U.S. Intellectual History Blog

The Strange, Transatlantic Career of "Neoliberalism"*

In 1956, Arthur Schlesinger, Jr., in many ways the leading theorist of Cold War liberalism, published an essay entitled “Liberalism in America: A Note for Europeans” in Perspectives USA, one of the many Cold War-era publications that sought to enhance the reputation of American thought and culture on the other side of the Atlantic.**  The essay is a kind of thumbnail history and celebration of American liberalism. And Schlesinger emphasizes a point that was essential for a European understanding of American liberalism:

Enough should have been said by now to indicate that liberalism in the American usage has little in common with the word as used in the politics of any European country, save possibly Britain. Liberalism in America has been a party of social progress rather than of intellectual doctrine, committed to ends rather than to methods. When a laissez-faire policy seemed best calculated to achieve the liberal objective of equality of opportunity for all — as it did in the time of Jefferson — liberals believed, in the Jeffersonian phrase, that that government is best which governs least. But, when the growing complexity of industrial conditions required increasing government intervention in order to assure more equal opportunities, the liberal tradition, faithful to the goal rather than to the dogma, altered its view of the state.

Indeed, for most of the period since the New Deal, the notion that “liberalism” has a fundamentally different meaning on the two sides of the Atlantic has been something of a commonplace. With the partial exception of the British “New Liberal” tradition associated with thinkers like T.H. Green, L.T. Hobhouse, and J.A. Hobson, European liberalism has tended to stick closer to the model of the “Classical Liberals,” emphasizing laissez faire economics and often deprecating the kind of activist government that has characterized American liberalism since the 1930s.  Self-described European liberals have thus tended to be  politically closer to American conservatives.

But in recent years, there’s been an odd terminological and philosophical confluence of U.S. and European usages that has centered around the term “neoliberalism.”  Though the word “neoliberalism” had separate U.S. and European births (corresponding, in each case, to a reimagining of each side’s notion of “liberalism”) there has been a remarkable convergence of these two “neoliberalisms,” such that, while 20th-century discussions of “liberalism” on the two sides of the Atlantic often concerned different things, the discussion of “neoliberalism” on both sides has come to focus on a single, global phenomenon.

Given the long and complicated history of liberalism, it’s not surprising that the word “neoliberalism” has appeared at various times to designate a variety of ideas and movements, varying both in terms of the (unmodified) liberalism with which they stood in contrast and the ways in which they differed from it.  The OED lists uses of the term in English going back to the 1890s.  And in the early 20th-century the term was sometimes used, at least in the US, to describe the British figures like Hobhouse and Hobson more usually referred to as “New Liberals.”

Eighties American Neoliberalism

As far as I can tell it was only in the early 1980s that a distinct tendency in American politics began to label itself “neoliberal.”  In the wake of the 1980 elections which featured not only the apparent triumph of Reaganite conservatism, but–in the Kennedy-Carter primary race–the latest major battle in the ongoing intra-Democratic war over the legacy of American liberalism, a number of more conservative Democrats began to adopt the label “neoliberal” to describe their position.***  Probably the single most important articulation of this tendency was “A Neoliberal’s Manifesto” (.pdf here) published in the May 1983 issue of The Washington Monthly by that journal’s founding editor, Charles Peters.****  But the term was also important in the first half of the 1980s in places like the New Republic, which seemed at times to embrace the term to describe its own politics, as in the April 9, 1984 TRB column (then written, I believe, by the magazine’s Editor, Michael Kinsley) entitled “Neoliberals, Paleoliberals,” which declared that the two leading Democratic presidential candidates, Gary Hart and Walter Mondale, respectively represented these two tendencies and expressed a clear preference for the former.

The New York Times, too, got in on the action.  In a May 15, 1984 article entitled “As Neoliberals Search for Closest Fit, Hart is Often Mentioned,” Walter Goodman described neoliberalism as “a political spirit in search of a candidate.”  In addition to the aforementioned Charles Peters and Michael Kinsley, Goodman lists Amitai Eztioni and James Fallows among the spirit’s “apostles,” “a small but prolific group of journalists and scholars, know what they don’t like, a category that includes President Reagan and Walter F. Mondale.”  During the early ’80s, the Grey Lady’s conservative columnist and language maven William Safire seemed particular fond of the term, writing, for example, in his July 11, 1982 “On Language” column that “the hot new word in political science is neoliberal, whose appearance was predicted in this space after the triumph of neoconservatism.”

Indeed, the entire conversation about “neoliberalism” during these years seems haunted by the specter of neoconservatism. “The neoliberals stand today in somewhat the position neoconservatives occupied a decade ago,” wrote Goodman in the above-mentioned May 1984 article, “Their ambition is to attain the influence in liberal politics that the neoconservatives have attained in conservative politics.”

But the relationship of neoliberalism to neoconservatism was more than merely structural. It is no accident (as some of the first neocons might have put it in their Old Left salad days) that the very first figure associated with the term in the pages of TNR, in October 1981, appears to have been Daniel Patrick Moynihan, who had, during the 1970s, frequently been called a neoconservative, but who had always rejected that description and who, following a long, slow rightward journey during much of the previous two decades, was then planting his flag as a major player in the Democratic opposition to (at least some of) Reaganism.*****

Some of the politics of ’80s US neoliberalism resembled the very earliest stages of what Justin Vaïsse (in his book Neoconservatism: the Biography of a Movement) calls the “First Age of Neoconservatism”: erstwhile leftists turned Cold War liberals who in the mid-1960s attempted to stand athwart the New Left (and later the New Politics) and yell “STOP.”  If anything the ’80s neoliberals had more in common with conservatives than the first-wave of the neoconservatives had had in the 1960s.   In addition to rejecting much of the legacy of the New Left, neoliberals seemed suspicious of some of the legacy of the New Deal.  Though they wanted (like the early neoconservatives, it should be said) to retain liberalism’s idealism, they were critical of welfare and Social Security (at least as we knew them), and sought to distance the Democratic Party from organized labor.

“If neoconservatives are liberals who took a critical look at liberalism and decided to become conservatives,” Charles Peters wrote in the opening of his 1983 “Manifesto,”

we are liberals who took the same look and decided to retain our goals but to abandon some of our prejudices. We still believe in liberty and justice and a fair chance for all, in mercy for the afflicted and help for the down and out.  But we no longer automatically favor  unions and big government or oppose the military and big business.  Indeed, in our search for solutions that work, we have come to distrust all automatic responses, liberal or conservative.

After the 1984 presidential campaign, discussions of “neoliberalism” began to peter out.  Hart’s association with the term–which helped buoy its usage in 1984–probably came to do more harm than good. And “liberalism,” for decades one of the most powerful, positive buzzwords in American life, had become almost a pejorative in American politics by the end of the Eighties. But the ideas that were associated with neoliberalism in the early-to-mid 1980s stuck around and received new labels. And their advocates became more and more powerful within the Democratic Party.

By the time the spirit of neoliberalism achieved something of an apotheosis in the Clinton administration, the word “neoliberalism” had largely been replaced by such terms as the “Third Way” and “New Democrat.” And to a great extent, these ideas are still dominant in the Democratic Party today, even as the Clinton-era labels themselves have passed.

In March 2007, David Brooks wrote a column in the New York Times, entitled “The Vanishing Neoliberal,” which argued that neoliberalism was dead. Charles Peters himself responded in an interview with Ezra Klein that appeared in the Washington Monthly:

I think in many, many areas, the neoliberals, in effect, won. But in some cases we won too much. For instance, the rebirth of capitalism produced such extremes that we then had to turn around and say no, that is wrong. But where we clearly haven’t won is with the government bureaucracy, the teacher’s unions. We have hardly made a dent, and they still have terribly strong power. You have to be able to fire incompetent teachers and incompetent civil servants. 

Both sides of this 2007 debate, I think, underestimated the continued power of what used to be called “neoliberalism” in the Democratic Party.  Certainly the Obama Administration has embraced the anti-teacher’s union policies that pass for educational reform in the era of No Child Left Behind and Waiting for Superman.******

European-Style Neoliberalism

Meanwhile, in Europe, a conversation about an entirely different thing called “neoliberalism” was brewing. Not surprisingly, this use of the word “neoliberalism” flowed out of the more European meaning of “liberalism,” roughly what we in America often call “classical liberalism,” the free-market doctrines associated with Smith, Ricardo, and company.   If that’s the “liberalism” in European “neoliberalism,” then what accounted for its “neo”?

The early history of the term “neoliberalism” in the European sense is associated with attempts in the 1930s and 1940s by members of the Austrian School of Economics like Friedrich Hayek, Ludwig von Mises, and Wilhelm Röpke,  to revive liberal economics in the European sense, i.e. laissez faire economics, in the face of the challenges posed by socialism (including social democracy) and fascism.  I say “is associated with” because, as far as I can tell, these thinkers did not always (or even usually) describe themselves as “neoliberal” (or “neo-liberal”).  They certainly were aware that they were renewing what they called liberalism. But they often used more descriptive neologisms (e.g. the German Ordoliberalism) or simply stuck with “liberalism.”  For example, Hayek’s Individualism and Economic Order (Chicago: University of Chicago Press, 1948) (inefficiently available for free in .pdf form from the Mises Institute) contains numerous uses of the words “liberal” and “liberalism” and not a single use of “neo-liberal” or “neo-liberalism” (with or without the hyphen).

At any rate, accounts of neoliberalism in this sense tend to begin with the Austrian School and then cross the Atlantic to discuss the Chicago School and its many intellectual and political progeny, including, e.g., the Mont Pelerin Society and Pinochet’s Chile, and ending with the so-called Washington Consensus that has guided mainstream economic thinking in the developed world for most of the last three decades.   This is the basic shape of Antina von Schnitzler’s entry on “Neoliberalism” in the International Encyclopedia of the Social Sciences (Ed. William A. Darity, Jr. Vol. 5. 2nd ed.  Detroit: Macmillan Reference USA, 2008. p473-475), and also of David Harvey’s standard A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005), which features on its cover pictures of Ronald Reagan, Deng Xiaoping, Augusto Pinochet, and Margaret Thatcher (see also the French image attached to this post).  Charles Peters, Gary Hart, and Michael Kinsley are nowhere in sight…nor should they be.  Simply put, “neoliberalism” in this sense is an entirely different phenomenon from “neoliberalism” in the ’80s American sense.

Convergence….or Something Else?

Then why has this second sense of “neoliberalism” become so important in American political talk today?  This is an interesting question for at least two related reasons: First, the term has the rather different American history and meaning attached to it that I map out above…a history and meaning that has not been entirely forgotten as the recent David Brooks-Charles Peters debate suggests. Second, what I’ve been calling the European meaning of “neoliberalism” is dependent for its meaning on an entirely European use of the word “liberal,” a usage that self-decribed liberals in the European sense like Hayek and Friedman fought hard for in this country in the ’40s and ’50s and distinctly lost.  Even the most classically liberal Republicans these days call themselves “conservative” not “liberal”  (if they feel the need to use an “l” word, it’s almost always “libertarian,” a term that is so popular across the U.S. right these days that it’s virtually devoid of any real meaning…but that’s another story).   At any rate, the Americans most associated with neoliberalism in the European sense are almost entirely figures who, in the American context, we refer to as “conservatives” not “liberals,” e.g.  Milton Friedman and Ronald Reagan,  

So why have Americans so easily adopted the European meaning of “neoliberalism”?  Partly it’s a question of globalization. Although it has European terminological origins, the phenomenon of neoliberalism is truly global and, like the world economy itself, its center has been the United States.  At some level we should just be glad that our country, which still insists on imperial measurements, is willing to adopt the vocabulary the rest of the world uses to describe its economic thought.

And yet this is not simply a matter of strategically adopting someone else’s vocabulary.  Because neoliberalism (in the “European” sense) turns out to be related to liberalism…and neoliberalism…in the American sense. We’ve seen that in Andrew’s posts on neoliberalism and the Sixties. And we see it when we look at the economic positions of the neoliberals (in the 1980s American sense) and their successors in the Clinton and Obama administrations, which have been (often brutally) neoliberal in the “European” sense.  Somehow American neoliberalism, which grew–ideologically and terminologically–out of American liberalism, and which defined itself at least in part in opposition to Reaganism, has converged with neoliberalism in the European sense, which is exemplified by Reaganism.

Is this convergent evolution, or do we have to question the view–held not simply by Arthur Schlesinger, Jr., but by nearly everyone else in the middle-to-late 20th century–that “liberalism in the American usage has little in common with the word as used in the politics of any European country”?
* This overly long post is inspired both by Tim’s challenge to get us talking about liberalism in America and by Andrew’s entirely appropriate, but nonetheless oddly European, use of the word “neoliberal,” a usage that has started appearing in both academic and blogospheric discussions of American politics in the last several years.

** This essay was reprinted in Schlesinger’s collection The Politics of Hope (Boston: Riverside Press, 1962).

*** I should note that the ’80s neoliberals would probably not have described themselves as “more conservative” than the “paleoliberals” (indeed their choice of the “neoliberal” moniker was indicative of their desire to describe their relative position within the Democratic Party in other-than left-and-right terms).

**** Peters became an important spokesperson for neoliberalism in the 1980s (see, for example, this cover-story debate with “radical Democrat” Robert Kuttner in the May 1985 issue of Mother Jones) and his “Manifesto” remains a touchstone of what “neoliberalism” meant in ’80s America for both conservatives and liberals today.

***** Fred Barnes, “Pat Moynihan, Neoliberal,” The New Republic, October 21, 1981, pp. 15-18.

****** Nevertheless, Matthew Continetti, blogging at the neoconservative Weekly Standard last May, declared that “the neoliberal tendency is pretty much extinguished these days” in the Democratic Party.  As with so much else printed by his magazine, I suppose I’ll just have to disagree.

5 Thoughts on this Post

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  1. Wow,, Ben, some great transatlantic analysis. I think perhaps you answered your own question in the sense that Reaganism routed Gary Hart-ism so that by the time you get to Clintonism US neoliberalism is barely distinguishable from Reaganism. But let me add this. I think we tend to use neoliberalism in the European sense because the best theoretical explanations for globalization have come from thinkers in the Marxist tradition, which is a continental language through and through. You mention Harvey. I would also add Hardt, Negri, Fraser, Zizek, Eagleton, Badiou, etc… All have written about neoliberalism in various ways, and all think of it in the form of Hayek. I first read deeply about neoliberalism in the works of the critical pedagogues, such as Paulo Freire and Henry Giroux, and being reconstructed Marxists, they used the continental version of the word. Your post did leave me wondering, though. Even though US and European neoliberalism had different etymological origins, are they really so different? Other than rhetoric about equal opportunity? It always boils down to market solutions, no?

  2. Excellent analysis… one small political observation. I think that a shorter way of saying “Somehow American neoliberalism, which grew–ideologically and terminologically–out of American liberalism, and which defined itself at least in part in opposition to Reaganism, has converged with neoliberalism in the European sense, which is exemplified by Reaganism” is they sold out.

    This is always been the precise beef with Obama and above all with Clinton. It was one thing to say that Great Society liberalism had its excesses; it’s another to give oneself over the Reaganism. And that’s what the “convergence” you describe has been about, at its political core.

  3. I think the other term(s) that used to be used for the description of US-style neoliberalism (as you’ve named it) and its devolution in the 1990s was “Third Path” in Europe and “Triangulation” in the US. In the former case this meant tacking between the Tories and old-line Labour in the UK, or between “Liberals” and “Socialists” — manifested in the early Tony Blair, who was given quite a bit of credit for helping moderate Thatcherism before he became Bush’s lapdog. One could basically ditto this for Clinton. One thing I would insist on though, is that the trouble with Clinton was not that he was advocating market solutions for everything – that’s just empirically untrue — rather, that he had largely accepted and accommodated himself to Reagan’s circumscription of the state — acting within that space rather than challenging its limits per se. This was became notably more the case following the collapse of health care reform and the crisis of the 1994 midterm elections. But it remains the case that the showdown with Gingrich over the debt ceiling and the federal budget was at least in part about drawing a line around the state which the more radical US conservative (neoliberais) could not cross — and which they still more-or-less dread to cross to this day. I think one could contextualize the split between Reich and Rubin in much the same way — granted Reich lost, but it’s important that it was even a debate really. That’s not to say that either Blair or Clinton should be confused with heroes of the so-called Left — but neither should they be simply conflated with market fundamentalists.

  4. Ben & Colleagues,

    First to Ben—thanks for taking up my challenge. And it’s great that you’ve brought together the natural connection between Andrew’s questions and mine.

    On the post, my current thinking about the definition and philosophical assumptions behind American liberalism is being ruled by the Stanford Encyclopedia of Philosophy (SEP online) article Gaus and Courtland. As such, I should note that they add Bernard Bosanquet to the British trio Ben cites of Green, Hobhouse, and Hobson. They are also called “neo-Hegelians.” It’s also interesting to me that J.S. Mill is cited as a source for both old ~and~ new liberalism. So answers to questions raised by Mill helped determine how Western liberalism would play out over the nineteenth and twentieth centuries.

    Ben feeds into my argument about current confusion over the term liberal with this line: “And in the early 20th-century the term [i.e. neoliberalism] was sometimes used, at least in the US, to describe the British figures like Hobhouse and Hobson more usually referred to as ‘New Liberals.’ ” …Ben, was the OED your source for this U.S. usage? Do you remember which publication and/or author the OED cited?

    It should be noted that the SEP article I cite nowhere references the writings or thought of Schlesinger, Jr. as representative of anything new in American liberalism. I don’t know what that says about Ben’s post or the SEP article. Perhaps nothing except that Schlesinger may only be representative of a type—i.e. symbolic—and of special interest to historians.

    I’d like to learn more about how a traditional liberal like Mondale fell into the category of neoliberal. Perhaps this indicates a shift in the use/definition of American neoliberalism post-1970s (representing something of co-option of the term by the Left to label disliked Democrat candidates rather than reflective of policy positions)?

    Side comment: It’s funny just how wrong Brooks was in 2007 relative to what’s happened policy-wise with Obama. In other words, I’m with Peters circa 2007.

    Calling Hayek a neoliberal, even in the European sense, at least goes with some observations I’ve seen about how the Tea Party is actually unfaithful to the Hayek school of economics (i.e. some government regulation is necessary and good).

    Ben’s observation about Friedman and Reagan accidentally goes to my post on the confusions of liberalism, and how Reagan in many ways fits the bill of a traditional American liberal (the continued ideological focus on personal freedom, except in the old school, British economic sense). The point is that the larger movement of liberalism in America must always prioritize individual freedom/autonomy (and even Sixties-era satisfaction)—a truth that many communitarian conservatives have been loath to concede of Republicans in the political environment of the last 30-40 years. The truth is that neither party philosophically prioritizes communitarian values, and it may not be possible in overall construction of American political thought. I digress.

    In any case, I can’t help but saying that I agree with Ben’s assessment of the convergence of American and European neoliberalism—even though within the parties of each nation state the affiliations play out differently.

    As for historical usage and consistency, I think we should default to the American etymology of neoliberalism when discussing American politics (in other words, the compromises of traditional American liberals who wanted to stay affiliated with the Democratic Party).

    In sum, an excellent post and comments thus far! – TL

  5. Thanks for all the comments! I have a lot to say in response to them, but I may save it for a follow-up post next week.

    For the moment, let me just draw attention to an important difference between the two uses of “neoliberalism” that Andrew alludes to and I had meant to mention: while “neoliberalism” (in the American sense) was a word coined and used by self-described “neoliberals” in the ’80s, “neoliberalism” (in the European–and increasingly global–sense) is a word largely used by critics (and AFAIK largely critics on the left).

    Also a clarification of a point raised by Tim in comments: in the 1980s, Walter Mondale was universally seen as a paleoliberal (though that word was used only rarely). The leading spokespeople for neoliberalism (in the American sense) wanted someone else as the party’s standard bearer in 1984 (though Mondale’s political team included some people–e.g. Bill Galston–who occupied roughly the ideological ground of neoliberalism).

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