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Varieties of Neo-Liberalism

I've read a lot of anti-neoliberal articles lately. It seems that most critics of neoliberalism don't actually know what neoliberalism is. I'm hesitant to call myself a neoliberal because of the ideas that term is generally associated with, but also hesitant to be too anti-neoliberal.

Basically, neoliberalism was a form of new liberalism (alongside New Deal liberalism and Keynesianism), which came about after the Great Depression. The new liberalisms arose out of classical liberalism and did two things: (1) synthesized liberalism with republicanism, laying the foundation for an ideology of "liberal democracy"—i.e. they advocated markets and free enterprise alongside republican democracy and (2) they rejected laissez-faire and recognized that markets require strong government and good regulations to function optimally. All the new liberals, whether Keynesian, New Dealer, or neoliberal, agreed on these points.

The neoliberals, however, disagreed with the command-and-control and the interventionist approaches of New Dealers and Keynesians. Instead, they wanted standard rules and regulations put in place that would prevent government from having to heavy-handedly intervene later on. The German social market, though very much like social democracy, is actually based in neoliberal ideas. And, the Nordic model can be seen as a synthesis of classical social democracy (socialism) with neoliberal capitalism.

Neoliberalism was founded in 1938 but it was not until about 1970 that the things people criticize neoliberalism for became associated with neoliberalism. And, critics of neoliberalism fail to see the extent to which right-wing libertarianism influenced those developments. Many critics of neoliberalism associate Ludwig von Mises with neoliberalism, but Misis was opposed to neoliberalism and instead aligned with laissez-faire fundamentalism. It was in the 1970s and 80s that supply-side economics (the philosophy of continual economic growth), privatization, and voucher systems became associated with neoliberalism. And this was mostly the result of Milton Friedman's sympathies with libertarian market-fundamentalism. But, even Friedman's neoliberalism is not as bad as critics claim. For instance, Friedman advocated land-value tax, universal basic income (through negative income tax), and universal healthcare (through universal catastrophic insurance and other reforms)—Friedman's plan was more progressive than the plans of most 2020 democratic candidates.

Neoliberalism failed for two reasons: (1) because it was never fully implimented [neoliberalism entails strong anti-trust laws and regulations to create situations analogous to pure completion, plus it entails a robust welfare state with universal healthcare and either a minimum income guarantee or universal basic income of some sort, so the reality is that only the nonessential aspects of neoliberalism were ever adopted] and (2) because later neoliberal theorists developed a faulty supply-side view that advocated cutting taxes to spur growth, based on the observation that tax cuts for corporations led to higher wages and better standards for people at the bottom [they failed to realize that the trickle-down effect was a direct result of high top marginal income tax rates, so they ended up cutting both corporate taxes and individual income taxes, which resulted in CEOs accumulating all new wealth and wages stagnating].

It can also be said that the anti-socialist slant of neoliberals was appealing to right-wing libertarians, which created inroads for anti-government extremists to take over the Republican Party and deregulate everything. While these supply-side, privatization, and deregulation aspects of later neoliberalism are disastrous, it's important to realize that they aren't essential aspects of neoliberalism. These things represent a particular libertarianism-infested strain of neoliberalism.

While we should be critical of neoliberalism (especially post-1970 neoliberalism), we ought not to throw out the baby with the bathwater. There's a lot of good ideas there. There's also a lot of mistakes to learn from.

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