Invisible Doctrine

1. Neoliberalism: The Invisible Doctrine Shaping Our World

Imagine that the people of the Soviet Union had never heard of Communism. That's more or less where we find ourselves today.

Pervasive yet unnamed. Neoliberalism is the dominant ideology of our times, affecting nearly every aspect of our lives, yet most people can't define it or even recognize its name. This anonymity is both a symptom and a cause of its power. Neoliberalism presents itself not as an ideology, but as a kind of natural law, like gravity or thermodynamics.

Core tenets and consequences. At its heart, neoliberalism believes that:

• Competition is the defining characteristic of human relations
• Society is best organized as a market
• The role of the state should be minimized
• Regulation and public services should be reduced

These beliefs have led to:

• Rising inequality
• Erosion of public services
• Democratic backsliding
• Environmental degradation

2. The Origins of Neoliberalism and Its Global Spread

When the time came, we were ready…and we could step straight in.

Post-war incubation. Neoliberalism was born in the aftermath of World War II, as a reaction against the rise of social democracy and state intervention in the economy. Key figures like Friedrich Hayek and Ludwig von Mises saw collective action and state planning as threats to individual freedom and economic efficiency.

From margins to mainstream. The ideology spread through:

• Think tanks funded by wealthy backers
• Academic departments, particularly at the University of Chicago
• Media outlets owned by sympathetic tycoons
• Political advisors to leaders like Margaret Thatcher and Ronald Reagan

By the 1980s, neoliberalism had moved from the fringes to the center of political and economic thinking in much of the world. It was embraced not only by right-wing parties but also by nominally left-wing ones, such as Tony Blair's New Labour in the UK and Bill Clinton's Democrats in the US.

3. The Myth of the Free Market and the Reality of Rent-Seeking

The fairy tale of capitalism tells us that you become rich through hard work and enterprise—it is the greatest propaganda coup in human history.

Market distortions. Neoliberalism promotes the idea of a "free market" where competition drives innovation and efficiency. In reality, it often leads to:

• Monopolies and oligopolies
• Rent-seeking behavior
• Privatization of public goods
• Socialization of private losses

Rentier capitalism. The system increasingly rewards those who own assets rather than those who produce goods or services. This leads to:

• Increased wealth concentration
• Economic stagnation
• Reduced social mobility
• Financial instability

The 2008 financial crisis exposed the flaws in this model, but the system proved resilient, largely due to the lack of a compelling alternative narrative.

4. The Erosion of Democracy and the Rise of Oligarchic Power

Democracy stops at the national border, but the operations of the World Bank, the International Monetary Fund, the bodies regulating transnational trade, and the offshore arbitration systems circle the globe.

Power shift. Neoliberalism has led to a transfer of power from democratic institutions to:

• Multinational corporations
• International financial institutions
• Wealthy individuals (oligarchs)

Democratic deficit. This power shift manifests in:

• Reduced government responsiveness to citizens
• Increased corporate influence on policy
• Rise of "dark money" in politics
• Growth of unaccountable supranational bodies

The result is a form of "managed democracy" or "post-democracy" where the forms of democratic governance remain, but much of the real decision-making happens outside of public view or control.

5. The Environmental Cost of Neoliberal Policies

Capitalism is not the only economic system to have scorched and poisoned the planet. Soviet and Chinese Communism have also caused spectacular environmental disasters. But capitalism is the system deemed by its champions to have triumphed.

Externalizing costs. Neoliberal policies often lead to environmental degradation by:

• Prioritizing short-term profit over long-term sustainability
• Resisting environmental regulations as "market distortions"
• Treating natural resources as infinitely exploitable

Global consequences. The environmental impact of these policies includes:

• Climate change acceleration
• Biodiversity loss
• Resource depletion
• Pollution of air, water, and soil

The neoliberal response to these crises often involves market-based solutions like carbon trading, which have proven inadequate to address the scale of the problem.

6. The Social Consequences: Inequality, Loneliness, and Mental Health

Neoliberalism promotes not just the extreme individuation of responsibility, but also the extreme individuation of human life.

Atomization of society. Neoliberal ideology emphasizes individual responsibility and competition, leading to:

• Increased social isolation
• Erosion of community ties
• Weakening of labor unions and other collective organizations

Mental health crisis. This social fragmentation contributes to:

• Rising rates of depression and anxiety
• Increased substance abuse
• "Deaths of despair" (suicides, drug overdoses)

Inequality spiral. Neoliberal policies have led to:

• Stagnant wages for most workers
• Explosive growth in top incomes
• Reduced social mobility
• Concentration of wealth and power

These trends reinforce each other, creating a self-perpetuating cycle of inequality and social disconnection.

7. Beyond Neoliberalism: Towards a New Economic and Political Model

We need a new story.

Reimagining the economy. Alternatives to neoliberalism could include:

• Stronger regulation of financial markets
• Universal basic services (healthcare, education, housing)
• Worker ownership and cooperatives
• Green New Deal policies

Revitalizing democracy. Potential reforms include:

• Campaign finance reform
• Participatory budgeting
• Citizens' assemblies
• Strengthening local and regional governance

Redefining progress. Moving beyond GDP growth as the primary measure of success, focusing instead on:

• Well-being and quality of life
• Environmental sustainability
• Social cohesion and trust
• Equitable distribution of resources

These alternatives require not just policy changes, but a fundamental shift in how we think about the economy, society, and our relationship to the natural world.

8. The Power of Narrative in Shaping Economic Policy

Stories are the means by which we navigate the world. They allow us to interpret its complex and contradictory signals. They create meaning out of chaos.

Narrative economics. Economic policies are not just dry technical matters, but are shaped by powerful narratives that:

• Define what is possible and desirable
• Shape public understanding of complex issues
• Legitimize certain power structures and delegitimize others

Neoliberal storytelling. The success of neoliberalism owes much to its compelling narrative, which includes:

• The "invisible hand" of the market
• The entrepreneur as hero
• The inefficiency of government
• The primacy of individual choice

Counter-narratives. Challenging neoliberalism requires not just critiquing its policies, but creating new stories that:

• Emphasize collective well-being over individual gain
• Redefine freedom to include positive liberties
• Highlight the interdependence of humans and nature
• Reimagine the role of government as enabler rather than obstacle

The battle over economic policy is, in many ways, a battle over which stories we tell ourselves about how the world works and what kind of world is possible.

Last updated: November 18, 2024