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Democracy May Be in Danger

But the future could belong to us.

Philosopher Immanuel Kant

My columns argue in favor of civic republicanism, a political tradition that emphasizes the common good, while also maintaining that it is not incompatible with America’s other formative political philosophy, that of liberalism, which prizes individual freedom. But there exists a politico-economic creed called neoliberalism that, despite its name, is incompatible with both of these conceptualizations.

The prefix “neo” of course means “new.” To what extent was neoliberalism new—not chronologically new, which it was when it began its ascent in the United States in the 1970s, but substantively new? Classical liberalism had advocated the economic doctrine of laissez-faire, which meant letting the so-called free market determine economic outcomes without interference from government. A direct result of laissez-faire policies in nineteenth-century America was a whole series of disastrous economic collapses, which were then called “panics” but today would be labeled recessions or, in some cases, outright depressions. Another result, once the Industrial Revolution was in full swing, was the creation of the kind of grotesque economic disparities with which we have since become familiar but that were not so prevalent before the Civil War.

Economic reforms of the Progressive Era mitigated some of the worst effects of industrializing capitalism, and, in the philosophical realm, classical liberalism gave way to the “egalitarian liberalism” that we recognize as modern liberalism today. But in the realm of economic practice, the doctrine of laissez-faire still held sway, until the advent of the biggest panic of all time, the Great Depression, put paid to this failed conception. First, it was established by the new Roosevelt administration that both the stock market (by means of the Securities and Exchange Commission) and the banking system (through various federal agencies, especially the Federal Reserve) would be government-regulated. Then, toward the end of the New Deal, FDR’s economic advisers began adopting Keynesian economic policies, which provided a means for the government (through public spending) to steer the overall economy without interfering in its actual concrete workings.

Any amount of interference in the capitalist marketplace was anathema to right-wing conservatives, but in order to counter it, they would need a plausible theory of why such intervention—despite overwhelming evidence to the contrary—was unnecessary or counterproductive. In her essay “From the exclusion of the people in neoliberalism to publicity without a public,” Regina Queiroz expounds on why opponents of state regulation and Keynesian fiscal policy could not simply revert to classical economic theory as first laid out by Adam Smith. Smith, she explains, while expressing admiration for a free market guided by what he called an “invisible hand,” did not deny the existence of public goods (such as education) that the state was obliged to provide, as neoliberalism does. Queiroz summarizes: “Smith accepts the existence of a public interest independent of individuals’ particular interests; on his view, the political life depends on intentional and collective deliberation on the interests of all.” This was, of course, also the view of Smith’s equivalent in the realm of liberal political philosophy, John Locke, for whom the legitimacy of government depended on the consent of the governed.

Neoliberalism, in contrast, Queiroz continues, denies the sovereignty of the people in political as well as economic matters. This is what the phrase “exclusion of the people in neoliberalism” in her article’s title references. Sovereignty, according to adherents of the neoliberal faith, belongs to the capitalist marketplace, which if properly constituted has no need of government intervention, and therefore no need for the populace to be involved in setting or approving governmental policy relating to the economy (and, of course, everything relates to the economy, in one way or another). The other part of Queiroz’s article, referred to in the title as “publicity without a public,” is based on Immanuel Kant’s hypothetical publicity test: “All actions relating to the rights of other human beings are wrong if their maxim is incompatible with publicity.” Queiroz contends that neoliberal politicians adhere to the following, and opposite, maxim: “pursue neoliberal goals by letting people think (wrongly) that other legitimate goals are being pursued.” She maintains further: “This maxim stems from the fact that their goal—‘overcoming’ public deliberation—will be more easily attained if it is kept secret.” Without public deliberation, of course, a public has no real political existence.

In their book Neoliberalism: A Very Short Introduction, Manfred B. Steger and Ravi K. Roy divide neoliberal theory into three components: its ideology, its modes of governance, and its policies. In the first category, they say, “these individuals saturate the public discourse with idealized images of a consumerist, free-market world.” In its modes of governance, neoliberals inject entrepreneurial values, such as competitiveness and self-interest, into a process traditionally concerned with the public interest. In their actual policies, they focus on privatization of state enterprises, liberalization of trade, massive tax cuts, reduction of social services and welfare, anti-union drives, and, generally, the downsizing of government at all levels.

An article by the Institute for New Economic Thinking’s Lynn Parramore, “OUR ECONOMIC SYSTEM IS MAKING US MENTALLY ILL,” traces the development of neoliberal theology from its inception in Austria after World War I to its implementation in the United States in the 1980s under Ronald Reagan, and details the maladies it has since spawned in the United States—including distrust, disconnection, and disempowerment—which, I would note, have played no small role in putting American democracy in peril. She then issues a call for the nation to disengage from its odious practices. “Such a shift requires enormous resources of endurance, commitment, patience, and boldness,” she writes. “Neoliberals manifested these things. They played a long, tough game to get their ultimately antisocial, anti-life ideas accepted.… If we learn to play a long game, the future can be our world, not theirs.”