NEOLIBERALISM VS. SOCIAL DEMOCRACY: A THREAD

There are broad areas where neoliberalism & liberal-socialism/social democracy overlap: rejection of laissez-faire, opposition to means-testing, recognition of the utility of the pricing mechanism, emphasis on rules & regulations to make markets function optimally.

They also have both emphasize economic growth as a means to raising the poor out of poverty and making everyone better off. The difference here is that neolibs think that wealth will automatically trickle down as GDP increases with economic growth.

Lib-soc/socdems, on the other hand, have recognized that anti-trust laws and highly progressive taxation are essential to raising people out of poverty, otherwise the new wealth will just go to the people at the top.

Neolibs, historically, also recognized the value of anti-trust, but mostly abandoned that aspect of their thought in the Nixon/Reagan era. At that time, they decided that tax cuts would spur economic growth and that monopolies weren't that bad as long as they increased GDP.

There was a broad consensus in support of some sort of single-payer healthcare and universal basic income among both neolibs and socdems for quite a while. But there was disagreement about how to fund it and about how generous it ought to be.

Neolibs opposed raising taxes on the rich, while socdems opposed funding it by raising taxes primarily on the middle class. But, post-1970, the Democratic Party adopted a reformed neolib position. This new neoliberalism was more conservative than earlier neoliberalism was.

The new neoliberalism of Charles Peters and the Clintons ended up integrating culturally/socially conservative ideas into the mix. They rejected single-payer, UBI, and minimum income proposals in favor of more bureaucratic means-tested measures and exalted workfare over welfare.

We think of welfare states as being social-democratic & see cut-throat unregulated markets as being neoliberal, but neolibs were somewhat diverse and the idealogy took off in different directions. The robust German social market was significantly a neolib creation.

Of course, the German social market philosophy and ordoliberalism were a result of synthesizing classical neoliberalism with Catholic social teachings and Christian socialist ideas. However, neoliberalism was central to the project as well.

The term "neoliberalism" was coined by one of the main architects of the social market economy. In Germany, neoliberalism went in a decidedly more egalitarian direction than it did in the UK and the US. In the US, it became about privatizing things & cutting taxes on the wealthy.

And this is perhaps one of the biggest differences between neolib & socdem philosophy. Lib-soc socdems want a mixed economy with a good deal of socialized enterprises, especially for welfare purposes.

Even in Germany, a lot of welfare provision is done mostly by private charities subsidized by gov't. In the UK, before the rise of neoliberalism, the lib-soc socdems got the National Health Service (socialized healthcare). In the US, on the other hand, we got ObamaCare.

The neolib solution of ObamaCare is actually a conservative plan based on a proposal from the Heritage Foundation. It mostly leaves health insurance provision up to the private sector and doesn't even guarantee universal coverage.

Contrast the doctrinaire privatization mentality of American neolibs with a socdem country like Norway, where the oil industry is nationalized so that it provides revenue to help fund all the services that the State provides.

The lib-soc/socdem approach resembles the ideas of America's Founding Fathers moreso than neoliberalism does. Thomas Paine wanted nationalization of ownership of land and a citizen's dividend from the revenue, akin to what socdems like Lange, Lerner, and Meade proposed.

Paine & Jefferson wanted widespread distribution of private ownership of the means of production, which they proposed to maintain through progressive taxation, mirroring lib-soc & socdem proposals. Jefferson supported the first ever single-payer/socialized healthcare proposal.

Alexander Hamilton's approach to finance, central banking, and monetary policy more closely resembles Keynesian/lib-soc/socdem approaches than neolib approaches.

Neolibs are awful today, but weren't always so bad. Neolibs made great contributions to political economy, especially in the first half of the 1900s. But their good insights & ideas were mostly integrated into lib-soc/socdem philosophy & Labour revisionist thought circa 1950s.

Modern neoliberalism, especially in the UK and US, is a toxic and stale ideology that doesn't really have anything to offer. However, historical neoliberal lit (prior to 1970) is still worth reading. And the early neolib influence on lib-soc ideology was mostly positive.

In the 1950s, socdem philosophers integrated the best insights of classical neoliberalism into social-democratic theory. Post-1970, neolibs went off the rails and took a sharp turn to the right.

Post-1970, Milton Friedman synthesized neoliberalism with Mises-Rothbard style libertarianism, while Charles Peters synthesized it with traditional conservatism.Thus, neoliberalism became a more rightwing phenomena rather than a centrist ideology.

So, as a result of the new conservative/libertarian plus neoliberal synthesis, neoliberalism became more of an anti-governemnt free-market ideology. Neolibs started supporting tax cuts and privatization as their biggest goals and those ideas drowned out classical neolib ideas.

If you've bothered to read this far, you should check out my Medium post on the "liberal-socialist" social-democratic philosophy of James Meade: https://link.medium.com/5UAjWABuT8