Taking a Crack at Neoliberalism

Here is the back story for my new piece “Rescuing Economics from Neoliberalism,” just out in the Boston Review.

I have never been a fan of the term “neoliberal.” It has never been quite clear what it means. Nor is it obvious who today’s neoliberals are. Thatcher, Reagan, Pinochet in their day, yes. But today?

Nevertheless, the term is widely used by its many critics to condemn in quite broad brush terms a certain way of thinking of the role of the market in society. There are more careful exegeses that give neoliberalism a more precise meaning and a specific historical trajectory (see here and here). But in public discourse the term has become a loose cannon – or to use perhaps a more appropriate metaphor -- a spray gun directed at one’s intellectual opponents.

I was happy to keep myself out of the ring on what neoliberalism is or isn’t. Then a few months ago Leon Wieseltier wrote to me out of the blue, and effectively cajoled me to write to a piece on the subject for what was going to be his new journal. He had seen the galleys of my new book which had apparently convinced him that I was the man for the job. So I set myself upon the task.

As it turned out, Wieseltier’s new journal was cancelled before its first issue came out. (In case you have missed it, here is the story). His publishers were kind enough to release the rights for the piece, and Josh Cohen was nice enough to want to publish it in the Boston Review.

Here is the core of it:

That neoliberalism is a slippery, shifting concept, with no explicit lobby of defenders, does not mean that it is irrelevant or unreal. Who can deny that the world has experienced a decisive shift toward markets from the 1980s on? Or that center-left politicians—Democrats in the United States, Socialists and Social Democrats in Europe—enthusiastically adopted some of the central creeds of Thatcherism and Reaganism, such as deregulation, privatization, financial liberalization, and individual enterprise? Much of our contemporary policy discussion remains infused with norms and principles supposedly grounded in homo economicus.

But the looseness of the term neoliberalism also means that criticism of it often misses the mark. There is nothing wrong with markets, private entrepreneurship, or incentives—when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism’s useful ideas.

The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions. A proper understanding of the economics that lies behind neoliberalism would allow us to identify—and to reject—ideology when it masquerades as economic science. Most importantly it would help us develop the institutional imagination we badly need to redesign capitalism for the twenty-first century.

For the full piece, go here.

PS. Many thanks by the way to Adam Kirsch and Lev Mendes for their work on the original piece.

See also: domestic, blue