The Perils of “Neoliberalism”

Hang around a campus long enough and you’ll soon get wind of the great bête noir of the left these days: “Neoliberalism.” When I first started hearing the term, I thought back to the early 1980s, when old line liberals like Charlie Peters of the Washington Monthly were trying to work out a “neoliberal manifesto” to go up against the highly successful neoconservatism. In fact Peters and Philip Keisling produced a book in 1985 entitled New Road for America: The Neoliberal Movement. (This was really just about finding a program for Gary Hart, whose famous “new ideas and new leadership” theme in 1984 turned out to consist of no more than his name change and self-assertion.)

You’d think “neoliberalism” would be something people on the left would embrace, but today “neoliberal” is a term of supreme hatred for the campus left, and it refers to any kind of market-friendly policies—like low taxes and deregulated markets—and restraints on social spending. The left’s critique of neoliberalism naturally hates Reagan, Thatcher, and other governments that adopted market-friendly policies (China?—that’s less clear to me, because I think the left still likes China’s one-party authoritarianism). Milton Friedman always comes in for a heavy slagging. But above all the left really hates the liberal politicians who embraced neoliberal policies, like Bill Clinton and Tony Blair. They’re even worse than Reagan and Thatcher, because they are traitors to the people, or something.

One nation comes in for particular scorn: Chile, because of the Pinochet dictatorship that succeeded the coup that toppled leftist hero Allende back in 1973. Milton Friedman and other free marketeers advised the Pinochet government about how best to get their economy going again, but Friedman also advised China around this same time, and somehow that never draws a complaint from the left. Anyway, Pinochet ultimately relinquished power and re-established free elections (anyone think Allende would have ever done that?), and today Chile’s economy is one of the strongest in the world.

How strong is it? The New York Times reported recently: ““The Chilean government, facing skyrocketing rates of obesity, is waging war on unhealthy foods with a phalanx of marketing restrictions, mandatory packaging, redesigns and labeling rules aimed at transforming the eating habits of 18 million people.”

Contrast this with Venezuela, where the equivalent of the Allende government has held power for nearly 20 years now, and the population is on the verge of starvation. Think Venezuelans might want a bit of neoliberalism right about now?

The New York Review of Books has a long piece by Enrique Krauze about Venezuela in its most recent edition, and it makes for bracing, but at times comical, reading. The bracing part is how thoroughly the Chavez-Maduro regime has botched the economy (especially the cash cow of the nation—its oil industry), and how completely they have suppressed political opposition:

This is a humanitarian crisis of immense proportions. By May 2017, Venezuela’s minimum monthly wage wasn’t enough to meet even 12 percent of a single person’s basic food needs.² A survey of 6,500 households by three prestigious universities showed that 74 percent of the population had lost on average nineteen pounds in 2016. Infant mortality in hospitals has risen by 100 percent. Diseases nearly eradicated in many countries, like malaria and diphtheria, have flourished; illnesses largely new to the area, like Chikungunya, Zika, and dengue, have spread. Caracas is now the most dangerous city on the planet. All this is happening in a country that has one of the largest oil reserves in the world.

None of the present crises seemed likely in 2007 and 2008, when I made a number of visits to Venezuela. Caracas was seen as the new Mecca for the European, Latin American, and American left. Progressive news organizations, magazines, and newspapers including The Guardian, The New Yorker, and the BBC reported favorably on Hugo Chávez, whose presidency lasted from 1999 until 2013. They mentioned the dangers of his cult of personality but yielded to it all the same.

Actually these crises were entirely predictable to anyone not lost in the fever swamps of paranoia about “neoliberalism.” There’s a clear lesson in the contrast between Chile and Venezuela. And no doubt to the pains of the NYRB‘s left-leaning readership, it even gets the fundamental cause right:

It became common to call Chávez “the soul of the fiesta.” The people of Venezuela hung on his every declaration. In December 2007 he scheduled a referendum that proposed dozens of constitutional changes meant to consolidate the Venezuelan socialist state: unrestricted presidential terms, limitations on private property, a “new political geometry” (which in practice would become a form of gerrymandering), the consolidation of his personal guard as a kind of army parallel to the country’s military, suppression of the autonomy of the Central Bank, direct access for the president to the country’s international monetary reserves and the license to use them however he pleased, and the establishment of a “popular power” based on the creation of communes. . .

To become a political heir to Castro, Chávez aspired to transform himself into the leader of “twenty-first century socialism,” to become “everything.”

I’m still waiting for an instance where this kind of government worked out well for the people. The article concludes, “In one of the country’s hellish hospitals, a woman told a reporter for El Nacional: ‘So rich a country. We had everything and they destroyed it. And the future.'”

Read the whole thing if you have a moment. The NYRB offers better reporting on Venezuela than the New York Times or Washington Post.