Is neoliberalism dead or alive? The latest big beautiful tax cuts fought through by Trump are in hard contrast with his arm wrestling of other states by imposing tariffs. While the tax cuts are conceived as hyper-neoliberalism, many people perceive tariffs as a complete contradiction with neoliberal doctrine. The seemingly contradictory policy mix of Trump and his extreme right companions around the world makes many people call this the end of the neoliberal era. And it is not only the seemingly erratic behaviour of Trump that posed this problem: both Biden and Obama were described as neoliberal, and so were George W. Bush and Bill Clinton. At this point, the labelling appears so broad that it might seem futile to talk about neoliberalism – it functions as little more than a leftist buzz word.
We should not retire the term neoliberalism too soon, though. The problem is that neoliberalism gets too quickly identified with a very specific set of policies – tax cuts, trade liberalisation, privatisations and so on – or, alternatively, with the abstract quest for individual freedom. Both of these perspectives fail to capture what neoliberalism is actually about: the privatisation of power. As long as we are not paying attention to this underlying tendency of capitalism’s latest (if not last) stage, we are unable to really understand economic and social policies, as well as what glues political formations together. And so, we are incapable of effectively critiquing contemporary capitalism and fighting the rise of the extreme right.
For this, it is most helpful to follow Antonio Gramsci’s analysis. He argued that the communist party would be able to attain power by becoming the Modern Prince, navigating the economic, political and ideological dimensions of power. Unfortunately, this advice was taken more seriously by organised capital, as corporations were able to amass this power to expand successively their control over the economy. We can therefore think about neoliberalism as the reign of the Corporate Prince.
This is very much in line with the findings of some other authors, demonstrating how infamous neoliberal initiatives on tax, trade, and deregulation have served to increase corporate power. It is now important to see how also the use of taxes, tariffs, and industrial policy are serving the overall neoliberal project of privatising power. This is not only an economic but also an ideological and political project that is still pursued today – entailing lately the Corporate Prince’s embrace of the extreme right.
How Neoliberal Policies Privatise Power
It would be wrong, though, to think that it is only the political right that is implementing neoliberal policies. In fact, the Corporate Prince is able to use a broad set of policy tools that are wielded both by the right and the centre left. Neoliberal policies are, thus, not all about free markets, but rather much more about making corporations the ultimate decision-makers in the economy – undermining the position of organised labour resistance.
The most obvious example for this is privatisation. While this policy was originally self-inflicted by the West – privatising telecommunication, energy networks, train lines, postal services etc. – the Corporate Prince moved quickly to impose Structural Adjustment Programmes onto the Global South to privatise the developmental industry. This both consolidated oligopolies in the West and foreclosed well-paying manufacturing jobs in the Global South, promising Western corporations profits through public contracts as well as cheapening labour and primary resources. Today, private ownership is unquestioned in discussions about (social) housing, medicines, public-partnerships in infrastructure, or the delivery of social services and development aid through privately-owned philanthropies. Even the latest political signals for state-led industrial policy are not a move away from neoliberalism. What we call industrial policy today – such as Biden’s attempt – merely means that the state is de-risking credits with private banks, granting ownership rights to corporations, and contractually guaranteeing private profits. All this leaves ultimately the control over state-issued economic resources in private control.
Another obvious candidate for neoliberal policy is tax. To be clear, removing taxes means that economic resources are shifted from the state to corporations or households, such that decisions about these resources cease to be a public or even democratic matter. While tax breaks appear to be a darling of the right, also centre-left parties adorn themselves with “smart tax policies”. The smart part of tax (breaks) is the supposed incentivising of labour-market integration for people of disabilities, use of renewable energy, and multi-millionaires’ donation to philanthropic causes. Accordingly, smart tax policy is not about making the rich pay the taxes they are evading, but rather creating new ways for them to avoid paying existing taxes – in the hope of some societal benefit. Ultimately, though, it is not the public that is directing the flow of economic resources, it is an individual or corporation taking over essential societal infrastructure – or not if tax breaks on profits are not able to compete with investments in sweatshops, fossil fuels, or capital markets.
To promote private power more indirectly, the neoliberal state engages in liberalisation. Typically, liberalising financial markets and trade are taken as a quasi-unquestionable necessity in the age of globalisation. Whenever the state removes regulations it shifts power from labour to capital. First, trade liberalisation allows Western oligopolists to increase their profits by undercutting competitors, that is smaller producers in the Global South. Second, financial liberalisation allows the dislocation of profit from production into capital markets, and dislocates production into jurisdictions that offer less regulation and lower wages. How then are tariffs neoliberal? Simply because sectoral protectionism allows some national capitalists to be protected from global market pressures, giving them more space to keep control of their national market share and prices. Truly, this might be at the expense of other capitalists though this should be compensated through tax cuts and other subsidies to preserve the broad capitalist support for the neoliberal political formation.
Less prominent but still at the heart of the neoliberal playbook is the deep institutional anchoring of central bank independence. This entrenches the central bank’s exclusive focus on using the interest rate to limit inflation. What does that have to do with power? On one hand, low interest rates stimulate economic activity, increasing employment, and thus potentially the bargaining power of labour. Since this typically increases, on average, the general price level, the central bank’s mandate is to kill off the economic dynamism by hiking interest rates. This punishes workers with unemployment and favours capital consolidation – read monopolisation – since only large corporations can afford higher capital cost. On the other hand, central bank independence systematically undermines the government’s ability to take on affordable debt. This is not straightforward, but neoclassical models rely heavily on the volume of government debt to determine the interest rate. Limiting public debt this way seriously limits the ability of government to exercise control over the economy, in favour of banks, mutual funds, and oligopolistic corporations.
Whose Freedom? Neoliberalism as the Entrepreneur Ideology
Okay, neoliberal policies might have effectively privatised power, but is neoliberalism not also about freedom? This is not quite so. Neoliberalism is not about freedom for everyone – which would have a dangerously egalitarian ring to it – but rather about shifting rules to wield power more freely. The Corporate Prince does not care about freedom from oppression, but is instead much more interested in the freedom to oppress. Instead of being about freedom, neoliberalism is about being anti-egalitarian. It is about some individuals deserving freedom, due to their superior intelligence, industriousness, or virtue.
This is best evidenced by neoliberalism’s surprisingly ambivalent relationship to markets and appreciation of monopolies. This was diligently worked out by Ian Bruff, who examined the attitudes of key neoliberal thinkers (from Hayek to Friedman). He identified a shared sense among these authors: while free markets are a nice model, they are not required a la lettre to make capitalism the best of all worlds. Neoliberal thinkers argue that even when a corporation concentrates substantial market power, it will still act virtuously: there is a hypothetical competitive threat of other entrepreneurs, the ingenuity of an efficiency-hunting entrepreneur, or just moral virtue across the market. At times, a monopolist is even preferable to actual competition! This couldn’t be more different from their assessment of market power exercised by states or labour unions. In fact, these arguably more democratically accountable institutions are blamed for corporate misbehaviour and smeared as taking advantage of class loyalty.
This veneration of the genius entrepreneur is still awfully present in contemporary neoliberalism. Take the all too familiar romanticisation of capital-owners as job creators and innovators. Entrepreneurs, so the argument goes, deserve as much control and resources as possible so that state and labour are not getting in the way of their creative power. The latest iteration of this was described in the 1990s as The Californian Ideology. This is a toxic amalgam of individualistic and tech-optimistic ideas, mixed to claim that the old (social welfare) state will “wither away to be replaced by unfettered interactions between autonomous individuals and their software. […] [B]ig government should stay off the backs of resourceful entrepreneurs who are the only people cool and courageous enough to take risks.” This was only catalysed by the advent of ChatGPT, resulting in the emergence of AI-powered eugenics. The billions of US Dollars captured by tech-entrepreneurs are now funding think-tanks fabricating grandiose ideas to create a non-human utopia (really!). On this grand mission, these uber-wealthy entrepreneurs – almost literally embodying the Corporate Prince – celebrate total control over workers, claiming that “the ‘best arrangement [for a start-up] is a quasi-mythological structure where you have a king-like founder […]”.
It comes as no surprise that neoliberalism’s entrepreneurial pseudo-aristocracy is decidedly patriarchal and colonial. While it is true that pure neoliberal doctrine is based on raceless and genderless individuals, this does not mean that the Corporate Prince is identity-neutral. In fact, the neoliberal ignorance of racial and patriarchal oppression is bound to reproduce and exacerbate these oppressions at the heart of the racial and patriarchal capitalism from which neoliberalism was born. Cutting government spending on social services – health care, childcare, and pensions – entails in reality that women are forced to carry an increased burden caring for sick, young, and old family members. Allowing corporations to issue contracts with lower pay and less job security, creates precarious work that is taken over in the great majority by women – or racialised workers (who are also often women). That situation is exacerbated by the border regime – from sponsored visas to business-owners confiscating workers’ passports – making someone’s very bodily presence conditional on their obedience in the workplace. All the while, the supply of migrant workers is guaranteed by contemporary imperialism: keeping Global South economies underdeveloped and tolerating the million-fold displacement of people by groups politically sponsored and armed by the West.
Monsters of the 21st Century
All this sketches a rather bleak image for neoliberalism’s trajectory. Neoliberalism serves the function of safeguarding capital accumulation through the continuous privatisation of economic control. This dynamic is stabilised by the establishment of neoliberal hegemony, becoming an unquestioned premise that entrepreneurs deserve unchecked power over the economy.
How did it come that far? When oil states challenged imperialist dominance in the Middle East through triggering the oil price shock in the 1970s, the West refused to yield and rather sustained a crisis for their industrial model. This offered the moment for neoliberal thinkers and think tanks – representatives of the Corporate Prince – to offer their worldview as an alternative. This brought neoliberal leaders to the top of conservative parties and into government. Neoliberalism achieved hegemony, when the collapse of the Soviet Union precipitated a crisis on the Marxist left, which was seized by a New-Labour-spirited clique. This emergent ideological coherence across the centre-left and right created the broad historical bloc of the 1990s. Unchecked by the state or labour, speculative capital ran amok, resulting in the great financial crisis of 2008. This Broad Bloc, particularly in the EU, offered a unified response – austerity. Though deeply unpopular, the bloc entrenched austerity: either by the Troika bullying elected governments, or by circumventing democratic elections through installing technocratic governments.
The instruments that the Broad Bloc used to impose austerity against voters is often described as neoliberal authoritarianism: the Corporate Prince is shedding democratic constraints to entrench the privatisation of power. Understandably, swaths of voters abandoned the neoliberal parties – especially evidenced by the collapse of centre-left parties – while now much of this discontent is captured by extreme right-wing parties. These distinguish themselves by policies that are exacerbating the oppression of marginalised groups: radicalising deadly border policies, restricting visa and citizenship rights, jacking-up police repression, and antagonising queer, gendered, and racialised people. Given neoliberalism’s patriarchal and colonial underbelly, these fascistic policies are not actually challenging neoliberal doctrine, but are rather in continuity with it. This makes the extreme right a welcome partner for the creation of a new historic bloc: the Corporate Prince is forging new political coalitions to hold on to neoliberalism.
Trump has already demonstrated that he is able to mobilise corporate donations from a wide range of capitalists – politically, often not on the same page, such as high-tech, construction, media, manufacturing and finance –, while EU commission president von der Leyen has been applauding Meloni, the PiS, and the Greek government for their deadly border policy, while also undermining liberal democratic institutions. What we witness is, thus, not the end of neoliberalism, but rather the emergence of a new political bloc, bringing fascistic elements into the neoliberal coalition. This bloc, reaching from the centre to the extreme right, aims to politically stabilise the privatisation of economic power, while exacerbating the oppression of marginalised groups. This is the success of the Corporate Prince, paving the way for the time of monsters in the 21st century.
Thabo Huntgeburth
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