Neoliberalism promised prosperity but delivered austerity, insecurity, and despair. It hollowed out our public services, undermined democracy, and left wealth in the hands of the few. In this video, I ask "What comes next?"
A new economics must put people before markets, care before profit, and truth before fear.
This is about rebuilding democracy from the ground up — and it begins by admitting neoliberalism has failed.
This is the audio version:
This is the transcript:
What comes after neoliberalism?
Neoliberalism is the economic philosophy that has dominated western thinking since 1979, when Margaret Thatcher introduced it into the UK and 1980, when Ronald Reagan introduced it into the USA.
And since then, Europe has crumbled in the face of neoliberalism and institutions like the World Bank and the IMF have forced it onto other countries all around the world.
The idea in neoliberalism is very straightforward. It is that markets know best and that governments should get out of the way.
It also claims that tax cuts for the rich create growth for all, and that regulation is bad, public spending is wasteful, and public debt is immoral.
And it's these dogmas that have shaped almost everything in our societies now, from housing to education, to healthcare, to planning, to, you name it, you've been affected by it.
And the point is this: the consequence of neoliberalism has not been the prosperity that it promised.
Instead, neoliberalism has delivered us austerity.
It has hollowed out services and left millions of people in the UK alone poorer; we've seen that.
We've had financial crises.
Climate change has got worse, and pandemics have proved that markets can fail.
Wages have stagnated while wealth has soared at the top of the scale, even though neoliberals deny it.
Neoliberalism no longer can pretend to work quite simply because it doesn't.
Those parties who speak of neoliberalism now, and I'm talking about political parties here in the main, do so because they fear what they call 'markets', but which are actually faith systems run by the high priests of neoliberalism - perhaps most of all, the central bankers of the world, because it is they who still carry the torch for this system of economic management.
They repeat the myths of fiscal responsibility as if that makes them credible. And without a new story, politics has drifted. It's drifted from innovation and supposed entrepreneurialism, which is what neoliberalism was meant to supply, into managerialism and despair. We are living through the exhaustion of an ideology.
So we need something that is different.
Neoliberalism is going to fail. Let's not pretend otherwise. It is collapsing under the weight of its own failures. The fact is that there is no innovation of any consequence. AI is not the solution to the problems that we are seeing in the world, and sometime soon, the market is going to wake up to that. And when you take it out of existence, there's no innovation left that is actually going on of any real consequence in the world at all now.
Our markets are moribund. They're not as vibrant as neoliberalism promised, and our private sector has crushed our public sector when it claimed things would happen the other way round.
The truth is, we need a totally new economics, and that has to be delivered to actually provide us with a future. It's as simple and as straightforward as that.
And in that new economics, we have to recognise that money is a public tool and not a private constraint.
We have to always put people first and never markets.
And we have to invest to meet needs and not to chase profits.
And we most definitely have to keep speculation under control. The idea that something real is created by reshuffling the way in which wealth is owned in the world is completely ridiculous and yet has been promoted by neoliberalism. It's wrong.
In fact, we need to redistribute wealth from those who have it, as well as redistributing power from those with wealth, through democracy, so that we embrace care and participation instead.
That's what we need from a new economy. And in that new economy, we'll measure success in well-being and sustainability and therefore survivability, and not by GDP.
So, policies must change.
Fiscal rules, if we were to have them, must serve society and not markets. So people must be at their core in the future and not a peripheral to be ignored as if money is the only thing that matters, which is what neoliberalism has ended up saying.
We would focus in this new economics on having more and better jobs.
We would seek to grow wages, especially at the bottom.
We would not seek to grow wealth.
We would not seek to grow profits. We would seek to grow wages.
To help with that, we would focus on lifelong learning. I find it absurd that I'm told by young people that because they failed GCSE at the age of sixteen, they are cursed for the rest of their lives. There is nothing they can now do because they don't have the maths or the English qualification, or whatever it might be that they require to do everything in the rest of their life, as if that is all that matters. We have to change this ridiculous situation where what happened when you were only just about ceasing to be a child defines your lifelong expectations.
And we must provide better support for those who are different from the norm in our society.
We need people who are not standard, whether they have autism or ADHD or they're dyslexic, or they are divergent in some other way, because society has deemed that they are not of the standard race, or not of the standard gender, or not of the standard sexual orientation, or whatever it might be. We need to support all those people, too, because they bring the essential diversity, which is the basis on which our society thrives. It's not uniformity that creates a society; it is, in fact, difference that creates a society, because out of difference, new ideas come.
And in all of this, this new economics must have caring at its core.
Public investment in this new economics should build resilience and not just balance books.
Tax must be used for its true social purpose. First of all, controlling inflation, but also controlling inequality and strengthening democracy, as well as correcting for the failures of markets.
Economic management must begin with moral purpose and not with the idea that balancing the books is the be-all and end-all of government activity, as if whatever else it might do is secondary to that task.
And of course, we must build for generations to come. Sustainability has to be at the core of all of our thinking.
And none of this is possible unless we are politically honest in the future. Leaders must say that scarcity exists in real resources, which means that we will have to change the way that we use them. But most of the rest of the things that we call scarce, like money, are just not of that nature. There's as much money in the world as we can use. There is no limit.
This form of scarcity, the one that politicians have been promoting, is in fact, usually a myth created by power, and what we need to do is put the public back in charge because they will, when they understand this truth.
Democracy will therefore decide what we are to do. People must be presented with real choices, real options, real ways in which we can make progress so that everyone has a chance to flourish.
And fear of markets must give way to this faith in people and the choices that they make. Choices driven by a politics of care and an economics of hope.
Neoliberalism is ending because it has run out of lies. The next economy must be built on care, community, and courage. I call it The Courageous State. We can choose renewal through truth or collapse through denial.
The future after neoliberalism starts when we stop pretending that neoliberalism works. It doesn't. It never has, and it's now obvious it never will. Let's get on with things and move on to a world that works for us all.
Comments
When commenting, please take note of this blog's comment policy, which is available here. Contravening this policy will result in comments being deleted before or after initial publication at the editor's sole discretion and without explanation being required or offered.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
All I would say – from observation – is that Neo-liberalism has failed already. There are so many chickens that have come home to roost –
The huge 2008 crash.
Lack of housing.
The failure and attempted recovery of our railways.
The water debacle.
Austerity.
The self perpetuating corruption of politics by wealth created by Neo-liberalism.
Environmental degradation.
I could go on. But it is all failure. I think that what we are perhaps failing to realise is that it is WE as a species who are now beginning to fail as result.
One of my family has a partner from Zambia. They are spending spend more on debt repayment than on education and health. The partner used to be a teacher in the state but is now in a good job here. A loss to her country but a gain to us.
Much of the developing world is being crushed by debt and high interest rates. I speculate what would happen if they refused to pay. I would guess many of the western banks would collapse. But OTOH the developing countries would now be able to buy more products from the west and markets could expand.
I think at some point, perhaps soon, the developing world will revolt.
If they succeed there could be less incentive for some to join so-called terrorist organisations protesting western ( and Chinese ) exploitation. Perhaps, also, less incentive to migrant to a different continent to do the jobs the natives don’t want to do. If they don’t succeed…
Money is a system of obligations represented by figures in bank accounts. If they were rearranged, there would still be as many hectares of farm land, machines in factories, personal skills and so on. It could be done I feel but the financial sector will insist that we would all be dragged down with them.
I don’t know what the answer is but I feel it could be possible to have a very different financial architecture for the world.
Thank you for this article and for your work, which, while it offers little comfort to those who feel their social contract with the government has been broken, is still appreciated. I have your book and read your blogs daily. This is my first time commenting, as I recently came across a 2005 equity strategy by Citigroup on plutonomy attached to a YouTube video (https://youtu.be/T2OHjHPkUzM?si=ZMbO_fN1KQb2WAvo). It was quite shocking to see how brutally the financial elite operate in the world.
Neo-liberalism has progressed to a point where those who earn their livelihoods through labour are often ignored from an economic perspective, being only equal at the ballot box, where we frequently vote to maintain the status quo. I am interested in learning more about economies that are driven by the wealthy and where consumption is now dominated by the rich. The greed inherent in this ideology is disturbing, and it seems that a complete collapse of the social contract with citizens (which we may be nearing) might be the only way to awaken people to these issues (if they are not too distracted by culture wars and dopamine addictive social media).
I remember reading that in 2005.
It did not shock me: I was witnessing the tax haven world daily
An economist whose name I’ve now forgotten (sorry) said recently that combating climate change is the only business that has the real potential to stimulate the economy in the foreseeable future. I think it’s an absolute tragedy therefore that the Labour Government, as soon as they got into power, drastically watered down their commitment to invest in green initiatives. It ticks all the boxes for good governance, in localising economic stimulus through home insulation, solar technology etc. which could be rapidly deployed and would be of real benefit to a great many people. This kind of initiative could bring politics and the economy to the local level where people can see a real difference, instead of which we see £billions being pumped into nuclear technology, or worse, farmed out to foreign corporates at no immediate cost to the Treasury and whose dubious benefit will be many years down the line. So the potential for MPs to do good and to be seen to do good at a local level, has disappeared and with it, probably, the desire of many community spirited would be MPs to get involved.
Wow! What a powerful video. It sits alongside another of your posts today – about the mediocre middle managers that masquerade as Tory and Labour politicians. I hope the theme of this video is adopted by the new kid on the political block – the Green Party who seem to be beginning to cut through with the public. If any of the main parties were to adopt your argument not only would the public not trust them ( because they would, in effect, be admitting to having pursued misguided, if not downright dishonest economic and social policies for the best part of half a century) but also they might try to warp the message. If someone like Zack Polanski were to argue your case it might also force Farage and Reform to respond and, in so doing, reveal their true motives and real beneficiaries. Come what may, when neoliberalism collapses today’s political orthodoxy will have some serious questions to answer.
Thanks
Appreciated
The blog post will now be a video later this week
As neoliberalism dies, what sort of change could follow?
Here’s a bit of Christian music being shared amongst my Jesus-following friends locally, about a revolution of compassion and table-turning very very different from the fakery of Tommy Robinson’s racism and Islamophobia.
https://youtu.be/ofhokl8CCfs
This is a very different revolution from the callous horrors offered by fascism and Christian Nationalism. “Rend Collective” produce a lot of this stuff.
After listening to Sarah Wilkinson’s traumatic Sumud Flotilla story last night, I needed this song’s emotional impact today – it reminds me of Martin Luther King Jnr’s “revolution of love”.
But maybe Shabana Mahmood would call it terrorism…
All this is the prelude to a paradigm shift, as it’s called in the sciences. It’s so obvious that one of these is coming. We don’t yet know whether it’s a shift to “politics of care”; govt as if people mattered. Or it may be a shift to a fascist view concentrating on power. Every effort one puts into the first possibility can be amplified to make it more likely. And just to name it as a paradigm shift, or a change in outlook to be more user-friendly, will help.
At the start of “Prelude to Foundation” Isaac Asimov portrays a society that is so moribund that it cannot use new, and useful, tech due to managerial/political/economic failures. Sounds very prescient to me.
There’s a summary at wikipedia – https://en.wikipedia.org/wiki/Prelude_to_Foundation
Your continued inclusion of autism, adhd, and other neurodivergent populations as a strength within society is important and appreciated.
Thanks
Aristotle, writing during 4th century BC, would have agreed. Also his philosophy contradicted ‘homo economicus’ (yesterday’s post). He was against life based on economic self-interest and considering this unnatural, incomplete, vulgar. His aim for human life “to live well through the pursuit of virtue and flourishing (eudaimonia), not the endless accumulation of wealth”.
I quote:
“The purpose of life: eudaimonia over gain
• The highest good is not wealth. In his Nicomachean Ethics, Aristotle argues that eudaimonia is the ultimate human good. While wealth is necessary for comfort and providing for one’s family, it is only a means to an end. Living a life devoted solely to money-making is “undertaken under compulsion”.
• The political animal. Aristotle famously described humans as a “political animal” naturally inclined to live in a community. A person who pursues only their own material interest would be acting contrary to this fundamental social nature.
• Economics is part of ethics. For Aristotle, economics was the management of the household and was subordinate to the higher science of politics and ethics. The goal was to provide enough resources for a “good life,” not to maximize profit.
The condemnation of unlimited accumulation
Aristotle made a clear distinction between natural and unnatural forms of wealth acquisition:
• Household Management: This is the natural and moral art of acquiring and using wealth. Its purpose is to provide the goods necessary for life and community and, as such, has a natural limit.
• Money-Making: This is the unnatural and immoral pursuit of wealth for its own sake. Aristotle saw it as an artificial economy detached from real needs, where profit is the only goal. This echoes the soulless, calculating nature of homo economicus.
Virtue and moderation in wealth
Aristotle’s philosophy of the “golden mean” applies directly to the possession and use of wealth.
• Liberality: He defined a virtue of generosity that stands between the vices of extravagance and stinginess. A liberal person knows how to give and spend their wealth appropriately for the benefit of others and society, which is a virtuous act.
• Moderation is key. A virtuous person seeks a moderate amount of wealth—enough to live well and be generous, but not an excessive amount that would corrupt their character. He noted that extreme poverty or immense wealth can both hinder the pursuit of virtue. He viewed the endless, insatiable desire for profit as a distortion of human character. “
Aristotle speaks to my condition.
The analysis of the failure and the blueprint going forward will be easily understood by most people who watch this video. My reservation is with the term neoliberalism, which most people outside of politics and this blog will be unfamiliar with. If we said Thatcherism, do you think people would recognise it as another way of describing the failed system?
I am not sure. Let me muse on that.
Neoliberalism has not failed if you are wealthy.
It has increased inequality.
And it has failed for the majority of us.
Symptomatic of this malaise is the UK’s continued elevation of the ‘Treasury’ above all other departments. What is this ‘treasure’ it is supposed to be in charge of? It’s just a bunch of accountants, tasked with keeping track of government cash flow.
It’s high time the Treasury was renamed as the Ministry of Finance, and the Chancellor of the Exchequer became just another Minister, the Minister of Finance. That Ministry should be in service to other Departments, not lording it over them.
This may seem like nit-picking, but I think it would signify and emphasise exactly the change we need to see in Westminster attitudes.
Much to agree with