The End of Neoliberalism?

Paolo Gerbaudo’s The Great Recoil is both a definitive and definite analysis of our Covid predicament. Published merely a year after humanity’s great confinement, Gerbaudo’s work – like Adam Tooze’s Shutdown (2021) and Toby Green’s The Covid Consensus (2021) – moves beyond the think piece and the take for a measured assessment of the worlds produced by the March 2020 Covid shock.

The risks of such ‘instant analysis’ are well known. Like a high-speed camera, contemporary history always risks falling prey to the fluidity and indeterminacy of the situation it wants to capture, wedged between impressionistic detail and grand abstraction. This need not be its fate, however. Gerbaudo ends his book with a citation by Franz Neumann, who was able to write an analysis of the Nazi state (or rather ‘non-state’) while the European war was still raging and even actively contributed to the Allied war effort. Neumman’s Behemoth — itself a Hobbesian motif — also sets out the parameters of Gerbaudo’s analysis: a bestiary of our new Covid Leviathan, tracking the decomposition and recomposition of state authority in a time of crisis, and what factions determined the new monster’s shape.

Gerbaudo fuses two areas of specialism here. On the one hand, he reaches backwards to the previous populist decade and the specific class blocs that coagulated around it—the subject of his previous books The Digital Party and The Mask and the Flag. Unlike poststructuralist analysts of ‘populism’, he moves from signifier to signified: what social constituencies do these different appeals to the people relate to in the current moment, and how do economic factors determine their interests? Secondly, he connects present and past with reference to the ‘mighty dead’ in the history of political thought: Hobbes, Machiavelli, Plato, Cicero, and Neumann, who all shed light on the dilemmas of public power today.

Gerbaudo rightly casts Covid as a terminal crisis for a specific ideal of neoliberal governance – the final nail in the monetarist coffin. The austerity mantras of the 2010s are dying out: both the European Union and the United States launched a series of impressive bailout funds in 2020; 'the state' is now back. The size of these funds indeed raises serious questions about the so-called 'death of neoliberalism', while commentators from Slavoj Žižek to Grace Blakeley have used the past few months to diagnose a 'new state'. The Biden funds provide plenty of reasons for that diagnosis. The price tag is huge: $3 trillion spread over two bills that run for ten years. This includes money for schools, highways, bridges, hospitals and corona aid; all in all, one of the most ambitious rescue plans since the Roosevelt era.

Yet, the Biden funds also exhibit striking continuities with our ‘pre-post-neoliberal’ era. The package’s bridges are still being built by private firms. Public healthcare has been wiped off the policy map (Biden even indicated that he would torpedo the proposal if it were to make it to the Senate). The American state is still mainly acting as a contracting authority. After ten years of quantitative easing and buybacks, these companies and funds are now sitting on mountains of underutilised capital for which they cannot find profitable investment.The services themselves must be guaranteed by a state, professing a strange, privatized Keynesianism: monetary policy radicalises, but fiscal policy changes little.

This is itself a continuity with the ‘commercial Keynesianism’ of the Kennedy administration in the 1960s, or the ‘supply-side Democracy’ Biden himself adhered to in the 1970s. In this sense, Gerbaudo’s Keynesian era was more neoliberal than we presupposed, and the neoliberal era more Keynesian. It is true, of course, that the 1980s saw repeated attempts to gut the welfare system and stigmatise public sectors. Underneath the restructuring, however, a curiously market-friendly variant of welfare was also being constructed: generous and not fiscally conservative, but hesitant about removing entire areas of social life from the market.

Neoliberalism thus offered both its own variant of Gerbaudo’s ‘protection’ and ‘control’: a shielding from the vagaries of the labour market through asset ownership or cash transfers, and a bid for control through the installation of consumer sovereignty in a new global civil society. With these two dominant models, politics itself was marketized, turning into the playing field of a simulated civil society of NGOs and activists. This itself was a Polanyian countermovement in an internal sense; the disembedding of society from the market was countered with a protective system anchored in the market.

Covid has clearly dynamited parts of this neoliberal consensus. Record spending levels are being recorded, while the fiscal dam has been broken from Singapore to Budapest. With the exception of China, however, the state has also taken on a curiously double role in this process. Welfarism in the twentieth century constituted an experimental program in a mixed economy and national development. Spurred on by a fractious but densely organized coalition between labour and small business, these states invested in long-term public services, the electrification of rural areas, the building of dams, roads, bridges, and other infrastructure. In its most ambitious moments, public money was spent to build public goods with very little private sector involvement.

This type of remaking of the economy for the public good has been, so far, completely absent from Covid crisis fighting. Instead, policy makers seem to have opted to replace the invisible hand of the market with the invisible hand of the state: a referee who will occasionally assist the players but rarely – if ever – partake in the game itself. In this sense, left-wing critiques risk relying too heavily upon a temporary ‘sugar high’: instead of reinvigorating the post-war welfare state, Covid could have opened the gateway to a ‘disinhibited public-private project’, as Adam Tooze recently put it. The vaccine race was itself a monument to this project: the state channels the cash, companies plan and produce. This is a creature more Behemoth than Leviathan, to use Neumann’s terms.

Gerbaudo is right to speak of a new statist moment. Yet the end result of this statism might also look frighteningly close to the UK’s Covid response: an uneasy continuation of the privatised state, with subcontractors angling for government contracts, now mainly oriented on a national rather than international axis. The list of providers for UK travel tests, for instance, provides a rabid illustration of this tendency: all British, all private.

This indeed is a far cry from the high globalisation we grew accustomed to in the 1990s and 2000s. Then, Tony Blair could compare the movement of prices to the turning of the seasons while Polish poets attended the opening of their country’s first McDonalds. The ‘openness’ of this original globalization was always ambiguous. As Gerbaudo notes, the ‘Endo-politics’ was always coupled with severe restrictions on labour movement—while it proclaimed a universal model of consumer citizenship, notably in the European Union, only two-tier citizenship could assure the neoliberal service economy its labour supply. The result looks more like what Nicholas Mulder recently described as ‘globalisation without globalists’: underneath the neoliberal momentum, the basics of capitalist statecraft have not shifted fundamentally—there is a ‘great recoil’, but capitalist society is hardly in the process of being sublated.

Gerbaudo is also clear that any prediction about the shape of our post-Covid world itself implies an abdication of agency – just like Neumann hoped that his book would be the contribution to a war of words that could help the war of actual armies. The task to combine this new politics of control with a politics of protection will have to be decided politically, not academically. Gerbaudo rightly criticizes the tendency to reduce the state to its pastoral functions—visible in works such as Benjamin Bratton’s Revenge of the Real—while he dissects the right’s ‘exit fantasies’.

Gerbaudo is clear that any move towards a more ‘public’ capitalism should obviously be welcomed from the left. But ‘socialization’ can happen both ‘from above’ and ‘from below’. The left needs more than the right kind of administration, much like it needed more than an assemblage of identities in the 2010s. ‘Populism’ was an attempt to do politics in a time after history, when the clash of classes and the bargaining of interests seemed both institutionally and intellectually impossible.

It is not clear how this populism will be channelled into our new era of public-private protectionism. The more the business of ‘government’ gets left to the central banks, and the more economic policy relies on simple cash-transfers, the less socialists have to offer as a philosophical counter-vision (‘Vote with your dollars or euros’ as the mantra of the future). If central banks can maintain certain consumption levels through cash transfers, the enormous gaps in inequality, the cannibalization of public services, and the decay of our social infrastructure can continue. This might indeed be neoliberalism’s end – but whatever’s next might prove even more confusing.

Filed under: covid-19, keynesianism, left-politics, neoliberalism, the-state