Click here to read "Response to 'What Was Neoliberalism?' A Debate Between Joshua Clover / Jasper Bernes and Michael W. Clune."


HOW DID IT HAPPEN? In the early 1970s, Western governments, academia, and the media understood the relationship between the state and the market according to the same liberal consensus that had been in place since the end of World War II. During what is commonly called the “golden age of capitalism,” government, capital, and labor had reached the uneasy agreement that markets produced social ruin when left to their own devices. The state was needed to mitigate inequality, to provide basic services, and — through a combination of monetary and fiscal means — to even out capitalism’s boom-bust cycle. By the early 1980s, all that had changed: the British and American governments, joined by large segments of the media and intelligentsia, declared that the state was the root of social evil, that free markets could do nearly everything better than government, and that the economic crises of the past were the result of state meddling.

This view is often called “neoliberalism,” a term first used by interwar continental and British economists and philosophers to describe an economic doctrine that favors privatization, deregulation, and unfettered free markets over public institutions and government. These philosophers saw themselves as championing the values of classical liberalism in a mid-20th century world threatened by unchecked state power — a threat vividly embodied in the totalitarian societies of Nazi Germany and Stalinist Russia. Writers like Ludwig von Mises and Karl Popper saw hope in the liberalism of J.S. Mill and Adam Smith. They shared the earlier philosophers’ skepticism about the capacity of human reason to design functional and ethical social orders, and were committed to processes of “liberated” or open exchange to create knowledge and distribute wealth.

The meaning of the prefix has aroused a great deal of debate. For thinkers on the left, “neo” signals a liberalism shorn of many of the features that made classical liberalism plausible and effective. Recent scholarship on Adam Smith, for example, has emphasized the extent to which neoliberal thinkers such as F. A. Hayek focus on Smith’s celebration of self-organizing markets in The Wealth of Nations while neglecting Smith’s argument, in the Theory of Moral Sentiments, for the importance of non-market values in sustaining social orders. Indeed, the neoliberal embrace of the prospect of a social world almost wholly organized by market relations strongly distinguishes this thought from the classical liberal tradition, which fostered a capitalism embedded in the institutions of civil society, the norms of civilized communication, and state regulation of the economy.

There are two popular accounts of how this philosophy of free markets and minimal government came to determine the economic policies of the US and UK. For the right, including the heirs and acolytes of Milton Friedman, the failures of both state socialism and the Keynesian welfare state made the political triumph of neoliberal ideas inevitable. For the left, including figures like the Marxist geographer David Harvey and the activist-journalist Naomi Klein, neoliberal policies were the expression of the interests of capital, which systematically infiltrated government in ord...