Neoliberalism vs. Right Libertarianism
"As a former libertarian and a current neoliberal..."
I recall vividly the frequency and hypocrisy of Alternet's(and similar neoliberal propaganda outlets' editorial crop of libertarianism-bashing articles populating its propaganda pages, but a few years back...
I always saw neoliberalism to be r-libertarianism on corrupted statist steroids and lacking the redeeming civil rights and foreign policy values which Ron Paul-libertarians hold dear.
If the "left" were presented with a choice of forming an alliance I can't imagine anyone choosing to ally with neoliberals; with Democrats over (r)Libertarians....
Neoliberalism vs. Libertarianism
Similar, yet so different.
As a former libertarian and a current neoliberal, I will describe the difference in approach to policy that makes neoliberals and libertarians similar but yet so distinct at the same time. Often, it’s difficult to describe what neoliberalism is, which I hope establishing these differences brings forth a clearer picture.
First and foremost, it’s important to recognize that libertarianism is a spectrum. On the far right, you would find the anti-government anarcho-capitalists. Spanning the right-wing, you’d see the mainstream libertarians like Rand Paul or Justin Amash. Yet, moving along towards the center to center-right, you’d find the many “so called” neoliberals. Neoliberals are distinct in that they have a fundamentally different approach to building a more libertarian society.
Neoliberals are moderate, centrist libertarians. They share the same ambitions as most libertarians in their desire for freer markets, cultural liberalism, and an end to foreign wars. However, nonetheless, neoliberal approaches to these issues are both subtle, yet still so distinct.
On the economy, neoliberals share in the same stereotypical fervor for the free market as libertarians. Neoliberals are strong supporters of privatizing bureaucracies best fit to be run by the private sector. Neoliberals, like libertarians, are also big fans of deregulation. Neoliberals want more economic disruption. This drives them to support deregulating the economy, promoting zero-tariff trade, higher immigration, and flexible labor laws. Strongly pushing for increasing the ease of doing business and the free-market, but opposing completely unregulated capitalism.
On markets, you would think neoliberals hold the same view as libertarians. Both believe that markets are the best solution to problems. Yet, libertarians believe the answer to most problems is total laissez-faire, allowing capitalism to handle the situation. Very much in line with the market fundamentalist standpoint. Neoliberals, on the other hand, very well know that pure markets are not a free-for-all. Markets don’t occur naturally, but are instead constructed through law and practices, and those practices can be extended into realms well beyond traditional markets. Free-markets are built—by government.
On welfare, neoliberals see safety-nets as a substitute for damaging, freedom-reducing regulation. They understand that the push for freer markets involves building a more effective, market-oriented safety-net. Neoliberals also know that free-markets have lot to gain from the presence of an effective safety-net: zero-tariff trade, less binding wage laws, low-level regulation, less intrusive unions, and a more flexible labor market. Neoliberals see it as ridiculous to pass all that up in exchange for the smaller, weaker welfare state that libertarians want. Instead, neoliberals find that freer markets coupled with more effective, basic redistribution can ensure poverty is eradicated, generally by the means of a basic income and child allowances. Paid out from the large gains of free trade, higher immigration, and the discontinuation of our ineffective means-tested system.
On taxes, neoliberals and libertarians have distinct differences. I’ve found many libertarians to believe in the taxation is theft slogan. Neoliberals and myself highly disagree, we actually like taxes and believe freer markets don’t require sacrificing revenue. We’re not socialist type tax enthusiasts either. We know no tax is created equal. Instead, we just seek to collect government revenue in the most market-based, business-friendly way possible. Unlike libertarians, neoliberals are convinced that revenue-to-GDP doesn’t necessarily destroy free-markets in itself, it’s the way government collects that revenue-to-GDP that can destroy markets. The Heritage Foundation’s Economic Freedom Report even self-proved this assessment. Estonia has a stronger score than the United States on tax burden, but Estonia collects more revenue-to-GDP. The reason — Estonia collects its revenue in a more business-friendly, market-based way than the United States. This prompts neoliberals to want to strengthen the tax code, not destroy it like libertarians would.
On the IRS, neoliberals are big supporters of the government department. Neoliberals gasp at when libertarians want to abolish the IRS, because the IRS is one of the government agencies that neoliberals strongly support. Neoliberals are passionate about shrinking the tax gap, unlike libertarians, so they would support higher investments put into the IRS to do so. Seeing it that funding the IRS would collect more revenue without any increase in actual taxes. Neoliberals also like the IRS because it literally pays for itself and more — put a dollar in, receive three in return. Neoliberals want a larger, more technocratic IRS. Libertarians simply just want to abolish it. It goes back to the reason that neoliberals are friendly to government revenue, while libertarians are extremely hostile to it.
On fiscal policy, neoliberals and libertarians largely overlap in their aim for balanced budgets. The libertarian approach, however, is starving the beast through large revenue reductions. Neoliberals are more in favor of austerity — reduce spending and raise taxes to tackle the deficit. President Obama tried to apply austerity through his balanced approach of curtailing tax deductions while reducing spending. Bill Clinton did it through his Omnibus Budget of 1993, which cut spending and raised taxes. Both times saw libertarians and republicans gasped at the hire taxes. Yet, results show that both neoliberal influenced Presidents left office with stronger finances than when they entered. Unlike libertarian influenced Reagan, W. Bush, and Trump — all of whom left the country in fiscal shambles through their “starve the beast” tax policies. Austerity is a fiscal approach that neoliberals strongly support, because it works.
On monetary policy, neoliberals are big fans of a robust, independent, and technocratic central bank to set stable monetary policy. Neoliberals believe the Federal Reserve functions well in the market economy and would simple seek to have the Fed mimic more of the free-market to make it more effective. Libertarians absolutely despise the Federal Reserve, wanting to conduct ridiculous audits, impose curtailing reforms, or it’s complete abolishment. Neoliberals know the economics behind money, finding the libertarian aim towards the gold standard as ridiculous. Continuing to defend and protect the current US dollar is the most sound monetary policy, which drives libertarian skepticism.
On the environment, neoliberals are strong supporters of tackling the issue. Libertarians, I’m not really sure. Some support it, other’s don’t, it all depends who you speak to. However, neoliberals are more united in the push for more robust climate policy. A high rising carbon tax would be imposed onto both businesses and new vehicle purchases to expedite the green economy. While at the same time using these carbon taxes to replace many of the environmental regulations that sought to accomplish the same thing. Neoliberals would impose a zero-subsididy energy policy for agriculture, fossil fuels, and even green energy. Clean tax cuts, clean free trade, clean private equity, tort reform, and the goal of planting a trillion trees. I could see many neoliberals getting behind this type of ambitious eco-friendly, market-driven agenda. Libertarians, maybe only part of it.
On healthcare, libertarians simply just want the presence of a free-market. It goes back to how neoliberals view the market—something that is constructed, not left alone. Neoliberals want a more market-driven health system, but would tackle head on the reason our health industry hasn’t been acting like every other market: commercially uninsurable risks. A problem that regulation and centralized mandates have failed to solve under Obamacare. Neoliberals would therefore use a strong state to build a safety-net for healthcare that directly insures against these risks under Universal Catastrophic Coverage. This would tackle the cost curve, allow for broad health insurance deregulation, and liberate the industry to function as an actual free-market like libertarians want.
On foreign policy, libertarians are more non-interventionist than neoliberals. They both share in their desire for less war, more peace, but stop short when it comes to America’s role in the world. I’ve seen libertarians become borderline isolationists and even nationalists. Neoliberals are free-market globalists. We believe more U.S. involvement in the global economy is a good thing. Yes, freer trade, higher immigration, but also more global alliances like the EU & UN. More humanitarian aid, denuclearization of our militaries, higher UN cooperation, and more diplomacy. Libertarians want out that.
On guns, as a neoliberal, I support higher levels of gun control. Under-regulated markets can also be bad thing, and right now, gun markets need more regulation. Commonsense gun measures to prevent gun violence and promote gun safety are completely reasonable. Most libertarians would probably disagree.
On government, this is where neoliberals are libertarians fundamentally disagree. Neoliberals are are pro-good government and libertarians have become dogmatically anti-government. The idea that the government is bad at everything is a complete lie. This is actually where I have parted ways from the libertarian label and became a neoliberal. Especially during covid, I have witnessed so much distrust and hate towards our government by the libertarian right. Rand Paul’s constant attacks against Dr. Fauci, refusal to comply with mask wearing, swift rejection of a government encouraged vaccination, and even the acceptance of radical covid conspiracy theories. I just couldn’t fathom sharing the libertarian label with these anti-government conspiracy theorists. To me, this is why libertarianism is internally falling apart. Since more and more libertarians seem to be drifting towards a nationalist, conspiratorial way of thinking, I wanted to differentiate myself from those people. If libertarianism meant agreeing with far-right Alex Jones in practice, I didn’t want to be part of it.
I’m a free-market neoliberal.
https://newwayinstitute.substack.com/p/neoliberalism-vs-libertarianism
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