Neoliberalism and neopopulism

About Post-scarcity notes: As the staff of The Public Interest Network advocate for a cleaner, greener, healthier world, from time to time we’ll share observations on the larger challenge facing our network and our society: How do we shift the dominant paradigm — the very way in which we see and make sense of the world — from disposable to sustainable, from “never enough” to “enough,” from “making a living” to “living.” The views expressed in this space relate to our work, but do not necessarily represent the position of the network or its organizations.

“A new centrism is rising in Washington,” proclaims the headline of a widely circulated, zeitgeist-capturing piece in The New York Times.

Democratic and Republican leaders increasingly agree that neoliberalism is out, it finds. Both parties are finding common ground on an agenda that stops dismantling barriers to trade and immigration—hallmarks of a competitive, meritocratic economic system—and instead starts erecting barriers to protect American industries and workers.

Columnist David Leonhardt writes, “It is a recognition that neoliberalism has failed to deliver. The notion that the old approach would bring prosperity, as Jake Sullivan, Biden’s national security adviser, has said, was ‘a promise made but not kept.’ In its place has risen a new worldview. Call it neopopulism.”

As evidence of neoliberalism’s failures, Leonhardt cites a growing recognition of: 

• “[U.S.] incomes and wealth [that] have grown slowly, except for the affluent;” 
• “[U.S.] life expectancy [that] is lower today than in any other high-income country;” and 
• The failures of freer global trade to turn China and Russia into freer societies, not to mention America itself, where Trumpian antagonism threatens the outcome of democratic elections and an independent judiciary.

There’s a lot to untangle here. By looking at neoliberalism and neopopulism through the lens of our post-scarcity analysis, we can see that the neoliberal era’s outcomes (both bad and good) were entirely foreseeable—and why the eventual failure of the emerging neopopulist approach is equally predictable.

Neoliberalism: A great train wreck

At its core, neoliberalism is about getting out of the way of the market so that it can work its magic to grow the economy.

Freer trade and freer movement of peoples across borders made the American economy more competitive and therefore meritocratic (as did the political and cultural accomplishments of women’s and black empowerment movements). These changes helped us outcompete the Soviets. And after winning the Cold War, America doubled down on a more neoliberal approach, under a set of expectations that, looking back, deserved greater scrutiny.

Many expected that neoliberalism would accelerate the growth of the global economy. And it did! But economic growth and actual improvements in the quality of our lives are two very different things. Beyond a certain threshold for generating material abundance, which humankind has already crossed, minimally restrained economic growth tends to threaten our collective well-being, rather than improve it.

The outcome everyone should’ve expected, and got: More stuff, and more problems that accompany all this stuff, from threats to public health and environmental sustainability to a culture pervaded by shallow materialism and meaningless, unfulfilling drudgery. It’s no wonder that the recent trajectory of the average U.S. life expectancy has been a bit wobbly.

Many expected that the vast material benefits and wealth generated by a more neoliberal economy would trickle down. And they have! But not nearly enough, in many cases, to offset the destabilizing impacts of a freer, more competitive and technologically efficient economy—an economy that requires less and less human labor to produce more and more stuff.

The outcome everyone should’ve expected, and got: A world of plenty that’s getting harder and harder to access for growing swaths of the working, or would-be-working, population, whose economic contributions have been diminished or replaced by machines.

Many even expected that neoliberal reforms would lead to greater economic equality. For the most part, this did not come to pass. Even as the proverbial floor kept rising virtually everywhere during neoliberalism’s 1990s heyday, the gap between the richest and poorest people tended to widen within most liberalizing economies.

This greater economic inequality was an outcome everyone should’ve expected, since that’s exactly what a more competitive, more meritocratic and more automated economy is designed to do. Of course, those who contribute the most to growth get the greatest economic rewards. It’s the opposite of unfair; it’s precisely what the rules of the game stipulate.

This isn’t to say there’s no actual unfairness in the system. There is. But making the system operate more fairly—encouraging equality of opportunity, creating a more level and less discriminatory playing field at the outset, expanding access to quality education, etc.—only makes the system more efficient at sorting us into economic “winners” and “losers.” And again, this sorting is taking place as technological advances render unnecessary the participation of many “losers” and even some “winners” in the economy.

It’s no wonder that many left-behind Americans looking for someone to blame have formed the MAGA movement. It’s also no wonder that the Chinese and Russian regimes have taken such repressive, anti-competitive measures to help ensure or improve their relative positions on the world stage. It all stems from a misplaced faith in the inherent goodness of economic growth and, downstream of that, neoliberal efforts to maximize that growth over the past half-century.

Neopopulism: The pendulum’s predictable path

Neopopulism, as Leonhardt describes it, tries to have it both ways.

The neopopulist still hopes for limitless economic growth, just as the neoliberal does, but looks to achieve that growth, somehow, with less emphasis on the meritocratic competition that’s been our best, most reliable tool to keep the economy growing as much as possible.

“Most Americans are not socialists, but they do favor policies to hold down the cost of living and create good-paying jobs,” Leonhardt writes, citing the broad popularity of market interventions such as minimum wage increases and protections for the U.S. semiconductor industry. “Polls show that [Americans] support restrictions on trade, higher taxes on the wealthy and a strong safety net.”

On the bright side, neopopulism’s ascendancy suggests that many Americans might be open, if only subconsciously, to adopting a more balanced set of priorities, trading away some economic growth for building more security and resilience into our institutions and our lives. In the near term, a bipartisan neopopulist consensus may even create political space for progress on some of our network’s efforts, whether it’s another round of federal infrastructure investment or stronger consumer protections.

But conspicuous in their absence from the neopopulist agenda are any sort of new or strengthened protections for the natural world, in Leonhardt’s piece or elsewhere, as far as I can tell. Neopopulists seem to take the health of our planet for granted. They aren’t appraising the enormous risk that even inadvertently-slowed economic growth could still pose to our air, water, wild places or the wildlife with which we share our world. Because of this negligence, a more neopopulist federal infrastructure investment could easily do more harm than good to the environment.

Thus far, the neopopulist vision is also failing to reconcile the ambition of its job-creating domestic industrial agenda with both the astounding pace of labor-saving technological advances and, crucially, the potential for the vast majority of us to live radically different and better lives, which are far freer from work as we’ve known it, in the not-too-distant future. Even if neopopulist economic policy could bring back millions of good-paying manufacturing jobs—which, at present, seems doubtful—shouldn’t we be asking ourselves if that’s still what we really want? Used wisely, automation, AI and our current state of unprecedented material abundance give us the chance to rethink what a life well-lived could realistically be. Yet, neopopulism apparently lacks the imagination to embrace that challenge and instead strives to put many of us back to work on the factory floor.

The way things are now, it’d be too good to be true if neopopulism actually fell out of favor because it didn’t account for environmental limits or emancipatory automation. So long as the American public avoids questioning its own core assumptions about the desirability of more and more economic growth, a different fate likely awaits neopopulism: Sometime in the future, whenever the next economic downturn happens, the political center will predictably turn on neopopulism, blaming its anti-competitive approach. Then, the center will fall back to what’s worked so well in the past—freer markets—to get things growing again, just as the center did when it first started shifting toward neoliberalism amid the economic volatility of the 1970s.

Absent a paradigm shift, the center of American politics resembles a pendulum, forever swinging back and forth between two inadequate ideologies. This swinging pendulum casts a shadow over what could otherwise be construed as a positive development for the nation’s political health, with Democrats and Republicans coming together to get things done in Washington that have broad public support.

This pendulum won’t stop swinging, damaging the planet and disrupting millions of lives as it goes, without a greater reckoning. Both the dynamic, abundant world that neoliberals want and the secure, supportive world that neopopulists want could be within our reach. But to grab hold of it, we must first let go of the deeply ingrained assumption that limitless economic growth is how we’ll get there.