5 Reasons Why Some Say Neoliberalism Is At The Root of America’s Problems Photo by Karolina Grabowska from Pexels
To many, the U.S. seems in chaos. The economy is spiraling out of control, and inflation keeps rising. Race relations have been strained to the breaking point, and the atmosphere is just tense. So why now?
“The current state of chaos and confusion is because the “policies of the past have failed,” said Felicia Wong and Kyle Strickland of the Roosevelt Institute. They presented their research as co-authors of a recently released paper on justice and democracy, “A New Paradigm for Justice and Democracy: Moving beyond the Twin Failures of Neoliberalism and Racial Liberalism.”
Wong is the president and CEO of the Roosevelt Institute. Strickland is the Institute’s deputy director of race and democracy. The New York City-based Roosevelt Institute is a think tank and the nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum. The Institute has published various studies on corporate and public power, labor and wages, and the economics of race and gender inequality.
What Is Neoliberalism?
A political ideology, neoliberalism stresses the importance of the free market, and it seeks to reduce the amount of government regulation in the economic sector. Proponents of neoliberalism believe that an unregulated free market has the most significant possible effect on the largest number of people, according to Your Dictionary.
Neoliberalism is often associated with the leadership of Margaret Thatcher, who was the prime minister of the U.K. from 1979 to 1990 and leader of the U.K.’s Conservative Party from 1975 to 1990. U.S. President Ronald Reagan, the 40th president of the U.S. (from 1981 to 1989), also favored neoliberalism. His brand of neoliberalism was dubbed Reaganomics. Reaganomics followed the philosophy if the wealthier got richer, the wealth with “trickle down” to the other classes and that fewer federal funds should be used on social spending. Reaganomics also included the federal deregulation of certain industries, including airlines, trucking and telecommunications.
More recently, neoliberalism has been associated with policies of austerity and attempts to cut government spending on social programs, Investopedia reported.
The policies of neoliberalism tend to support fiscal austerity, deregulation, free trade, privatization, and a reduction in government spending. There are many criticisms of neoliberalism, including its tendency to endanger democracy, workers’ rights, and sovereign nations’ right to self-determination, Investopedia reported.
Here are five reasons why some say neoliberalism is at the root of America’s problems.
Some experts say that one of the significant downfalls of neoliberalism is that it wreaks havoc on politics, and it disrupts but not with a progressive outcome.
“Political crisis perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis,” The Guardian reported. Instead of policies being decided by vote, under neoliberalism “people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle.”
This is what occurred, say some, led to the acceptance to the politics of Donald Trump, that offered little social protection for the lower classes.
As the Wu Tang song “C.R.E.A.M.” declares “cash rules everything around me.” This is the state of life under neoliberalism. Neoliberalism “redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency,” The Guardian reported.
The ideology also endangers workers because it is free of trade unions and collective bargaining, The Guardian reported.
Under neoliberalism, the rich are viewed as the generator of wealth, and that this wealth trickles down to enrich everyone. But this has yet to happen. This philosophy also affects one’s self image.
“The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance, and class – that may have helped secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances,” The Guardian reported.
Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era due to the smashing of trade unions, tax reductions, rising rents, privatization, and deregulation.
According to the Roosevelt Institute’s Wong and Strickland, neoliberalism and racial liberalism have both failed and their failures have led to the racially charged America we see today.
“What we argue in this paper is that the racial liberal worldview that we are living in…the idea that opportunity and access to the current system would bring racial and economic equity — that kind of racial liberalism really failed.” And it failed, she said, because of the rise of neoliberalism.
Racial liberalism and neoliberalism, instead of furthering the rights for Blacks, have undermined the fight for racial justice, Wong and Strickland noted in their report. “Not talking about race is bad for democracy,” Wong said. “Everything these days has been racial-ized.” She cited how most major issues today are centered around race — from vaccination and mask mandates to immigration policies.
Over the past 50 years, the fight for racial justice has been weakened by an individualistic, “race-neutral” conception of access and opportunity within a society dominated by neoliberal economics, as well as the types of policymaking we need to center race and racial justice.
“In the wake of the 2020 racial uprisings responding to rampant white supremacy, the Biden-Harris administration pledged to make racial justice central to its platform. However, progress towards racial liberation continues to be strangled by neoliberal principles and policies that perpetuate systemic racism and exacerbate poverty and material equality,” the Roosevelt Institute study stated.
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Under neoliberal economic policies, corporations are granted the same legal standing as citizens. “Corporate personhood” is one example of neoliberal “legal fiction,” which means that the U.S. judicial system declared something to be true, even though objectively not, Medium reported.
Since corporations are richer than individual people, when we treat corporations like they are people, they’ll be allowed to “continuously exploit the public, no matter how guilty they are,” Medium reported.
