I have recently read the ++article++ about neo-liberalism by Lene Johansen, an active (neo)liberal opinion-maker in Norway who writes at the Norwegian-speaking liberaleren.no portal. The article is called “A dear child has many names” (my translation) and focuses on recent discussions about liberalism at the Mont Pelerin Society meeting in Oslo.
Lene writes that Norwegian neoliberals have stopped using the word neoliberal. If one listens to how the term is used in the social debate, one can understand that neoliberalism is to blame for everything wrong in society. According to her writing, to be neoliberal is to favor using the market as a distribution mechanism in situations where markets are the best solution.
The case of economic historian Stefan Kolev
The article also focuses on the opinions and arguments of economic historian Stefan Kolev from Hungary. Kolev is promoting to neoliberals “to retake ownership of the word neoliberalism.” He talks about the history of neoliberalism in the plural because each generation creates its neoliberalism in contrast to the neoliberalism of the previous generation. The neoliberalism of Thatcher and Reagan in the 80s and 90s was “contemporary neoliberalism,” Their solutions have no answer to our current political challenges.
For example, Johansen writes that tax relief is not a solution to all challenges in a society where liberal social institutions have become vulnerable to collapse. The disparity between those who live on capital income and those who live on labor income, the limits of the state now that public enterprises have matured, the increasing nationalism and populism on both the right and left flanks, the migration crisis or the challenges we have with climate and nature loss are examples of issues that require different answers.
According to Johansen, liberals need to take “the liberal toolbox” and see solutions to today's challenges in the almost 400-year-old tradition of ideas on which liberals of all kinds build their worldviews. Kolev has pointed out that Liberalism is again in a crisis, partly because the liberal order has become fragile and unstable. Kolev would like us to return to thinking in order, as he calls it, since society is a patchwork of different orders. The biggest are legal, economic, social, public, and international, and they all set the framework for how others should function. She writes that more focus should be given to legal and social orders.
“Anglo-American neo-liberalism” vs. “European/Continental neo-liberalism”
Johansen writes that since the Walter Lippman Colloquium meeting in 1938, there has been a split between liberals from the Anglo-American parts of the world and continental Europe. This distinction is based on the fact that Anglo-American liberals are mainly concerned with state power. In contrast, liberals from continental Europe have been critical of all forms of power, including private economic power. Johansen writes that this divorce still exists and was also visible at the Mont Pelerin Society meeting in Oslo in 2022.
The Anglo-Americans have discussions about protecting the individual against abuse by the state. They do not consider how private companies and capital owners have grown strong enough to regularly commit more significant abuses against individuals than the state dares to bear. The company has gained so much power that it even abuses states. Still, liberals who are primarily influenced by the Anglo-American liberal program about which it is so easy to find information on the digital media platforms of these companies do not see it. They don't wear power-critical glasses other than when they look at the state.
The divide can also be seen in neoliberal research programs in the USA and continental Europe. The American state has become heavy and heavy simultaneously as it has become ineffective. The most crucial neoliberal research now focuses on entrepreneurship and the historical narrative of capitalism's incredible effects on people. Environment, loss of nature, and a decaying democratic and social order are not a topic. It is a topic that neoliberal researchers in continental Europe are investigating. The Anglo-American and European research programs produce exciting results, but only the European ones answer contemporary people's questions. The Americans try vainly to hold on to the glory days of growth after the wall's fall. According to Johansen, the glory days won't return, and “we must create new growth elsewhere.”
States, economics, humans, and the world
Historically, the work of economists from the Austrian school, the ordoliberalism, and the old Chicago school was taken into the mainstream of economics. Economic theories based on limiting government intervention that put the price mechanism out of action and the dismantling of trade barriers were to be tested. The International Monetary Fund, the World Bank, and the US State Department demanded deregulation and dismantling of trade barriers to provide loans to national economies in crisis. It started the current wave of globalization, free trade, and economic growth worldwide.
According to Johansen, financial power rules the world economy and the nation-states. However, at the same time, the state still ensures that the population lives a good life and that economic stability is the political goal. The ruling elites no longer intervene directly in the lives of individuals and tell them what to do and what not to do. They build their power on managing the shared values created by everyone being productive. Those who cannot or do not want to be productive are a problem.
This is the neoliberal state in a power-analytic sense but not an ideological one. Economic signals are the state's management tool, and the state is acting according to values and norms and, not least, according to numbers. Productivity targets, gross national product, consumer indices, lending rates, inflation, vaccine coverage, and disease burden are just some of the targets that govern your life and mine. As individuals, we follow these incentives and make protests uncomfortable for the governing authorities when they set unreasonable goals. If the politicians and others don't listen, we will replace them in the next election.
In the search for neo-neo-liberalism, Johansen is also writing about the problems and historical differences regarding the more Anglo-American neo-liberalism. She takes up the case of labor markets and unions. As in the UK during the 1980s, abolishing domestic political tools meant interest groups lost political privileges and influence. It does not happen without a struggle because powerful trade unions in the private and public sectors fought to keep their power. Public enterprises were privatized, and subsidies and special arrangements were to be removed. When it comes to Norway, the tripartite labor-market cooperation between employers, employees, and unions meant that compromise solutions were found that all parties in working life could live with, the governing authorities in the USA and Great Britain did not stop until the trade unions were left with almost no power. It may be close to thinking that they did not deserve that power in the first place when they did not find room for compromises that took into account other groups in their communities. The Norwegian trade unions managed to make it happen almost simultaneously.
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From Thatcher-Reagan to Ostrom
Johansen writes that “our old ideas about what Liberalism should look like no longer have any strength or attraction.” According to her, the unholy alliance over economic liberalism that liberals have had with conservatives should have died with the election of George W. Bush. The alliance limped on until the election of Obama. Then the latent white chauvinism that lay dormant in American culture awoking, and it seeped through the cracks in the Republican Party. After that, there was no single reason why the alliance should continue.
For our own time, the social order must be more prominent in the new neoliberalism. Solidarity and solutions based on social communities must again be more significant in contemporary neoliberalism. It is an integral part of our tradition of ideas, but this sort of thing has not been given much space in neoliberal thought in the last 50 years. One of the thinkers who must be given much more space than she has had is the Nobel Prize winner Elinor Oström.
Therefore, as Johansen argues, Norwegian liberals must accept the challenge from Kolev and start a long and thorough dialogue about what neoliberalism looks like in the 21st century. Liberals cannot afford to lose a generation or two of young people on behalf of the liberal worldview just because we are doing ourselves a disservice by putting the Liberalism of the past on a pedestal and thinking about the good old days.
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