How to Replace Neoliberalism With a Caring Economy
In her timely book No Is Not Enough: Resisting Trump's Shock Politics and Winning the World We Need, Naomi Klein calls on us to resist President Trump and the turn to reactionary-right politics in the US. She also reminds us that, even if we succeed, we will still be left with the conditions that gave rise to Trumpism in the first place. We've got to do more than resist Trump. She calls us to change the neoliberal paradigm that has guided (or rather, misguided) public and private life for the last four decades in the United States and much of the rest of the world. This is no small challenge, but without a new way forward, life will become increasingly unlivable.
As I have discussed previously, neoliberalism is a renewal of the 19th century liberalism of laissez faire, free market, unbridled capitalism of the robber baron era. The 20th century social liberalism we are more familiar with is the opposite of that. Born of the crisis of the Great Depression of the 1930s, it accepts the need for an active state to protect ordinary people from the depredations of the market while also regulating and guiding the economy to make capitalism work. That social liberalism, or "social democracy" as it is also called, was the dominant public ideology in the US up through the 1970s.
But then, with the presidency of Ronald Reagan in the US and Margaret Thatcher's leadership in the United Kingdom, a new ideology began to eclipse "social democracy." Rather than seeing the state as the instrument for democratic self-government, this ideology saw government as the source of our problems. In this view, government should just "get out of the way" and let the market direct society.
The dirty little secret that advocates of neoliberalism try to hide from us is that government is still needed to structure markets so they will work for capitalism. For example, unions must be curtailed since organized workers bargaining collectively distort a free market in labor. Individual workers are to be free to sell their labor as they choose. Powerless as individuals, the "right to work" in reality amounts to a right to work for less. At the same time, investors can organize collectively into corporations and operate freely in the market. In neoliberalism, grossly unequal power relation between individuals and corporations is ignored or even perpetuated. This means that neoliberalism favors the interests of corporate capitalism over working people, and that neoliberalism is a project for unbridled capitalism. It is the default position of capital when unrestrained by popular forces.
What is the function of government in a capitalist society? Naomi Klein has stated the neoliberal answer in clear terms: "governments exist to create the optimal conditions for private interests to maximize their profits and wealth…." It is then claimed by neoliberals that this is in the general interest of society because profits and economic growth benefits everyone -- the "trickle-down" myth.
With this agenda, it should not be surprising to find widespread anti-government sentiment among the populace. When government benefits the few at the expense of the many, then government is seen as bad and less government is therefore better. It is precisely due to the anti-democratic character of neoliberal government that both the government itself and the political elite who champion neoliberalism lack legitimacy, as voters declared in the 2016 election.
By contrast, in a genuine social democracy, government is an instrument through which a community promotes the common good. One way government can do this is by making available those common resources that can support the human development of its members. Institutionally, this takes the form of public goods or other types of commons.
A commons is a resource available to the members of a community (whether local or national) that is governed democratically by that community so as to better contribute to the human development of its members. Examples of such commons abound: They range from the public library and fire department, public schools and the internet, to public security and, in other countries, the health care system. These contribute to human flourishing and are "common" because they can better benefit all when shared rather than held as private property. Then, of course, there is that greatest commons of all -- the planet. With climate change, we are seeing what happens when a commons is not governed in the common good and private interests are allowed to ravage it.
Like all institutions, the commons educates us to a way of being. While a capitalist market educates us to a competitive individualism, a commons economy educates us to a nurturing community. And through the participation of the commoners in the governance of the commons, we are educated to democracy.
The thrust of neoliberal ideology is to privatize everything, taking common resources (even those built at public expense) and commodifying them so as to be able to realize a profit from their use. This then leads to economic inequality. As Ronald Reagan famously said: "I always want America to be a country where someone can get rich." [Note: "someone," but not everyone.] The role of government is to facilitate private enrichment.
It takes pressure to force ruling elites to moderate policies to favor the public, even if it is only to maintain social stability. This often results in the creation of public goods. But when popular pressure wanes, the capitalist state reverts to its neoliberal function, privatizing these public goods. Privatization of a public good breaks it away from the community and subjects it to the will of a private owner. No longer serving the interest of the community, it serves the interest of its owner.
It is that privatization we are now called on to resist in the age of Trump. This administration is imposing a veritable tsunami of privatizations, attempting to complete the destruction of the New Deal/Great Society programs that have been undermined bit by bit over the last four decades. Now, as we wake up to the clear and present threat to public goods that have sustained us, we can better appreciate their value to us. With this increased consciousness, we may now be better able to press for an expansion of public goods.
A public good is a commons that is provided by government. There are other commons that are provided by communities, but it is the public ones that are now under attack due to the hostile corporate takeover of the government. There is now a concerted campaign by the right-wing to complete the privatization and commodification of education, health care, the internet, transportation infrastructure, public lands, prisons, security, the military and even Social Security. As corporate capital is hungry for places to invest, it looks to these public goods as potential profit centers. Every area of social life is being subordinated to the logic of capitalism and its markets. This has the effect of fragmenting society and de-socializing individuals who are "freed" from social solidarities and thereby become vulnerable to unregulated corporate forces in the market. The campaign to destroy unions is a prime example of this.
As we resist this neoliberal offensive, we need to be clear about what we are for. What is our vision of an alternative? We need more than a program that is a laundry list of what we are defending. We need to connect the dots by showing how they fit together in a coherent vision of a better society. Naomi Klein's "Leap Manifesto" links them with a value: the value of caretaking. A caring society is a compelling alternative to the present neoliberal order. But we need to make the ethics of caring concrete by outlining how it can be institutionalized. We need to institutionalize it in an expansion of commons that embody the ethics of caring.
Now, while existing commons are under threat of privatization and we are called on to defend them, we have an opportunity to call for their expansion. While neoliberals seek to strengthen the reign of private profits in our health care system, this is the time to demand health care as a right and call for its socialization as a public good. In this as in other areas, we need to boldly put forth the vision of expanded free access to common resources that enrich us all. A caring society requires social institutions that guarantee and protect the commons.
In the neoliberal ideology, there is no common good. Indeed, there is no society. This was the premise of neoliberalism in the view of Margaret Thatcher. As she said, "There is no such thing as society. There are only individuals and families." In fact, this is not a description of reality. Rather, it is a project to remake reality. As she admitted, "Economics are the method, but the object is to change the soul." Neoliberalism attempts to remake reality by shredding the social contract and dissolving society into individuals who are powerless to resist the ravages of capitalism.
The neoliberal concept of the human being is what economists call "homo economicus." Economic man is a purely self-interested individual seeking his own economic advantage in the marketplace. He is shorn of any moral restraints, compassion for others, or sense of responsibility to the community or others. He is an amoral, asocial atom.
This homo economicus is usually understood to be an abstraction. It is recognized that in reality, we are social beings, with meaningful relations with others and moral sentiments, living in communities. Nevertheless, as Naomi Klein points out, with Donald Trump we have a neoliberal man, a personification of homo economicus. He is a nearly pure product of neoliberal capitalism. He is asocial and amoral. His entire being is focused on self-interest. In him, we can see mirrored what neoliberalism is making us. It is from that that we recoil in horror.
Long ago, Karl Marx observed this tendency in capitalism when he noted how the bourgeois system had "left remaining no other nexus between man and man than naked self-interest, than callous 'cash payment.'" He famously observed: "It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom -- Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation." This is the ethics of neoliberalism unleashed by unrestrained capitalism and personified in our president today.
That is why a genuinely alternative vision to neoliberalism roots us in human collectivities, in communities. We are not only economic beings, we are also moral beings with a social identity. We care for others as well as for self. That is why we common together with others in a community to share resources that contribute to the fuller human development of all.
The conceptual basis of such a society has been set forth by Gar Alperovitz in his book Principles of a Pluralist Commonwealth. The idea of a commonwealth is a political community that recognizes wealth (in the sense of well-being) comes from our association together in society. For decades, Alperovitz has been building institutions within present capitalist society that strengthen our interdependence for the common good -- institutions such as cooperatives and community development corporations.
He recognizes that who owns capital is a major determinant of who has power in a society. Thus, to have a democratic society where power rests with the people, much of the capital of society must be in the hands of the popular classes. But that does not necessarily mean the state, as was commonly assumed in the 20th century. Applying the principle of subsidiarity, ownership and decision-making power should be at the lowest level possible, with higher levels providing support. This then gives scope to a participatory form of democracy such as is possible in a worker-owned, self-managed cooperative. However, Alperovitz points out, "the interests of workers in any unit of production or social administration are not the same as those of the community as a whole." Thus, to ensure that the common good prevails, cooperatives must be "embedded within more comprehensive frameworks of support and democratic control," as in the Evergreen Cooperatives in Cleveland, for example.
In addition to cooperatives, Alperovitz allows for small, private, individual ownership, as well as larger firms held as public utilities. But such a pluralist commonwealth can be oriented to the common good with "public provision of, and oversight over, investment capital." As he asserts, "a rigorous conception of a robust and democratic public sphere depends to a significant degree on the development of democratic forms of ownership."
As we struggle to resist the neoliberal world, we come together to build vibrant, resilient communities. Ours is a vision of a society based on solidarity, of collective empowerment, of public institutions that nurture the fuller development of all humans. Ours is a struggle to reclaim a human world in the midst of the multiple crises of these times.