What "neoliberalism" is about for Democrats and Republicans

Dan Froomkin in The Jobs Crisis: Obama, Romney and the Low-Wage Future of America Huffington Post 08/28/2012 gives an excellent description of neoliberalism, aka, the Washington Consensus, though without using either name.

The term Washington Consensus came from the austerity prescriptions that the IMF and the World Bank have insisted for decades on applying to underdeveloped countries that got into debt trouble or financial crisis. Those measures were aimed at exploiting the crises to weaken organize labor and open those countries to maximum exploitation by multinational corporations. For the majority of people, those measures were disastrous. Germany under Chancellor Angela "Frau Fritz" Merkel is now imposing those same measures via the EU onto Greece, Ireland, Italy, Spain and Portugal, with the entirely predictable disastrous results for the people of those countries.

The "liberalism" involved is the classical understanding of economic liberalism, which is still called liberalism or neoliberalism in most of the world. The US political vocabulary is unusual in using "liberal" to mean pro-labor and "left", a usage going back to the post-First World War period when pro-labor Americans wanted to distinguish their position from the Progressive movement, which sometimes took a neutral or even hostile attitude toward labor, e.g., in their undifferentiated opposition to urban "political machines", which often served labor and working-class neighborhoods well.

The liberals also wanted to distinguish themselves from revolutionary "Bolsheviks" and, as Christopher Lasch put it in The True and Only Heaven: Progress and Its Critics (1991), "also because wartime repression gave new importance to the defense of civil liberties." History has to a certain extent repeated itself in the last 10 years, as pro-labor Democrats have started calling themselves "progressive" again in no small part for the same reason that Lasch described why progressives at the start of the last century began calling themselves that: "'Liberalism' was too closely associated with laisssz-faire economics to serve their purposes." In more recent times, a rejection of the hawkish assumptions of the Democratic Party establishment in foreign policy has also been a major feature. During the Vietnam War, that view was stigmatized by the 1960s New Left as "Cold War liberalism." (Describing intellectual and political trends can become a tangle; the thinking most associated with what was known as "Cold War liberalism" circa 1970 became what today we know as neoconservatism.)

Froomkin's definition is derived from Jeff Faux, who recently elaborted his view in The Servant Economy: Where America’s Elite Is Sending the Middle Class (2012):

Faux argues that by the mid-2020s, even with the most optimistic assumptions about economic growth, current trends indicate that the average American’s wages will drop about 20 percent. One big factor is that more and more good jobs will go overseas, leaving even America’s best and brightest no alternative but to enter the service industry.

“You go into an Apple store and you see the future,” Faux said. “The future’s not in the technology - the future of the labor force is all in those smart college-educated people with the T-shirts whose job is to be a retail clerk for Chinese goods.” ...

Neither party, Faux argues, is addressing the economic realities that make this the most likely future for our country - because changing course would require massive government intervention. There’s a pretty strong consensus among all but the most ideologically conservative economists that the solution would involve considerable public investment in education, infrastructure, and green energy, new policies to promote domestic manufacturing, more activist regulation of the financial industry in particular, and a more progressive tax structure.

But no matter who wins the election, Faux said, the governing elite has pretty much already ruled out that agenda, in favor of light regulation and governmental austerity. ...

Still, Faux argues, someone should be making the argument to the public that “Hey, this is a big country. It needs a big government to solve its big problems.”

That's an excellent summary of the neoliberalism which is the current bipartisan consensus.

As I usually feel compelled to add, that does not mean that there are no important differences between the two parties or that voters determined to get the democratic system beyond this paralyzing and destructive neoliberal consensus can or should ignore the politics of the two parties. It does mean that progressives for whom these issues are a real concern have to be especially aware of the need for progressive pressure on the Democratic Party that doesn't become absorbed by the neoliberal-dominated Democratic Party. Whether it's labor unions, long-standing progressive organizations or relatively newer ones, they all need to realize that progressive and prolabor policies can only be established and maintained on a longterm basis by defeating the neoliberal ideology and policies that go with it.

And by recognizing that, often enough, neoliberal priorities coincide very well with plain old reactionary policies that want to take the US back to a dystopian, pre-New Deal state of affairs.

Tags: neoliberalism