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On Theorizing Neoliberalism

The Problems and Politics of a Critique

In a recent piece for Public Seminar, Jeffery Goldfarb explores the problems of the term and concept of neoliberalism, specifically its inconsistent application by those on the left. He claims that neoliberalism is used to describe a wide range of policy positions from public-private ventures up to the complete deregulation of private industry or “market fundamentalism.” Goldfarb also argues that “neoliberalism” is a kind of “elite-speak,” incomprehensible to anyone outside of a narrow coterie of left-leaning academics. Despite these cogent observations, I contend that neoliberalism as a concept is both more coherent and more problematic than Goldfarb’s analysis suggests.

In this brief essay, I want to build on Goldfarb’s argument in two ways. First, I will explore how it is that we could understand politicians as diverse as Paul Ryan and Barack Obama as neoliberals, without the concept losing complete coherence and instrumental-critical value. Second, I will show how the critique of neoliberalism too easily maintains the false possibility of the reformation of capitalism. If neoliberalism is perceived as the central problem, our critique of capitalism is weakened. The critique of neoliberalism, often regarded as a unique political perversion of a nicer, more humane capitalism, too easily moves the goal posts of radical and progressive change.

In order to retain the coherence of neoliberalism as a concept, we need to distinguish between the ideal-typical political ideology of “neoliberalism,” represented in the work of thinkers like Friedrich Hayek and Milton Friedman, and the process of “neoliberalization.” Neoliberalism, as an ideal-type, is best understood as a government-driven market-based political economy, which places the private property rights and profits of corporations above the democratic control and interests of the people. Neoliberalization then would be any policy, process, or movement that in some form advances neoliberal interests or ends. Neoliberalization, as the process of moving towards the “normative horizon” (or cliff) of neoliberalism, thus typically involves the erosion of public-democratic services, spaces, and even “the public” itself. When most academics refer to something as neoliberal, what they really mean is that it contributes to neoliberalization — not that it represents some pure ideal-type — which is likely the source of Goldfarb’s and many others’ confusion.

That neoliberalism is a matter of degree can be understood by looking at the on-going debate over health care in the US. There are three policies, which are each, to varying degrees, part of a neoliberalization process.

First, we have the Affordable Care Act, or “Obamacare,” wherein the government mandates that individual citizens buy health care from private companies. This individual mandate leaves the roots of the American healthcare system in the market, and even forces citizens into that market to the benefit of private insurance companies. On the other hand, the ACA also expanded the government’s role in providing health insurance by offering citizens subsidies and offering states increased funding to expand Medicaid coverage. Thus, the ACA contains elements that contribute to neoliberalization and others that hedge against full-scale neoliberalism.

Compare the ACA to the Ryan-Trump plan that was recently withdrawn from a planned floor vote in the House of Representatives. This bill was was a more aggressive form of neoliberalization than the ACA in that it removed the individual mandate (the penalty for violation being paid to the federal government) and replaced it with a rule allowing private insurers to charge up to 30% more for people who lacked health insurance for more than 63 days in the previous calendar year. There is still a government-allowed penalty for failing to buy insurance, but in this case the money is paid directly to private companies. Additionally, while the plan retained subsidies, they were substantially more regressive than with the ACA.

The alternative bill proposed by the so-called “Freedom Caucus” of the House GOP, called for the complete repeal (without replacement) of the ACA. No subsidies to help people buy insurance. No individual mandate in any form. Insurance companies would be able to charge more or less whatever they wanted to anyone. They could discriminate based on age, gender, and pre-existing conditions. This bill is much closer to — if not fully representing — neoliberalism in its ideal form.

Privatization can take many forms, but when we think about the drift towards neoliberalism, it is fundamentally a matter of degree, with few policies ever likely to fully meet the ideal-typical definition of neoliberalism sketched out above. This is where the concept of neoliberalism has value; it allows us to understand how policies as diverse as the ACA and the Freedom Caucus proposal each embody neoliberal values in distinct ways and why all degrees of neoliberalization need to be resisted.

This leads me to my second point. Neoliberalism is still a flawed concept, but less for analytical reasons than for political-strategic reasons. While there is an analytical coherence to the concept, especially when thought of as a pursuit of an ideal-type, Goldfarb is right to point to the conceptual drift that occurs too often with the concept of neoliberalism. This looseness that Goldfarb identifies is closely tied to, though not solely caused by, the academic Left’s general desire to avoid directly criticizing the capitalist system. If you criticize capitalism, you “become” a socialist or Marxist, tough identities to maintain within the academy. Being a critic of neoliberalism hardly holds that same stigma.

When the Left aims its criticism against neoliberalization (eg., austerity) however helpful it may be to avoid ostracization and motivate movements in the short-term, I contend it too easily allows activists and critical scholars to lose sight of the broader oppressive horizon of global capitalism. Yes, welfare state capitalism is better than pure neoliberal capitalism, but both have, historically, been actively criticized by the Left. Now it seems like the Left’s goal is “less neoliberalism,” not “less capitalism.” As I argue in my recent piece for New Politics (Winter 2017) when those on the Left focus on resisting specific manifestations, periods, or trends of capitalism, the system is no longer thought of as the enemy.

To the left of the center-left, the focus on neoliberalism is not as analytically problematic as Goldfarb suggests, but on the other hand, it is far more politically-problematic than merely being elitist. Even if the general public knew what neoliberalism was, focusing on resisting that would be a far cry from resisting capitalism in its entirety. Goldfarb is right that “democratic intellectuals” need to be cognizant that people may misunderstand the term neoliberalism. We’re talking about privatization. We are talking about a kind of extreme capitalism, of “market fundamentalism.” We should be clear about this, and this means exploring how policies like the ACA still, in various, ways reinforce neoliberalism and resist genuine democratic socialization of the fundamental spheres of life necessary for a just, egalitarian, and humane society. Neoliberalism is a perverse escalation of an already-perverse political-economic capitalist system, and that is what we should focus our energies convincing people of.

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Bryant William Sculos

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