by Umair Haque

March 01, 2018

from Eudaimonia Website

Spanish version








Why Neoliberalism

is Ending in Authoritarianism

Rising Around the Globe Again


You might be surprised, and a little disheartened, as I am, to look around the world in the early 21st century, and see it, well, giving up on freedom.


There is America, lapsing into comic-book authoritarianism. There, China has a newly forged lifelong leader. Over there, Britain is leaving the world's largest political union  - in which neo-Nazis are again sitting in the Bundestag. There is Turkey, now a dictatorship, there is Eastern Europe, pulsing with nationalism and extremism.


So... why is the world giving up on freedom?

It's an interesting question.

Every age has an order, and ours is a neoliberal one. Now, it's true that nations "got richer" under neoliberalism  - but that is a very broad and almost meaningless term (after all, I can break your arm, and the economy will "grow" when you go to the doctor).


Don't you think it's interesting that neoliberals never much examine its costs? I do, so let us.

The first great cost of neoliberalism was stagnation. America is of course the bellwether example  - incomes began to flatline began in the 1970s, and now they are shrinking in real terms.


But in Germany and Britain, too, by about 2000, incomes had flattened. Even in oft idealized Scandinavia, wages are largely being kept afloat by reducing work hours, so there are more jobs to go around.


The reason was straightforward:

neoliberalism traded political rights for financial ones, so work flowed to the lowest, most inhumane bidder.

But it's one thing for everyone's incomes to flatline  - and quite another for the rich to grow super-rich, while the average stagnates.


The second great cost of neoliberalism was inequality. It wasn't just that incomes got stuck  - it was that rich grew fantastically, absurdly, grotesquely richer. That meant that a predatory economy had emerged.


Growth was being siphoned off by the rich from the average  - unless you believe that teacher, engineer, or doctor contributes nothing to a society's prosperity.


The rich were getting richer by doing things which made the average person poorer, not richer, too  - things like,

  • financial engineering

  • stock market bubbles

  • property investment,

...all glorified ponzi schemes, which create less than no real lasting well being or value for anyone at all.

Now people whose incomes are not growing can hardly save very much. So apart from the German middle class  - which is notoriously frugal  - savings declined, too.


North America is the prime example:

people are so unable to save that no one is able to retire very much at all anymore.

The elderly are beginning to have to work at Walmart until the day they drop dead  - and that will be the norm for the young.


People, as a result, began to be laden down with debt  - and engineering more and more cheap credit, whether through scores, bonds, cards, or loans, instead of growing incomes so people could save, became key to the survival of these troubled economies.


This was the third great cost of neoliberalism  - declining savings, a growing reliance on credit, which makes economies, societies, and democracies more fragile, vulnerable, and unhealthy.

What happens when societies are unable to save?


Well  - and this may strike you as foolish, but it is nonetheless true  - they demand less social spending, so as to have more money in their pockets today.


And so across rich nations, savage austerity arose.


In Britain, its great institutions, like the NHS and BBC began to shrink. The EU's levels of social investments fell. And in America, people simply stopped having affordable healthcare and education at all  - they were forced to make barbaric choices, like feeding their kids versus basic medicine like insulin.

This was the third great cost of neoliberalism :

social deconstruction.

The great social contracts of the post-war, though many did not quite know it yet, were being ripped up by now  - and their key innovations, like,

  • universal healthcare

  • retirement

  • pensions

  • education,

...began to be tossed upon the rubbish heap of history:

the very lessons of the last great World War were now being forgotten, ignored, denied.

And, of course, a result, social stability, safety, security, opportunity, and mobility all began to wither, dwindle, and fall.

Ironically, slashing social programs couldn't make up for a lack of income and savings  - after all, you might save 10-20% on taxes this way, but since your income is flat, the effect is temporary, giving you at most a year or two's illusion of a "raise".


But the price endures  - social contracts once ripped up thus often take generations to repair.


In this way, people had made a fools' bargain  - but economists certainly did not tell them so, because in the terms of neoliberalism, social investment is something better done by private hands anyways.

"Why, this is all working out perfectly well!" thought the neoliberals  - and most still do...

What happens when people realized that they were beginning to grow poorer?


After all, that is what being unable to save is. Well, they begin to distrust one another. So soon enough, social bonds began to fray. In America, they imploded spectacularly  - right down to the point where young people began massacring one another at school, numbing themselves with opioids.


Whole regions lay in ruins, their towns and cities reduced to wrecks, as industries crumbled.


People's sense of belonging imploded  - not just in those destroyed places, but fanning out across the land, as a nation's sense of identity began to collapse.

  • Who are we now?


  • Is there anything that unites us?


  • What is it that we can call our own?

Though it happened in America sooner, this implosion of social bonds soon enough hit elsewhere as well.


Brexit set region against region, neighbor against neighbor, demanding isolationism.


The underdeveloped part of Germany set itself against the richer part, turning hard to the right. And so on. This was the fourth great cost of neoliberalism  - shattered bonds and mounting distrust, whether in the form of anger, suspicion, xenophobia, rage, or despair.

This brings us to fifth great cost of neoliberalism:

authoritarianism and extremism.

By now, the average person was in a truly desperate position:

flat income, few savings, a broken social contract, little faith for a better future, imploded social bonds, eroded trust.

His sense of dignity, fairness, belonging and safety had all been shattered like glass under a boot. To different degrees, to be sure, across classes and countries.


And yet neoliberalism seemed to converge here  - this was its endpoint.


It didn't seem capable of making life any better, really, for the regular person  - only making it worse, endlessly, in a vicious circle of taking everything that mattered to him, whether it was the chance to have a family, or do work that mattered, or enjoy a sense of ease, stability, and peace, in the place where he had spent those long summer days as a child.

  • What would a person feeling all that do?


  • What would you do  - if you didn't have your better angels to stop you?

You too might turn to the nearest Trump, Farage, Le Pen, AfD...


People are fragile, easily hurt things...


And when they are as damaged as neoliberalism has left them, it is no great surprise that they seek precisely and exactly all they have lost  - prosperity, trust, safety, and strength  - in the soothing, warm arms of strongmen.


Unless, of course, you think all this is a set of three mere coincidences :

  1. strongmen arising across the globe at the same time

  2. people turning to them for the same reasons

  3. looking for exactly what they have lost, which is what neoliberalism cannot offer them

Let me put that another way  - the way that critics of neoliberalism often put it, but I think it misses the point.


There is no provision made for the "losers" under this global order. It elides the point that the "winners" are not often the best "players"  - but the most cunning, ruthless, connected, or clever ones.


Still, there is a point there:

neoliberalism causes losses. Very real ones, very life-changing ones, and very lasting ones.

Here is the irony. The problem is deeper still.


You see, neoliberalism is a strangely mechanical thing. It cannot see emotional, social, human, environmental, or cultural costs  - like some kind of killer robot, it cannot see human suffering.


So it simply pretends such costs do not exist.


Yet all those costs are exactly what people must pay:

the costs of broken societies, relationships, careers, possibilities, stress, anger, rage, depression, and so on.

But because it cannot even see human suffering, neoliberals still proclaim, dumbfounded:

"What is the problem? The world is getting better!!", even as freedom goes into turbocharged reverse.

The calculus of neoliberalism's "loser"  - scratch that  - let us call him neoliberalism's victim, instead, because he is usually a pretty good and decent person, is simple.


It is probably best of all to have safety, security, stability, income, wealth, trust, happiness, and freedom.


But if freedom costs you safety, security, stability, income, wealth, trust, and happiness - if it is only suffering, pure, sharp, and somehow never-ending, day after day, one day the loss of a job, the next the loss of a career, the next the loss of your self-respect - then what good is it anyways?


After all, freedom is a means, not an end in itself. Better to have all the things that freedom is there to help one live, than to have freedom, without any of those things.

In that, neoliberalism's victim is a far more rational creature than the neoliberals suppose.


They do not understand why he is giving up on freedom.

"Damn you!", they cry, "don't you want to be free? Don't you want to be a part of this world that is getting better?"

The victim laughs, and salutes the strongman...

His choice is the most sensible one of all, seen through his own eyes. Neoliberalism has cost him a good life. He has paid the costs too long, of a failed global order, which has not benefitted him much at all  - because it cannot see his suffering.


But there is someone who can: the strongman, the fascist, singing him soothing lullabies of greatness and strength. He will be great again!


Ah, at last:

an end to suffering.

Some ideologies end with a scream, others with barely a whisper.


Neoliberalism is ending in,

  • authoritarianism and fascism


  • despair and loss


  • anxiety and rage

Which one would you call that...?

Just as America has turned away from freedom, having had to pay the soul-destroying costs of neoliberalism for too long, so too the rest of the world is following.


And still, because neoliberalism is like a robot who cannot see human beings, who cannot see those costs, it wonders, baffled:

"why is freedom failing...?"