Written by Stephanie Yang
In my four years as a Stern student, I have never heard the word “neoliberalism” beyond Gould Plaza, let alone learned about it in a formal classroom setting. Sure, I’ve studied laissez-faire economics, deregulation, and profit-maximization. But it wasn’t until my senior fall that I learned about this sneaky little word. Some argue that neoliberalism is a pejorative, hurled by political pundits, critics, or activists. But as students who learn about market forces day in and day out, it seems only fair to ask why the world is so fixated on business through the lens of “neoliberalism”.
Defining neoliberalism is tricky. A Google search will reveal dozens of confusing definitions. Investopedia defines neoliberalism as “a policy model… that seeks to transfer control of economic factors to the private sector from the public sector.” Frances Fox Piven, a professor at the City University of New York, views neoliberalism as “essentially hyper-capitalism.” Lester Spence, a Johns Hopkins University professor, sees it as the idea that an optimal society is one in which people and institutions work based on market principles. Corpwatch, a research group focused on corporate accountability, says neoliberalism promotes the rule of the market, cutting public expenditure for social services, deregulation, privatization, and eliminating the idea of “the public good” and replacing it with “individual responsibility”.
We learn in school that the free market benefits consumers through creative competition, disruption, and lower prices. But when the free market becomes a little too free, how does that impact individuals– not as consumers, but as people?
Neoliberalism saw a resurgence in the 1980s that many credit to Margaret Thatcher and Ronald Reagan. Academics have reported that alongside increased privatization, deregulation, weaker unions, lower taxes, and higher housing costs, the wealth gap has accelerated since the 1980s. Specifically, neoliberalism has spurred the privatization of prisons, private investment in education, and gentrification. Unpacking neoliberalism takes a lot of time. But at the end of the day, it’s clear that neoliberal policies also have negative consequences, usually for vulnerable members of society.
Neoliberalism also plays a role in reactionary politics. In an interview with The Nation, famed thinker Noam Chomsky discussed the role of neoliberalism in the recent wave of populism, asserting, “When you impose socioeconomic policies that lead to stagnation or decline for the majority of the population, undermine democracy, remove decision-making out of popular hands, you’re going to get anger, discontent, fear take all kinds of forms. And that’s the phenomenon that’s misleadingly called ‘populism’.”
Manifestations of neoliberal ideology also materialize through shifts in our collective psychology. British author George Monbiot explains how neoliberalism impacts to whom we assign the fault of our failures. “Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident… In a world governed by competition, those who fall behind become defined and self-defined as losers.” Neoliberalism implies that access to the benefits of free-flowing markets is universal, and negates structural barriers in society– if you aren’t winning, it’s your own fault. In the context of recruiting, we are taught to self-manage and work hard independently to stay competitive in the winner-loser job market, despite the structural advantages or disadvantages such as education, class, race, gender, and personal networks that push us up or hold us back. With growing rates of depression, anxiety, and loneliness in neoliberal countries, as Monbiot begins to ask, should we even be surprised?
I believe that Stern’s Social Impact Core has been a respectable start in asking these important questions around the impact of business on society. However, it’s not just about recognizing the potentially positive role of business. It’s also about recognizing the structures that are hurting our neighbors, even when these same structures benefit us. The point of this article is not to guilt you with a laundry list of reasons why neoliberalism is evil. Neoliberalism– as polarizing of a word it may be– causes us, students of the market, to think deeper about our future influence. At the very least, we Stern students should educate ourselves and express solidarity to those afflicted by the burdens of big business.