There is a furious debate going on within the right about the virtues of neo-liberalism. Reactionaries insist it has been a total failure; the PBPs, its principal beneficiaries, disagree. Who is correct here?
The principal components of neo-liberalism are as follows:
- Cut taxes and regulations on business. This will result in additional investment, higher productivity, and increased profits, which will ultimately cause wages to increase. Everyone wins.
- Embrace globalization and technological change. Free trade creates efficiencies and thus higher profits with lower prices on consumer goods.
- Resist expansions of the welfare state for the benefit of the losers from globalization and technological change. They only encourage workers to lounge in the hammock of dependency.
It is fair to say that the ultimate, and predictable, outcome of neo-liberalism is the dollar store economy, which had the following symptoms:
- Global inequality decreased significantly. If you’re a Chinese worker, that’s a great thing. If you’re an American worker, not so much.
- Inequality in America has skyrocketed as the result of vastly increased share and asset prices. American bosses make far more money relative to workers than they did fifty years ago.
- The price of consumer goods remained steady or even decreased. This was a substantial blessing for everyone, including the poor, that was incorrectly taken for granted until recently.
- With the exception of Obamacare and the expiring pandemic programs, the right succeeded in preventing any redistribution of the benefits of globalization and technological change to workers and the poor. The result of this victory is right-wing populism.
The bottom line is that neo-liberalism did, in fact, create efficiencies, and could have worked for everyone if the business community had been willing to share its benefits. It didn’t; large areas of America suffered; and our current political situation is the result.