Neoliberal institutions and ideas embody a project of global integration and governance that’s distinctly inimical to popular sovereignty.
He sees neoliberalism as a movement both on the left and the right. Neoliberals feared both Communism and national corporatism. The former was too anti-market and too totalitarian. The letter was too sclerotic, giving interest groups the power to put sand in the gears of free markets.
With the Great Society-era in particular, the orientation of social programs transitioned from the New Deal logic of brokering between large stakeholders to a technocratic logic of applied social science, as though poverty, inequality and family breakdown were problems for experts to solve.
From the mid-1930s through the 1970s, the neoliberal was not a libertarian, anti-government radical. He was a pro-market technocrat, like Alfred Kahn, the Carter Administration official who kicked off the supply-side deregulation era.
Ralph Nader was a friend and admirer of the economist Alfred E. Kahn, for instance, seeing the price deregulations he advanced while in the Carter administration as a great win for consumers.
Kudos to Hammond for his historical perspective on neoliberalism, especially for not overlooking Kahn.
Hammond sees the anti-populism inherent in neoliberalism as the source of its downfall.
the public has become increasingly disenfranchised, while politicians have lost the output legitimacy that comes from brokering deals on behalf of their constituents. The dominant “theory of change” within large think tanks, foundations and media organizations has thus shifted toward “narrative change” and Potemkin forms of grass-roots organizing, fulfilling Walter Lippmann’s vision of a democracy made safe from the demos. Elections now matter less for the orientation of public policy than the conventional wisdom of unelected policy wonks, suggesting that the crises common to our post-national constellation, even if fixable by enlightened reformers, will tend to reoccur.
The crises of this century, such as the Great Financial Crisis and the pandemic, left the public feeling no sense of ownership over the policy response. If policy in the 1950s and 1960s was determined by political leaders negotiating in consultation with Big Business and Big Labor, policy in the 21st century has been set by the likes of Bernanke, Paulson, and Fauci.
He concludes,
neoliberalism’s primary legacy was not uniform deregulation and austerity but rather a shift toward supranational, elite-driven forms of technocracy and proceduralism.
As I’ll discuss in my next post, transcending the neoliberal era will thus in many ways require a restoration of the older, embedded form of liberalism; a return to what Michael Lind calls democratic pluralism. That means dismantling unaccountable bureaucracies, reinvesting authority in executive institutions and mass-membership organizations, and embracing a developmentalist, bottom-up mode of capitalism that takes the bonds of nationality far more seriously.
I see this as hoping to put the toothpaste back in the tube. I do not see the sort of organized mass-membership groups that can play the roles once played by Big Business or Big Labor, or the NAACP or the National Organization of Women, for that matter.
What Martin Gurri calls the revolt of the public, is a decentralized, unstructured eruption. The rebels lack an agenda or a negotiating strategy. So an old-fashioned politician would have nothing to work with.
Moreover, within each party’s base, negative partisanship is so strong that the sort of deal-maker politician who was successful in 1970 would today be primaried out of office. It seems to me that we need to bring neoliberalism back, because we are over-regulated and recklessly running up the national debt. And Europe needs neoliberalism even more than we do. But it is an elitist project, and I don’t see it getting past populist opposition.
Economists and ordinary people often seem to inhabit different planets, but seldom has the chasm been this wide.
As former President Donald Trump and Vice President Kamala Harris compete for any possible edge in a tight election, they have offered a plethora of ideas that, while delighting voters by varying degrees, have appalled economists because they would distort markets or deepen America’s fiscal hole.
I recommend how Hammond’s essay explains the history of neoliberalism in an accurate and nuanced way. People can benefit from reading it.
substacks referenced above:
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Instead of this: "Neoliberal institutions and ideas embody a project of global integration and governance that’s distinctly inimical to popular sovereignty."
Try this: "The US Constitution's institutions and ideas embody a project of governance that’s distinctly inimical to popular sovereignty."
Which is certainly true when it comes to anti-majoritarian prohibitions on violating "fundamental rights" and of other constitutional provisions. After all, the whole idea of having a republic and a constitution which is hard to amend (or of quaint, dying institutions like the Senate filibuster) is to put certain matters outside of what can be done with ordinary exercises of popular sovereignty. This isn't necessarily 'elitist', because often it's the elites pursuing a strategy of recruiting a bare majority of voters to allow those elites to try to make the awful changes those elites want to make, with the constitutional institutions inimical to popular sovereignty being all that's holding them back.
The fact is that practically no one is an anything-goes, absolutist-majoritarianist, direct-democratarian on every question. Instead, almost everyone who calls themselves a proponent of 'democracy' thinks there are some matters that are properly in the scope of what can be done with bare majorities, and other matters which require much higher supermajority levels of consensus (even in the case of unanimity among jurors), and even some matters which no government should ever be able to do at all no matter how popular they may be, and perhaps other actions which government must do, no matter how unpopular.
It's just that everyone disagrees on the details and on which matters go into which basket, in a way that tends to line up with what their side wants to change, and what they want to make impossible for the other side to change.
Even some hypothetical apolitical saint of democracy might recognize a few key areas where the lesson of history - especially in the context of a particular culture and time - is that popular sovereignty, when not blocked by institutions inimical to its exercise, is repeatedly exercised in ways that are predictably and severely catastrophic in ways that threaten to take whole countries off a cliff, but without any accountability or learning process to prevent these Social Failure Modes from recurring over and over.
Really, it would be better to name these particular "adult supervision required" 'projects' after the particular set of popular sovereignty Social Failure Modes they were intended to mitigate. Neoliberalism is just one project out of many, focused on the variety of common SFMs of national economic policy.
Re: "we need to bring neoliberalism back, because we are over-regulated and recklessly running up the national debt. [... .]. But it is an elitist project, and I don’t see it getting past populist opposition."
Maybe elites who favor deregulation and fiscal discipline should try and persuade the people. Where is Milton Friedman when we need him?!