Neoliberal minority rule

If democracy was never the concern of neoliberals, the creed’s offspring aren’t ashamed to rule in its name

COMMENT | JAMES LIVINGSTONE | Readers of The Economist and other such august publications have encountered report after report in recent years lamenting, celebrating, or coolly analysing the demise of neoliberalism. One might think the tide has turned and social-democratic alternatives to the gospel of “free markets” have gained enough intellectual and legislative ground to become conventional wisdom.

It certainly does look as if the left has been winning what the Italian Marxist philosopher Antonio Gramsci called the “war of position,” whereby the emergence of a new “common sense” changes political reality (at least where majority rule and the consent of the governed determine political possibilities). In the United States, Occupy Wall Street, Black Lives Matter, #MeToo, Bernie Sanders, the “great resignation,” the rehabilitation of industrial policy, and the new unionism have indeed changed the way Americans perceive the role of markets.

Likewise, during the COVID-19 pandemic, the question of inequality found answers in the form of income redistribution, while new ideas about employment and education fundamentally altered mainstream thinking. And in the preceding decade, a broken health-care system and labour market made Medicare for All and massive government spending on infrastructure or a Green New Deal seem like obvious solutions to substantial majorities of Americans.

At the same time, the Supreme Court’s attacks on reproductive rights, the state’s regulatory reach, and the scope of citizenship have produced an ideological backlash that has reanimated “progressivism” and salvaged the Democratic Party’s standing at the state level. Meanwhile, Pew Research polling has confirmed that, contrary to received wisdom, younger voters are not moving right as they enter the labour market and try to make a life as well as a living: labour unions and socialism have never been so popular, not even in the fabled 1930s.

Taken together, these ideological trends, at least as we can measure them through polling and voting, explain both the hysterical rhetoric of the right regarding the apparent advent of socialism in the U.S. and the sober reflections of The Economist with respect to the impending demise of free markets. We do seem on the verge of radical change.

But if the left has won the war of position, the “war of maneuver” the contest for control of the state apparatus, which Gramsci believed would be an effect of the war of position has no more been consigned to the dustbin of history than the idea of free markets has. Instead, conservative and avowedly reactionary social movements, mostly animated by a desire to reinstate patriarchy, and knowing full well that they are fighting a rear-guard battle, have used their access to state power to commandeer public opinion.

The example of Florida, where Governor Ron DeSantis has used the state legislature to mount a frontal assault on both the private and public sectors of the culture industry  Disney World and education is only the most egregious. Elsewhere, electoral gerrymandering and the ruthless pursuit of legislation to place “conservative” policy beyond the reach of majority rule, judicial ruling, or executive veto have proved sufficient to the task of minority rule.

That reality undermines the claim  on which neoliberalism’s founding fathers, Friedrich von Hayek and Milton Friedman, always insisted – that free markets are not only compatible with democracy but are its necessary condition. After all, whatever else Donald Trump’s GOP is peddling these days, free enterprise is always at the top of the agenda. On this much the “deplorables” and the cowboy billionaires agree, as do the Wall Street constituents of the Clinton, Obama, and Biden administrations, no matter how “woke” they may be. The idea of free markets is alive and well.

If democracy was never the concern of neoliberals, we can’t expect the creed’s unruly offspring to be afraid or ashamed of ruling in the name of a minority. The architects of the neoliberal edifice always treated the traditional American commitment to liberty and equality as a contradiction in terms. Liberty for them is freedom of contract, which presupposes free markets. Thus, any attempt to regulate markets in the name of equality of opportunity is a threat to liberty of contract and must be opposed or prohibited.

The use of state power to regulate the most private of enterprises to oversee the deployment of women’s bodies, say, or to dictate religious belief  is not evidence of “hypocrisy” on the part of right-wing lawmakers armed with neoliberal arguments. Nor are their strenuous efforts to limit equal access to the ballot or to prevent unionisation. For if the means to achieve equality threaten liberty of contract, they cannot be tolerated, even if equality advances a more democratic polity.

Neoliberals know, in this sense, that markets have never been free, and that democracy has always been at the mercy of those who have created, fortified, and administered markets by making the designation and protection of private property the highest priority of the law. In the U.S., the rights of property have always taken precedence over the rights of persons, notwithstanding the founders’ efforts to balance them in designing a republic for the ages. That is why a strike, but not capital flight, can be enjoined by petitioning a judge: whereas the former threatens the value of property as the law now designates it, the latter does not.

The war of position and the war of maneuver have shown that the question is not how but whether free markets can serve democracy’s cause. While the Democratic Party establishment, still in thrall to its own neoliberal assumptions, desperately wants to avoid answering that question, Trump’s GOP does not seem to care one way or the other. The rest of us probably do.

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James Livingston, Professor of History at Rutgers University, is the author of six books, including Origins of the Federal Reserve System: Money, Class, and Corporate Capitalism, 1890-1913 (Cornell University Press, 1986), and the forthcoming The Intellectual Earthquake: How Pragmatism Changed the World, 1898-2008 (University of Chicago Press).

Copyright: Project Syndicate, 2023.