The Last Gasp of Neoliberalism

Abstract:

The ideas of both Thorstein Veblen and Karl Polanyi shed light on understanding the last gasp of neoliberalism. The last gasp refers to Donald Trump’s abandonment of free trade, long considered a cornerstone of the neoliberal agenda, and his overt attacks on democratic institutions. In Trump, neoliberalism’s attempt to overcome the gridlock of liberal democracy has revealed its fascist leanings. Both Polanyi and Veblen warned about the trend towards fascism. Trump was elected, in part, by filling the void left by the factioning of neoliberalism, in part by the injustice felt by people in rural areas, those with stagnant incomes, white males, and others. Trump has transcended the neoliberal agenda, approaching market relations from the point-of-view of the fight. The emergence of a predatory culture, in both the domestic and international realms, resembles the culture outlined in Veblen’s The Theory of Business Enterprise. Trump’s actions reveal the need to extend Polanyi’s idea of social protection given the negative effects of modern technology and Trump’s efforts to dismantle or reduce some regulatory agencies. Changing demographics and the adverse reaction to Trump’s fascist leanings may yet see the emergence of a new progressive era, suggesting, at least, that Trump represents the last gasp of neoliberalism.

Keywords::

• double-movement
• fascism
• neoliberalism
• Polanyi
• Veblen JEL Classification Codes: B52
• F6
• K2

JEL Classification Codes::

• B52
• F6
• K2

Notes

¹ Neoliberalism is a political and economic philosophy espousing economic freedom and laissez-faire policies as the best means of achieving economic prosperity. As David Harvey observes, “Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and advanced by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices” (2007, 2).

² Nancy MacLean (2017) argues that “ending democracy” has long been part of the neoliberal agenda. Trump, however, has made attacking democratic institutions explicit.

³ “The preservation of freedom is the protective reason for limiting and centralizing governmental power” (Friedman, 1962, 3).

⁴ “Now, business enterprise and the machine process are the two prime movers in modern culture” (Veblen [1904] 1975, 377).

⁵ Mariana Mazzucato (2015) points out that much of the technology used by corporations were, in fact, developed by researchers funded by U.S. taxpayers.

⁶ Pre-World War I Britain and Germany provide a similar example. British culture developed along-side modern technology such that much of the output produced by modern technology could be consumed. Germany, however, had recently adopted modern technology from Britain but lacked a consumer culture. Instead, to maintain its economy, Germany channeled the increased output into militarism. See (Veblen [1915] 1968).

⁷ “[T]here is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rule of the game, which is to say, engages in open and free competition, without deception or fraud” (Friedman, 1962, 133).

⁸ Pyle was the President of the American Energy Alliance, an organization that promotes laissez-faire with special concern for energy development.

Additional information

Notes on contributors

John P. Watkins

John P. Watkins is a professor of economics at Westminster College. James E. Seidelman is the Distinguished Service Professor of Economics and former provost at Westminster College

James E. Seidelman

John P. Watkins is a professor of economics at Westminster College. James E. Seidelman is the Distinguished Service Professor of Economics and former provost at Westminster College