Neoliberalism: The End of the American Dream
Updated: Nov 13, 2020
By Adam O'Leary, Junior Macro Analyst at University College Dublin Student Managed Fund
The prevailing ideologies of neoliberalism and fundamental market capitalism have run their course and have proven to be an absolute disaster on a number of levels. The prioritisation of the shareholder and the complete disregard for social, ethical and moral standards with a view to maximising profits has undoubtedly had a detrimental impact on certain groups on a global scale. This article will briefly deal with why it has ruptured the culturally-ingrained doctrine of the ‘American Dream’ and the falsehoods and shortcomings surrounding neo-liberal ideology, of which there are many.
One of the main misrepresentations found in arguments for Neoliberalism is actually found in the supposed ‘empirical evidence’ showing that it works in application. To be more specific, the successes of market deregulation are disproportionately represented in cherry-picked economic indicators.
This is applicable in the cases of economic growth, unemployment, productivity and especially in GDP. For instance, advocates of limited government involvement in the markets will often mention USA performance during the 1990s and the early 2000s, arguably the peak of such attitudes towards economics. This is because of the consistent outperformance by the USA against European countries when judging by GDP per capita. However, it is found through more thorough research that when it came to GDP per the amount of hours worked, certain European countries had better results.
It is evident from these statistics that any argument for neoliberalism supported by claims of increased productivity are rendered ultimately inconsequential in the debate over approaches to business regulation. The increased productivity is more a result of a shifted labour market and cultural attitudes to work than a direct result of market-capitalistic trends.
For instance, it can be argued that the USA is still trapped somewhat in the age of corporatism which massively prioritised work over enjoyment of life in a monotonous and wholly depression-inducing system. Even now, Americans generally tend to work longer hours and take less holidays. Any increase in productivity can also be attributed to the so called ‘gig economy’ where Americans have limited job security and it is not uncommon for a person to work multiple jobs.
In essence, if more work hours are needed to perform better economically, is the system more productive at all? Surely a productive system would mean there is less need for labour hours, whether it be better through better organised workplaces and superior planning or even an increased amount of automation. For these reasons, it can be concluded that neoliberalism thrives more on cheap and exploitative labour than any other factor.
Another major issue that is rarely discussed is that market deregulation under neoliberalism effectively destroys chances for innovation and creativity. The reality of the situation is that with a lack of control over businesses, such as the lack of tax and competition policy in the USA, it is the larger multinational corporations that prevail and control the markets. We have seen over the last few decades the growth of a system that protects the predator over the prey, where larger organisations take advantage of smaller firms with hostile takeovers, economic duress and various other unethical methods.
In the ‘land of opportunity’, the only opportunities we really see are those in favour of big business, with the example of the monopolistic giants of Big Tech; Apple, Alphabet, Facebook, Google and Amazon. Even the most innovative start-ups are inevitably going to struggle to compete in a situation where it is all but impossible to obtain a significant market share. This goes back to the point about neoliberalism and productivity, where we see restrictions on the creation of better technologies, and just general products and work systems. The system suffers from the lack of new, independent inventions and inputs into the market, and these roles are taken up by monopolies who, whether they actually do or not, have little incentive to innovate.
For these reasons, I hope to have made clear a brief set of arguments against Neoliberalism, based on both opinions and empirical evidence. In conclusion we can derive from this article that there are at least some misrepresentations and falsehoods in arguments for neoliberal policies, and that these must be taken into account when we as a society, business leaders and our government decide on our approach to business regulation and overall market policy.
What do you think? Let us know in the comment section below!
Interested in writing for us? Click on the 'Write For Us' button at the top of the page!