Crisis of Inequality Meets the "Post-Neoliberal" Illusion
A recent piece in The Guardian drew attention to an open letter sent to the UN secretary-general and the president of the World Bank. The letter raised alarm bells about the growing crisis of inequality between the global North and the global South.
Its signatories included a number of high-profile voices, including heterodox economists like Thomas Piketty and Joseph Stiglitz, as well as prominent public officials like New Zealand’s former prime minister, Helen Clark.
The upshot was this:
We are living through a time of extraordinarily high economic inequality. Extreme poverty and extreme wealth have risen sharply and simultaneously for the first time in 25 years. Between 2019 and 2020, global inequality grew more rapidly than at any time since WW2…The richest 10% of the global population currently takes 52% of global income, whereas the poorest half of the population earns 8.5% of it. Billions of people face the terrible hardship of high and rising food prices and hunger, whilst the number of billionaires has doubled in the last decade.
This is truly a crisis, at a global scale. And there’s zero prospect whatsoever of this crisis being addressed without large amounts of public spending.
Public spending, of course, violates the ethos of neoliberal globalization and the austerity it reflexively calls for anytime a government faces dire economic straits. So the ability for governments to address this crisis depends on whether the global economic order is “post-neoliberal.”
Naturally, the first place to look to answer that question is the US because, as the Core of the world system, the US has been a major enforcer of the logic of austerity at home and abroad.
The Biden administration—and specifically Jake Sullivan—claims the so-called New Washington Consensus, which I wrote about previously, is post-neoliberal. Indeed, Bidenomics rests on a (reasonably solid) critique of neoliberal globalization.
But that claim is based on a narrow, misleading conception of what we mean by neoliberalism, and even then it applies only to the US.
There’s no doubt that what passes for economic common sense—especially in America—has changed since the pandemic.
But the austerity policies associated with neoliberalism are alive and well in America; they’re just being reframed with a national security lens. And most of the world continues to endure the worst of what neoliberal globalization has imposed on it, same as ever.
The crazy thing is that there’s a way in which America’s big public spending—which is supposed to be a repudiation of neoliberalism—directly depends on most of the world remaining trapped in neoliberalism of some sort. Extreme global inequality may be a condition of possibility for Bidenomics.
Let me explain.