The Wreckage of Neoliberalism

The postwar neoliberal economic project is nearing its end. The question is who will write the last chapter, the Democrats or the totalitarians?

A store that has shuttered for business.

For millions of Americans—especially those who don’t live in the high-income urban mega-economies—it feels like life itself is unspooling.

This sense of dislocation is what Donald Trump’s politics of grievance seized upon when he launched his campaign for the presidency in 2015. He offered easy scapegoats—immigrants, Muslims, and economic elites—to blame for the loss of meaning and economic autonomy felt by many Americans. He signaled an intent to break America apart from the world economy and the international order. He railed against the technology companies that had seemed to replace families and churches as the new enforcers of moral order. Tragically, it worked. And frankly, given that Trump is running even with President Joe Biden in a hypothetical 2024 matchup, it’s still working.

In essence, what Trump is attacking is neoliberalism. Economic neoliberalism underpins the past 70 years of Western economic and cultural order. Broadly speaking, neoliberalism argues that barrier-free international markets, rapidly advancing communications technology and automation, decreased regulation, and empowered citizen-consumers are the keys to prosperity, happiness, and strong democracy.

Though it contains the word liberal, neoliberalism was devised by libertarian-conservative economists and political scientists as an alternative to the state-controlled command economy favored by Communists and other authoritarians. In the decades after the Second World War, Americans settled comfortably into this new paradigm, ready and eager to reap the bounty. For a time, it arrived in spades. But then, about 30 years ago, the project started to fray at the edges. The newly global economy moved America’s well-paying jobs—the ones that had created the U.S.’s early- and mid-20th-century blue-collar aristocracy—overseas, but the jobs that replaced them offered lower pay, fewer benefits, and less opportunity for advancement. Technology, which had promised to make our lives easier and more connected, started to get so complicated, and advance at a pace so dizzying, that it no longer felt within our control. Social media joined us, but also bred resentment and societal fragmentation. Automation and online commerce erased our local economies, our local meeting places, and our local news sources. And the consumerism that was supposed to fill our lives with the material rewards necessary for happiness instead left many feeling empty as our cultures and identities got swallowed up by the shapeless, antiseptic, profit-obsessed international economy.

The result, today, is a very real epidemic of American unhappiness. Surveys taken during the past decade suggest that Americans have never been so pessimistic. Despite the nonstop information flow, more Americans report greater feelings of intense loneliness today than at any time before. People know they have more access to things—shiny things, fancy things, complicated things—but they grope for meaning and sense a depressing, decreasing personal control over their own future.

Although Trump’s anti-neoliberal messaging has been successful, his policies have never matched his rhetoric. By the time he left office, there were fewer, not more, well-paying manufacturing jobs in America. Trump did nothing to curb corporate excess or restore power to families and workers—his primary domestic legislative accomplishment was a tax cut in which 83 percent of the benefits would go to the same 1 percent of the population he attacked in his speeches. And he championed no legislation to rein in the corrosive influence of social media or unchecked automation. Indeed, his promises to undo economic neoliberalism was all empty rhetoric; instead, his entire term was an unending parade of gifts to the very status quo forces he condemned in his rise to power.

Nothing will change if Republicans regain power in Washington. Republican nihilists hate the government so much that their party will never be able to pass legislation to create the kind of national industrial policy needed to bring innovation and manufacturing jobs back to America. Nor do Republicans have any interest in the sort of consumer-friendly regulatory framework needed to protect average Americans from unchecked corporate power, or the excesses of modern technology.

Trump and his followers are frauds—mouthing critical platitudes about the neoliberal order while ultimately serving its biggest beneficiaries—and Democrats should expose them as such. No matter their rhetorical attacks on elites, Republicans’ agenda still begins and ends with using government as a crude means to deliver favors to their billionaire and corporate friends. My fellow Democrats must do a better job of exposing this hypocrisy, and then do the work that would make us the natural favorite for Americans who want government to act in their interests—not merely as the facilitator of some dreamy neoliberal ideal.

Luckily, President Biden’s first two years of accomplishments provide Democrats with an opportunity to sell a new, winning message of actionable economic nationalism—the antidote to the failures of neoliberalism. Biden has already passed three major legislative acts that show how economic nationalism works in practice. First, the Bipartisan Infrastructure Law set about the work of rebuilding America’s roads, rails, and power lines, which will attract lost jobs back to America. Second, the CHIPS Act restarted the American microchip industry, as evidenced by the recent announcement of a $20 billion, 3,000-job microchip factory in Ohio. Finally, the Inflation Reduction Act supercharged the domestic renewable-energy industry; one estimate suggests that the law will create 9 million new jobs over the next decade.

This isn’t talk; it’s action. It’s a real agenda of economic nationalism. And Democrats need to capitalize on this string of legislative successes to outflank the fake, anti-neoliberal populism of the right. This requires Democrats to juxtapose Republican support for elites (tax cuts for the rich, Social Security privatization) against Democrats’ commitment to a rebirth of American industry and well-paying jobs. Democrats can win the fight over industrial policy, but only if we commit to making the argument.

Democrats would also be wise to address Americans’ other complaints with postwar neoliberalism. For instance, Democrats, not Republicans, are the natural party to make sure that technology works for people, instead of people working for technology. Republicans’ hostility toward regulation will make them allergic to setting new rules for social media. But the fact is that no technology company should be so big that a single CEO’s decision about an algorithm moves markets or redefines political conversation. No social-media company should be allowed to purposefully target young children. Americans want technology to serve us, not rule us.

Democrats should be vocal about the harmful substitution of consumer morality for family- and community-based ethical standards. Being a good consumer does not equal being a good human, despite what current American culture would have us believe. Families, not markets, should set value structures. But Republicans currently occupy the high ground in this area by ceaselessly claiming to be the “pro-family” party. The truth is, little about Republicans is “pro-family,” including the criteria they use to define “family.” They seek to put government, not individuals, in charge of the key decisions about family formation—those regarding marriage and childbirth. They oppose tax cuts for families with children. They wage war on the public-school teachers who educate our kids. As with the question of economic globalization, Republicans are all talk and no action when it comes to families. Democrats, the party of the child tax credit, public education, and affordable college, are the true pro-family party. We have the better policies to return power and agency to families; framing these policies as an antidote to the excesses of the consumer economy helps put our party on the right side of the growing frustration with the outsourcing of morality to the market.

By accentuating a pro-family platform of economic nationalism salted with a bit of healthy tech skepticism, Democrats can build a new coalition that sells in the parts of our society that have suffered under, and grown tired of, the neoliberal consensus. And it isn’t hyperbole to suggest that the future of our democracy rests on the question of which party offers the most credible alternative to the neoliberal order. Republicans’ fake populism is just a way to secure total power. This is the era of the post-democracy Republican Party, and if their critique of neoliberalism brings their party complete power after the 2024 election, they are likely to change the rules of democracy in order to make sure Democrats never win again. Trump’s Republican Party believes that Democrats present an existential threat to America, and therefore any means—even the end of democracy—is justified to defeat the left. Whether it be a purge of thousands of professional civil servants, continued crackdowns on voting rights, or a rigging of elections, if Trump and his allies win control of Congress and the White House again, our 250-year experiment may be over.

This does not have to be our nation’s fate. It is possible to reverse the damaging impacts of the neoliberal world order while saving democracy. Today, Democrats are noncompetitive in half of American states. In largely rural parts of the country, Americans who feel left behind by neoliberal economics want to regain control over their economic destiny. They worry about social media capturing their children and global commerce wiping out their Main Streets. They lose sleep over the decreasing power of families and local institutions. Today, the majority of voters who feel this way support Trump. This is disastrous for the future survival of our democracy. But it isn’t too late. Democrats can build a new, lasting political coalition if we become the party that best understands and addresses this angst. This task is as achievable as it is vital.