The Emergent Neoliberal Order in American Political Development

Scholars of American political development pay special attention to the role of “orders” and “traditions.” But while those such as Rogers Smith have demonstrated that liberalism is but one in a series of multiple traditions that have each shaped a corresponding set competing political orders, there is relatively little discussion of the impact of neoliberalism on APD. This is especially unfortunate since the United States is perhaps the most extreme example of a state in which neoliberal ideas have become almost hegemonic and where its policies have been most widely applied.This paper argues that neoliberalism, as an ideology, a set of policy prescriptions, and institutional designs, constitutes an emergent order in APD that is conceptually distinct from liberalism, especially in its “New Deal” form and from conservatism and republicanism. Central to the neoliberal view is the notion that freedom, justice, and well-being are best achieved by competition, ideally fostered by market-mechanisms. This foundational idea gives rise to a slew of policies and institutional frameworks, ranging from privatization, to tax cuts, and deregulation. As such, neoliberalism has its roots in classical liberalism, but with one crucial exception: the role of the state. Whereas classical liberals recommend a minimal state, neoliberals see a central role for the state in ensuring competitive markets, or “planning for competition” as Hayek put it. Moreover, while New Deal liberalism sought to aid those who did not benefit from capitalism, neoliberalism seeks to strip those protections away wherever possible. The neoliberal approach is also distinct from conservatism given its ambivalence toward hierarchy and tradition. Indeed, given the neoliberal penchant for sweeping change, it is radical, not conservative. Finally, neoliberalism sees individuals as the primary unit of society and does not accord a special status to community and is not especially committed to democracy, especially at the local level. As such, it seeks to disrupt not only the liberal and conservative orders, but republican ones too.Neoliberal ideas, policies, and practices have had a direct effect on two crucial elements in recent American political development. First, it is responsible for the transformation of the American political economy that has resulted in stagnating median incomes and in the explosion in American economic inequality. Second, neoliberalism has vastly reduced state capacity and, to a lesser degree, state authority. These phenomena come into sharpest focus when peering below national political institutions to the state and local levels. The most obvious examples include the emergence of austerity economics in states such as Wisconsin and cities like Detroit, the cuts to basic services, and the creation of institutions, such as financial control boards, that have replaced democratic decision-making. This paper will define neoliberalism, explain how the concept is crucial to our understanding of APD, and use a series of examples drawn from national, state, and city politics to examine how it has reshaped the American political economy and reduced the capacity and authority of the state.