New Book Defines Neoliberalism, Challenges Elite Charade of Changing the World

Betsy DeVos, our current U.S. Secretary of Education, is easy to peg.  She’s an education libertarian who has been known to declare, “Government really sucks.” She believes in the glory of private markets and has an added commitment to religious education and using government money to help parents pay for it.

But how do we accurately name and fully explain to ourselves the thinking of people like Arne Duncan and Barack Obama, Bill and Hillary Clinton, and the people who call themselves Democrats for Education Reform? These Democrats want to divert public tax dollars away from the traditional public schools—which continue to serve over 50 million American children—to unregulated private contractors called charter schools. How did school privatization become bipartisan, with conservative Republicans like DeVos favoring vouchers and Democrats enthusiastically supporting charters? Turning so-called “failing” public schools over to Charter Management Organizations, if you will remember, was one of the “remedies” of the bipartisan, Bush-era No Child Left Behind Act, and of Race to the Top, the project of Obama-era Democrats.

In his new book, Winners Take All: The Elite Charade of Changing the World, Anand Giridharadas helps us out here.  While much of the book focuses on current trends in the philanthropic sector, Giridharadas also defines the values that have become a new kind of conventional wisdom about public policy in our now alarmingly unequal society.  Giridharadas provides the data depicting the incomes of the rest of us next to those in the top One Percent and the top .001 Percent.  He describes the kind of inequality that separates the rich and the poor but leaves the rich with all the power when it comes to framing solutions to unequal healthcare, for example, or a public education system that has, following residential trends, become increasingly segregated by economics as well as race—schools with radically unequal funding that provide radically disparate access to opportunity.  Giridharadas does not explore these social and economic challenges in themselves, nor does he suggest solutions. Instead he chooses to delineate all the ways powerful elites have assigned themselves responsibility for solving the problems—and to describe the injustice that follows when the voices of the rest of us are absent from the conferences at Davos or Aspen.

Giridharadas defines neoliberalism, a term that gets thrown around all the time these days but is infrequently explained. Giridharadas adopts the simple definition of anthropologist David Harvey: Neoliberalism is “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade… (D)eregulation, privatization, and withdrawal of the state from many areas of social provision tend to follow.  While personal and individual freedom in the marketplace is guaranteed, each individual is held responsible and accountable for his or her own actions and well-being.  This principle extends into the realms of welfare, education, health care, and even pensions.”  Giridharadas adds, quoting from the thinking of political philosopher Yascha Mounk, that we have entered a “new age of responsibility in which responsibility—which once meant the moral duty to help and support others—has come to suggest an obligation to be self-sufficient.” (pp. 18-19)

All this has created a new ethos on many college campuses, particularly on campuses where the business and investment sectors are underwriting centers to promote “social innovation” and “social entrepreneurship,” or where students are becoming interns or fellows in financial firms, which push students to imagine their futures and do well by doing good: “Change the world. Improve lives. Invent something new. Solve a complex problem. Extend your talents. Build enduring relationships.” (p. 24) And the way this can happen, students are told, is by going to work for business or the financial sector to address alarming inequality and its many challenges or applying for a grant from a huge foundation whose endowment has exploded as massive untaxed profits have accumulated.  Giridharadas continues: “Nowhere is this idea of entrepreneurship-as-humanitarianism more entrenched than in Silicon Valley, where company founders regularly speak of themselves as liberators of mankind and of their technologies as intrinsically utopian.” (p. 47)

Giridharadas names today’s ethos “marketworld”:  “Marketworld is an ascendant power elite that is defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo.  It consists of enlightened business people and their collaborators in the worlds of charity, academia, media, government, and think tanks. It has its own thinkers, whom it calls thought leaders, its own language, and even its own territory—including a constantly shifting archipelago of conferences at which its values are reinforced and disseminated and translated into action.  MarketWorld is a network and community, but it is also a culture and state of mind. These elites believe and promote the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform.” (p. 30)

What about the role of government, which most of us think of as the institution protecting the rights of individuals and marginalized groups and providing oversight to protect society from the inevitable negative externalities of capitalism?  Instead in MarketWorld, it is believed that government and the private sector can work together in a “win-win” for everybody:  “People typically think of government and market working in opposition to each other—and regulation being the tool by which government constrains the market… This new ideology believes that government is an investor in capitalism. The government works not as a check on capitalism but for capitalism—to make capitalism successful, to ensure that the conditions for its success are in place: that there is a decent education system to produce the requisite number of workers, that trade agreements get written so as to allow companies to buy from and sell to far-off places; that the infrastructure allows trucks to get produce to the supermarket before it rots; that the air is clean enough that people live long and (more important) productive lives.” (p. 48)

The example from education, of course, is the diversion of billions of dollars from the states’ public education budgets over a twenty year period to unregulated, private contractors called charter schools. The neoliberal justification has been that charters embody the business school values of innovation and disruption. The charter school sector is among America’s biggest experiments with social entrepreneurship paid for by government.

The Nobel Prize winning economist Joseph Stiglitz sums up the overall economic problem that is the focus of Giridharadas’s book: Powerful businesses and giant philanthropic foundations have found ways to pretend to address the economic catastrophe we face today in American society.  But there is no way, according to Stiglitz, that this arrangement can possibly address the problems that derive from inequality: “Like the dieter who would rather do anything to lose weight than actually eat less, this business elite would save the world through social impact investing, entrepreneurship, sustainable capitalism, philanthro-capitalism, artificial intelligence, market-driven solutions.  They would fund a million of these buzzwordy programs rather than fundamentally question the rules of the game—or even alter their own behavior to reduce the harm of the existing distorted, inefficient and unfair rules. Doing the right thing—and moving away from their win-win mentality—would involve real sacrifice; instead, it’s easier to focus on their pet projects and initiatives..”

Stiglitz, the economist, explains that eliminating inequality will inevitably require changing the system itself in a way that challenges today’s One Percent.  After all, we’ll need to address, for example, what businesses pay and how they treat their employees and increase taxes (which will incidentally reduce the endowments and power of today’s mega-philanthropies): “In order to really have an economy with the greatest opportunity for all, the kind of economy they seem to champion, the MarketWorlders would have to pay high levels of corporate and personal income tax, offer decent wages to their workers, allow unions, fund public schools (instead of pet charter projects) and support some form of single payer health care and campaign finance reform. One simply can’t arrive at a more economically equal reality when the rungs of the ladder are so far apart.”

Giridharadas’s book works best as a descriptor of a dangerous ethos at work among the powerful. In his preface, however, he challenges the power of neoliberalism: “What is at stake is whether the reform of our common life is led by governments elected by and accountable to the people, or rather by wealthy elites claiming to know our best interests. We must decide whether, in the name of ascendant values such as efficiency and scale, we are willing to allow democratic purpose to be usurped by private actors who often genuinely aspire to improve things, but first things first, seek to protect themselves… We must ask ourselves why we have so easily lost faith in the engines of progress that got us where we are today—in the democratic efforts to outlaw slavery, end child labor, limit the workday, keep drugs safe, protect collective bargaining, create public schools, battle the Great Depression, electrify rural America, weave a nation together by road, pursue a Great Society free of poverty, extend civil and political rights to women and African Americans and other minorities, and give our fellow citizens health, security, and dignity in old age.” (pp. 10-11)