Julian Farley : About Me

Sanders and Trump: The Beginning of the End of Neoliberalism?

Love them or hate them, you have to admit that Donald Trump and Bernie Sanders have had an explosive impact on both the Republican and Democratic parties this election cycle.

 

Yes, Sanders fell short of securing his party’s nomination. And Trump (if the latest polls are to be believed) might also fall short of his goal.

 

neoliberalism

 

But both men have led campaigns that captured a lot of enthusiasm and support, indicating something much larger going on: a revolutionary response to decades of an economic and social political theory, indeed the overriding philosophy of the second half of the 20th Century.

 

We’re talking about Neoliberalism.

 

This discontent isn’t new. Think of the anti-globalization protests of the late 1990s. Think of Ross Perot and Pat Buchanan with their populist, anti-NAFTA insurgencies against the GOP establishment. More recently, think of Occupy Wall Street and the Tea Party.

 

All of these things, as well as the latest political dramas in the U.S. presidential race, are pushback against Neoliberalism. ”Neoliberalism” itself is a misunderstood term. Many are surprised to learn it is more associated with the Right than with the political Left, although it began as a protest to the traditional liberalism (i.e. “government interference”) of the New Deal and the Great Society.

 

Neoliberalism calls for a strong federal government that benefits business and the wealthy ruling class. It calls for a strong military and is traditionally against unions of any kind. All these things set it apart from traditional liberalism.

 

You can read about the origins of Neoliberalism in books like Never Let a Serious Crisis Go To Waste, by Philip Mirowski and A Brief History of Neoliberalism, by David Harvey. Basically, it got started when economist Friedrich Hayek presented his vision against totalitarianism and collectivism in 1947, a vision that sought to replace state control with the “invisible hand of the market.”

 

Neoliberalism become a dominant force in the 1970′s as a response to “stagflation”—unemployment, high inflation, and stagnant growth. Many thought America’s best chance at a bright future would be free markets and deregulation. A key element of neoliberalism is the openness to global trade and investment though eliminating tariffs and eliminating capital controls.

 

 

President Jimmy Carter (yes, a Democrat!) became an aggressive advocate for deregulation, but it was the political rise of Reagan and Thatcher, and their conservative vision of a global free market, that made Neoliberalism a global force to be reckoned with.

 

Reagan’s administration resulted in three decades of Neoliberal policies at the federal level. From then all the way up through the Obama administration (and the likely third Clinton administration to come), the U.S. became attached to international trade agreements that were drawn up in secrecy, with no input from the workers who would be affected. The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) are simply the latest example of such secretive back-room deals.

 

Trump and Sanders are as different as night and day, true, but they are essentially “Yin” and “Yang” of the new anti-Neoliberal revolt. Both are against Neoliberalism’s global elitism, which seeks to to undermine the bargaining power of the domestic workforce. Sanders is against the politico-legal attack on the unions; Trump is against the large-scale immigration that chips away at the bargaining power of the U.S. worker.

 

At the end of the day,  anti-Neoliberalism’s biggest legacy (and the thing that drive its opponents) has been income inequality. If you don’t think we’re experiencing income inequality, consider this: Historian David Harvey writes that “the median compensation of workers to the salaries of CEOs increased from just over 30 to 1 to nearly 500 to 1” between 1970 and 2000.

 

And there’s this: Between 1948 and 1972, every section of the American population experienced sizable increases in their standard of living. However, between 1972-2013, the bottom 10 percent  experienced falling real income while the top 10 percent continued to do better and better.

 

As mentioned, the populist, anti-Neoliberal backlash really got started in the 1990s, but the western financial crisis of 2007-8 ( the worst since 1931) really kicked it into high gear.

 

Now, as if from nowhere, Donald Trump has risen the tide of anti-globalisation to champion the rights of the American worker. Bernie Sanders, who came surprisingly close to clinching the Democratic nomination, ran on a “worker’s rights” platform that was quickly called “Socialist” (although, technically, the “Democratic Socialism” of Sanders isn’t the same thing at all).

 

Even if Hillary Clinton wins and Neoliberalism continues to drive U.S. policy for another eight years, the groundswell movement against it is too strong to simply go away. Clinton and her ilk will keep supporting free-market ideology. They may even push for more “laissez-faire” market conditions, letting everything be driven by what the market wants.

 

But let’s be clear: What “the market wants” means what corporations and their executives want.

 

Trump and Sanders are opposite sides of the same coin. But it’s a coin that represents opposition to Hillary Clinton—the ultimate establishment, globalist candidate. In the not-distant future, we won’t wonder how oddballs like Trump and Sanders got as far as they did; we’ll wonder why it took them so long to get in power in the first place.

 

 

 

 



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