Rooted in classical liberal ideology, neoliberalism rests on laissez-faire and social Darwinist principles that affirm societal progress as defined by materialist self-interest. Because private financial gain is the sole measure of success and virtue, neoliberals demand that the state and international organizations must remove impediments to capital accumulation nationally and internationally no matter the consequences to the non-propertied classes. Aiming for more than mere mechanical compliance, the goal of the ideology is to create the illusion of the neoliberal self that lives, breathes, and actualizes neoliberal myths in every aspect of life from a person as a worker to consumer and citizen.
Jim Mcguigan argues that “the transition from organised capitalism to neoliberal hegemony over the recent period has brought about a corresponding transformation in subjectivity. … Leading celebrities, most notably high-tech entrepreneurs, for instance, operate in the popular imagination as models of achievement for the aspiring young. They are seldom emulated in real life, however, even unrealistically so. Still, their famed lifestyles and heavily publicised opinions provide guidelines to appropriate conduct in a ruthlessly competitive and unequal world.” (Jim McGuigan: ‘The Neoliberal Self’, Culture Unbound, Volume 6, 2014; http://www.cultureunbound.ep.liu.se/v6/a13/cu14v6a13.pdf
It is part of the neoliberal ideology that markets dictate the lives of people in every respect from cradle to grave where self and identity are inexorably intertwined. Striving to determine public policy in all its phases of the individual\s life, of localities, nationally and internationally, the market has no other means to retain hegemony in society and pursue capital formation with the fewest possible obstacles. Neoliberals justify such an ideology on the basis that modernization of society transcends not just social justice but societal collective welfare when measured against private gain. https://www.salon.com/2016/03/27/good_riddance_gig_economy_uber_ayn_rand_and_the_awesome_collapse_of_silicon_valleys_dream_of_destroying_your_job/; https://www.greeneuropeanjournal.eu/neoliberalism-has-eviscerated-the-fabric-of-social-life/
In neoliberal society either of the pluralist-diversity or of the authoritarian political camp there are elements of polizeistaat though not nearly full blown as in the Third Reich. While conformity to the status quo and self-censorship is the only way to survive, modern means of communication and multiple dissident outlets attacking the status quo from the right, which is far more pervasive and socio-politically acceptable than doing so from the left, has actually facilitated the evolution of the new totalitarian state. http://www.thegreatregression.eu/progressive-neoliberalism-versus-reactionary-populism-a-hobsons-choice/
Whereas big business collaborated closely with Fascist dictators from the very beginning to secure the preeminence of the existing social order threatened by the crisis of democracy created by capitalism, big business under the neoliberal social contract has the same goal, despite disagreement on the means of forging political consensus. Partly because neoliberalism carries the legacy of late 19th century liberalism and operates in most countries within the parliamentary system, and partly because of fear of grassroots social revolution, a segment of the capitalist class wants to preserve the democratic façade of the neoliberal social contract by perpetuating identity politics. In either case, ‘economic fascism’ as the essence of neoliberalism, or post-fascism as Miklos Tamas calls it, is an inescapable reality. (Andrea Micocci and Flavia Di Mario, The Fascist Nature of Neoliberalism, 2017).
The convergence of neoliberalism and Fascism is hardly surprising when one considers that both aim at a totalitarian society of different sorts, one of state-driven ideology and the other market-driven with the corporate welfare state behind it. In some respects, Sheldon Wolin’s the “inverted totalitarianism” theory places this issue into another perspective, arguing that despite the absence of a dictator the corporate state behind the façade of ‘electoral democracy’ is an instrument of totalitarianism. Considering the increased role of security-intelligence-surveillance agencies in a presumably open society, it is not difficult to see that society has more illiberal than classic liberal traits. Sheldon Wolin, Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism, 2008)
More powerful than the Axis Powers combined, American “Inverted totalitarianism” was internationalized during the Cold War and became more blatant during the war on terror, in large measure used as a pretext to impose neoliberalism in the name of national security. As the police-state gradually became institutionalized in every respect from illegal surveillance of citizens to suppressing dissent to the counterterrorism-neoliberal regime, it was becoming clearer to many scholars that a version of fascism was emerging in the US which also sprang up around the world. (Charlotte Heath-Kelly et al. eds., Neoliberalism and Terror: Critical Engagements, 2016; https://deeppoliticsforum.com/forums/showthread.php?15074-Chris-Hedges-The-Great-Unraveling-USA-on-the-brink-of-neo-fascist-police-state#.WifwyLBrzIU
Not just the US, but Europe has been flirting with ‘illiberal democracy’ characterized by strong authoritarian-style elected officials as Garry Jacobs has observed. Amid elections in Bosnia in 1996, US diplomat Richard Holbrooke wondered about the rightwing path of former Yugoslav republics. "Suppose the election was declared free and fair and those elected are "racists, fascists, separatists, who are publicly opposed to [peace and reintegration]. That is the dilemma." Twenty years after what Holbrooke dreaded election outcomes in Yugoslavia, the US elected a rightwing neoliberal populist leading the Republican Party and making culture wars a central theme to distract from the undercurrent class struggle in the country. A structural issue that transcends personalities, this reality in America is symptomatic of the link between neoliberalism and the rise of illiberal democracy in a number of countries around the world. https://www.foreignaffairs.com/articles/1997-11-01/rise-illiberal-democracy
If we equate the stock market with the ‘wealth of the nation’, then in 1982 when the S & P index stood at 117 rising to 2675 in December 2017, the logical conclusion is that living standards across the US rose accordingly. However, this is the period when real incomes for workers and the middle class actually declined despite sharp rise in productivity and immense profits reflected in the incomes gap reflected in the bottom 90% vs. the top 10%. This is also the period when we see the striking divergence between wealth accumulation for the top 1% and a relative decline for the bottom 90%. https://www.nytimes.com/2017/11/17/upshot/income-inequality-united-states.html; https://ourworldindata.org/income-inequality/
Capital accumulation not just in the US but on a world scale without a ceiling has resulted in more thorough exploitation of workers and in a less socially just society today than in the early 1960s when Jules Henry was writing and it is headed increasingly toward authoritarian models of government behind the very thin veneer of meaningless elections. Against this background of unfettered neoliberalism, social responsibility is relegated to issues ranging from corporate-supported sustainable development in which large businesses have a vested interest as part of future designs on capital accumulation, to respecting lifestyle and cultural and religious freedoms within the existing social contract. (Dieter Plehwe et al. eds., Neoliberal Hegemony, 2006; Carl Ferenbach and Chris Pinney, “Toward a 21st Century Social Contract” Journal of Applied Corporate Finance, Vol. 24, No 2, 2012; http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6622.2012.00372.x/abstract
“Neoliberalism was born in reaction against totalitarian statism, and matured at the University of Chicago into a program of state-reduction that was directed not just against the totalitarian state and the socialist state but also (and especially) against the New Deal regulatory and welfare state. … It is a self-consciously reactionary ideology that seeks to roll back the status quo and institutionalize (or, on its own understanding, re-institutionalize) the “natural” principles of the market. … But the contradiction between its individualist ideals and our corporate reality means that the effort to institutionalize it, oblivious to this contradiction, has induced deep dysfunction in our corporate system, producing weakened growth, intense inequality, and coercion. … And when the ideological support of a system collapses—as appears to be happening with neoliberalism—then either the system will collapse, or new levels of coercion and manipulation will be deployed to maintain it. This appears to be the juncture at which we have arrived.” https://americanaffairsjournal.org/2017/05/corporate-contradictions-neoliberalism/
Historically, the safe assumption has been that higher education is the key to upward social mobility and financial security, regardless of cyclical economic trends. However, the laws of overproduction apply not only to commodities but to the labor force, especially as the information revolution continues to chip away at human labor. College education is hardly a guarantee to upward social mobility, but often a catalyst to descent into the debtor unemployed class, or minimum wage/seasonal part time job or several such jobs. The fate of the college-educated falling into the chronic debtor class is part of a much larger framework, namely the ‘financialization’ of the economy that is at the core of neoliberalism. ( Vik Loveday, “Working-class participation, middle-class aspiration? Value, upward mobility and symbolic indebtedness in higher education.” The Sociological Review, September 2014)
Beyond the simplistic suggestion of ‘more training’ to keep up with tech changes, the root cause of social exclusion and the chronic debtor class revolves around the ‘financialization’ of the neoliberal globalist economy around which central banks make monetary policy. Since the beginning of the Thatcher-Reagan era, advanced capitalist countries led by the US conducted policy to promote the centrality of financial markets as the core of the economy. This entails resting more on showing quarterly profit even at the expense of taking on debt, lower productivity and long-term sustainability, or even breaking a company apart and dismissing workers because it would add shareholder value. Therefore, the short-term financial motives and projection of market performance carry far more weight than any other consideration.
By making both private and public debt, an integral part of the means of production, the neoliberal system has reshaped social life and social relationships because the entire world economy is debt-based. Servicing loans entails lower living standards for the working class in advanced capitalist countries, and even lower in the rest of the world, but it also means integrating the debtor into the system more closely than at any time in history. While it is true that throughout the history of civilization human beings from China and India to Europe have used various systems of credit to transact business (David Graeber, Debt: the First 5000 Years, 2014), no one would suggest reverting back to debt-slavery as part of the social structure. Yet, neoliberalism has created the ‘indebted man’ as part of a policy that has resulted in social asymmetrical power, aiming to speed up capital accumulation and maintain market hegemony in society while generating greater social exclusion. https://marxandphilosophy.org.uk/reviewofbooks/reviews/2013/87E0
Ever since the British Abolition of the Slave Trade Act in 1807, followed by a number of other European governments in the early 1800s, there was an assumption that slave labor is inconsistent with free labor markets as well as with the liberal social contract rooted in individual freedom. Nevertheless, at the core of neoliberal capitalism US consumer debt as of October 2017 stood at $3.8 trillion in a 419 trillion economy. Debt-to-personal income ratio is at 160%; college student debt runs at approximately $1.5 trillion, with most of that since 2000; mortgage debt has tripled since 1955, with an alarming 8 million people delinquent on their payments and the foreclosure rate hovering at 4.5% or three times higher than postwar average; consumer debt has risen 1,700 since 1971 to above $1 trillion, and roughly half of Americans are carrying monthly credit debt with an average rate of 14%. The debt problem is hardly better for Europe where a number of countries have a much higher personal debt per capita than the US. In addition to personal debt, public debt has become a burden on the working class in so far as neoliberal politicians and the IMF are using as a pretext to impose austerity conditions, cut entitlements and social programs amid diminished purchasing power because of inflationary asset values and higher taxes. https://www.thebalance.com/consumer-debt-statistics-causes-and-impact-3305704; https://www.nytimes.com/2017/05/17/business/dealbook/household-debt-united-states.html
While personal debt is often but not always a reflection of a consumerist society, personal debt encompasses everything from education to health care costs in times when the digital/artificial intelligence economy is creating a surplus labor force that results in work instability and asymmetrical social relations. Technology-automation-induced unemployment driving down living standards creates debtor-workers chasing the technology to keep up with debt payments in order to survive until the next payment is due. Considering the financial system backed by a legal framework is established to favor creditors, especially given the safeguards and protections accorded to creditors in the past four decades, there are many blatant and overt ways that the state uses to criminalize poverty and debt. In 2015, for example, Montana became the first state not to take the driver’s license of those delinquent on their student debt, thus decriminalizing debt in this one aspect, though hardly addressing the larger issue of the underlying causes of debt and social exclusion. https://academiccommons.columbia.edu/catalog/ac:4b8gtht779; https://lumpenproletariat.org/tag/neoliberalism/
As Italian journalist Claudio Hallo put it: “If the core of neoliberalism is a natural fact, as suggested by the ideology already embedded deep within our collective psyche, who can change it? Can you live without breathing, or stop the succession of days and nights? This is why Western democracy chooses among the many masks behind which is essentially the same liberal party. Change is not forbidden, change is impossible. Some consider this feature to be an insidious form of invisible totalitarianism.” https://www.rt.com/op-edge/171240-global-totalitarianism-change-neoliberalism/
Self-righteous pluralist neoliberals castigate rightwing billionaires for funding rightwing politicians. However, there is silence when it comes to the millions amassed by pluralist neoliberals as the infamous “Panama Papers” revealed in 2016. Despite the institutionalized kleptocracy, the media has indoctrinated the public to accept as ‘normal’ the converging interests of the capitalist class and ruling political class just as it has indoctrinated the public to accept social exclusion, social inequality, and poverty as natural and democratic; all part of the social contract. (http://revistes.uab.cat/tdevorado/article/view/v2-n1-armao; Jose Manuel Sanchez Bermudez, The Neoliberal Pattern of Domination: Capital’s Reign in Decline, 2012; https://www.globalresearch.ca/neoliberalisms-world-of-corruption-money-laundering-corporate-lobbying-drug-money/5519907
China is not pursuing the kind of neoliberal model that exists in the US or the EU, but its economy is well integrated with the global neoliberal system and operates within those perimeters despite quasi-statist policies also found in other countries to a lesser degree. Adjusted for purchasing power parity (PPP), China’s current share of world GDP stands at 16% and at annual growth above 6% it is expected to reach 20%, by 2020. This in comparison with only 1.9% in 1979 and it explains why its currency is now among the IMF-recognized reserved currencies. With about half-a-million foreign companies in China and an average of 12,000 new companies entering every day, capitalists from all over the world are betting heavily on China’s future as the world’s preeminent capitalist core country in the 21st century. China will play a determining role in the course of global neoliberalism, and it is politically willing to accept the US as the military hegemon while Beijing strives for economic preeminence. Interested in extracting greater profits from China while tempering its race to number one, Western businesses and governments have been pressuring Beijing to become more immersed in neoliberal policies and eliminate all elements of statism. http://www.chinadaily.com.cn/business/2012-09/22/content_15775312.htm; https://en.portal.santandertrade.com/establish-overseas/china/foreign-investment
Although the US that has 450,000 troops in 800 foreign military bases in more than 150 countries and uses its military muscle along with ‘soft-power’ policies including sanctions as leverage for economic power, many governments and multinational corporations consider Beijing not Washington as a source of global stability and growth. With China breathing new life into neoliberalism on the promise of geographic and social convergence, it is fantasy to speculate that neoliberalism is in decline when in fact it is becoming more forcefully ubiquitous. However, China like the West that had promised geographic and social convergence in the last four decades of neoliberalism will not be any more successful in delivering on such promises. The result of such policies will continue to be greater polarization and social exclusion and greater uneven development, with China and multinationals investing in its enterprises becoming richer while the US will continue to use militarism as leverage to retain global economic hegemony rapidly eroding from its grip. (http://www.businessinsider.com/us-military-deployments-may-2017-5; http://www.zapruderworld.org/welfare-state-decline-and-rise-neoliberalism-1980s-some-approaches-between-latin-americas-core-and; Dic Lo, Alternatives to Neoliberal Globalization, 2012)
Between China and the US, the world can expect neoliberal globalization to continue under the pluralist and populist rightwing models in different countries with the two converging and reflecting the totalitarian essence of the system at its core. Characterized by rapid development and sluggish growth in Japan and Western core countries, neoliberal globalization has entailed lack of income convergence between the developed and developing world where uneven export-oriented growth based on the primary sector keeps developing nations perpetually dependent and poor. Interestingly, the trend of falling incomes characteristic of the developing nations from 1980 to 2000 was just as true in Western countries. It was during these two decades of ascendant neoliberalism that rightwing populist movements began to challenge the pluralist neoliberal political camp and offering nationally-based neoliberal solutions, further adding to the system’s existing contradictions. (Dic Lo, Alternatives to Neoliberal Globalization, 2012)
The debate whether the rise of populism or perhaps the faint voices of anti-capitalism will finally bring about the end of neoliberalism often centers on the digital-biotech revolution often blamed for exacerbating rather than solving social problems owing to uneven benefits accruing across social classes. It is somewhat surprising that IMF economists have questioned the wisdom of pursuing unfettered neoliberalism where there is a trade-off between economic growth and social exclusion owing to growing income inequality. Naturally, the IMF refrains from self-criticism and it would never suggest that neoliberal globalization that the Fund has been promoting is responsible for the rise of rightwing populism around the world.
Within the neoliberal camp, pluralist-diversity advocates are satisfied they have done their part in the ‘fight for democracy’ when in fact their stealthy brand of the neoliberal social contract is in some respects more dangerous than the populist camp which is unapologetically candid about its pro-big business, pro-monopoly, pro-deregulation anti-social welfare platform. Shortly after Trump won the presidential election with the help of rightwing billionaires and disillusioned workers who actually believed that he represented them rather than the billionaires, an article appearing in the Christian Science Monitor is typical of how pluralist neoliberals view the global tide of rightwing populism.
“Worldwide, it has been a rough years for democracy. The UK, the United States and Colombia made critical decisions about their nations' future, and – at least from the perspective of liberal values and social justice – they decided poorly. Beyond the clear persistence of racism, sexism and xenophobia in people's decision-making, scholars and pundits have argued that to understand the results of recent popular votes, we must reflect on neoliberalism. International capitalism, which has dominated the globe for the past three decades, has its winners and its losers. And, for many thinkers, the losers have spoken. My fieldwork in South America has taught me that there are alternative and effective ways to push back against neoliberalism. These include resistance movements based on pluralism and alternative forms of social organisation, production and consumption.” https://www.csmonitor.com/Technology/Breakthroughs-Voices/2016/1206/Opposing-neoliberalism-without-right-wing-populism-A-Latin-American-guide
Despite everything pointing to the dynamics of a continued neoliberal social contract, diehard pluralists like British academic Martin Jacques and American economist Joseph Stiglitz insist there is hope for reformist change. In The Politics of Thatcherism (1983) Jacques applauded neoliberalism, but during the US presidential election in 2016 he had changed his mind, predicting neoliberalism’s demise. He felt encouraged that other pluralist neoliberals like Paul Krugman and Joseph Stiglitz were voicing their concerns signaling an interest in the debate about social inequality. In an article entitled “The death of neoliberalism and the crisis in western politics”, he wrote: “A sure sign of the declining influence of neoliberalism is the rising chorus of intellectual voices raised against it. From the mid-70s through the 80s, the economic debate was increasingly dominated by monetarists and free marketeers.” https://www.theguardian.com/commentisfree/2016/aug/21/death-of-neoliberalism-crisis-in-western-politics
Along with Krugman, Stiglitz and others in the pluralist camp favoring a policy mix that includes Keynesianism, Martin Jacques, Thomas Picketty and others like them around the world do enjoy some small influence with the pluralist-diversity camp. However, the demise of neoliberalism will not result from intellectual critiques regardless of the merits. On the contrary, the neoliberal social contract is solidifying not evolving toward dissolution. This is largely because the dynamics of the social order continue to favor it and the opposition is split between ultra-right nationalists, pluralists of varying sorts resting on hope of restoring Keynesian rationalism in the capitalist system, and the very weak and divided leftists in just about every country and especially the core ones. https://theconversation.com/if-we-are-reaching-neoliberal-capitalisms-end-days-what-comes-next-72366