Marco D’Eramo’s Masters overestimates the ideological power of neoliberalism, and underestimates our capacity to fight it, argues Dominic Alexander

By all rights, neoliberalism should have been killed off as an ideology by the financial crisis of 2008, which torpedoed its claims to ensure economic growth and stability. Instead, it mutated to allow for the financial rescue of the banks, while imposing the costs on society. The experience of the resultant austerity certainly did provoke various rebellions, like Corbynism in Britain, or Syriza in Greece, but the elite reaction was sufficiently ferocious to crush or force these rebellions into retreat. The pandemic then necessitated even more blatant breaks with key nostrums about the small state and free markets in order to prevent social collapse.

In this mutated neoliberalism, state intervention was designed purely to stabilise the system, and get profits flowing again. It was therefore accompanied by widespread reliance on the private sector, which resulted in a farrago of corruption and disastrous incapability. All this has left the credibility of conventional economic policy in tatters, while public opinion has revolted; there have been majorities in favour of the renationalisation of privatised sectors like energy, utilities and rail for some time now.

The post-pandemic inflation crisis, overwhelmingly caused by problems resulting from the globalised supply chains championed by neoliberals, has been blamed on workers’ demands for higher wages to compensate for inflation itself. This move has only deepened the estrangement of the public from the neoliberal political establishment, sectors of which have been resorting to culture wars in a desperate attempt to shore up their collapsing authority.

While in Britain, neoliberal economic orthodoxy looks set to continue under a future Labour government, it is by no means clear such an agenda will be politically successful. Over in the United States, ever since 2008, there has been more policy room for expansionist economic methods, although these have still largely favoured the financial sector. ‘Bidenomics’ in the form of the Inflation Reduction Act, and the CHIPS and Science Act, has cautiously brought direct and strategic state economic intervention back into permissible policy. America’s role as world financial hegemon allows this, and also motivates Biden’s military-inflected interventionism to forestall China’s economic challenge, but it does mark a shift away from neoliberalism as such, just not from capitalist and imperialist interests. In any case, the neoliberal doctrine is now long past its prime.

A ‘stealth’ revolution?

Given all this, it is perhaps a curious decision for Marco D’Eramo to write a book on neoliberal ideology as an ‘invisible, “stealth” revolution’ going on for fifty years, that ‘the other side didn’t notice’ (pp.viii-x). Many people might not be apprised of the technical vocabulary and concepts involved, but have nonetheless been acutely aware of the ongoing war of the rich upon the rest of us. As snooker player Ronnie O’Sullivan said quite pithily:

‘“I just think: ‘How bad is it when the world is brought to its knees and not one person got punished for it?’ There’s no jobs. No jobs in this country or America. There’s a lot of people on food stamps over there. Meanwhile, the boss of Walmart gets a $20m salary or whatever it is. It’s just wrong. There’s too much of a divide…. But since they took away the unions and people power, people are fucked, basically. They have nowhere to go.’

The impact of 2008 on trust in the establishment, and even authority in general seems well captured here, alongside a clear sense of class. D’Eramo’s foundational conceit of ‘an invisible war’ seems therefore questionable, even slightly baffling. Nonetheless, it is certainly true that neoliberalism is more undead than actually buried, so a consideration of its ideological nature and support is still useful. D’Eramo explicitly focuses the discussion on the US, and begins with a run through of the role of billionaire-funded policy foundations in nurturing neoliberal theorists and their policy platforms in the post-war period. He notes that changes to US law have enabled this funding to become much more anonymous in the last twenty years (p.27). The goal always was to spread market logic into an understanding of every area of social and economic life; neoliberalism ‘provides nothing short of a totalizing interpretation of society and human history’ (p.38).

D’Eramo presents the neoliberal relationship to the state as a paradox. Originally, neoliberal thinkers were ostensibly determined to cut down the state, so that it would act merely as the guarantor of markets, rather than being able to intervene in society to any effective degree. Yet, over the neoliberal decades, state spending has, in fact, risen relentlessly. In one sense this was a direct result of the aim to shrink the state; ‘to cut taxes in a way that forces the state to reduce public services’ (p.39). The maximum marginal tax rate in the US dropped from 94% in 1944 to 28% under Reagan, and post-Trump, corporate tax dropped to 21%, while by 2022, the US public deficit had reached $1.38 trillion (p.40). Moreover, the ‘tax subsidies for charitable works cost the US treasury some $53.7 billion’, at the same time that donations by the neoliberal foundations (which count to these tax breaks), which D’Eramo introduced at the start of the book, amounted to ‘$49 billion’: ‘It truly is an act of genius to use the state’s own money in order to demolish it’ (p.76).

Of course, the neoliberals only want to destroy the state’s capacity to fund public services and social welfare, they do otherwise need a strong state. A ‘perverse passion’, D’Eramo calls it (p.175). Yet this is only a surface anomaly. Neoliberals know that there is a need for a strong coercive state precisely to deal with the problems caused by the destruction of social infrastructure, not to mention potential resistance, which was the reason for neoliberal enthusiasm for Pinochet’s bloody dictatorship in Chile (p.175). Hence also military budgets and calamitous, expensive foreign interventions bloat state budgets.

None of these are new observations, but there is another layer to the neoliberal relationship to the state. Capitalist growth entails the development of ever more complex infrastructure, investment at huge scales, and the relative growth of the service sector in relation to manufacturing. All of this requires an ever larger state. At the same time, crises, such as the 2008 financial implosion, or the pandemic, demand far greater state interventions to prevent catastrophic breakdown, than the nineteenth-century liberal state ever had to contemplate. It is within the sphere of these issues that the crucial contradictions of neoliberalism can be found.

Crisis of the system

D’Eramo does notice these crises, noting that they turn into further state debt, seeing this as part of the systems ‘elegance’, in that ‘states are not only burdened with debts they must then service, but they take away all their possible resources with which to honour them by cutting taxes for the wealthiest’ (p.109). Yet, this does not quite get to the heart of the problem, because these crises have shaken neoliberalism gravely, undermining its credibility and legitimacy, and threatening the ruling class’s capacity to manage the system. There is ongoing political instability in the US, the UK and elsewhere in the West as a result, which is deeply worrying for the elite. However, because D’Eramo takes neoliberalism as theory, rather than as a practice enmeshed in the contradictory reality of capitalism as a material system, the analysis continually presents neoliberalism as an impregnable circle of logic, rather than as an increasingly vulnerable system.

The hyper-individualism of neoliberal theory, D’Eramo explains, insists that we are all entrepreneurs, and thus there are no classes, as those with no capital are still ‘owners of ourselves’, possessing ‘our own human capital … our own enterprise’ (p.31). Through these bogus intellectual moves, not only class, but exploitation and alienation as concepts are lost, which ‘in turn, undermines the workers’ movement’ (p.32). Insofar as these ideas have been generalised in society, this is true, but D’Eramo takes it as given that the ‘totalising’ ambition of neoliberal ideology has been achieved. Throughout, large claims are made to this effect, as for example:

‘Today, it is commonly held that anyone with a permanent contract with “social benefits” attached is considered to be privileged’ and also that ‘the social state is already dead in the consciousness of those who should benefit from it’ (p.91).

D’Eramo is explicit in concentrating on America, for which some of these assertions may fit better, but they are surely too broad to accept at face value, even so. They are certainly what the right wants everyone to believe, so that anyone who disagrees will feel isolated. However, given recent successes in unionising casualised workers, at Amazon and elsewhere, or the drivers of the ADCU for example, it seems clear that neoliberal ideas have not, in fact,been universally generalised.

D’Eramo is lucid and convincing when dissecting the logic and consequences of neoliberal thinking, including its failure to understand the differences in systems between higher and lower levels of organisation (p.202). This renders neoliberal ideologues’ attempts to extend its individualistic market logic across to all social spheres and intellectual disciplines untenable and actually ridiculous, although that has not stopped the flow of reductive thinking pouring out of the thinktanks. However, the problem is not the intellectual vacuity of project, but rather its social power.

The same issue arises in the discussion of the foundational principle of neoclassical economics, which is the notion of ‘utility’. This was intended as a replacement for the concept of value, which, after Marx, economists rejected due to its dangerous theoretical consequences. The replacement, ‘utility’, is hopelessly circular, as has been noted by many heterodox economists; a commodity is of use, therefore it sells, indicating its ‘utility’ (pp.198-9). The purpose of the concept is, however, to enable obfuscating statistical calculations around ‘marginal utility’, so its obvious theoretical failings have not mattered to mainstream economists at all. The issue is therefore the institutional ability of neoclassical economists to dominate the profession, rather than the intellectual content of the doctrine in itself.

Protest changes consciousness

D’Eramo is therefore on entirely the wrong track when he claims, about de-mystifying neoliberal cant, that the ‘fight against euphemism might seem marginal in the ideological clash, but in reality, it is the only conceptual weapon we have for revealing, for lifting the veils from, reality’ (p.228). The veils have been lifted many times already, and it is not, in fact, a general ignorance about the shape of what has been happening for the last fifty years that is our problem.

The framing assumption that neoliberalism has been entirely successful in dominating people’s consciousness is a serious error, that if the reader takes seriously, can only lead to self-defeating passivity. However, D’Eramo insists that ‘the privatization of our brains has convinced us all that collective action makes no sense, that it produces nothing’ (p.124). Obviously, he was writing before the recent outbreak of worker militancy and the huge surge in collective protest for Palestine solidarity. Even so, a thesis that can be contradicted by events so quickly has some serious weaknesses in it.

One aspect of this movement, in the UK at least, is the large proportion of young people involved in the demonstrations. This is the generation that has been most exposed to a society thoroughly shaped by neoliberal forces, and yet they clearly do not think that collective action is pointless. Neoliberalism dominates establishment thinking, certainly, and, equally, it has colonised the liberal and social-democratic lefts. Nonetheless, a ruling-class ideology can never dominate entirely in a class society, because it will necessarily be at odds with much of the material experience of the oppressed and exploited.

The contradictions between the ideological picture propagated by the ruling class, and the realities of life in a dysfunctional, capitalist society produce various kinds of dissonance in consciousness, and therefore resistance to it. Such dissonant consciousness is always present, even in the minds of people who accept parts of the ruling ideology, but collective protest is one of the most effective ways of bringing dissenting thinking to the fore among wide layers of people.

In times of crisis, the dominant ideas in society can shift very rapidly; the old orthodoxies can be swept away, as people gain the confidence to assert the uselessness and untruth of ruling ideas. However, this is only possible at a transformative scale if there is significant socialist organisation that can gather and amplify the class consciousness that surges during a crisis. It is certainly true that the defeats of the 1980s, and the retreats of the 1990s, have led to weakened socialist organisation today, but the present is an important opportunity to build it up to a scale that can seriously challenge the ruling class, and give people the alternative they know is needed.

Neoliberalism may still have a stranglehold on official politics, but its economic project is in tatters after fifteen years of stagnation, crisis and increasing levels of social decay. We still need trenchant critiques of neoliberal ideology, of course, but even more, we need clarity that it is through mass action, from strikes to demonstrations, that we will be able to break through and shift the consciousness of the majority of people towards action for social transformation. However this will only come through seizing the moment to build revolutionary socialist organisation.