Neoliberalism

Few terms in contemporary political economy generate as much controversy as neoliberalism. For proponents, it describes a set of policies that liberated economies, generated growth, and lifted over a billion people from extreme poverty in four decades. For critics, it names an ideology that dismantled public goods, concentrated wealth in ever-fewer hands, and subordinated democratic politics to market logic. The term itself is contested: rarely claimed by those accused of practicing it, “neoliberalism” functions simultaneously as analytical category, policy prescription, and epithet. Understanding what neoliberalism means—and what it has produced—requires cutting through the polemics to examine both ideas and outcomes.

Defining Neoliberalism¶

At its core, neoliberalism holds that economic efficiency and prosperity are best achieved through free markets with minimal government intervention. The term first emerged at the 1938 Walter Lippmann Colloquium in Paris, where European liberals sought to distinguish a renewed liberalism from both laissez-faire capitalism and socialist planning. The Cambridge Dictionary characterizes contemporary neoliberalism as “the policy of supporting a large amount of freedom for markets, with little government control or spending, and low taxes.”

Key principles include:

Market primacy — Markets, rather than governments, should allocate resources. Price signals efficiently coordinate supply and demand across millions of transactions; bureaucratic planning cannot replicate this distributed information processing. When the Soviet Gosplan attempted to set 24 million prices annually, the result was chronic shortages and surpluses—a practical demonstration of Friedrich Hayek’s theoretical argument about the “knowledge problem.” Government intervention distorts incentives and produces inefficiency; markets, left alone, tend toward equilibrium.

Deregulation — Rules that constrain business activity should be minimized. Regulations impose compliance costs estimated at $1.9 trillion annually in the united-states alone (according to the Competitive Enterprise Institute), slow innovation through bureaucratic approval processes, and protect incumbent firms from competitive challenge. The airline industry’s transformation after 1978 deregulation—with fares dropping 50% in real terms and passenger numbers tripling—exemplified deregulation’s potential. Light-touch regulation allows entrepreneurship to flourish; heavy-handed intervention stifles it.

Privatization — Public enterprises should be transferred to private ownership. Private firms face competitive pressure and profit incentives that drive efficiency; state-owned enterprises suffer from political interference, soft budget constraints, and lack of accountability. Britain’s privatization of British Telecom (1984), British Gas (1986), and British Airways (1987) under Margaret Thatcher provided models subsequently adopted worldwide. By 2000, privatization proceeds globally had exceeded $1 trillion.

Fiscal discipline — Government budgets should be balanced, with spending constrained and borrowing limited. High public spending crowds out private investment by absorbing capital that would otherwise fund productive enterprise; deficit financing creates debt burdens that constrain future policy options. The stagflation of the 1970s—simultaneous inflation and unemployment that Keynesian models said was impossible—discredited expansionary fiscal policy and elevated concerns about government profligacy.

Trade liberalization — Barriers to international trade and investment should be reduced. Free trade enables comparative advantage, as David Ricardo demonstrated two centuries ago; each country should specialize in what it produces most efficiently. Average tariff rates in developed countries fell from approximately 40% in 1947 to under 5% by 2000; world trade grew from 25% of global GDP in 1970 to over 60% by 2008. Lower prices for consumers, expanded choice, and efficiency gains across borders were the promised benefits.

Property rights — Strong protection of private property and contract enforcement provides the foundation for market activity. Secure property rights encourage investment (why build if the state can confiscate?) and innovation (why invent if others can copy freely?). Hernando de Soto’s influential work argued that developing countries’ poverty stemmed partly from weak property rights that left trillions in “dead capital”—assets without legal title that could not serve as collateral or be traded efficiently.

Intellectual Origins¶

Neoliberalism’s intellectual roots extend to interwar debates about the failures of classical liberalism and the dangers of socialism. The Great Depression had discredited laissez-faire; the rise of fascism and communism threatened liberal society itself. A generation of thinkers sought to articulate a renewed liberalism that could survive these challenges.

The Mont Pelerin Society (1947) gathered 39 economists, philosophers, and historians at a Swiss resort—including Friedrich Hayek, Milton Friedman, Ludwig von Mises, Karl Popper, and George Stigler—concerned about collectivism’s postwar spread. In the year the Marshall Plan launched and Britain nationalized coal, steel, and railways, they sought to articulate a liberalism that defended markets while acknowledging some role for the state in providing a social safety net and preventing monopoly. Eight Mont Pelerin members would eventually win Nobel Prizes in Economics; the society’s influence on academic economics and eventually on policy proved enormous—though its prominence remained obscure for decades.

Austrian economics contributed skepticism of central planning rooted in epistemological analysis. Ludwig von Mises’ 1920 essay “Economic Calculation in the Socialist Commonwealth” argued that without market prices, rational economic calculation was impossible—planners could not know what to produce or how to produce it efficiently. Hayek extended this critique in “The Use of Knowledge in Society” (1945): the knowledge relevant to economic decisions is dispersed among millions of individuals, constantly changing, and often tacit. No central authority can possess this information; markets aggregate it through prices. Planning, however well-intentioned, must fail because it cannot overcome this knowledge problem.

Chicago School economics developed monetarist theory and applied price theory to domains previously considered outside economics. Milton Friedman’s “A Monetary History of the United States” (with Anna Schwartz, 1963) attributed the Great Depression to Federal Reserve policy failures rather than inherent capitalist instability—a reinterpretation that undermined Keynesian arguments for activist government. Friedman’s advocacy for free markets, floating exchange rates, school vouchers, negative income taxes, and limited government—popularized in “Capitalism and Freedom” (1962) and the television series “Free to Choose” (1980)—provided intellectual ammunition for policy change. Gary Becker extended economic analysis to marriage, crime, discrimination, and other social phenomena, suggesting market logic applied far beyond traditional economic domains.

Public choice theory, developed by James Buchanan and Gordon Tullock, analyzed government failure alongside market failure. If bureaucrats and politicians pursue self-interest like other economic actors—seeking larger budgets, electoral success, and personal advantage—then government intervention may produce worse outcomes than the market failures it purports to correct. Regulatory agencies may be “captured” by the industries they regulate; politicians may favor concentrated interests (who vote and donate) over diffuse publics (who remain rationally ignorant). Public choice undermined the assumption that government acted as a benevolent corrective to market failures, introducing systematic skepticism about state capacity.

Law and economics, centered at the University of Chicago Law School, applied economic analysis to legal rules and institutions. Richard Posner, Ronald Coase, and others argued that legal rules should be evaluated by their efficiency consequences; that property rights and contracts, properly structured, could resolve externality problems without government regulation (the “Coase theorem”); and that common law evolved toward efficient outcomes. This approach transformed antitrust, tort law, and regulatory analysis, generally in directions favorable to market solutions.

The Neoliberal Turn¶

The late 1970s marked neoliberalism’s transition from intellectual movement to governing philosophy, driven by the perceived failures of the postwar Keynesian consensus.

The crisis of the 1970s provided the catalyst. Stagflation—simultaneous inflation exceeding 10% and unemployment reaching 9% in the united-states—contradicted Keynesian models that assumed a stable tradeoff between the two. Oil shocks in 1973 and 1979 demonstrated Western vulnerability to external economic forces. Britain, the supposed success story of social democracy, experienced the “Winter of Discontent” (1978-79) when strikes paralyzed public services and unburied dead accumulated. The postwar settlement appeared exhausted; alternatives beckoned.

The Thatcher revolution in Britain (1979-1990) implemented neoliberal principles with revolutionary determination. Margaret Thatcher’s government privatized state industries: British Telecom (1984, raising $4.8 billion), British Gas (1986, $8.0 billion), British Airways (1987), British Steel (1988), water companies (1989), and electricity (1990-91). The privatization program eventually raised over $40 billion, created millions of new shareholders, and established a model copied worldwide.

Thatcher broke union power through confrontation. The 1984-85 miners’ strike—lasting a year, involving 142,000 workers, and costing an estimated $3 billion—ended in decisive government victory. Union membership fell from 13 million in 1979 to 9 million by 1990; strike days declined from 29 million in 1979 to 2 million by 1990. The transformation of British industrial relations was permanent.

Financial deregulation culminated in the “Big Bang” of October 27, 1986, which eliminated fixed commissions, opened the London Stock Exchange to foreign ownership, and abolished the distinction between jobbers and brokers. London became a global financial center competing with New York; financial services grew from 5.5% of British GDP in 1980 to over 9% by 2000.

Top marginal income tax rates fell from 83% to 40%; corporate taxes from 52% to 35%. Thatcherism explicitly rejected the postwar consensus of nationalized industries, corporatist bargaining between government, business, and unions, and demand management through fiscal policy.

Reaganomics in the United States (1981-1989) pursued tax cuts, deregulation, and monetary tightening with rhetorical flair. The Economic Recovery Tax Act of 1981 cut top marginal income tax rates from 70% to 50% (later 28% in 1986); capital gains taxes fell similarly. Supply-side theory promised that lower rates would stimulate growth sufficient to increase revenue—a prediction that proved overly optimistic as deficits ballooned.

Deregulation accelerated across sectors: airlines (completed from Carter-era beginnings), trucking, telecommunications, savings and loans (with disastrous consequences), and natural gas. The regulatory state did not disappear, but its orientation shifted toward market-compatible approaches.

Federal Reserve Chairman Paul Volcker’s tight monetary policy—raising the federal funds rate to 20% by June 1981—broke inflation (from 13.5% in 1981 to 3.2% by 1983) at the cost of severe recession (unemployment reached 10.8% in late 1982). But disinflation established Fed credibility and enabled the subsequent expansion.

Though government spending actually increased—defense spending rose from 4.9% to 5.8% of GDP, and total federal spending remained around 22%—Reagan’s rhetoric and regulatory approach shifted the policy climate rightward. “Government is not the solution to our problem; government is the problem,” became received wisdom.

The Washington Consensus emerged in the 1990s as a development policy framework that codified neoliberal principles for the developing world. Economist John Williamson coined the term in 1989 to describe the policy positions that Washington-based institutions—the IMF, World Bank, and U.S. Treasury—promoted as conditions for assistance.

The consensus comprised ten policy prescriptions: fiscal discipline; redirecting public spending toward education, health, and infrastructure; tax reform (lower marginal rates, broader bases); interest rate liberalization; competitive exchange rates; trade liberalization; openness to foreign direct investment; privatization; deregulation; and secure property rights.

The IMF and World Bank promoted these policies in developing countries, often as conditions (“structural adjustment”) for loans during financial crises. When Mexico collapsed in 1994, East Asia in 1997-98, Russia in 1998, and Argentina in 2001, the institutions prescribed austerity, privatization, and liberalization—policies that critics argued exacerbated crises rather than resolving them.

Third Way politics under Tony Blair (UK, 1997-2007), Bill Clinton (US, 1993-2001), and Gerhard Schröder (Germany, 1998-2005) adapted neoliberal elements while maintaining welfare states. Markets were embraced as engines of growth; the state’s role became “enabling” rather than directing—providing education, infrastructure, and a safety net while leaving production to private enterprise.

Clinton declared that “the era of big government is over” while reforming welfare to impose work requirements and time limits. “New Labour” accepted much of Thatcherism’s economic settlement—privatization, union laws, financial deregulation—while increasing spending on health and education. Schröder’s “Agenda 2010” reformed Germany’s labor market and welfare state in directions that traditional social democrats found objectionable.

The Third Way represented neoliberalism’s political domestication: center-left parties that had once advocated socialism now competed to prove their market-friendliness. This convergence created space for subsequent populist backlash from both left and right.

Global Spread and Variation¶

Neoliberal policies spread globally but were implemented unevenly, with dramatically different results depending on local conditions, sequencing, and institutional capacity.

Latin America experienced dramatic neoliberal transformation, particularly after the 1980s debt crisis. Chile under Augusto Pinochet pioneered privatization and market reforms starting in 1975, advised by “Chicago Boys” economists trained under Milton Friedman. Social security was privatized into individual accounts (1980); state enterprises were sold; trade was liberalized; inflation fell from 500% to 10%. Chile’s economy grew, but at severe cost: GDP collapsed 14% in 1975; unemployment reached 30% by 1983; inequality, already high, increased further.

Mexico’s crisis (1982), the Brady Plan for debt relief (1989), and NAFTA (1994) pushed similar reforms throughout the region. Argentina under Carlos Menem privatized nearly everything—airlines, telecommunications, railroads, oil—and fixed the peso to the dollar. Initial success gave way to prolonged recession and the catastrophic 2001-02 collapse: GDP fell 11%; unemployment exceeded 20%; the peso lost 75% of its value; Argentina defaulted on $100 billion in debt.

Results across the region were mixed: inflation was tamed (from average rates exceeding 100% in the 1980s to single digits by the 2000s), but growth disappointed (averaging just 2.8% annually from 1980-2000, below the pre-crisis period). Income inequality in Latin America—already the world’s highest—often increased further. The subsequent “pink tide” of left-wing governments reflected popular backlash against Washington Consensus policies.

Post-Soviet transitions applied “shock therapy” in some cases, most notably Russia under Western advice. Rapid price liberalization (January 1992), privatization through vouchers (1992-94), and opening to trade followed the Soviet collapse. Results were catastrophic: Russian GDP fell approximately 40% during the 1990s; life expectancy for men dropped from 64 to 58 years; oligarchs acquired state assets worth billions for kopecks; organized crime flourished amid institutional collapse.

Jeffrey Sachs and other shock therapy advocates argued that gradual reform would fail because vested interests would capture the process. Critics countered that rapid liberalization without functioning legal institutions created predatory capitalism rather than competitive markets. The Russian experience discredited Western economic advice for a generation and contributed to the political conditions that enabled Vladimir Putin’s authoritarian restoration.

Poland, by contrast, implemented similar rapid reforms with greater success—suggesting that institutional context, not the policies themselves, determined outcomes. Czech Republic, Hungary, and the Baltic states achieved relatively successful transitions; Ukraine, Belarus, and Central Asian states did not.

East Asia generally maintained more state direction than neoliberal orthodoxy prescribed—and achieved superior growth outcomes. Japan, South Korea, and Taiwan developed through industrial policy, directed credit, protected domestic markets, and strategic trade policies that Washington Consensus advocates criticized as “picking winners.” Japanese GDP per capita reached Western European levels by the 1980s; South Korea grew from GDP per capita comparable to Ghana (1960) to OECD membership (1996).

The 1997-98 Asian financial crisis—triggered by capital flight after Thailand’s currency collapsed, spreading to Indonesia, South Korea, and Malaysia—challenged the region’s development model. IMF rescue packages imposed fiscal austerity, high interest rates, and structural reforms that critics argued deepened the crisis. Indonesia’s economy contracted 13% in 1998; Suharto’s 32-year regime collapsed; ethnic violence killed thousands. Malaysia, which rejected IMF advice and imposed capital controls, recovered more quickly—a data point that heterodox economists cite against neoliberal prescriptions.

China’s economic transformation combined market mechanisms with continued state control, creating a hybrid that defied neoliberal categories while achieving unprecedented growth. Deng Xiaoping’s reforms after 1978 introduced markets gradually: agricultural decollectivization, special economic zones, dual-track pricing, and eventually private enterprise—but always under Communist Party control.

China avoided shock therapy in favor of “crossing the river by feeling the stones.” State-owned enterprises were reformed rather than rapidly privatized; capital controls remained; strategic industries stayed under state direction. The results speak for themselves: GDP growth averaging nearly 10% annually for four decades; 800 million people lifted from poverty; transformation from agrarian backwater to the world’s second-largest economy (over $17 trillion GDP by 2024).

Whether China’s success validates or refutes neoliberalism depends on which elements one emphasizes. Markets, property rights, and trade openness—neoliberal prescriptions—played crucial roles. But so did state direction, industrial policy, and capital controls that neoliberal orthodoxy rejected. The “Beijing Consensus,” if it exists, offers an alternative development model that many countries find attractive precisely because it diverges from Washington prescriptions.

Critiques and Consequences¶

Neoliberalism’s critics identify multiple problems that have fueled political backlash across the ideological spectrum:

Inequality has increased in many countries that adopted neoliberal policies. In the united-states, the share of income going to the top 1% rose from 8% in 1980 to over 20% by 2020; the top 0.1%’s share tripled. CEO compensation, which was roughly 30 times average worker pay in 1980, exceeded 350 times by 2020. The Gini coefficient—measuring income inequality—rose from 0.35 in 1979 to 0.49 by 2019.

Similar patterns appeared in the united-kingdom under Thatcher and Blair: the share of the richest 10% rose from 28% of national income in 1980 to 42% by 2015. Capital gains, executive compensation, and financial sector incomes grew faster than wages; real median wages in the U.S. stagnated for four decades even as productivity doubled. The concentration of wealth raises concerns about democratic equality (the wealthy exercise disproportionate political influence), social mobility (children’s economic outcomes increasingly reflect parental status), and macroeconomic stability (when wealth concentrates, demand may be insufficient to sustain growth).

Financial instability culminated in the 2008 global financial crisis—the worst since the Great Depression. Deregulation enabled excessive risk-taking: the repeal of Glass-Steagall (1999) allowed banks to combine commercial and investment banking; the Commodity Futures Modernization Act (2000) exempted derivatives from regulation; bank leverage ratios reached 30:1 or higher. When housing prices fell and mortgage-backed securities collapsed, the entire financial system teetered.

The crisis response—$700 billion in TARP funds, Federal Reserve lending exceeding $16 trillion at peak, bank bailouts across Europe—contradicted neoliberal principles while highlighting finance’s centrality. Governments that had preached fiscal discipline accepted trillion-dollar deficits; central banks that had proclaimed price stability as their sole mandate became lenders of last resort to entire financial systems. The resulting austerity, imposed to restore fiscal balance, fell disproportionately on those who did not cause the crisis.

Public service degradation allegedly followed privatization and fiscal austerity. UK rail privatization (1994) produced fragmentation, underinvestment, and the Hatfield crash (2000) that revealed crumbling infrastructure. Water privatization led to sewage spills as companies prioritized shareholder returns over capital investment. American prisons, run by private contractors, housed 8% of prisoners by 2019 with documented problems of understaffing and poor conditions.

Healthcare provides the starkest comparison: the U.S. spends 17% of GDP on healthcare—far more than any other developed country—while achieving worse outcomes on life expectancy, infant mortality, and disease burden. The market-oriented American system delivers neither efficiency nor equity; single-payer systems that neoliberals criticize often perform better.

Environmental harm results when market prices fail to incorporate ecological costs. Carbon emissions constitute the classic externality: burning fossil fuels imposes costs (climate change) on parties not involved in the transaction. The result—atmospheric CO2 rising from 340 ppm in 1980 to over 420 ppm by 2024, global temperatures increasing 1.2°C above pre-industrial levels—represents market failure at civilizational scale.

Neoliberalism’s reluctance to regulate has been criticized for inadequate environmental protection. Market-based solutions (carbon taxes, cap-and-trade) exist and are theoretically compatible with neoliberal principles, but the political economy of implementing them has proved challenging. The fossil fuel industry, a concentrated interest with enormous resources, has successfully delayed climate action that would benefit a diffuse public.

Democratic erosion occurs when economic policy is insulated from democratic contestation. Independent central banks—the Federal Reserve, European Central Bank, Bank of England—make monetary policy decisions affecting millions without electoral accountability. Trade agreements like NAFTA and the WTO constrain national policy choices; investor-state dispute settlement mechanisms allow corporations to sue governments over regulations. Fiscal rules embedded in the EU’s Stability and Growth Pact limit deficit spending regardless of electoral mandates.

This “democratic deficit” was deliberate: neoliberal theorists believed that economic policy should be protected from populist pressures. But when voters cannot change economic policy through elections, they may turn to populist alternatives that promise to overturn the entire system—as Brexit and Trump demonstrated.

Labor market precarity increased with deregulation and union decline. U.S. union membership fell from 35% of the private workforce in 1955 to 6% by 2022. “Gig economy” workers lack benefits, job security, or bargaining power. Zero-hours contracts in the UK, temporary work in Japan, and precarious employment across Europe shifted risk from employers to workers. Flexible labor markets may enhance efficiency, but they also erode the job security that enabled middle-class life and stable families.

Defenders respond with significant counterpoints:

Global poverty declined dramatically during the neoliberal era. The share of humanity living in extreme poverty (under $1.90/day) fell from 42% in 1981 to under 10% by 2019—the greatest reduction in absolute poverty in human history. Much of this reflects China’s growth, which followed a heterodox path, but trade liberalization enabled developing countries across Asia to grow through export-led industrialization.

Trade liberalization created winners as well as losers. Consumer prices fell as manufacturing shifted to lower-cost producers; the variety of goods available to ordinary people expanded enormously; and export opportunities enabled countries like South Korea, Taiwan, and eventually China to achieve prosperity that import-substitution strategies had not delivered.

Inflation was tamed after the volatility of the 1970s. Central bank independence and monetarist policies brought price stability that benefits everyone who saves, invests, or lives on fixed incomes. The “great moderation”—reduced macroeconomic volatility from the 1980s through 2007—enabled long-term planning and investment.

Privatization often improved service quality and efficiency. British Telecom, moribund as a state monopoly, became a dynamic company after privatization; waiting times for telephone installation dropped from months to days. Not all privatizations succeeded, but state-owned enterprises’ historical record—overstaffing, political interference, chronic losses—was hardly superior.

Alternatives historically performed worse. Soviet central planning produced shortages and stagnation; import-substitution industrialization in Latin America led to debt crises; protectionism prolongs inefficiency. Neoliberalism’s failures must be weighed against the failures of alternatives, not against imagined utopias.

After the Financial Crisis¶

The 2008 crisis prompted widespread reassessment. The visible failure of financial markets—institutions that were supposed to efficiently allocate capital instead drove the global economy off a cliff—and the necessity of massive state intervention undermined claims that markets were self-correcting. Lehman Brothers’ bankruptcy (September 15, 2008) triggered a global panic that only government action could arrest; the “Greenspan put” that had protected markets for two decades gave way to explicit government guarantees of financial system solvency.

Even institutions like the IMF acknowledged that some neoliberal policies had increased inequality without delivering promised growth. A 2016 IMF paper titled “Neoliberalism: Oversold?” concluded that capital account liberalization had increased volatility without clearly boosting growth, while fiscal consolidation (“austerity”) often proved counterproductive by depressing demand during recessions. This represented a remarkable departure for an institution long associated with Washington Consensus orthodoxy.

The COVID-19 pandemic (2020-2022) further disrupted neoliberal assumptions. States intervened massively in economies: the united-states alone authorized over $5 trillion in pandemic relief; European governments subsidized wages to prevent mass layoffs; central banks expanded balance sheets by trillions. Supply chain vulnerabilities—semiconductor shortages, PPE dependence on China, critical medicine imports—revealed the risks of globalized production optimized for efficiency rather than resilience.

Public health requirements trumped market considerations: governments mandated vaccines, closed businesses, restricted movement. The contrast with market-oriented approaches (Sweden’s initially permissive strategy, inadequate U.S. healthcare capacity) suggested that state capacity mattered more than market flexibility in crisis response.

Yet neoliberalism’s demise has been prematurely announced before. Many of its institutional features—independent central banks, trade agreements, privatized utilities, flexible labor markets—remain embedded in policy frameworks. The post-pandemic recovery saw inflation that central banks addressed with interest rate increases following monetarist prescriptions. Trade volumes recovered; global supply chains adapted rather than collapsed; capital continued to flow across borders.

Alternative visions—green new deals, modern monetary theory, industrial policy, sovereign wealth funds—gain attention but face implementation challenges. The enthusiasm for “building back better” has confronted political obstacles, institutional inertia, and questions about whether alternatives would actually perform better.

Contemporary Context¶

The neoliberalism debate continues to evolve as circumstances change:

Geoeconomic competition has challenged free trade premises fundamentally. The U.S.-China rivalry involves tariffs (reaching 25% on $250 billion of Chinese goods under Trump, largely maintained under Biden), technology export controls (restricting advanced semiconductor equipment sales), and industrial policy (the $280 billion CHIPS Act subsidizing domestic semiconductor production). Strategic autonomy, supply chain security, and techno-nationalism justify interventions that neoliberal orthodoxy would reject. “Friendshoring”—restructuring supply chains to favor allies over adversaries—acknowledges that trade has security dimensions that pure efficiency logic ignores.

Climate policy requires state action at a scale incompatible with strict market reliance. Carbon pricing may be a market mechanism, but implementing it requires political decisions that markets alone cannot make: setting the price, determining coverage, managing distributional effects, and coordinating internationally. The Inflation Reduction Act (2022) deployed $369 billion in subsidies for clean energy—industrial policy of a scale unseen since the Cold War. Whether market mechanisms or direct government intervention better address climate change remains debated, but the neoliberal presumption against state direction has clearly weakened.

The populist backlash against globalization reflects neoliberalism’s political vulnerability. When policies are perceived as benefiting coastal elites while harming industrial heartland workers, democratic reversals become possible. Brexit represented a comprehensive rejection of European economic integration by British voters whose communities had not prospered from globalization. Trump’s 2016 victory relied on regions where manufacturing decline had devastated local economies. Left-wing populism (Sanders, Ocasio-Cortez, Podemos, Syriza) and right-wing populism (Trump, Le Pen, Orbán) agree on little except that neoliberal globalization has failed ordinary people.

Post-neoliberal possibilities range across the political spectrum. Progressive capitalism (championed by economists like Joseph Stiglitz) would reform markets while maintaining their centrality—stronger antitrust, labor rights, and regulation without abandoning market allocation. Modern monetary theory suggests governments can spend more freely than fiscal orthodoxy allows. Industrial policy has returned to respectability in mainstream economics. Green new deal proposals would mobilize state resources for decarbonization at wartime scale. More radical alternatives—degrowth, common ownership, platform cooperativism, even planned economies using modern computing—attract academic attention if not political traction.

Whether neoliberalism represents a coherent ideology, a policy toolkit, or merely a term of criticism depends on who is using the word and for what purpose. But the debates it names—about the proper relationship between markets and states, about efficiency and equity, about economic growth and environmental sustainability, about national autonomy and global integration—will shape economic policy for decades to come. The neoliberal era may be ending, but what replaces it remains to be determined.

Sources & Further Reading¶

• The Road to Serfdom by Friedrich A. Hayek — The 1944 classic that warned against central planning and provided intellectual foundations for the neoliberal movement, though Hayek himself rejected the label.

• Capitalism and Freedom by Milton Friedman — Friedman’s accessible 1962 manifesto arguing for free markets, limited government, and individual liberty, which shaped a generation of policy thinking.

• A Brief History of Neoliberalism by David Harvey — A critical geographic analysis of how neoliberalism emerged and spread, essential for understanding the left critique of market-oriented policies.

• Globalization and Its Discontents by Joseph E. Stiglitz — A Nobel laureate’s insider critique of IMF policies and the Washington Consensus, questioning whether market liberalization was properly sequenced.

• The Great Transformation by Karl Polanyi — Though written in 1944, this analysis of how markets were politically constructed provides theoretical grounding for understanding neoliberalism as a political project rather than a natural order.