Neoliberalism’s Final Stronghold
As the world moves on from four decades of neoliberalism, the Economist remains faithful to the orthodoxy of Margaret Thatcher, Ronald Reagan, and the Washington Consensus. But addressing the US economy’s many problems will be impossible if Americans blame them on the government.
BERKELEY – The past decade has not been kind to neoliberalism. With 40 years of deregulation, financialization, and globalization having failed to deliver prosperity for anyone but the rich, the United States and other Western liberal democracies have seemingly moved on from the neoliberal experiment and re-embraced industrial policy. But the economic paradigm that underpinned Thatcherism, Reaganomics, and the Washington Consensus is alive and well in at least one place: the pages of the Economist.
A recent essay celebrating America’s “astonishing economic record” is a case in point. After urging despondent Americans to be happy about their country’s “stunning success story,” the authors double down on condescension: “The more that Americans think their economy is a problem in need of fixing, the more likely their politicians are to mess up the next 30 years.” While acknowledging that “America’s openness” brought prosperity to firms and consumers, the authors also note that former President Donald Trump and current President Joe Biden “have turned to protectionism.” Subsidies, they warn, could boost investment in the short term but “entrench wasteful and distorting lobbying.” In order to address challenges like the rise of China and climate change, the US must “remember what has powered its long and successful run.”
As usual, the Economist delivers its reverence for neoliberal dogma with all the sanctimony and certitude of a true believer. Americans must sit down, shut up, and recite the catechism: “The market giveth, the market taketh away: blessed be the name of the market.” To doubt that the US economy’s current problems are caused by anything other than an interventionist, overbearing government is apostasy. But, as an economic historian, what took my breath away was the essay’s conclusion, which attributes America’s postwar prosperity to its worship of the Mammon of Unrighteousness (more commonly known as laissez-faire capitalism).