Of the two meanings of “Neoliberalism”
The use of the term “neoliberal” has recently been criticized as a meaningless epithet, a tabula rasa used to disparage anyone deemed unsatisfactorily conservative.
To the contrary, I think the term “neoliberal” is fairly precise, but much like the term “liberal” itself, it has two quite different meanings depending on whether the definition descends from its original European or American incarnation. The first variety is very right-wing. The second is centrist.
A good description of right-wing neoliberalism can be found in this article in Al Jazeera this past weekend on a right-wing awakening in Latin America:
[N]eoliberalism is … a means to an end. The state is purposefully reduced in its scope of action to a minimum – by way of policies associated with fiscal austerity, financial deregulation, free trade and the privatisation of public assets, among others – so nothing can prevent the market and its profit-oriented agents from reaching a fair point of equilibrium between demand and supply. According to those who advocate such perspective, the state is nothing but a “necessary evil”.
Similarly, Brad DeLong has said:
[R]ight-neoliberalism is the claim that social democracy was one huge mistake–that it created a North Atlantic of takers who mooched off the makers. It holds that if we got rid of social democracy, we would have a utopia because the makers wouldn’t have to carry the takers on their backs and the takers would shape up ….
This right-wing meaning, of “neoliberalism” is a reincarnation of European-style 19th Century laissez-faire liberalism, a belief that the ideal state should operate and be limited by the rule of law, and administered by neutral officials selected on merit, with the economic markets left to themselves without interference by government. Nineteenth century liberals had no problem with, for example, government promotion of infrastructure, including things like sanitation and education. Right-wing neoliberals, by contrast, see all government bureaucracy as inherently evil — even, as we saw in the case of Flint, Michigan, in the case of basic sanitation.
Note that right-wing neoliberalism is similar to, but not quite the same as, “libertarianism.” Libertarians believe the state also has no business in the private sphere of people’s lives. Thus it should stay out of the bedroom as well as the boardroom. Not necessarily for right-wing neoliberalism. Right wing liberalism is agnostic as to whether foreign policy is passive or imperialistic, and whether or not government intervenes in the social sphere, so long as it stays out of the economic sphere.
The second type of “neoliberalsim,” centrist neoliberalism, originates from the US meaning of liberalism, and is once again defined pretty well by Brad DeLong:
1. Most of the time the best way to accomplish social-democratic ends will be to get the money to the people who maximally want those ends accomplished, and then let them spend it.
2. Most of the time the best way to correctly manage the market system so that it doesn’t rain destruction upon the land is to impose the appropriate anti-destruction-raining Pigovian taxes (and subsidies).
3. Most of the time command-and-control is strictly dominated by other modes of government intervention that are less vulnerable to naked rent-seeking by the politically influential.
Elsewhere he quotes John Quiggin: