What is Neoliberalism?

The word, the idea, the myth

In my first class as a doctoral student, I had a very real imposter syndrome moment. We were discussing a reading, and everyone was throwing around the word neoliberalism, and I had no idea what it meant. I could hardly pronounce it. Context clues vaguely helped, but there was no way I was going to chime into the conversation without knowing this important concept that my class seemed so focused on.

I remember thinking, oh god! How have I gone my whole life not knowing this word everyone else knows? It was embarrassing. Even looking up the term in our texts or searching online didn’t give me an answer that left me confident enough to use the term in class.

Gradually, throughout the next few weeks, I found out that I wasn’t the only one with this issue. When I confessed my problem to my professor, she explained that neoliberalism is a loaded term, and that it is totally understandable not to have clarity on what it is or what all it entails. When I asked her for a reliable definition, she just smiled. “That sounds like an excellent project for a doctoral student.”

So I did what she recommended. I scoured our readings, google searched, library searched, and just generally asked around. Since then, I have a much better grasp on the idea of neoliberalism. Now, I use it and have an understanding of the weight that comes with it. It is quite powerful.

Unfortunately, the word is often misused and misunderstood. It’s sometimes mistaken as an attack on one political party or on those who are politically left leaning. Sometimes it’s equated with capitalism.

So, I’d like to share a few resources and ideas that helped me wrap my head around what neoliberalism is. When we understand it, we understand a phenomenon that shapes the entire world around us. Just as importantly, we have the language and perspective to be able to change it.

Base definitions:

“A theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”

-David Harvey in A Brief History of Neoliberalism, p.2

Phew. That was a lot. Basically Harvey is saying that neoliberalism is the political practice of promoting capitalism and removing obstacles to its free markets. Another definition gives more specifics:

“A political movement beginning in the early 1980s for ‘regulatory reform’, i.e. the rollback of environmental laws, worker health and safety, consumer protection, and other state regulatory processes seen as impinging on the ‘free’ market and the profits of capital.”

-Daniel R. Faber and Deborah McCarthy in Just Sustainabilities: Development in an unequal world

One might ask, why don’t we just say capitalism? It is because neoliberalism is more than just capitalism. It is the way in which capitalism is interwoven into our culture, and the deliberate methods it uses to prop up a very small portion of society.

A helpful analogy:

“If you think of the economic system as being like a computer, capitalism is the hardware and neoliberalism is the software. It’s like the operating system. So, capitalism is a whole bunch of institutions and power relations that structure how the economy works, including markets and private property and finance…And neoliberalism is the operating system. It’s the set of rules for how you should run capitalism.”

-Christine Berry, in Sustainababble podcast, Episode 109

What it means in practice:

• Deregulating markets

• Privatizing goods and services (including, for example, land, water, education, health care, social services)

• Measuring well-being with GDP and GNI, rather than measures that directly related to individual health, happiness, and financial success.

• Interfering in markets only to stabilize the value and security of money (i.e. controlling inflation, bailing out institutions that could damage currency value if they fail, protecting financial institutions)

Universal health care, social security, and public education funding are hot button issues for a reason. They challenge the neoliberal playbook. Politicians use the argument that private markets are superior to public services because it is so deeply engrained in American culture.

Related policies and ideas:

• Trickle down economics works.

• Charity is the means to provide societal safety nets.

• Unions are harmful.

• Markets have stronger logic than governments do.

• The environment is valued based its ability to generate revenue.

• The environment is a commodity, separate from humans and separate from the economy.

• If everyone acts in their own self interest, then society will benefit.

Ronald Reagan and Margaret Thatcher are the two politicians who first used this economic theory as a road map for running government. Now, all major political parties play a role in neoliberalism. It is the dominant thinking, and its rare to have a successful political position that is completely devoid of its logic.

Why it’s powerful, and what’s this all mean?

Neoliberalism is unclear for a reason. It has not been presented to the public as a theory, or an approach, or a model. Rather, its proponents have insisted that it is common sense and textbook economics.

Just like 2+2=4, they say that capitalism + government deregulation = a healthy economy. And a healthy economy = collective well being.

This idea is powerfully destructive because it places humans and environment secondary to money. It holds on wealth on high, alters our image of who we are as individuals and nations, and gears society to ravage the planet at lightening speed. Neoliberalists gaslight the rest of the world into believing that there is no other way.

They are wrong, and their theory is incredibly fallible.

Now, there are more and more people offering alternatives, imagining worlds beyond its constraints. However, these oppositions are not mainstream, and our collective reality is still tied up in logic that revolves around problematic ideas of neoliberalism.

So, how do we get out of this ever-present group think?

The first step to challenging and changing our neoliberal system is to understand it. Recognizing what it is and when it comes up, and having the language to call it out are monumentally important.

Once we can do this, we can move towards a better operating system. We can intentionally use language and take actions that promote healthier communities. We can choose leaders and support policies that more aptly build up society.

There is a path forward when we set our minds to finding it.

With love and hope for the future,

Stephanie

Learn more:

David Harvey

Christine Berry

Kate Raworth