Many libertarians, including the early me, see neoliberalism as essentially a boogeyman. They’d never use the term for their worldview themselves, preferring “liberalism”, “libertarianism”, “classical liberalism”. But left-leaning people seem addicted to the term, which makes sense if you see it as essentially the same thing as those views with a few extra negative connotations attached. There’s some truth to this perspective, but on balance, I now think there is a much truer approach. Indeed, I think three things can be said about neoliberalism, none of which I’d expect past me, or the average libertarian to endorse.
1. Neoliberalism is distinct from libertarianism and classical liberalism.
Neoliberalism does reside roughly in the same area of the political map as libertarianism. But while both the Adam Smith Institute and the Economist could be described as neoliberal, only the ASI could be described as libertarian. Neoliberalism is not about reducing government interference in the market and in people’s personal life, in the context of property rights, but it is socially liberal and fiscally conservative.
It just does this in an importantly different way. As opposed to libertarianism, which says government should get out of the way and let the market work, neoliberalism likes to design solutions to perceived social problems on a case by case basis—this is a very important part of point 3—and it does this by considering (often very complex and ingenious) market mechanisms. But it is not tied to market mechanisms, and it is just as content with quasi-markets, and incentive systems libertarians would see as “artificial” or “corporate welfare”.
When it comes to social liberalism, libertarianism says “do not use the legal system to favour or disfavour any particular lifestyle”. Neoliberalism says “work to make sure society is approximately neutral between different lifestyle choices”. These are very very different! Libertarianism is, in theory, comfortable with cultural discrimination if done through “legitimate” means (i.e. respecting personal and property rights). Neoliberalism wants anti-discrimination law—whether regarding religion, race, gender, age, sexual preference—enforced on private businesses, charities and the government alike.
2. Neoliberalism is by far the dominant ideology today
Neoreactionaries say that "Cthulhu swims left". What they mean, is that if you look at institutions, orthodoxies, policies a few decades apart, the later period will always look much more left-wing than the previous period. Libertarians are fond of claiming that the left-right axis contains multitudes, and there’s a bit of truth to this, but I think it’s overstated (and so do reactionaries). Most societies, policies, views can be more or less accurately ranked according to their leftness or rightness. Leftness means equality and social justice are judged important by society and the government. Rightness means order, stability and traditional justice/values are held as important—inequality between those judged unequal is not seen as a problem.
Now these claims might seem to be refuted by some of recent history. Consider the USA and the UK. Sure, today’s society is far to the left of the society of 1900, but the story vs. 50 years isn’t as clear. Wasn’t there a post-war/New Deal consensus, where left-leaning parties, with large majorities, enacted redistribution, welfare policies, nationalisation, extensive regulation and so on? Didn’t this get, to a large extent rolled back by Reaganism and Thatcherism? Aren’t markets accepted as a central institution in society by the mainstream of the left-wing parties in the UK, US and elsewhere, whereas even the right-wing parties were once happy to preside over nationalised telecoms, airlines, and state-directed universities?
The answer is “yes”. There has been a big change since the 1950s and 1960s, and it can largely be seen as towards neoliberalism—a managerial but market-orientated ideology in the economic sphere. But this doesn’t mean society hasn’t rowed left on social issues. Even since the ’50s it has banned the death penalty and corporal punishment, then legalised homosexuality, then banned discrimination against homosexuals, then banned hate speech and even enforced marriage equality! We are incomparably more left on social issues than we were sixty years ago. And sixty years ago, we were incomparably more left on social issues than we were fifty years before then.
Thus the society we have today is neoliberal—it says that smart, knowledgeable people should manage social institutions to achieve good outcomes (and markets are a good such institution)—but it also says that the state should enforce a very strong version of liberal neutrality. Whereas libertarianism is compatible, at least in theory, with the dominant culture in society using social pressure to bring about conformity, neoliberalism is not, seeing this as an affront to equality.
3. Neoliberalism is compatible with, and indeed very similar to, social democracy
People who describe themselves as social democrats typically dislike or even abhor neoliberalism. Neoliberalism is seen by the communitarian left as a vulgar affront to proper values by bringing market structures where they don’t belong. And it is seen by the liberal left as caring insufficiently about the wellbeing of the badly-off. On top of that, other left-leaning people think markets don’t work that well, or at least have serious flaws which require correction very often. This might lead us to believe that social democracy and neoliberalism are very distinct, and incompatible.
But what characterises social democracy is extensive redistribution/welfare state, a social ideal of equality, and a democratic-managerial approach to social problems. When a social problem comes along, the social democrat looks at that problem—say, high rents—then looks for a solution to it. One solution might be market forces. Another might be a specific regulation, subsidy or control. What makes this socially democratic is that elected representatives, drawing on the knowledge and wisdom of technocrats, decide on economic issues on a case-by-base basis. Socialism and classical liberalism have prescriptions for most problems already. Social democracy, so long as equality is enshrined, and redistribution/the welfare state is in place, can take a “what works” approach to issues as they come up.
But this is exactly what neoliberalism does! Neoliberalism is comfortable with the state spending 40-50% of GDP, it is comfortable with minimum wages, redistribution, social insurance, state pensions and extensively-regulated finance. Sure, it likes to use market mechanisms in healthcare, schooling and utilities, but if these can be shown to be effective, why wouldn’t they fit into social democracy? And never ignore the relentless pursuit of equality neoliberalism and social democracy are tied to in the non-economic spheres.
Consider gay marriage, a policy that was absolutely a marginal crazy fringe view 20 years ago. Now, to have once opposed gay marriage is enough to have significant subsections of society hate you, and even boycott films based on your books! The pursuit of equality in this sphere is so relentless and rapid that it doesn’t really do to attack neoliberalism for insufficient zeal in other areas. And interestingly, the moves toward the desired goal, which include most importantly changing of social norms and mores, but also changes in laws and what we expect of politicians, don’t seem to reduce the desire for further progress. Instead, the focus moves onto other areas. Ideas like complete equality for and normalisation of trans* people (a noble goal!) and effectively open borders (a yet more noble goal!) will undoubtedly become completely hegemonic over the next 20 years.