The Collapse of Neoliberalism
The Collapse of Neoliberalism
The long-dominant ideology brought us forever wars, the Great Recession, and extreme inequality. Good riddance.
By GANESH SITARAMAN at the New Republic
https://newrepublic.com/amp/article/155970/collapse-neoliberalism?__twitter_impression=true
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This shouldn’t have been too much of a surprise, as neoliberal policies had already wreaked havoc around the world. Looking back at the 1997 Asian financial crisis, the economist Joseph Stiglitz comments that “excessively rapid financial and capital market liberalization was probably the single most important cause of the crisis”; he also notes that after the crisis, the International Monetary Fund’s policies “exacerbated the downturns.” Neoliberals pushed swift privatization in Russia after the Cold War, alongside a restrictive monetary policy. The result was a growing barter economy, low exports, and asset-stripping, as burgeoning oligarchs bought up state enterprises and then moved their money out of the country.
Despite its alleged commitment to market competition, the neoliberal economic agenda instead brought the decline of competition and the rise of close to monopoly power in vast swaths of the economy: pharmaceuticals, telecom, airlines, agriculture, banking, industrials, retail, utilities, and even beer. A study by The Economist found that between 1997 and 2012, two-thirds of industries became more concentrated. Even centrist think tanks like the Brookings Institution have recognized the dangerous rise of monopolies and argued that the concentration of economic power brings with it higher prices for consumers, increased economic inequality, and a less dynamic economy.
Rising economic inequality and the creation of monopolistic megacorporations also threaten democracy. In study after study, political scientists have shown that the U.S. government is highly responsive to the policy preferences of the wealthiest people, corporations, and trade associations—and that it is largely unresponsive to the views of ordinary people. The wealthiest people, corporations, and their interest groups participate more in politics, spend more on politics, and lobby governments more. Leading political scientists have declared that the U.S. is no longer best characterized as a democracy or a republic but as an oligarchy—a government of the rich, by the rich, and for the rich.
The neoliberal embrace of individualism and opposition to “the collective society,” as Margaret Thatcher put it, also had perverse consequences for social and political life. Humans are social animals. But neoliberalism rejects both the medieval approach of having fixed social classes based on wealth and power and the modern approach of having a single, shared civic identity based on participation in a democratic community. The problem is that amid neoliberalism’s individualistic rat race, people still need to find meaning somewhere in their lives. And so there has been a retreat to tribalism and identity groups, with civic associations replaced by religious, ethnic, or other cultural affiliations.
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