Part I: Defining Neoliberalism
Aside from entirely failing to define neoliberalism perhaps the most egregious error in DKos posts on the subject is the use of exclusively policy-oriented definitions. For example, some writers provide a definition similar to that set forth at the estimable web site CorpWatch, which states that "'Neo-liberalism' is a set of economic policies" including "five main points": the rule of the market, cutting social spending, deregulation, privatization, and eliminating the concepts of the public good or community.
Although these policies are characteristic of neoliberalism, no list of characteristics can ever define the essence of a phenomenon, particularly one as complex as the ideology of neoliberalism. Policies are the results of the application of a given ideology to a given set of real-world circumstances, but the former can never be said to define the latter: this would put the cart before the horse.
More pragmatically, laundry-list definitions encourage simplistic, laundry-list discussions that barely skim the surface and go nowhere.
What is needed instead is a definition of neoliberalism that grasps its core, essential elements as an ideology, i.e., a system of ideas or pattern of thinking that forms the basis of an economic or political theory characteristic of a group, social class, or movement.
Geography professor David Harvey has provided an excellent definition meeting these criteria in his book, "A Brief History of Neoliberalism" (Oxford U.P. 2007), which states as follows:
Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices.
Harvey, p. 2 (emphasis added).
Like all ideologies, neoliberalism arose within specific social groups (the wealthy and their apologists), to meet their specific needs (to protect and increase their wealth and power), at a specific period (the early 1970s, when capitalist economic growth was slowing and previous gains favoring limited social equality, e.g., the welfare state & labor unions, meant that the wealthy might have to bear a share of the impending economic pain). As Harvey explains:
when growth collapsed in the 1970s, when real interest rates went negative and paltry dividends and profits were the norm, then upper classes everywhere felt threatened. In the US the control of wealth (as opposed to income) by the top 1 per cent of the population had remained fairly stable throughout the twentieth century. But in the 1970s it plunged precipitously ... as asset values (stocks, property, savings) collapsed. The upper classes had to move decisively if they were to protect themselves from political and economic annihilation. The coup in Chile and the military takeover in Argentina, promoted internally by the upper classes with US support, provided one kind of solution. The subsequent Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed under forced privatization. ... Gérard Duménil and Dominique Lévy, after careful reconstruction of the data, have concluded that neoliberalization was from the very beginning a project to achieve the restoration of class power. After the implementation of neoliberal policies in the late 1970s, the share of national income of the top 1 per cent of income earners in the US soared, to reach 15 per cent (very close to its pre-Second World War share) by the end of the century.
Harvey, at 15-16 (hyperlinks and emphasis added). As is well known, the growing inequality of income (and wealth) to which Dr. Harvey alludes has only gotten more pronounced, not only in the U.S. but throughout the world.
Although the focus here is on ideology rather than policy, it bears mentioning that key neoliberal policies enacted in the U.S. at the federal level since the 1970s have included the Airline Deregulation Act of 1978, the Motor Carrier Act of 1980, various tax cuts for the wealthy (especially capital gains tax rate cuts), NAFTA, TPP and other "free trade" agreements, the breaking of PATCO and other anti-labor policies too numerous to catalog, the Personal Responsibility and Work Opportunity Act of 1996, the Financial Services Modernization Act of 1999, the Telecommunications Act of 1996, and many others.
Even the Affordable Care Act is, ideologically speaking, a basically neoliberal statute, given its reliance on private insurance companies and the so-called "market" instead of publicly-run alternatives like single-payer or the "public option" that President Obama failed even to fight for. This point illustrates the hegemonic nature of neoliberal ideology: 21st Century centrist or center-left political actors often attempt to achieve "leftish" goals like expanding health care access by basing their policy proposals on neoliberal principles, but in doing so they actually strengthen neoliberal ideology while lining the pockets of corporate capital.
With our definition of neoliberalism in mind -- "a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade" -- let us proceed to evaluate Hillary Clinton's ideology and determine the extent to which her thinking is neoliberal.
Part II: Hillary Clinton's Soft Neoliberalism
We will focus our attention on the area of political economy, from which neoliberal ideology arose and upon it has had its most apparent impact. As Thomas Palley pointed out in late May, Hillary Clinton has surrounded herself with neoliberal economists:
If you take a look at the list of big name economists who have significant influence on Mrs. Clinton, you will find that nearly all of them agreed, back during “Bill’s boom”, that NAFTA was good for the economy. So too was giving China access to the US market without effective labor standards, environmental standards and protections against currency manipulation. They also thought financial deregulation was a must and financial concentration was cool.
Mrs. Clinton’s economics team includes Robert Rubin, Larry Summers and Peter Orszag. In the 1990s, Rubin and Summers put in place the trade, deregulation and competition policies that have gotten us in so much trouble. The housing bubble that ended so badly also began on their watch. Above all, they argued persistently for fiscal austerity and even toyed with privatizing Social Security.
Following in the footsteps of Messrs. Rubin and Summers, for the last several years Mr. Orszag has been collecting booty on Wall Street. Before that, his starting job in Washington was to write papers showing that budget deficits increase interest rates, thereby preparing the political table for a menu of fiscal austerity and entitlement cuts.
Not only do neoliberal economists have Mrs. Clinton's ear, but Wall Street bigwigs are largely funding her campaign, as they have in the past, as detailed here
, and here
. It bears noting as well that Clinton's Wall Street funders are not taking her recent rhetorical turn to liberal themes, exemplified in last week's economic policy speech, too seriously
But our focus today is on neoliberal ideology. Consider these excerpts from the aforementioned policy speech, each of which exemplifies neoliberal ideology (emphasis added):
Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation.
Small businesses create more than 60 percent of new American jobs on net, so they have to be a top priority. I’ve said I want to be the small-business president, and I mean it. And throughout this campaign, I’m going to be talking about how we empower entrepreneurs with less red tape, easier access to capital, tax relief and simplification.
We are in a global competition, as I’m sure you have noticed. And we cant afford to leave talent on the sidelines. But that’s exactly what we’re doing today. When we leave people out or write them off, we not only shortchange them and their dreams, we shortchange our country and our future.
I will produce ways to encourage companies to share profits with their employees. That is good for workers and good businesses. Studies show that profit sharing that gives everyone a stake in the company’s success can boost productivity and put money directly into employees’ pockets. It’s a win-win.
I firmly believe that the best anti-poverty program is a job but that’s hard to say if there aren’t enough jobs for people that were trying to help lift themselves out of poverty. That’s why Ive called for reviving the new markets tax credit and empowerment zones to create greater incentives to invest in poor and remote areas.
I believe many business leaders are eager to embrace their responsibilities, not just to today’s share price but also to workers, communities and ultimately to our country and, indeed, our planet.
Now I’m not talking about charity; I’m talking about clear-eyed capitalism. Many companies have prospered by improving wages and training their workers that then yield higher productivity, better service and larger profits.
Workers are assets. Investing in them pays off; higher wages pay off. Training pays off. To help more companies do that, I proposed a $1,500 tax credit for every worker they train and hire.
As a former senator from New York, I know firsthand the role that Wall Street can and should play in our economy, helping main street grow and prosper, and boosting new companies that make America more competitive globally.
Even as she advocated policies of a somewhat liberal nature -- while avoiding more progressive proposals like rejecting the TPP, urging expansion of Social Security, or breaking up the "too big to fail banks" -- Clinton's underlying reasoning was neoliberal in nature, characterizing human beings as "assets," praising "clear-eyed capitalism," "small business," and the positive role of Wall Street.
These are not mere rhetorical flourishes: they are evidence of Clinton's basic thinking, especially her references to the "on-demand" economy, profit sharing, and human capital, all of which reflect an understanding of the individual's role in the economy as a sort of mini-capitalist entrepreneur, even those who own no capital and are really seeking only to survive and achieve basic economic security. As Wendy Brown, U.C. Berkeley Professor of Political Science and author of Undoing the Demos: Neoliberalism’s Stealth Revolution, pointed out in a recent interview, this vision of human beings is distinctly neoliberal:
In this book, I treat neoliberalism as a governing rationality through which everything is “economized” and in a very specific way: human beings become market actors and nothing but, every field of activity is seen as a market, and every entity (whether public or private, whether person, business, or state) is governed as a firm. Neoliberalism ... casts people as human capital who must constantly tend to their own present and future value.
Neoliberalism is a “reprogramming of liberalism” rather than only a transformation of capitalism. ... Thirty years ago, at the dawn of the neoliberal era, we get human capital that entrepreneurializes itself at every turn. Today, homo oeconomicus has been significantly reshaped as financialized human capital, seeking to enhance its value in every domain of life.
In contrast with classical economic liberalism, then, the contemporary figure of homo oeconomicus is distinctive in at least two ways. First, for neoliberals, humans are only and everywhere homo oeconomicus. This was not so for classical economists, where we were market creatures in the economy, but not in civic, familial, political, religious, or ethical life. Second, neoliberal homo oeconomicus today takes shape as value-enhancing human capital, not as a creature of exchange, production, or even interest.
Far more could be written, but such is not necessary here. Hopefully a lively discussion will ensue and the issues discussed above can be further developed and additional ones can be explored as well. I think it is clear that Hillary Clinton ideology is fundamentally neoliberal, albeit softened or tempered by a desire to ameliorate some of the harsher consequences of the neoliberal order. But can such efforts succeed when the basic ideas of neoliberalism hold that those consequences are actually a positive aspect of the capitalist system, and that ideology actively undermines even the impulse to help the less fortunate?