The Most Successful Social Movement

Before taking on the activities of this social movement, we need to understand the basic ideas that are in play.

The term "neoliberalism" is confusing for Americans. What is this new liberalism? A new version of Roosevelt's New Deal or Johnson's Great Society?  No, this is a new liberalism based on 18th and 19th-century European liberalism. A very different beast.

You will hear the names Friedrich Hayek, Milton Friedman, and Ludwig von Mises as founders of this movement. Key political figures include President Ronald Reagan, UK Prime Minister Margaret Thatcher, President Bill Clinton, and Chilean Prime Minister Augusto Pinochet. Institutions associated with neoliberalism include the Mont Pelerin Society, the University of Chicago Economics Department (home of Milton Friedman), the International Monetary Fund (IMF), the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the US think tanks Cato Institute, Heritage Foundation, and American Enterprise Institute. The American Libertarian Party flies the neoliberal banner. The Republican Party and, since the mid-1980s, the Democratic Party have both embraced the policy recommendations of Neoliberalism.

The key Neoliberal ideas include the notion that markets, when left free from government interference, produce the most efficient and desirable outcomes. Individuals are seen as rational actors who make decisions to maximize utility or profit. Social and economic order arises naturally from the voluntary actions of individuals in markets, without the need for central planning. The government should focus on protecting private property, enforcing contracts, and upholding the rule of law, rather than managing the economy.  Government-owned enterprises and services (e.g., water, electricity, transportation, education) should be moved to private ownership. And, finally, governments should avoid budget deficits and reduce public debt, often by implementing austerity measures and making spending cuts.

It is easy to see how neoliberalism appealed to American conservatives, initially within the Republican Party in the 1960s and 1970s, and then within the Democratic Party in the 1980s, a trend that continues to this day. In the 1950s, the conservative wing of the Republican Party opposed the New Deal, particularly its programs such as welfare, Social Security, labor protections, and public housing. They also wanted reduced personal and corporate taxes, as well as estate taxes. They were consistently in favor of strict Federal budget discipline and reducing the size of government across the board.

The conservatives added their special sauces of anti-immigrant, pro-nativist, and pro-white Christian nationalism to the brew for a very effective political campaign. Add in a lot of money, much of it secret, and you have think tanks, universities, business schools, and mass media singing their songs. Don't forget the patience to sustain the effort for decades.

 We will examine how the rich and corporations collaborated with the American conservative movement of the 1960s and 1970s to transform American capitalism and determine who benefited from these changes.

The Great Depression (1929-1941) and the policies that ended it created a multi-decade détente between the political forces representing the working and middle classes in the U.S., and the rich and corporations. It seems likely that these New Deal programs and the impacts of WWII helped save capitalism in America during that period. The wealthy and corporations were compelled to accommodate the demands of workers for employment¹, decent incomes, and the needs of an economy that armed over ten million soldiers and produced tens of thousands of airplanes and tanks, not to mention a global naval armada. The first decades after the war were marked by a booming economy, an expansion of the middle class, the construction of an interstate highway system, suburban housing growth, and other developments. Partly driven by the educational benefits of the GI Bill, the Soviet Union's putting Sputnik into Earth orbit in 1957, and the national project to reach the moon in the 1960s, higher education expanded in both size and accessibility.

Income and wealth inequalities were significant during the 1950s and 1960s. However, compared to what has emerged in the last 50 years, they seem quaint. For example, the ratio of CEO pay to the average worker's pay was 25 to 1 in the mid-fifties, while today it exceeds 350 to 1.

Beginning in the early 1970s, the economy encountered significant troubles. An energy crisis instigated widespread uncertainty regarding supply and increased prices. The economy faced high inflation, sluggish growth, and low corporate profits, collectively termed "stagflation." The rich and corporations viewed this situation as an opportunity to shift government policies.

American conservatives were never satisfied with the bargain they had been forced into during the Great Depression.² They feared the forces of racial equality and anti-militarism, which were significant elements of our politics and culture in the 1960s. Instead, they favored free markets, small government, and minimal regulation. They supported patriarchy, white dominance, and nativism. They employed a range of political strategies to exploit these tendencies in the broader population. Moreover, they were willing to play the long game in implementing their strategies.³  This involved widespread, well-funded participation in educational, institutional, and media spheres. They enlisted academics in their campaigns, providing funding for many think tanks as well as university departments and institutes. They altered the very language of American politics. American mass media began to echo their ideas and rhetoric. Presidents Carter and Reagan executed deregulation campaigns.

These strategies proved so successful that, by the mid-1980s, a new faction of the Democratic Party, known as New Democrats (later referred to as Clinton Democrats), emerged, sharing similar economic views while adopting somewhat more progressive social perspectives.

What Laws and Regulations Did This Movement Change?

• Deregulation of industries (trucking, airlines, telecommunications, banking, and financial services)
• Weakened enforcement of antitrust (anti-monopolization), pro-competition regulations
• Financial deregulation (repeal of Glass-Steagall, deregulation of derivatives).
• Legalization of stock buybacks.⁴
• Tax cuts for corporations and the wealthy.
• Welfare cuts to reduce government assistance.
• Global trade and finance liberalization (NAFTA, WTO).
• Weakening of labor laws and union influence.

Class Warfare Victorious

Normally, when one encounters the phrase "class warfare," images of masses of people in action against the plutocrats come to mind. From Marx and Engels' Communist Manifesto, the line “Workers of the world, unite! You have nothing to lose but your chains.” pops to mind. For the last fifty years, we have experienced a top-down version of class warfare. It is the rich and corporations using their control of the government to emerge victorious over the rest of the population. This is why I consider this the most successful social revolution of the past century.