We get a lot of comments blaming neoliberalism for the world’s ills. Europe has endured years of austerity and crisis, with policymakers lurching from one emergency to the next, and seemingly with only sluggish growth and stubbornly high unemployment rates to show for it. With the recent election of Jeremy Corbyn as Labour leader in the UK, along with the re-election of Alexis Tsipras and the radical left SYRIZA party in Greece, are voters across Europe rejecting the neoliberal agenda?
But first, what exactly is neoliberalism? To get an idea we spoke to Mark Pennington, Professor of Public Policy and Political Economy at King’s College London, and an expert on classical liberalism and the Austrian school of economics. Here’s the definition he gave:
Well, I think there are probably three different elements to it. As a general principal, it’s based on the idea of reducing the role of the state in the economy, relying more on private enterprise rather than publicly-owned industries, and in particular fostering the creation of competitive markets.
Alongside reducing the role of the state in terms of ownership of industry, a thoroughgoing neoliberal perspective would also be committed to reducing the role of government in terms of financial expenditure. So, a neoliberal policy would be associated with a declining share of GDP being spent by the state, and a greater share being dedicated to private individuals and companies.
The final element would be, I suggest, a commitement to a low-regulation environment. So, the idea is that competitive markets rely on low regulation. The higher levels of regulation you have, the less competition you have, because regulation acts as a barrier to entry into markets and makes them less competitive than they otherwise would be.
To get another perspective, we also spoke to Thomas Biebricher, Associate Professor of Political Theory and Philosophy at Goethe University Frankfurt, and author of the book Neoliberalismus zur Einführung (Introduction to Neoliberalism). He agreed with Professor Pennington’s broad definition, but added that neoliberalism was a project that grew out of the perceived failures of liberalism during the Great Depression, and that it was not aiming for the complete abolition of the state:
Well, to me, as a political theorist, it is a phenonenon that I trace back to the 1930s and 1940s, and it was a political and intellectual project that aimed at a revitalisation of liberal ideas, and at the same time that was based on a revision of the classical liberal agenda.
Now, neoliberalism is often understood as a synonym of the doctrine of self-regulating markets, but I don’t think that’s really appropriate. I think neoliberals are quite clear that states have certain functions to fulfill in order to make markets function. But they should only engage in certain kinds of actions, and these are particularly market-enabling actions.
So, neoliberalism is not the same thing as libertarianism or anarcho-capitalism. Nevertheless, it is all about markets.
Was the global economic crisis a sign that the neoliberal project has failed? And does the rise of populist parties on both the Left and the Right advocating more protectionist policies and greater state intervention pose a fatal challenge? We had a comment sent in by Yannick, asking if “post-neoliberalism” was finally at our door, and whether it would be a good thing if it was.
We put this question to Bastiaan Van Apeldoorn, Reader in International Relations at the Department of Political Science and Public Administration of VU University, Amsterdam, and editor of the book Neoliberalism in Crisis.
Well, that’s a very difficult question that is not easy to answer. I would say I hope it is finally on our doorstep, but I’m not sure yet. I think neoliberalism is in a crisis; there is much less consent, there is more dissent and resistance. But, at the same time, there is also not an alternative project yet, and so neoliberalism as a policy regime goes on unabated. So, neoliberalism is not dead yet, and I don’t think we have entirely entered into the post-neoliberal phase, though it might be just around the corner.
Has neoliberalism failed? Was the global economic crisis the death knell of neoliberalism? Does the rise of populist parties advocating greater state intervention post a fatal challenge to the neoliberal project? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts for their reactions!