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What is neoliberalism?

Updated: Apr 21

I think neoliberalism is one of the worst things in the world.


But it's hard to talk to people about this, because the word itself is opaque. It's very hard to understand.


It's a Latin prefix, attached to an overloaded Enlightenment term, and the word that results does not obviously or intuitively describe the concept that it is used to describe.


If all you knew were the meaning of the prefix "neo" and some definition of the word "liberalism" - any definition of "liberalism" - you would not be able to guess what neoliberalism actually refers to, either theoretically or practically.


It is possible to gain a vague working understanding of the term "neoliberalism" based on contextual usage. However, these working definitions are easy to accidentally mix with other concepts, whether or not those other concepts are, in fact, related to neoliberalism in some intrinsic way. The result is these working definitions get really vague, and thus useless, really fast.


OK, so "neoliberalism" is a non-obvious term. Fine. What does it actually mean, though?


Definition #1: Neoliberalism is the idea that corporations are people


That definition seems like a bold one. Let's piece it together.


The starting point here is liberalism itself. Liberalism has taken many forms in many contexts, but the basic idea in all of them is that people are self-determining individuals who deserve to be free from the interference of other people. This has many potential implications, which can be politically progressive, regressive, or anywhere in between.


That last point is worth driving home, so let's talk about how liberalism can mean contradictory things across a political spectrum.


How we treat the houseless: A lens into different modes of liberalism


If you give money to a houseless person, this could be construed as a liberal act. In this case, your thinking is probably articulable along the lines of: "This person has a right to self-determination, but they clearly cannot self-determine if they are stuck at the bottom of Maslow's hierarchy of needs. I'm gonna help them rise above that base level, so they can move toward the process of self-determination." This would generally be taken as a progressive form of liberalism, and is what we are usually taught to think of when we think about liberalism, or liberals, in the modern United States.


However, if you refuse to give money to a houseless person, this could also be construed as a liberal act. Here, your thoughts are probably more along the lines of: "This person needs to self-determine, so my charity would detract from the meaningfulness of anything they go on to achieve with my money. Moreover, parting with this money would interfere with my own ability to pursue self-determination, because I need to keep all the money I make for myself in order to self-determine." This is a conservative form of liberalism. It is not something we usually think of when we say "liberalism" in the modern United States, but it is a real philosophy. In fact, it is fairly common, and usually manifests as some flavor of libertarianism.


You can go a step further, though, and actively try to remove houseless people from their places of rest, or limit what they are allowed to do and where they are allowed to be - and this could still be a kind of liberalism. Someone with this mindset might say: "These houseless people are scaring away the housed people like me and thereby infringing on our ability to self-determine, by limiting where we can shop, or eat, or take our children to play. And because we are greater in number than them, their presence is against the common good. They self-determined their way into houselessness, and can self-determine their way out of it, somewhere else." This is a regressive (and often reactionary) form of liberalism, which seems more at home in an Ayn Rand novel than real life but, shamefully, is also quite common even in real cities that advertise as progressive.


These three modes of liberalism (progressive, conservative, and regressive) are of course arbitrary points on a long spectrum. Nevertheless, they illustrate how differently the idea of liberalism can manifest in political practice. The thing each manifestation has in common is the idea of individual self-determination. Disagreements arise over things like whose self-determination matters more, or at all.


Clearly, in all three cases, the party that is more likely to be acutely disadvantaged by any interpretation of liberalism is the party that is, economically, already disadvantaged. At best, they will retain a disadvantaged position relative to those who start out with more financial resources. At worst, they will be punished and their disadvantage made to compound.


That systemic imbalance is not good, because under liberalism all of these people are forced to be sociopolitical competitors. In the housing example above, one end of the liberal spectrum wants the opportunity to live in shelter and safety; the other end of the liberal spectrum wants the opportunity to punish those who do not live in shelter and safety; and the middle ground of liberalism is occupied by self-described "moderates" who claim to wish for compromise between these fundamentally irreconcilable viewpoints.


One thing that liberalism does tend to universally claim, though, is that being a human being matters more in the liberal sociopolitical contest than, say, the size of your paycheck. The latter obviously does matter, which makes the claim of equal sociopolitical consideration between all people disingenuous more often than not. But in liberalism, it is at least supposed to be the case that inanimate property is of secondary consideration to the simple fact of being a living person with the default capacity for self-determination and a right to use that capacity without interference from other people.


Neoliberalism expands the liberal contest by making businesses equal to people


Clearly, businesses cannot self-determine anything. They are not alive. They are abstract tools of economic mediation between actual human beings who actually can self-determine. As such, they should never be entered as competitors into a contest between living human beings. Yet they have been.


And this is not merely because of the 2010 Supreme Court decision in Citizens United v. Federal Election Commission, which basically gave the constitutionally protected right of free speech to corporations as if they were people.


No, this started much earlier, with the invention and forcible spread of neoliberalism in the second half of the 20th century. That history is both important and horrifying to learn about, but I won't cover it here. The thing I want to focus on is the changed dynamic that occurs when businesses are made equal to human beings in sociopolitical contests.


Say you and your neighbor have opposite views on abortion, equally strong feelings, and roughly similar financial situations. Depending on how politically active each of you is, you may engage in a tit for tat. You put up a sign, they put up a sign. They start a petition, you start a counter-petition. You load your car with bumper stickers, and so do they. The success that each of you has is dependent on a lot of factors, including how liked you are, your level of extroversion or introversion, how much the people around you already agree with you, and so on. But, most of these factors are not exclusively limited by monetary cost.


Now say the situation is mostly the same, but your neighbor is actually very rich, and you are not. They will immediately have disproportionately greater access than you do to things like ads, lobbying power, political friendships, "respectability", and so on. Now, make that very rich neighbor an even richer company, with its own brand recognition, legions of fans, and even more advertisements and lobbying power, and employees that it can pressure into servicing its political will. How do you compete with that kind of entity on a political level? By yourself, as an individual human being, you can't.


Companies will always dominate people in the individualistic contest of liberalism


If people work together in large numbers, they can beat companies, through strikes, boycotts, and electoral political pressure. However, liberalism itself intrinsically hinders this kind of collaboration. As a political and philosophical framework, liberalism discourages us from working together too closely with too many other people - after all, it is your own ability to self-determine that is important, remember? Achieving your goals in concert with other people diminishes your ownership of the victory, and thus its overall value to yourself. Illuminated this way, the liberal philosophy is a self-isolating viewpoint that destroys our ability to combat businesses in the sociopolitical arena of neoliberalism.


But this is not the only way to think of neoliberalism.


Definition #2: Neoliberalism is hyper-capitalism


Capitalism has been with us, ubiquitous and overwhelming, for quite some time. This makes it hard to see - almost like trying to see the air. It's just there.


But you can see capitalism, sort of. Like smoke illuminating the currents of air, the movements of which you otherwise might be unaware, you can see capitalism in the deep mismatch between the deep exhaustion you are left in after work and the shallowness of your paycheck. You can see it in every hour that you labor at your job and are paid a tenth of what your labor allows your employer to make.


But neoliberalism is more than just this. Neoliberalism begins with the inequities of capitalism and heightens them, through deregulation and tax cuts and privatization. Let's briefly go through what each of these means and how they relate to the expansion of capitalist inequities.


Deregulation


One of the primary roles of government is to physically protect its citizens against physical threats. These days, that includes not just weapons and walls against invading armies sent by opposing governments, but also regulations against poisons and pathogens sent by the companies that operate under the rules of your own government. Regulations govern everything from what a company is allowed to dump into lakes and rivers, to how food is processed and handled, to how houses and offices are built.


Will you get chemical poisoning from your tap water? Salmonella from your meat? Killed by an explosion at your cosmetics job? It is the job of governmental regulations to push the answers to these questions away from "yes" and toward "no".


Companies don't like that. At all. It's expensive. Way more expensive than hiring the occasional new worker when an old one gets sick or dies. Even more expensive than paying off lawsuits, usually. So what's a company to do? Well, when you want to get rid of some regulations, you push to deregulate. This is why you hired all those lobbyists to bribe senators and presidents.


Broadly speaking, deregulation can happen through two methods. Regulations can be formally repealed on a legal basis. Or the government can refuse to enforce them, typically by defunding the agency in charge of the regulations. Either way, the company gets what it wants, which is monetary savings that would have otherwise gone toward satisfying safety regulations.


Tax cuts


This one is even more straightforward and obvious than deregulation. Nominally, all companies are supposed to pay taxes, the same way that people are. However, the power of investing a few bribes - I mean, lobbying campaigns - up front pays off down the road, when elected officials beholden to a company try very hard to cut taxes for every company that might reward them with more money.


In short, this is how politicians give your money back to the companies that made them rich. Call it a loan paid back with the labor of others, if you will. It's perfectly fine.


Privatization


This is what it sounds like - it means taking a public service, like roads or water utilities or a postal service, and giving private companies domain over those services. Yes, this means costs go up across the board for everyone, but if you are rich enough, you won't really notice. Most people will, though. Privatization is expensive and inefficient, and it is always the poor who bear the brunt of the resulting costs, up to and including paying with their lives.


Privatization is possibly the thorniest of the three main tools of neoliberalism. It occurs over the longest timescales, and its practical impacts take the longest to materialize. It is also the hardest one for citizens to undo, partially because the commodification or decommodification of an industry or company is much more logistically complicated than adding or repealing regulations and tax cuts, and partially because companies will literally fight to the death to oppose losing their profits to governmental entities.


Definition #3: Neoliberalism is one of the worst things in the world


I mentioned this at the start of this piece, and the tone of my writing has clearly reflected this viewpoint. However, my primary goal here has been to provide some helpful definitions to use as a baseline when thinking critically about neoliberalism for the first time. In subsequent pieces, I will discuss in more detail how neoliberalism tangibly manifests in the world around us, what kinds of damage it is doing, and what we can do to eradicate it like the deadly weed it is.

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