January 2021 was a very long year ago. Then, many of us who have long advocated for a post-neoliberal economics were increasingly optimistic. Joe Biden, as a newly elected President, embraced and enacted some big new ideas: public investment in a high-care, low-carbon economy. Taxes on the wealthy and corporations to pay for those. An American Rescue Plan that, unlike the federal government’s response to the Great Recession a decade before, sent money to workers, cities, and states—and put billions of dollars directly into the bank accounts of low-income families at a time of enormous economic and public health distress.
We were even more excited about the people making change. A National Economic Council staffed by people who prioritize climate, job creation, and curbing corporate extraction. A Treasury Secretary who cares more about labor markets than financial markets. The Federal Trade Commission and Antitrust Division of the Department of Justice staffed by new thinkers ready to battle the root causes of economically dominant private actors.
And we thought that maybe all this meant that neoliberalism had been vanquished.
We were wrong.
Yes, the ideas and the people embraced by the Biden Administration at the outset are remarkable. These are—and remain—enormous victories, none of which happened by accident. This work has enormous potential consequences. The policies themselves are still significantly popular.
And yes, the economics profession has made a significant and probably long-term pivot in its fundamental understanding of markets and their limitations, and most importantly in its centering of inequality—what causes it, how destructive it is, and how it can be ameliorated. In the world of economic ideas, neoliberalism is no longer hegemonic.
But to put it mildly, it’s not all upside. The neoliberalism that many of us knew in the 1980s, 1990s, and 2000s—that unquestioning faith that the way forward in America was to strive for education, college if you could; to get a good job; and to get ahead—is gone, never to return. But the post-neoliberalism we are now living through is chaotic and, for many, terrifying. We are at some kind of inflection point, not only because of COVID, but also because the ideas that had held sway and governed our sense of right and wrong have lost their explanatory power. We are living through the midst of paradigm change. And we are just as likely to come out on the dark side—a racist, populist economics upheld by an authoritarian regime—as we are to come out looking more like some combination of the New Deal and the Great Society, updated for a multi-racial twenty-first century.
The path to a better outcome remains available. But getting there requires that we understand the fight for a democratic and multi-racial post-neoliberal future is not just rooted in policy, but is rooted in politics: alliance building, institution building, and organizing.
The fact that our democratic institutions, and faith in political decision-making by the people, is today in so much peril is in part the legacy of neoliberalism itself.
That is because neoliberalism has never been only about the economics. Neoliberalism is a set of cultural beliefs that celebrates and reifies individualism, property ownership, and wealth accumulation in ways that are profoundly anti-political and anti-democratic. Some of the wealth accumulation and property ownership elements of neoliberalism have come under question, especially for younger people. But the anti-political and anti-democratic strands of neoliberalism, in particular, are alive and thriving as we march into 2022.
Paradigms, Social Norms, and Alliance-Building: The Power of Strange Bedfellows
Looking at this as a matter of paradigm shift matters. This is not just about individual policy outcomes or legislative wins or losses. The erosion of both social mobility (always greater for white Americans than for people of color) and democratic institutions and norms has been 50 years in the making. As I wrote in these pages in 2019, the roots of today’s crisis go back at least to the pre-Reagan 1960s and ’70s. Neoliberal ideas had gained traction in economics departments, especially at Chicago and Virginia, in the 1940s and ’50s. But in the 1960s and ’70s, those ideas grew, metastasized, and gained powerfully disparate political adherents for reasons well beyond economics.
In those decades, mainstream American politics began to embrace the vilification of taxation; increased and ultimately militarized policing in the wake of uprisings in cities from Los Angeles to Detroit; the social idealization of women as unpaid or underpaid care labor; the valorization of business as profit maximizers and job-creators. The neoliberal world certainly had an economic, supply-and-demand, markets-focused backbone. But its flesh and blood was a set of social beliefs that said that nuclear families and white Christian churches were safe and calm, producing moral good; that government was sclerotic, bureaucratic, and unfairly redistributive; and that social justice movements were chaotic, dangerous, and frightening.
These deep social beliefs, and their institutional tilts, are what a powerful paradigm can yield. Those of us searching for solutions to today’s crisis must understand what we are battling—a neoliberalism that attacked not just Keynesian economics but also democratic norms and institutions. Neoliberalism shifted power to the private sector and at the same time decimated and discredited the rules and social norms that would hold private actors accountable. Theirs became our shared neoliberal vernacular.
Now we must create a new, post-neoliberal language. The best way to do that is to flip neoliberalism on its head, and center democracy itself.
Beyond Build Back Better: Three Pillars of the New Worldview
Fast forward to today. For the past year, headlines have been dominated by the ups and downs of the Biden economic agenda, and the triumphs, failures, and frustrations of intra-Democratic party politics. That kind of reporting misses a big picture look at the ideas driving President Biden’s economics.
The Biden agenda, at the highest level, is post-neoliberal in ways that are pro-public and racially inclusive. Taken as a whole, the Biden executive orders and legislative plans bring to bear different kinds of governmental tools—regulation, taxation, direct provision, public investment—to reshape the American economy. Taken together, the American Rescue Plan Act, the Bipartisan Infrastructure Law, and Build Back Better’s focus on climate and care could be transformative.
But of course, the fact that the Build Back Better Plan has been so painfully negotiated, and is now so distressingly stalled, perhaps permanently, has led many pundits to throw all hope of a new economic thinking under the bus. Joe Manchin’s conservatism must mean that Americans as a whole are not ready for higher taxes on the wealthy, government regulation of monopolies from tech to meatpacking, government investment in cleaner, greener commodities production, or a healthier way to care for our elderly and our children.
Of course, this is not so. Higher taxes on the wealthy and corporations, regulating Facebook, and green jobs are all popular with supermajorities of the American public. Post-neoliberal economic ideas are faring well, despite Build Back Better’s tortured legislative path. The short-term problem remains the 50-50 balance of power in the Senate. The longer-term problem, much more worrisome, is that neoliberalism’s anti-public institution and anti-democratic stance remains so powerful.
For neoliberalism to be fully vanquished, and for its material defects—slower growth, greater inequality, more suffering—to be battled back, we must develop not just a politics in favor of the new economics. We must also develop a politics in favor of politics. We need a pro-public institution, pro-democracy coalition.
A new post-neoliberal politics will rest on three pillars: a deep shift on race; policy design for the people; and a full-throated support of democracy itself. In a 2020 economic landscape paper, I argued that post-neoliberalism will “take seriously the power of the government to do good in many ways—to set guardrails and rules for the market; to provide goods and services directly; to set economic goals and catalyze change.” We now know, even more deeply than we did a few years ago, that these policy approaches will take root only in stronger, revitalized democratic institutions.
Getting there will require cultural shifts and infrastructure and organization-building. None of them will make news headlines. None of them will be easy. But they are essential if democratic post-neoliberalism is to prevail.
1. Post-Racial Liberalism
First, we need a deep shift on race. We must move from a thin racial liberalism that is race-neutral, focusing on market competition and nondiscrimination, to a more far-reaching and historically accurate “whole-of-government” anti-racism.
Neoliberalism flattened the civil rights movement’s work on everything from voting rights and political control of governmental institutions to basic income and full employment. Neoliberals imposed the white male private sector status quo on both the civil rights and decolonization movements by making market competition the solution to past discrimination and by saying that everyone could compete on equal footing. But this kind of racial liberalism ultimately deepened divides of wealth, health, and political voice, especially in the United States. Globally, prioritizing free trade unleashed the growth of profit-seeking multinationals at the expense of workers, the environment, and the political power of states and regions formerly under mostly white colonial rule.
Today, after the racial reckoning and nationwide uprisings of 2020, we are seeing a long-lasting change in public opinion. Republicans have hardened in their beliefs that the legacy of racism is irrelevant, and they are vilifying those who focus on it. But Democrats and Independents have shifted, perhaps permanently, to a deeper belief that structural forces—discrimination, anti-immigrant laws and prohibitions, the legacy of enslavement—are responsible for racial inequality. This is a real change from a decade ago.
A focus on structural exclusions drives the Biden Administration’s efforts on race. With an executive order on his first day in office, Biden decried “entrenched disparities in our laws and public policies, and in our public and private institutions,” lauded “a historic movement for justice” for highlighting “the unbearable human costs of systemic racism,” and declared its leadership on “an ambitious whole-of-government equity agenda that matches the scale of the opportunities and challenges that we face.”
But what’s next? The jury is still out. The Office of Management and Budget within the White House has focused on changing government itself. The goals are ambitious, if not always media-worthy: policy design, especially with a focus on administrative burden—how difficult or easy it is to access government services; data science—better collection of information about the American public; organizational change management, including the idea that agencies and federal employees themselves ought to be drivers of equity and engage stakeholders and the American people more effectively.
Whether and how these changes manifest, and whether they can be long-lasting across different political administrations, are of course the critical questions. But the whole-of-government focus on making governmental institutions affirmatively pro-race equity is critical to democratic post-neoliberalism, and it merits our ongoing attention.
Other elements in the post-neoliberal battle for race equity are far more distressing. Despite ongoing evidence of race-based disparities in government relief, the federal courts, along with a range of conservative legal nonprofits, have successfully argued that the law must be “race neutral.” Developing a jurisprudence that properly recognizes racially exclusionary or disparate treatment will need a strong, concerted effort. That will be difficult given relative paucity of think tanks and advocacy organizations (not individual scholars) focused on race-forward jurisprudential work. And it will feel near-impossible given the conservative hold on the courts. Their long-term investment in a combination of ideological power and hardball political tactics will make any jurisprudential change exceptionally difficult, because their control, as both judge and jury, is self-reinforcing.
The Republican embrace of anti-anti-racism is more frontal. The MAGA coalition, which now controls the mainstream Republican Party, is essentially defined by its dedication to whiteness and against racial equity.
2. Policy for the People: Direct Investment, Direct Provision
Secondly, we need to change our views of public institutions and policy design itself. Two kinds of tools are important: direct investment to shape markets, and direct provision to relieve suffering and reinforce democratic norms and values. The Biden approach has been to lean more heavily toward investment than provision—but for a democratic post-neoliberalism, both are important.
New ideas for public investment—planning for the public good—are alive and well. Government funding can fundamentally shape and structure critical markets, especially for greener production and manufacturing and for more equitable and higher-paying elder and childcare work. A range of tools is available. More government research and development. Federal procurement—government acting as a market shaper by buying certain kinds of goods. This is about incentivizing private funding toward a high-care, low-carbon vision of our economy. Much of this thinking has yet to be fully realized as policy. This past summer, the 2021 Senate passed legislation dedicating more than $100 billion to technical research and development, with a focus on semiconductors, and with the goal of distributing those monies geographically, not just to existing tech hubs like Silicon Valley.
I have argued that this—the sunny side of post-neoliberalism, more carrots than sticks—has always been most fundamentally attuned to the way that Joe Biden personally sees politics. A small example makes the larger point. In a novel twist in antitrust and competition policy, the White House plan to combat a monopolistic meat industry is not only to use new anti-trust mechanisms, but also to provide $1 billion in loans and grants to smaller, often rural, producers. Government capital can restructure markets. If and when public investment becomes a more robust American industrial policy, it will be critical to ensure that government funding counters the power of large private industry players rather than reinforcing their market dominance.
Direct provision to individuals, families, states, and cities is another tool. In some ways, the pandemic yielded a remarkable change in relief policies: fewer nudges and more direct provision. Whether the Biden team has gone far enough is up for serious debate.
On the one hand, consider the direct stimulus checks authorized by Congress, beginning with the CARES Act and continuing with the American Rescue Plan Act, that went to low- and moderate-income Americans. Or the larger, fully refundable Child Tax Credit (which needs a new name: How about Social Security for Kids?) that, thanks to a dedicated group of wonks and advocates, was larger, fully refundable, and went directly and monthly to a larger group of parents.
On the other hand, consider the $80 billion in renter relief funds, which were intended to go directly to tenants threatened with eviction. This has not been easy. The Treasury Department has had to develop new rules—carrots, sticks, and simplifications—to ensure that money gets to renters themselves, not to landlords or other officials, in a timely fashion. More direct public provision would be more public and social housing, or, in the emergency context of the pandemic, commandeering unoccupied buildings to use for those without housing.
The provision of COVID-19 rapid tests during the pandemic is perhaps a more pointed example. The governments in other wealthy nations throughout Europe and Asia have done far more to use their power to meet citizens’ needs, rather than relying on markets. The Biden Administration has recently moved to direct procurement and opt-in public distribution of tests, which is good. But the Administration could have produced rapid tests, or purchased them at low cost from manufacturers, and distributed them to every household, far sooner. Instead, throughout 2021, including the high-risk holiday season, tests in the United States were privately produced, expensive, and difficult to find. Medicare does not cover COVID tests. The White House argument that private insurance reimbursement is working, and that “everyone in America has access to free testing in an efficient and effective way,” is just not credible.
Some of this change could happen now. The federal government has more authority than it is using. Other change will require institution-building, which takes time. For example, the astonishing $420 billion in federal relief money from the American Rescue Plan Act, much of which will go to states and cities, requires the Department of Treasury to work through its newly established Office of Recovery Programs. Whether this team, which reports directly through the Treasury Secretary’s office, can lay tracks for a longer-term shift toward direct public provisioning, will be important.
3. Democracy as a Practice and an Ideal
Third and finally, a democratic post-neoliberal politics need a much deeper understanding of democracy itself, as a practice and an ideal. It is clear, a year after the January 6 insurrection, that our post-neoliberal world could become less democratic, not more. Poll after poll records that Americans believe our democracy is in crisis now—with Democrats alarmed at the Capitol insurrectionists and at rising political violence from the right, and Republicans believing that political violence is justified because they buy the Big Lie of stolen elections. Prominent Republicans say that “capitalism is more important than democracy” or “democracy isn’t the objective.” These are more than economic or electoral statements. They are efforts by conservatives to paint large movements for workers’ rights, voting rights, racial and gender equity as chaotic, dangerous, and themselves undemocratic (see Senator Mike Lee’s dismissal of “rank democracy”).
Anti-democracy is where neoliberalism itself still flourishes. Neoliberalism continues to reduce citizens to consumers and narrows democratic choices to buying and selling. Education, in the neoliberal view that holds sway in public schools today, is not John Dewey’s ideal of helping to shape citizens and society, but instead emphasizes training students for work and testing for technocratic skills. Many progressives still rely on technocratic policy answers or on metrics of scale alone, rather than organizing membership groups for collective action and democratic contest. In the meantime, white nationalist organizers are gaining ground in part because they operate with the protection, both tacit and explicit, of the Republican Party, and because they practice deep organizing.
We are at grave risk of finding ourselves in a post-neoliberalism that combines a version of anti-corporate economic populism with outright white supremacy. The predecessor here is neoliberals’ dismissal of democracy as a strange combination of inefficient, bureaucratic, and anarchically explosive. As Wendy Brown warned years ago, this was neoliberalism’s stealth revolution. By denigrating and decimating institutions of public governance themselves, neoliberalism corroded democracy.
This would have been devastating in itself. But combined with neoliberal economics’ inability to provide reasonable material equity or consistent economic growth that is widely shared demographically, geographically, or across race and gender—it has proven almost deadly.
A Public Fight for a Pro-Public Democracy: A Truly Post-Neoliberal Politics
Where we go next is up for grabs. Democratically, post-neoliberal economists and policy experts are winning the ideas war. And yet, democratic institution-builders and politicians are losing the wars of governance, narrative, and, very possibly, elections themselves. No reasonable person can say with certainty what will happen next. But how history treats this moment and the Biden presidency will depend, in the near-term, on the Administration’s willingness to take a more frontal stance on issues of race equity, public provisioning, and democracy—in ways that are available now. The long-term will require a more fundamental set of institutional shifts.
On race equity, the Biden team could add a more public fight to the whole-of-government, under-the radar-approach they have taken thus far. The President could be seen as more clearly on the side of both long-standing civil rights leaders and younger racial justice movement leaders. It remains to be seen whether the year-anniversary of the January 6 insurrection will prove to have been, as Representative James Clyburn predicted, a turning point toward a more pugilistic posture for the Biden Administration. In the words of Melanie Campbell, CEO of the National Coalition on Black Civic Participation, “If you are going to do a whole-of-government approach, if you’re going to use a bully pulpit, you cannot do that just from the White House.” Partnering with movement leaders to reinvigorate the case for voting rights and against election subversion must happen where people are, and where they live.
On public provisioning and public health, the Biden team must continue to assert and act on the government’s rights and responsibilities in providing for public health and the public good.
And finally, in the face of Donald Trump’s continued and, remarkably, strengthened authoritarian hold over the Republican base, Democrats must fight volubly against the Capitol rioters and the Republicans who supported, encouraged, and continue to defend them. This is not a fringe movement. The January 6 insurrection was led by mainstream Americans: CEOs, accountants, public safety officers, those with college degrees. They are supported by all but a handful of Republican politicians. Under these circumstances, bipartisan legislative efforts, as laudable as they might be under different conditions, are, as we have seen, almost always doomed to both policy and political failure.
Conclusion: Welcome Their Hatred
It is early in the Biden presidency to ask how history will treat him. But the possibility that Biden will build on FDR’s legacy to fully usher in a New Deal for today’s multiracial America is looking increasingly distant. The Administration’s policy ideas remain remarkable in their breadth, depth, vision, and intention. The Biden policy team represents some of the best of the new economics. But the political playing field is such that Biden will likely be a transition figure as we now understand both Richard Nixon and Jimmy Carter to have been in the 1970s.
Nixon’s vision won that battle. That is because, unlike Carter, who toggled between Keynesianism and austerity, and had few organized interests to push him toward the former, Nixon was part of a rising tide. Yes, he was a conservative who created the Environmental Protection Agency. But he vetoed public childcare. And most fundamentally, he embraced the Southern strategy of “law and order” and states’ rights. Nixon’s neoliberalism was strengthened by a growing network of people who argued for the moral good of business profit-making, the moral righteousness of the evangelical church, and the idea that capitalism itself would solve racial discrimination. The neoliberal vision took root and grew in networks of powerful institutions, ultimately leading to the political success of neoliberalism in the 1980s and beyond.
This suggests that Biden must do more to name his enemies, and more to embrace and strengthen his friends. He must say whose side he is on: the side of democrats, as well as Democrats. Biden does not have the political hand that FDR was dealt in 1933—60 seats in the Senate and 313 seats in the House. Not even close. But given what he is facing, he can take one page out of FDR’s book, declaring who his enemies are—a combination of “organized money and the organized mob”—and welcoming their hatred.
And then it is up to the rest of us to organize. We must see ourselves as parts of a larger fight for a democratic post-neoliberalism. This requires that we change our thinking and our institutions. Our strongest membership institutions, like unions, have seen an upsurge in recent years, but remain historically weak. Our best leaders are organized for disparate, often siloed fights—against gun violence, for women’s equality, against police brutality. We must see these as part of a greater whole.
That bigger vision must be, and describe itself as, pro-public: fighting against election subversion and for voting rights, and fighting for democratic—not corporate or private—governance of our public institutions. This is the long game.
But building that new democracy also requires fighting MAGA now, as it grows and keeps the dagger at our nation’s throat. As such, we might need to reach across some old divides. Reaching across is never easy, especially after decades of arguing. Some of it will prove impossible, especially where potential allies see themselves as locked into a zero-sum fight over both material benefits (to tax the wealthy or not?) or status (to share neighborhoods, schools, and workplace authority or not?).
But some reaching across could be possible, and strange bedfellow alliances could be forged, around the pillars I argue for here: race, governance, and democracy. The new economics that has come to prominence over the last five years should help. We can afford less inequality. The trade-off between growth and efficiency is not what we once thought. We can invest public funds in a greener future. The win-win possibilities opened up by the new economics is far from determinative of a new politics, but it does set the table for some new alliances.
Remember: Neoliberalism’s strange bedfellows didn’t have much in common, either. But conservative fusion was possible because different factions shared a belief that private markets would yield better outcomes. We must embrace a similarly effective, but fundamentally different, approach, focused on democratic, and not privatized, governance.
Our governmental institutions and our movement institutions have yet to catch up to the ideas. Time is not on our side. But we must now do everything we can with everything we have, dealing with our imperfections and amplifying our strengths. There is no alternative.