble burst around 2002 and even deader after the financial meltdown of 2008. Books announcing its demise can be purchased cheap in bookstore bargain bins.

And now, post-pandemic, in the midst of “build back better” commitments here, in the U.S. and Europe, neoliberalism is yet again being pronounced dead. Just how many lives does it have or, as some have begun to wonder, is it more like a zombie wreaking havoc long after its demise because we haven’t figured out how to take it out of its misery, our misery.

What is this thing?

There is now a vast, confusing, often contradictory literature about just what neoliberalism is: ideology, philosophical doctrine, political project, all or none of the above? Coined in the 1930s by Ludwig von Mises and Friedrich Hayek, it was, at its root, a reaction to what they perceived as the threat of “collectivism”—Nazism and communism, of course, but also the softer collectivism across much of Western Europe. 

Warning about the hubris of government planning and the danger it posed to individual freedom, they made the case for market competition. While characterizing democracy as a great good, to protect freedoms and constrain abuse of power, they spent far more words explaining why democracy must be limited to ensure that neither governments nor unions become so powerful that they might interfere with the market, whether through collective bargaining or “excessive” government regulation or programs of redistribution.

Much has been written about the limits and dangers of this view—its comfort with, indeed embrace of, inequality; its blindness to the environment; its overconfidence in the efficiency of markets; its limited view of democracy; and its narrow view of freedom. But what’s more important, for our purposes, is to understand how these ideas have been used and abused as part of a political agenda to shore up the wealth and power of the wealthy and powerful.

Neoliberal politics and freedom

It’s quite likely that Hayek and Von Mises would object to much of the rhetoric that pretends to draw on their work, but it’s clear that a number of very rich people saw opportunity in their ideas.

In the 1970s, in particular, democracy was expanding and power was shifting. Unions had secured a strong foothold. Civil society groups were making demands on behalf of the many who had been excluded from the benefits of the welfare state. What sociologist Herbert Gans called the “equality revolution” was in full swing.

If democracy is always a battle about who will shape the future, the powerful few or the many, the powerful seemed to be losing ground. And some were getting worried. Something had to be done. Hobbesian warnings started to appear about “an excess of democracy” and an “upward spiral” of demands for social and environmental justice. Think tanks proliferated, spreading the message of the virtues of the market and the dangers of democracy let loose.

If neoliberalism would show the way, the economic turmoil at the end of that decade provided the opportunity. Ronald Reagan and Margaret Thatcher got elected. Political discourse began to change.

No more talk about social justice. Regulations to protect labour rights, health and the environment became red tape. Taxes became a burden or, worse, a punishment.

Government no longer was our means to level the playing field, protect rights, and pursue the common good; it was part of the problem and had to be shrunk and refocused. Public debt was toxic. Private trumped public. Efficiency trumped equity. Price stability trumped full employment. Market competition at home and reducing barriers to global trade and investment were the route to a better world.

And underlying all this, the promise of freedom—freedom from government, freedom to consume, freedom to get rich.

The language had an undeniable appeal: freedom, a global view, low taxes. And for about four decades, this is the language that has shaped our politics. Over those decades, we have seen environmental degradation, rising inequality, hollowing out of public institutions, and yet, with minor variations here and there, we kept getting more of the same: tax cuts, deregulation, privatization, financialization, offshoring of manufacturing, austerity.

Neoliberalism’s most recent death

So what is it that has some yet again declaring neoliberalism’s demise? Here in Canada, we have seen economists pleading for a new fiscal anchor after the federal government eschewed the convention of balanced budgets, embraced deficit spending and promised no return to austerity.

Here, as elsewhere, we are hearing talk of more active government, taxing the rich, increased public investment to drive the transition to a carbon neutral and more equal future.

The federal government promised a renewed commitment to gender equality and respect for human rights, Indigenous reconciliation and anti-racism.

For the first time in decades, we saw a major new social program—$10 a day child care—and an expansion of public health, most recently with public dental care.

We are also hearing more talk about reducing dependency on fragile global supply chains, building domestic capacity to make what we need and, if not onshoring, at least friend-shoring more of our manufacturing.

What’s going on? Is it really dead this time?

What does seem evident is that neoliberalism has lost its glow. Does anybody still buy that a rising tide lifts all boats or that wealth will trickle down or that the so-called free market always rewards the worthy and punishes inefficiency?

Zombie neoliberalism?

Yet it seems equally evident that, zombie-like, neoliberalism continues to influence our politics.

We see it in the reluctance to use government’s regulatory clout to advance our climate goals in favour of market mechanisms.

We see it in continued dependence on the private sector for achieving public goals.

We see it in the caution about raising taxes and a view of taxes as simply how we pay for public goods rather than a way to deconcentrate power and reduce inequality.

We see it in the preference for means-tested programs over universality.

We see it in the same old responses to inflation and in the pushback against change in the politics of several provinces.

We see it in the policy lurches as our governments shuffle between incremental steps forward and incremental steps in reverse.

But perhaps most importantly, we see it in a political culture of inevitability, fatalism and division. Research has documented decades of decline in social and political trust and, with that, a decline in commitment to democracy and trust in the idea of progress. In this low-trust post-truth era we cannot even agree on what is. How are we to find common ground on what could be?

Zigmunt Bauman, perhaps the most influential sociologist of our times, lamented that in an age of massive collective challenges, our collective toolkit has rarely been weaker. Neoliberalism has infiltrated our common sense and stunted our political imagination.

For about four decades, we have lived in a world in which we are urged to focus on our own interests, our family and maybe our friends next door—a world in which there is no society, no obligations to the stranger or to some notion of the public good.

Ours is the age of austerity, where government was backing away, less present in our lives and, in any case, seen increasingly as foreign, even dangerous, rather than a means to express our collective will. Most of our political leaders have known nothing else.

Little wonder, then, that we have—most of us—turned our eyes to private troubles rather than public issues, that we have come to see social problems like poverty and inequality not as a failure of policy but as just the way the world works.

Many simply now accept as inevitable that our kids will have a tougher time than we did, that however much we may dislike what’s going on, there’s just not much we can do about it and we are pretty much on our own to manage whatever comes.

Thatcher’s “there is no alternative” could be the slogan for zombie neoliberalism.

But is it really dead?

But perhaps neoliberalism isn’t dead at all. Wolfgang Streeck describes what is said to be an Italian way of seeing politics, “dietrismo.”

“Dietro” means behind and this perspective asks what’s really going on behind the rhetoric, behind the curtain. It’s a useful frame for thinking about neoliberalism as a political project.

How do we reconcile the language of leaner, less intrusive government with the growth of the security state, packed prisons and cameras surveilling just about everything?

How do we reconcile the language of free markets with the readiness to bail out banks and other big corporations when they run into strong headwinds?

How do we reconcile the language of competition with the unprecedented degree of corporate concentration and the failure to deal with monopolies or near monopolies in critical sectors?

Few have been as explicit as libertarian tech billionaire, Peter Thiel, when he wrote “competition is for losers” and monopolies are how best to create and preserve value. But he captures well neoliberalism in practice.

Perhaps neoliberalism is not so much a zombie as a shape-shifter, defined only by its purpose: to preserve the power structure, to subordinate the state to that purpose, to keep democracy in check, with whatever means are at hand. So, for example, growing concern about global supply chains and free trade may not signal the death of neoliberalism but, rather, an adjustment necessary to protect growth and profits.

What about the various virulent forms of authoritarianism seemingly on the rise around the world? We are well to remember that neoliberal’s fiercest proponents made clear in both writings and actions that they’d prefer capitalism even under a dictator over any version of social democracy

In any case, we do not seem anywhere near a new consensus that will finally and truly kill off neoliberalism.

What will it take?

Progressives of my generation have too often either spent our energy fighting to preserve the programs of the past from the cutters and dismantlers or settled for a menu of incrementalism as the best we could hope for.

We have, I fear, become something of a conservative force, often defending government as it is from the neoliberal assault rather than imagining the government we need for a more just and sustainable future.

There are, however, plenty of powerful ideas out there—largely from a new generation of leaders—that could form the basis of a new consensus; one that understands that all that we value depends on our ability to build a carbon-neutral economy and reverse nature loss, and that we will achieve neither if we do not simultaneously reduce inequality, build a care economy and put in place the measures necessary to help those most affected by the transition at home and globally.

And central to all of this is the renewal of democracy in our politics and in our workplaces. Democracy is no side issue. Without a shift in power, no change will hold.

So how do we move forward? How do we overcome the prevailing fatalism, division and distrust?

Perhaps there are lessons to be drawn from the equality revolution of the 1960s and in the work of the Combabee River Collective on how, in collective action, we can overcome our loneliness and cynicism to find courage and strength.

The collective was a group of Black women of various sexual orientations in the U.S. fed up that their issues and voices were always sidelined or subordinated. They developed a manifesto based on class and identity, taking on both privilege and power, and joined up with other equity-seeking groups, recognizing that while inequality and oppression are experienced differently by each, there is much that is shared and they were stronger together—each for all, all for each.

They fought for the common good and universal rights, but with an understanding of diverse needs and a belief that only through collective action could they hope to establish the conditions for individual freedom.

Perhaps in the Combabee River Collective and their remaking of solidarity, their commitment to fighting inequality in all its forms and their understanding of the emancipatory power of collective action are clues for how we might kill neoliberalism…again.

The fight these women waged might serve as a reminder of the joy that can be found and the possibilities that are opened up when we reject neoliberalism’s insistence that human purpose must be subordinated to the logic of the market and unite instead in the pursuit of common purpose and the possibilities of a richer freedom, for all.