Symposium | Beyond Neoliberalism Part II

The New Paradigm: How Fares Post-Neoliberalism?

By Quinn Slobodian

Tagged Biden AdministrationFranklin D. RooseveltMilton Friedmanneoliberalism

In early 2018, Larry Kramer, the dean of Stanford Law School and the president of the William and Flora Hewlett Foundation, which held assets of about $10 billion and disbursed around $400 million a year in grants, wrote a memo to the foundation’s board with a plan to end neoliberalism. Across 26 pages, he laid out a theory of recent U.S. history. By his account, the last four decades had seen the steady rise to dominance of a philosophy that operated around three interconnected beliefs: Society was composed of individuals seeking to maximize their own utility, progress was measured in metrics of monetary wealth, and the role of government was to enable markets to operate as freely as possible. The philosophy was incubated by a small group of intellectuals including Milton Friedman and Friedrich Hayek, who carried out a breathtaking victory march from the margins in the early postwar years of social democracy and Keynesianism to the center of American political consciousness. By the 1980s and 1990s, neoliberalism reached into every field of human endeavor from higher education to public policy. Kramer noted that philanthropy had played a major role in the success of neoliberalism, from the William Volker Fund to the Olin Foundation to the Koch Network. He proposed something radical to the board of the philanthropic body he directed: The Hewlett Foundation should take this history and flip it, reverse-engineer the neoliberal project and replace it with a new economic paradigm.

The Hewlett Foundation was in some ways an unlikely motor for such an initiative. Created by the co-founder of Hewlett-Packard, it had concentrated more on issues of population and reproductive rights alongside environmental and cultural issues over the years. Kramer’s pitch was more confrontational than most of their previous efforts. He was targeting the pituitary gland of the American body politic, proposing that a change in the ruling ideology at the source could reshape social life as a whole. Yet the board agreed. They committed $10 million to the first two years in 2018 and, in 2020, renewed with $50 million more.
What to make of the current state of the neoliberalism initiative? Four years later, it’s time to take stock and see where the attempt at moving beyond neoliberalism has found purchase and where it has not.

As one starting point for the colossal project of remaking the economic paradigm, Kramer took a page from the neoliberal playbook. This was a page the neoliberals had themselves taken from the left. In an influential 1949 text on “intellectuals and socialism,” Hayek emphasized the role of “professional secondhand dealers in ideas” in early twentieth-century socialist movements like the Fabian Society. He meant journalists and popular authors as well as theorists and academics, people who created “a picture of the kind of future society at which they were aiming.”

One dealer in the ideas to oppose neoliberalism was this very journal. In spring 2019, a special issue of Democracy supported by the Hewlett Foundation, assembled some of the brightest lights in the academic and policy world feeling out the contours of a post-neoliberal project. (This symposium received support from Hewlett as well, as did a History and Political Economy Project I launched recently with Johns Hopkins professor Christy Thornton.) Among the contributors in 2019 were Heather Boushey, the president of the Washington Center for Equitable Growth. She concentrated on the academic discipline of economics where she saw a hopeful shift from theory to empiricism in recent years. Another was law professor K. Sabeel Rahman, who laid out the need to reclaim the language of freedom from neoliberals as “emancipation from conditions of structural inequality and subordination.” Yet another was Felicia Wong, who dwelled on the need to build “post-neoliberal” institutions, imagining a “pro-public equivalent of the Chamber of Commerce.” The director of Hewlett’s Beyond Neoliberalism initiative, Jennifer Harris, named some of those institutions in her programmatic piece. They included Demos (directed by Rahman), the Roosevelt Institute (directed by Wong), and the Open Markets institute (praised by Chris Hughes, another contributor to the special issue, in his call to “break up Facebook”). Harris highlighted the need to attack the problem from an oblique angle. As she saw it, in a near echo of Hayek, philanthropy’s role was to move from single-issue funding to supporting the creation of new ideas that “cohere into a story that both helps explain how the world works, and points society toward some interventions, and away from others.”

Less than two years from the publication of the special issue, the ambitious, if vague, ruminations of the special issue came down to earth as all of the authors named above took on roles in the incoming Biden Administration. Boushey was a member of the new Council of Economic Advisors. Rahman was Senior Counselor in the Office of Information and Regulatory Affairs. Wong was the U.S. representative on the G7 Economic Resilience Panel. And Harris became a member of both the National Security Council and the National Economic Council. Lina Khan, a veteran of the Open Markets Institute and founding member of the Law and Political Economic Project at Yale, itself funded by a $600,000 Hewlett grant, was the director of the Federal Trade Commission.

This was an astonishing success, a seizure of some of the commanding heights of policymaking by a cohort defining their project self-consciously as transcending neoliberalism. But the record in office has been mixed. The Administration began 2021 with great headwind, the all-bets-are-off mood of the pandemic, and a drumbeat of invocations of FDR. Yet, the multitrillions of proposed spending was sliced back salami-style over the months in the need to woo wavering Democratic senators, and the year ended with the signature Build Back Better Act unpassed.

Yet there have been successful challenges to the neoliberal status quo. Consider international trade. Extending the hawkish turn initiated by Trump’s U.S. Trade Representative Robert Lighthizer, the Biden Administration has embraced tariffs, export controls, and trade restrictions as tools of foreign policy. This accords with the advice of Harris herself, outlined in an op-ed co-authored with later National Security Advisor Jake Sullivan. In that piece, in Foreign Policy, Harris and Sullivan defined neoliberalism as the “reflexive confidence in competitive markets” and the “corresponding belief that the role of government is best confined to securing those competitive markets through enforcing property rights.” They made the case for combining the imperatives of foreign policy and economic policy, emphasizing the importance of long-term industrial policy to match Chinese competitors.

Antitrust lawsuits against Facebook are a break from Barack Obama, who speculated about a post-presidential career in Silicon Valley.

Their iteration of post-neoliberalism aligned with what Anthea Roberts and co-authors have called the “geoeconomic world order,” the abandonment of conceits of depoliticized global capitalism and the self-conscious instrumentalization of economic measures for geopolitical ends. In one sign of the success of this policy direction, a bill banning goods made with forced labor in Xinjiang passed the Senate in late 2021 in a rare show of bipartisanship. The new U.S. Trade Representative, Katherine Tai, has continued much of Lighthizer’s trajectory albeit with more earnest attention to issues of climate and labor rights. The Administration’s 100-day supply chain review pointed to a new awareness that the global market may be not only a site of freedom—as the neoliberals had argued—but also a site of dependency and danger.

Another notable shift has been around the regulation of tax havenry. For many, the liberty of quicksilver capital and corporate profits to escape taxation through flight and domicile in the offshore world has been a defining feature of the neoliberal era. In a decision heralded by Wong as a “huge win” in October 2021, the OECD agreed on a 15 percent global minimum tax. The move by the OECD shows the breakthrough politicization of tax havenry by the work of economists like Gabriel Zucman, who co-edited a special issue of Boston Review also funded by the Hewlett initiative.

The appointment of Khan as director of the FTC, Jonathan Kanter as head of antitrust at the Department of Justice, and Tim Wu to the National Economic Council signaled an oppositional stance vis-à-vis the power of the clutch of corporations that dominate the technology sector. Antitrust lawsuits against Facebook represent a break from the stance of the Democratic leadership under Barack Obama, who is co-producing a series with Netflix and once speculated about a post-presidential career in Silicon Valley.

A through line in the places where the post-neoliberal turn has had some traction is their overlap with the policy stance of the “national conservative” wing of the Republican Party: against China, foreign tax havens, and Big Tech; and for infrastructure spending and industrial policy. There is a common enemy in cosmopolitan capital and its sheltering doctrine of neoliberal globalism whereby nation-states are reconfigured as guarantors of the primary human rights of private property and capital mobility. It is perhaps no coincidence that the right-wing journal American Affairs, another recipient of Hewlett funding, has been the most consistent mouthpiece for this position.

In the event, it may be up to the post-neoliberal wing of the Republican Party to carry the above-named policies forward. The loss of Democratic control of one or both houses of Congress and perhaps the White House in 2024 could make their limited achievements ephemeral—and render the loftier demands articulated in the 2019 Democracy issue for “a new Wagner Act for the working ‘precariat,’ a new Voting Rights Act and democracy reform agenda, and a Green New Deal”—let alone reparations—once again into will-o-the-wisps.

Yet recall that according to Harris’s original brief, the goal of the Hewlett initiative was not single-issue victories but a shift in common sense. With that longer-term goal in mind, it is worth drawing attention to two matters beyond the ambit of the existing Hewlett-funded discourse of post-neoliberalism. Both relate to the world beyond America’s borders, which remains all but terra incognita for the programmatic texts of the last few years.

The first revolves around the Chinese challenge. To date, China appears in post-neoliberal discourse primarily as an economic and military threat and, thus, as a spur to more domestic spending. Underplayed is the way that China offers a model beyond the binary of neoliberalism and post-neoliberalism. The inward-looking tendency of the American policy world and of academia can sometimes lead to the false conclusion that the United States is still the global primum mobile when, in fact, the interdependence of the U.S. and Chinese economies means that decisions made in Beijing must be granted weight close to those taken in Washington.

The recent moves of Xi Jinping’s administration toward a paradigm of “common prosperity” as a replacement of the previous long-standing doctrine of “get rich first” has consequences that are still unfolding. The state decision to let real estate giant Evergrande default on its debts shows a determination to scale back the Chinese economy’s reliance on a speculative real estate market. The disciplining of Jack Ma, whose critical remarks about Chinese regulators led to the cancelation of his Ant Group’s IPO and his near-disappearance from the public eye, signals an impatience with the rising prominence and potential political disruption of tech billionaires. And the crackdowns on gaming and the private tutoring industry can be read as seriousness about slowing the widening gap of economic inequality and opportunity.

Geopolitically, the Chinese government tends less toward universalist solutions in the Anglo-American tradition of Bretton Woods and the World Trade Organization and more to what some have pejoratively called “authoritarian bilateralism.” Another way of looking at state-led efforts such as the Belt and Road Initiative is a model of territorialized partnership. The BRI does not rest on the legal principles of reciprocity and the neoliberal myth of unfettered markets but on a network of transportation, information, and communications infrastructure expanding westward across Central and West Asia, southward through Southeast Asia and across the Indian Ocean to the coast of East Africa, including Djibouti at the tip of the Horn of Africa. China built its first overseas military base in 2016 in Djibouti, at the chokepoint of the Red Sea, where container ships and tankers carry goods and fuel through the Suez Canal to Europe. Taking Chinese capitalism seriously complicates an America-centric vision of political economy.

Looking southward rather than westward from the United States, we see other political developments that should remain on the radar of progressives as their hopes for a Rooseveltian presidency dim. Recall that the first extensive use of the category of “post-neoliberalism” was in the early 2000s when the leadership of Lula in Brazil, Evo Morales in Bolivia, and Hugo Chavez in Venezuela spawned talk of a “pink tide” borne by a global commodity boom fueled by Chinese demand. The election of left-wing leaders in Peru, Honduras, and Chile in the last year and the possible return of Lula to the presidency in 2022 has led to talk of another pink tide. As reliance on critical inputs like Chile’s lithium deepen in the move to electrification of mobility, attending to “supply chain justice” will be one way the left-wing version of post-neoliberalism avoids being subsumed into a rebooted right-wing economic nationalism. As one Twitter wag posted (and later deleted) after Gabriel Boric’s victory in Chile: How could neoliberalism die without the Hewlett Foundation?

Any effort at building a post-neoliberalism worth its name must remain open to impulses outside of the world of U.S. policy and academia. As Dorian Warren noted in the 2019 Democracy special issue, any assumption that a new era will be ushered in from the “grass-tops” down is working with a bad theory of historical change.

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Read more about Biden AdministrationFranklin D. RooseveltMilton Friedmanneoliberalism

Quinn Slobodian is Marion Butler MacLean Associate Professor of the History of Ideas at Wellesley College and the author of Globalists: The End of Empire and the Birth of Neoliberalism. He is also an associate fellow at Chatham House and a visiting associate professor at Brown University for 2022.

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