Is Neoliberalism Dying? (Beware The Walking Dead)
This week, The Platypus steps back from the details of the budget bill being debated in Congress to ask what it means and what it portends. (And, we find answers to progressive conundrums in The Walking Dead.)
Also, a cool event hosted by the New America Foundation launching the paperback edition of Immigration Matters: Movements, Visions, and Strategies for a Progressive Future on 9/28 at noon, featuring E. Tammy Kim, Justin Gest, Ruth Milkman and Cecilia Munoz.
(If you’re enjoying The Platypus, we hope you’ll share it and subscribe.)
Is Neoliberalism Dying? Beware Zombie Authoritarian Racist Neoliberalism (ZARN)
Many on left have been pleasantly surprised by the ambition and scale of President Biden’s economic program. From climate to care, labor to immigration, paid leave to education, health care to the refundable child tax credit, the legislation moving through Congress represents the most sweeping progressive program to be considered by Congress since the Great Society. As we hurtle toward a dramatic and highly consequential denouement in the debate about the budget reconciliation bill in which many of Biden’s far-reaching proposals are embedded, it seems worth asking: What’s going on? Does this debate mark this the death of an old order, and if so, what exactly is being born?
Beginning in the 1970s, and then decisively with the Reagan revolution, a new economic paradigm displaced the Keynesian consensus that had defined the contours of policymaking for decades. The new framework somewhat confusingly called “neoliberalism” is defined by the propositions that small government, tax cuts for the rich, deregulation, free movement of capital across borders, privatization of government services, a shrunken safety net, and weakened unions will produce economic growth and shared prosperity. Because it is impossible to talk about economic policy without also talking about racism, this era of neoliberalism would more accurately be called “racialized neoliberalism.” The destruction of the welfare state disproportionately harmed people of color and was legitimized by racist attacks on the beneficiaries of government programs, infamously by Ronald Reagan who deployed the trope of “welfare queens.” The rise of mass incarceration and punitive immigration policies paralleled the dismantling of the safety net. The triumph of racialized neoliberalism was ratified by a Democratic President, Bill Clinton, who signed brutal welfare, crime, and immigration laws while deregulating banking and concluding the disastrous North American Free Trade Agreement. He famously campaigned to “end welfare as we know it,” and as president declared that “the era of big government is over.” Neoliberalism has been a bi-partisan undertaking, and Democrats have done much of the dirty work. The result of all of this has been, of course, a massive upward redistribution of wealth, with Bezos and Musk literally and figuratively headed for outer space while most working people live on the edge.
Trump campaigned at times as something other than a neoliberal — decrying free trade and globalization, promising to protect Medicare and Social Security and to invest in infrastructure. But his core economic policies once in office — tax cuts for the rich and deregulation on an epic scale — were a grotesque culmination of what had come before. What was new in Trumpism was the overtly racist character of governance and the frontal assault on multi-racial democracy. If neoliberalism had become electorally unpopular, Trump’s calculus was that a more racist and authoritarian version could succeed by juicing white identity politics. Rhetorically, Trump gestured vaguely towards something new on economic policy, but mostly we got more plutocracy. This shifted somewhat towards the end of his term, as the response of the federal government to the pandemic was to shovel trillions of dollars including direct, unconditional cash payments, which had the effect of dramatic reductions in poverty even before Biden took office. (Elise Gould has a nice take on poverty reduction between 2019 and 2020).
But that spending burst was the exception that proves the rule: McConnell and the Republicans refused to pass more aid, even to save two the Republican Senate seats in Georgia, and they have been implacably opposed to Biden’s economic agenda. The Republican barista now offers customers exactly one, highly caffeinated beverage, a potent brew of racism, authoritarianism, and plutocracy. Neoliberalism is not dead in the Republican Party. It has metastasized into something far worse: Zombie Authoritarian Racist Neoliberalism (ZARN).
The zombie part is that the vast transfer of wealth to the super-rich barely bothers to justify itself as good for everyone anymore — it’s plunder without pretense, robbery without romance. We don’t even get Laffer curves ridiculously suggesting that tax cuts for the rich will increase government revenue, or Milton Friedmans to propagandize for exploitation. The zombie body of neoliberalism shambles forward even as the brain registers no activity. The authoritarian element is the determination to break any rules that thwart the will to power. Neoliberalism and democracy were always uncomfortable bedfellows. ZARN signs the divorce papers. The racism part is the blunt appeal to white identity politics that Trump prototyped and mainstreamed to mobilize support across class lines, not only from working class white people but also from middle-class and rich strata. Racism is not new to neoliberalism — but it has been turbocharged. We should not underestimate the potential of ZARN as an ideological and political construction to become the ruling paradigm for generations to come. The coalition that gathers underneath its umbrella is formidable, and it benefits from rigged rules that amplify its power. Zombies are notoriously unsubtle (in comparison to the more stylishly fiendish vampires or werewolves), but they are determined. Defeating the ZARN army is the defining struggle of this decade.
(There are some contradictions inside the right-wing juggernaut – divisions within the ruling class, an alteration in the pecking order within the Republican coalition, and some defections that create openings, which we’ll explore in later issues.)
If there are zombies on the right of us, what’s happening with the Democrats? To his overwhelming credit, Biden proposed sweeping investments in the American Jobs and Families Plans that would dramatically increase the role of the federal government and reorient spending towards the care and green economies. In “Biden’s Big Economic Gamble,” Rebecca Traister profiles groups of intellectuals and wonks meeting long before Biden took office and credits their spadework with overturning the dominance of neoliberal thinking in the Democratic Party, and she rightly highlights the enormous stakes of the bet.
Few of the people meeting in these groups were outsiders, exactly; some had already advised presidents. But many had been traumatized by the slow pace of economic recovery after the 2008 financial crisis and the decision to bail out banks while millions of Americans lost homes and jobs. Some were reckoning with their own roles in that recovery and the politics that undergirded it. Jake Sullivan, formerly Clinton’s top policy adviser, wrote a 2018 piece in Democracy Journal arguing that Democrats had “reached another turning point” at which the recession had “laid bare the failure of our government to protect its citizens”; others were coming to the conversations out of movements for economic, racial and gender justice (Occupy, Fight for $15, Black Lives Matter, Me Too). The approach they were taking — those looking to push the Establishment from the inside and those wondering how to make a new Establishment — functioned like the professional class’s version of grassroots organizing.
And now, in 2021, a startling number of those people are working in the Biden administration. . .
Now, the question is whether he can execute their [plans]. Few expected Biden would be at the helm of the Democratic Party’s biggest left turn since LBJ. (“A lot of us are like, Huh?” said one advocate who works closely with the administration. “I’m closer to it than some people, and I’m still like … Huh.”)But here we are, with a federal-budget proposal representing the highest sustained government spending since World War II being negotiated in the Senate and historic investments in a care economy and climate policy on the table via an imperiled reconciliation bill. It’s stuff that — if any of it works — would be the result of decades of organizing: on the streets, in electoral politics, and in the field of economic policy. If it doesn’t, human beings and the planet will be that much further from getting anything close to what they so desperately need. But success or failure now is also about whether this president will truly take advantage of that once-in-a-lifetime shift in economic thinking to produce lasting change, or just a marginally better version of an old Democratic model. . . .
And there is so much — from Senate obstruction to supply-chain blockages to the logistical challenges of implementing new ideas — that could go wrong. Screwups would harm millions of Americans, the planet, and Joe Biden’s legacy. But they could also halt a crucial and overdue turn of the Democratic Party away from its compromised past and toward a more humane future. “This is an extraordinary moment,” the official said. “It couldn’t be higher stakes. But if something goes wrong, we’re going to discredit everything many of us have been working toward.”
Felicia Wong and the Roosevelt Institute she leads have been indispensable architects of this remarkable remaking of the Democratic economic consensus. She explained the nature and origins of Bidenomics in a must-listen interview with Ezra Klein. She argues, rightly in our view, that Biden’s plans are far more ambitious than warmed over “left neoliberalism.”
I think a lot of people actually misunderstand Biden’s strategy. And I think that’s because they default to a kind of old understanding of what Democrats stand for, this idea that Democrats are tax and spend liberals. Don’t get me wrong. I’m all for taxing. I’m all for spending.
But what Biden is trying to push is much more about actually remaking our economy, so that it does different things, and it actually regularly produces different outcomes. Biden has a vision for leading an economic transformation that really is high care low carbon… And I do think there is a left rulemaking that can be seen as left neoliberalism.
But when you combine it with this real expansion of childcare, and pre-K, and the child tax credit, and Medicaid expansion, and this idea that you’re going to spend, at least at one point in the plan, it was $450 billion to increase the pay of home health workers. Yes, that’s about remaking the market in home-based health care. So that women are actually getting higher wages for doing work that is incredibly difficult. So yes, that’s about remaking a market. But that’s actually about a kind of public spending that no neoliberal could ever have imagined and countenanced.
In a superb piece in New Left Review, “1979 in Reverse,” Cedric Durand, argues that we are in new terrain.
Moves to strengthen the relative position of labour, to overturn rentier-class tax privileges and to reject the neoliberal wisdom that market coordination is always preferable to state intervention: these signals amount to more than just a rhetorical shift. They point to a structural break in the regulation of capitalism, the shockwaves of which will reverberate in the global political economy for years to come.
Is this shift sufficient to tackle the century’s social and ecological crises? Not nearly. Does it alter essential class relations? On the contrary: it strives to re-legitimize the social order. Is it unambiguous? No: while private finance has been kept out of new domestic infrastructure projects, the US is still driving privatization and deregulation in the global south and intensifying its new Cold War on China. Will it propel a new phase of economic expansion? I doubt it, due to the sheer scale of global overaccumulation and the fade-out of the industrialization bonanza. Even so, 2021 will be remembered as the moment when global capitalism was reorganized beyond neoliberalism, a tectonic shift that will irrevocably alter the terrain of political struggle.
That we have arrived at this moment should not be a surprise. There have been many signs that the neoliberal tool-kit was proving less and less effective for the day-to-day management of capital accumulation. The Eurozone crisis, global waves of ‘populist’ protest, the new assertiveness of digital monopolies, were indications of growing systemic instability. On top of that the pandemic accelerated the pressure for change. At this stage, one of the few things that can be said with confidence is that the possibility of tasting once again the flavour of popular victories is just a little greater than it was five months ago. That’s not much. But for people like me, born in the 1970s or after, it is a first.
Many deserve credit for this monumental shift. First, savvy think tanks and economists, inside and outside the beltway, have been making the case for an alternative paradigm for many years. Second, progressive electeds — especially the Congressional Progressive Caucus, under the leadership of the magnificent Rep. Pramila Jayapal — have also been a major force this year in shaping the deals. Third, and perhaps the most of all, popular movements — notably the Sanders insurgency, the Fight for 15, and the Movement for Black Lives — heaved into the mainstream once unthinkable alternatives to racialized neoliberalism. Let’s also give Occupy Wall Street, which celebrates its 10th anniversary this week, its due. (Ruth Milkman, Stephanie Luce, and Penny Lewis have a great new piece up in The Nation,“Did Occupy Wall Street Make a Difference?” Based on interviews with the original Occupy activists, the authors make a persuasive case for the movement’s catalytic impact. Also worth checking out are Nelini Stamp’s amazing tweets, which convey the visceral experience of occupying Zuccotti Park.) Finally, credit goes to Biden and his administration. He is an unlikely champion of those progressive forces: Biden as a senator voted for Bill Clinton’s neoliberal policies and the head of his National Economic Council, Brian Deese, previously worked for BlackRock. But thanks to this convergence of forces, we are seeing a realignment on economic policy — big enough to be called a rupture — in the Democratic Party.
So the ZARN zombies have met their match, right?
The Platypus does not want to be the skunk at the garden party, but we worry. Actually, we have four worries. First, and obviously, the passage of the $3.5 trillion Biden plan through Congress is itself no sure thing, and every progressive should has a stake in the outcome. Neoliberalism has plenty of defenders in the Democratic Party, and given the narrowness of the margins, they are dangerous as we move into the final weeks. Joe Manchin has famously decried the $3.5 trillion price tag and insists that the child tax credit go to “the right people” — demanding work requirements that are the very core of racist neoliberal policy making. And he’s not alone — Larry Summers is out there being Larry Summers, Bill Galston whines in the op-ed pages of the Wall Street Journal, and the situation that is Sen. Krysten Sinema continues to confound. A renegade group of conservative House Democrats have caused leadership trouble. Three Democrats in the pocket of Big Pharma have at least temporarily tanked Medicare prescription drug provisions that would have saved $700 billion dollars needed to finance social spending provisions in the bill. Failure to pass the budget bill, which contains the main legislative program of Democrats, would presage an electoral catastrophe in 2022 and delegitimize the left turn before it’s made.
Second, some of the noxious “common sense” of neoliberalism still has plenty of force in the public debate, and not just on the right: the idea, for example, that lazy workers are avoiding taking jobs because of generous government benefits (rather than low wages) has unfortunate cultural resonance. Zombie ideas have a surprisingly long shelf life. Organizing and popular education to change “common sense” on economic issues is more important than ever.
Third, the problem of concentrated wealth and inequality has grown so enormously that, breathtaking as Biden’s proposals are by the standards of recent economic discourse in the Beltway, even more dramatic steps will be needed to start unmaking our plutocracy. Wealth accumulation during the pandemic would not be meaningfully reversed by the Biden tax plan. As the New York Times points out in “House Democrats Plan to Tax the Rich Leaves Vast Fortunes Unscathed,” the focus on increasing income tax rates rather than taxing wealth has profound limits:
The richest of the rich earn little from actual paychecks (Mr. Bezos’s salary as the founder of Amazon was $81,840 in 2020), so a surtax on income would have little impact. Their vast fortunes in stocks, bonds, real estate and other assets grow largely untaxed each year.
The Biden plans will need not only to pass but be a springboard to a continuing cycle of more ambitious policymaking that moves to break up concentrated wealth and drive even more investment decisions from the government.
Lastly, and perhaps most important, if Zombie Authoritarian Racist Neoliberalism is to be defeated, we’ll need to do more than enact good economic policy that delivers income and restructures markets. Relations of power in society and the economy must be reshaped. Neoliberalism isn’t just or mainly an ideology or a set of policies; it has been above all a program to redistribute power in American society. And it continues to be astonishingly successful. Warren Buffett put it succinctly: “There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning.” Adam Tooze elaborates in his Vox interview, “Neoliberalism has really ruptured”
The elements of neoliberalism which, in some senses, have proven most resilient are precisely the dimensions of social class inequality. If you think of neoliberalism as a project, really of the restoration of the balance of class power and the creation and making permanent of various types of structures of inequality, then 2020 did nothing but reinforce those.
And in part, 2020 did nothing but reinforce those because we saw in 2020, as we saw in 2008, the mobilization of state resources — state spending and monetary policy. In very explicit terms, we were trying to conservatively stabilize the status quo. We proclaimed that because businesses were not responsible for 2020, there is no moral hazard problem, and it’s legitimate to hand out hundreds of billions of dollars to them.
Winning the war of ideas or even the narrative war, it turns out, are not the same as winning the actual war. What this means concretely is that some of the hidden gems in the legislation moving through Congress that would alter power relations in profound ways need to be prioritized and preserved in the horsetrading over the next couple of weeks. These include the worker rights provisions and voting rights provisions Bob Kuttner rightly foregrounds as two sleepers in budget reconciliation. Also critical are measures to provide a path to citizenship for up to 8 million undocumented immigrants, facilitate organization by home care workers, and create a source of unconditional income for workers, thereby increasing their bargaining power, through the refundable child tax credit.
Viewing the battle with ZARN as struggle for power, not merely for the best ideas, suggests that not only the content of a bill but how progressives organize after a bill is enacted may be the decisive ingredient. Just as a wave of labor organizing both preceded and came after the National Labor Relations Act (NLRA), so too we’ll need to see an upsurge to implement, defend, and expand the victories we hope to win. Samir Sonti, in a brilliant forthcoming piece, “The Crisis of US Labor Past and Present” in the Socialist Register, makes the case that Bidenomics, whatever its tensions and contradictions, offers a potential springboard for new labor organizing if it passes. “The contradictions of four decades of neoliberalism have delivered to us an opportunity – perhaps not what we would have chosen, but the one with which we will have to make our own history.” (You can pre-order Socialist Register 2022: New Polarizations and Old Contradictions: The Crisis of Centrism which includes Sonti’s article here).
So where does all of this leave us? As Dorian Warren told Traister, if we are indeed “in the midst of the crumbling of the old neoliberal-conservative order, it’s possible that the stage we’re in now is an interregnum of some kind.” Interregnums are periods in which the balance of power is unstable and multiple futures flash into view, and also, as Gramsci famously put it, when “a great variety of morbid symptoms appear.” From January 6th insurrection to Covid denialism to the Q-Anon cult to the growing prominence of unhinged characters like Marjorie Taylor Greene in public life, morbid symptoms are everywhere. (And not to be too literal, but for the first time in recorded history, Alabama had more deaths than births in 2020.)
In the early Trump years, Deepak found a strange consolation in The Walking Dead, a grim post-apocalyptic series in which an unknown virus had turned most of the world’s population into marauding zombies with only small bands of traumatized holdouts left to carry to the torch for humanity. In a memorable scene, one of the heroes walks up to the edge of a cliff only to find a horde of zombies blocking the descent. One interpretation of the show’s appeal is that peering over the abyss can steady your nerves for dangers that must be faced. So today, on one side lie the ZARN predators, marching shambolically forward and out for blood. They point towards one plausible, terrifying, path out of neoliberalism’s crisis of legitimacy. Another path leads to something far more desirable albeit less fully developed: a holograph that has blinked into view of a different, more just future. Passing the bill pending before Congress in its most robust form is a crucial although insufficient step to reach that better future. We will have to avoid many traps and ambushes along the way, and summon the kind of sobriety, discipline, and unity that have not been the long suits of the left in recent years. But a look out over the abyss should strengthen our resolve, remind us of the strategic imperative of unity, and quicken our pace in the other direction.