What’s a Neoliberal Good For?

Maybe not absolutely nothing

Who is actually a neoliberal? Am I one? Honestly, I couldn’t tell you. Up until recently, virtually no one self-identified as a neoliberal. The term was mostly just an epithet that folks on the hardline left would hurl at anyone they deemed insufficiently leftist — a slight to anyone not in complete alignment with their worldview. And to be sure, it is still used in that way. But as with so many shallow insults before it (think “nerd” or “queer” or “socialist”), it was only a matter of time before the people on the receiving end decided to reclaim it.

Today, some people are gleefully adopting the “neoliberal” label and wearing it as a badge of honor. The Neoliberal Project is the name of a real non-profit organization that aims to create “a salient neoliberal identity in the age of populism.” Columnists scoff at the left’s excessive use of the term, while wisecracking social media pages like “Gnarly Neoliberal Memes” and “Free Trade Memes for Imported Jeans” poke fun at populist sentiments on both the right and left. Even sober-minded Washington think tanks like the Niskanen Center have attempted to form coherent policy platforms around this new, positive conception of neoliberalism.

When I refer to “neoliberalism” in this context, I’m using it as the self-identified neoliberals use it (as I believe one should do with any label). Neoliberalism, then, refers to a worldview that is socially liberal and economically centrist or technocratic. Importantly, neoliberals are liberals (that is, supporters of liberal democracy, civil liberties, and personal freedom), but not necessarily part of the left (an economic position that supports a higher degree of government intervention in the economy). Unlike libertarians, neoliberals are not free-market fundamentalists who oppose government intervention at any time and for any reason, but they do tend to think that market forces, on balance, do more good than harm. They are more likely to support some limited forms of social safety net (such as a public option for health insurance or a minimal basic income), or market-friendly nudges (such as carbon pricing), than direct regulations on businesses. They make this distinction based on pragmatic, rather than idealogical, considerations— i.e., they believe that some redistribution is simply more effective at helping the least fortunate without hurting overall economic growth, while excessive regulations tend to be counterproductive.

In some debates, the term neoliberalism is used as a proxy for the moderate wing of the Democratic Party. Their progressive critics love to lament that business-friendly neoliberalism is the only thing standing between us and utopia (and to be fair, some of those critics make better arguments than others). But it’s easy to see why this debate persists. In a liberal democracy, what we call “social issues” should not really be up for debate. If you don’t believe that people with different beliefs, sexual orientations, gender identities, or ethnic backgrounds are entitled to all the same rights that you are, then you fundamentally misunderstand how our system of government is supposed to work (the philosopher Karl Popper called this “the paradox of tolerance”). Economic issues, on the other hand, are much more complex, and a group of reasonable people, all committed to the ideas of liberal pluralism, may still come to different conclusions about what optimizes human flourishing (remember the old joke that if you put 100 economists in a room together, you’ll end up with at least 101 different opinions). Crafting effective economic policy requires a substantial amount of research, experimentation, and cost-benefit analysis. It is completely understandable that a large, diverse political party like the Democrats would not be of one mind here.

Another potential problem is that opponents in a heated debate might be opperating under different assumptions about what neoliberalism actually means. To be fair to the left’s criticism, the term did originate from a group of mid-20th century academics, made up primarily of idealogical laissez-faire advocates who were trying to reclaim the mantle of liberalism from contemporary social liberals. Starting in the 1980s, left-leaning academics used the term “neoliberal” to describe the fierce commitment to tax cuts, austerity, deregulation and privatization associated with the Reagan and Thatcher administrations. It’s unclear when the popular meaning of “neoliberal” changed from “hardcore capitalist” to “anyone who’s not a hardcore socialist,” but today’s neoliberals (and neoliberal critics) are more likely to name a pragmatic politician like Barack Obama or a wonkish scholar like Cass Sunstein as an influential neoliberal than some deceased free-marketeer.

With all of these precarious labels, we risk running into the “No True Scotsman” fallacy if we’re not careful to draw out what an individual means when they call themselves a neoliberal (or a socialist, or what have you). This is especially true of labels that were born out of epithets.

By turning a term of abuse into a term of endearment, the proud neoliberals of today are following in the footsteps of organizations like the Democratic Socialists of America. After years of conservative pundits haphazardly using “socialism” to describe every non-conservative policy stance, the word has lost much of its venom. Although self-identified democratic socialists are still a fairly small minority, the popularity of the label has certainly grown in recent years, especially among young progressive activists. Much of this can probably be attributed to pushback against conservatives’ gross misuse of the word. And while curmudgeonly older millennials like myself might like to point out that much of what these folks are advocating could be more accurately called social democracy, it’s possible for the meanings of these labels to change over time (few have been more liberally redefined than “liberal”).

Rather than resigning themselves to be political adversaries, perhaps neoliberals and progressives can develop a more complementary relationship. While the growth-focused neoliberals may have some blind spots, they also have some ideas that anyone concerned with social and economic injustice should consider, particularly when it comes to the way in which certain government regulations help prop up larger companies and wealthy landowners at the expense of smaller businesses and low-income renters. Progressives should also take note of the common neoliberal talking point that restrictions on free trade are likely to harm some of the poorest people on earth. Similarly, there are ideas coming from the social democratic left that neoliberals should realize aren’t so pie-in-the-sky. Ideas like co-determination, for example, which work fairly well in other countries, may be more pragmatic than neoliberal commentators make them out to be. And in some cases, universal social programs may be more appropriate than means-tested ones.

In my ideal world, our two major political parties might be a neoliberal party and a social democratic party— both checking the other’s excesses and curbing the other’s flaws while maintaining a significant amount of common ground (and if you think that sounds totally wacky, I’m basically describing the two largest parties in Sweden). Within the context of the United States, of course, that’s not likely to play out in our near future. The main challenge we face now is not a particular economic system, but rather, the staggering level of illiberal and un-democratic sentiments within the Republican Party. All opponents of autocracy, be they neoliberal, progressive, or anything else, should consider at least temporarily joining hands and forming a coalition for liberal democracy. In doing so, the hard-nosed technocrats and starry-eyed idealists may even be able to learn from each other.

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