Neoliberalism and the Drift to Proto-Fascism: Political and Economic Causes of the Crisis of Liberal Democracy

Thomas Palley

Journal of Economic Issues, 2024, vol. 58, issue 3, 732-755

Abstract: Neoliberalism is a political economic philosophy consisting of two claims, one economic and the other political. The economic claim is laissez-faire is the best way to organize economic activity as it generates efficient outcomes that maximize well-being. The political claim is free markets promote individual liberty. This article argues both claims are problematic. The evidence from the Neoliberal era shows Neoliberalism has undercut shared prosperity and unleashed illiberal forces that threaten liberty. The article distinguishes between the first political turn which established Neoliberal political hegemony, and the second political turn toward proto-fascism now underway. The second turn is being driven by a collection of factors which have created a demand for proto-fascism and weakened the defenses against alt-right ideas. Those factors include socio-economic disembedding, institutional destruction and political disembedding, increased economic inequality that tilts political power, transformation of attitudes to government and governance, transformation of economic identity, and behavioral transformation that celebrates sociopathic egotism. The Third Way’s capture of center-left politics means liberal elites occupy the political place that should be held by true opponents of Neoliberalism. Those elites obstruct the politics needed to reverse the deep causes of the drift to proto-fascism. Ironically, that makes them a real danger.

Date: 2024
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DOI: 10.1080/00213624.2024.2381414

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