THE PRICE IS RIGHT

The rise and fall of neoliberalism.

- LOUIS MENAND

“Neoliberalism” has been called a political swear word, and it gets blamed for pretty much every socioeconomic ill we have, from bank failures and income inequality to the gig economy and demagogic populism. Yet for forty years neoliberalism was the principal economic doctrine of the American government. Is that what has landed us in the mess we’re in?

What’s “neo” about neoliberalism is really what’s retro about it. It’s confusing, because in the nineteen-thirties the term “liberal” was appropriated by politicians such as Franklin D. Roosevelt and came to stand for policy packages like the New Deal and, later on, the Great Society. Liberals were people who believed in using government to regulate business and to provide public goods—education, housing, dams and highways, retirement pensions, medical care, welfare, and so on. And they thought collective bargaining would insure that workers could afford the goods the economy was producing.

Those mid-century liberals were not opposed to capitalism and private enterprise. On the contrary, they thought that government programs and strong labor unions made capitalist economies more productive and more equitable. They wanted to save capitalism from its own failures and excesses. Today, we call these people progressives. (Those on the right call them Communists.)