President Donald Trump’s return to the White House set off a slew of “hand-wringing” about the future of the global order.
While commentators theorized that Trump, along with other quasi-populists such as Argentina’s Javier Milei and Italy’s Giorgia Meloni, was a rejection of the so-called elite, they also proclaimed it another nail in the coffin for “neoliberalism.”
Joseph Stiglitz, who was the chairman of former President Bill Clinton’s Council of Economic Advisers, howled that neoliberal policy led to the economic stagnation of middle-class wealth, greater income inequality, and lower life expectancy in a piece titled “How Trump’s Victory Exposes the Failures of Neoliberalism” at Social Europe.
Stiglitz proclaimed his former boss helped in the slow death of the American dream through “unleashed globalism, believing in a trickle-down economics that would ultimately benefit everyone.”
Not to be outdone, former World Bank economist Branko Milanovic declared Trump’s remarkable comeback to the White House the “symbolic end to global neoliberalism.” He saw neoliberalism as only an economic term while globalism was now nationalism. The social parts of neoliberalism, defined by Milanovic as racial and gender equality, immigration, and multiculturalism, were dead and buried. What remained were lower taxes, deregulation, and profit worship.
But Milanovic seemed happy that neoliberalism was out despite a strong disagreement with Trump’s election. He proclaimed the philosophy exited the global stage with a “scent of falsehood and dishonesty.” Milanovic saw neoliberalism as a way of thinking that loved democracy but caused “anarchy, discord, and chaos,” broke rules it sought to defend, and criticized ruling classes but created an “aristocracy of wealth and power.”
“It ends on Jan. 20,” he said.
If Stiglitz and Milanovic attacked neoliberalism from the Left, Oren Cass of the economic nationalist American Compass came at it from the Right.
In 2020, as Trump’s first term began winding down, Cass observed “Neoliberalism Falls Apart” while reviewing American politics. He believed America’s center, aka neoliberalism, wouldn’t survive whatever political system came out of the coronavirus pandemic.
Cass aired out his grievances against neoliberalism much like Stiglitz. He scoffed that it destroyed society and relied too much on “redistribution to those left behind.”
He saw neoliberalism as the reason for declining birth rates and physical and mental well-being, a lack of productivity and rising wages, political dysfunction, and the concentration of wealth. Cass summed up neoliberalism as outdated for the current world: “Conservative principles can guide solutions in the face of these shifts; playbooks published in the 1980s cannot.”
Secretary of State Marco Rubio agreed. In 2023, the then-senator from Florida called neoliberalism a “disaster on the grandest scale” because it involved shifting away from American-made production for finance and digital technology jobs. It was a stark reversal for Rubio, who defended free trade and free markets a decade ago.
This raises an important question: What is neoliberalism?
No one seems to agree on a definition despite its regular usage in political commentary.
The term appears to date back to the 1930s and American economist Henry Simons.
“Neoliberalism” references exploded at the turn of the century, going from fewer than 100 mentions in academic papers in 1992 to more than 1,000 in 2004. It outpaced the “neoconservatism” label of George W. Bush, Dick Cheney, and Paul Wolfowitz.
In 1951, Milton Friedman suggested neoliberalism took the best of 19th-century individualist philosophy and combined it with state governance of the system. Neoliberalism also empowered the state to “relieve acute misery and distress.” Meanwhile, private enterprise would keep the state from direct interference.
Friedman saw neoliberalism as a way to push back against collectivist policies in the United States and the United Kingdom. (At the time, the Republican and Conservative parties argued in favor of direct government interventionism into the market via price controls and tariffs instead of free enterprise. This was despite their professed opposition to socialism.)
On the other hand, the Encyclopedia Britannica defined neoliberalism as an “ideology and policy model that emphasizes the value of free market competition.”
Merriam-Webster called a neoliberal “a liberal who supports or promotes free market competition and sustained economic growth through capitalism as a means for achieving progress.”
Since this sounded like the classical liberalism of John Locke, Frederic Bastiat, David Ricardo, and Thomas Jefferson, I reached out to multiple classical liberals for their definitions of neoliberalism.
They seemed as confused as I did.
Cato Institute senior fellow Johan Norberg said he “never really understood what it is,” while Mercatus Center economist Veronique de Rugy bluntly stated, “I have no clue. … It really doesn’t mean anything.” Jason Pye, a senior policy adviser at the Independent Center, remarked neoliberalism was a more socially conscious liberalism.
To Steve Hanke, a professor of applied economics at Johns Hopkins University, the term was “ill-defined” because it has a variety of meanings “depending on who is using the term.”
Hanke’s assessment of the fungibility of “neoliberal” made the most sense.
Essayist Louis Menand characterized “neoliberalism” as more “retro-liberalism” and a pushback against 1940s New Deal policy. He wrote in the New Yorker that neoliberals are everyone from libertarians to politicians like Bill Clinton, “who embrace the policy goals of the New Deal and the Great Society but think that there are better means of achieving them.”
Others, such as Vox co-founder Matthew Yglesias, have attempted to come up with a definitive term for “neoliberalism.”
Yglesias agreed with Friedman’s definition. He rejected the idea that it is “free-market fundamentalism” that’s focused on “growth at all costs,” arguing it endorses big government and the welfare state. When it comes to pushing privatization, Yglesias said neoliberalism can endorse privatization but supports regulation.
Norberg suggested the rise in the use of “neoliberalism” was due to American leftists usurping the phrase “liberal” to avoid any associations with socialism. He compared the shifting term of liberalism to guitars becoming known as acoustic guitars when electric guitars started to be produced and regularly used. So, liberalism became classical liberalism. “And then, once that started sounding too old, like a dead language, some people started calling it neoliberalism,” Norberg said.
To some, neoliberal politicians are everywhere. To British economist Geoffrey Hodgson, anyone who supports markets is a neoliberal. This would include everyone from Margaret Thatcher and Ronald Reagan to Tony Blair, Emmanuel Macron, Joe Biden, and Trump. George W. Bush and the Clintons were labeled neoliberals, as was Barack Obama.
Under Hodgson’s definition, Deng Xiaoping, who replaced Mao Zedong as China’s leader, was called neoliberal for pivoting from communism to a more market-friendly socialism.
Meanwhile, Jacobin suggested that Iran was “a neoliberal state” because none of its leaders are considered part of the Left. Since the U.S. once bought Iranian oil in the 1990s and it has a stock exchange, Iran was a capitalist society. Let’s ignore the fact that its oil production company is government-owned — it’s neoliberal!
Former Bloomberg columnist Noah Smith agreed with the “neoliberal as a pejorative” term due to “increasingly looney and strident Twitter socialists” calling anyone not aligned with Sen. Bernie Sanders (I-VT) a neoliberal. But his view lined up with Yglesias and Friedman.
In other words, neoliberalism can mean whatever people want.
It’s almost lost its meaning, much like when people throw around the words “globalist,” “socialist,” and “fascist.” Since they can mean different things to different people, they’re useful only as insults instead of terms that can be used in an actual debate.
This is even though there are actual definitions of “socialist” and “fascist” with easily accessible examples throughout history. It’s just easier to call someone one of these terms because it puts people on the defensive and elicits an emotional reaction during debates. Which may say more about those who are involved in the debates versus the importance of the topic.
At the same time, true neoliberalism may be closer to classical liberalism or just plain liberalism than people realize if we go by the definitions found in the dictionaries.
Classical liberals believe the government needs to be small and weak, letting people live however they want as long as they don’t hurt anyone or take their stuff or freedom — the theory that people can say what they want without government reprisal and the free exchange of goods.
Governments tend to shift to liberalism when they decide that big government, massive state spending, government-owned enterprises, and high tariffs don’t work. Governments privatize businesses, allow competition, reduce spending, and extol the importance of free speech and peaceful dissent.
Neoliberalism aligns more with classical liberalism than critics want to acknowledge. It champions individual freedom, the exchange of goods, and limited government. These principles define liberal thought.
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The uniqueness of liberalism is that it believes in the power of the individual to control his or her life. People get to choose where they work, where they live, and whether they have a family. To quote John Locke, “Being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions.”
Those who suggest neoliberalism is a balancing act between state economic control and some sort of market economy are wrong. Instead, that’s another form of collectivism, or what liberals are supposed to be against.
Taylor Millard is a freelance journalist who lives in Virginia.