Historians disagree
Historians Disagree: Neoliberalism
What is neoliberalism as a historical concept?
by Kim Phillips-Fein, Columbia University
Historians are just beginning to write about the period that follows the election of Ronald Reagan in 1980, and as they do so they have sought new ways to conceptualize and explain the social, economic, and political changes of the decades since. One of the major ideas scholars have advanced is represented by the term “neoliberalism.” What this means, though, is often far from clear, especially since, unlike other political labels, few people use it to refer to themselves.
In general, neoliberalism refers to the political project of cutting back the welfare state and the sphere of government activity generally. In the United States, major pieces of legislation that are considered signals of the rise of a neoliberal framework include the tax cuts of the early Reagan years, the North American Free Trade Agreement (NAFTA) of 1994, the welfare reform bill of 1996, and the deregulation of the financial industry in the late 1990s. When Reagan broke the federal air traffic controllers’ strike in 1981 by firing the striking workers, it helped to legitimize a greater level of employer hostility to labor unions. Privatization of public services, deregulation of industries that had been subject to greater public control, austerity policies that curtail public spending, and a political approach that favors the market as opposed to the state all point to the kinds of policies that social critics have termed “neoliberal.” Scholars such as David Harvey (in A Brief History of Neoliberalism) and Wendy Brown (Undoing the Demos) have argued that these kinds of policies have resulted in greater economic inequality and in the hollowing out of the public sphere, as well as the deepening atrophy of democracy itself.
While there were some earlier uses of the term, the idea of neoliberalism became most popular in the early 2000s, as social theorists tried to explain how and why both major political parties and many intellectuals in the United States had become far more tolerant of the idea that the free market, left to its own devices, would arrive at optimal solutions for all. The concept refers to the classical liberalism of the nineteenth century advanced by political economists such as Adam Smith and John Stuart Mill, which posited that reducing government regulation and giving the free market the widest possible rein would lead to the best social outcomes for everyone. Over the course of the twentieth century, especially following the Great Depression of the 1930s, many governments around the world moved away from laissez-faire policies, instead adopting regulation of finance and labor markets, higher taxes, and a broader public sector and welfare state. In the United States, that took the form of the New Deal. Neoliberalism refers to the move away from these policies and back to giving the free market more latitude. Historian Quinn Slobidian, who has written about early neoliberal thinkers such as the Austrian economist Friedrich von Hayek, argues that in contrast to nineteenth-century liberalism, neoliberalism has intended specifically to undercut various forms of collective action, and thus has often been quite skeptical or hostile to political democracy.
Scholars disagree about the extent to which neoliberalism is the right framework to use to think about recent history in the United States. Some historians have objected to the way the idea suggests the total dismantling of the welfare state, pointing out that many social programs (such as Social Security) have lasted to the present day. Others, such as Loic Waquant (Punishing the Poor), have complicated visions of neoliberalism that focus entirely on shrinking the government, by observing that state spending has actually grown in many cases, including on the military, policing, and prisons. Still others (including Amy Offner, in Sorting Out the Mixed Economy) point out that postwar liberalism shares many underlying assumptions with the post-1980 moment. And many historians (as well as anthropologists and sociologists) have challenged the idea that neoliberalism can be used to think about culture as well as policy, pointing out the many areas of social life that do not conform to the model. Nonetheless, the tensions within the neoliberal model that have emerged in recent years—especially the increasing criticism of economic inequality, especially after the financial crisis of 2008, and the growing awareness of collective problems such as climate change, which may be difficult to resolve through the private market alone—have highlighted the distinctive nature of social policy over the last forty years. Whether or not neoliberalism is the best way to think about these problems, historians and other scholars will continue to debate the term and to consider alternatives.
Additional Reading
Melinda Cooper, Family Values: Between Neoliberalism and the New Social Conservatism (New York: Zone Books/MIT Press, 2017).
Gary Gerstle, “The Rise and Fall (?) of America’s Neoliberal Order,” Transactions of the Royal Historical Society 28 (December 2018): 241–64).
David Harvey, A Brief History of Neoliberalism (New York: Oxford University Press, 2007).
Amy Offner, Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas (Princeton, NJ: Princeton University Press, 2019).
Quinn Slobidian, Globalists: The End of Empire and the Birth of Neoliberalism (Cambridge, MA: Harvard University Press, 2018).