The Genesis of Neoliberalism

Neoliberalism, as articulated by Milton Friedman and his disciples at the University of Chicago, is predicated on the belief that unregulated markets, driven by individual self-interest, produce optimal economic and social outcomes. Friedman’s vision, often summarized as “greed is good,” was not merely an academic theory but a blueprint for radical economic transformation. In 1975, Friedman’s ideas found a real-world testing ground in Chile under Augusto Pinochet’s dictatorship. The “Chicago Boys,” Friedman’s protégés, implemented a radical free-market experiment, slashing government spending, privatizing industries, and deregulating markets. The result, contrary to Friedman’s promised “Miracle of Chile,” was catastrophic: unemployment soared to 30%, inequality widened, and the economy entered a free fall. Pinochet’s brutal regime, which included throwing dissenters from helicopters, ensured compliance with this economic vision, revealing the authoritarian underbelly of neoliberalism.

This experiment was not an anomaly but a harbinger of neoliberalism’s global impact. In the 1980s, China faced a similar ideological battle between Friedmanite economists advocating for rapid market liberalization and proponents of Alexander Hamilton’s American Plan, which emphasized strategic government intervention. Chairman Deng Xiaoping and Premier Zhao Ziyang opted for Hamilton’s approach, using tariffs, subsidies, and state-led industrial policies to fuel China’s manufacturing boom. The contrast with Russia’s post-Soviet “shock therapy” is stark: Russia’s economy collapsed under neoliberal reforms, with plummeting wages, life expectancy, and industrial output, while China’s government-guided model now accounts for one-eighth of global goods and services production. This divergence underscores a critical lesson: neoliberalism’s faith in unregulated markets often leads to economic devastation and social inequity, while strategic state intervention can foster prosperity.

Neoliberalism in America: Privatization, Deregulation, and Social Decay

In the United States, neoliberalism took root under Ronald Reagan and has since reshaped the nation’s economic and social landscape. Reagan’s policies—deregulation, tax cuts for the wealthy, and the weakening of unions—set the stage for a decades-long assault on the middle class and public institutions. The 1986 immigration reforms, which ceased enforcement against employers hiring undocumented workers, decimated unionized industries like construction and meatpacking, replacing well-paid American workers with low-wage, precarious labor. The North American Free Trade Agreement (NAFTA), negotiated by Reagan and George H.W. Bush, accelerated the offshoring of over 60,000 factories, costing at least 15 million American jobs. George W. Bush’s Medicare Modernization Act of 2003 furthered this trend by privatizing nearly half of Medicare’s services, prioritizing corporate profits over public health.

Republican politicians, whose animating force must be greed, have consistently prioritized the interests of their wealthy donors over the public good. Their opposition to Social Security and Medicare is not rooted in ideological fears of socialism but in a refusal to fund social safety nets. Their use of racist rhetoric and policies, while appealing to low-information voters, serves a deeper economic purpose: maintaining an underclass of low-wage workers to maximize corporate profits. This strategy, cloaked in appeals to “freedom” and “conservatism,” has led to Red states becoming the nation’s poorest, with the highest rates of poverty, violence, disease, and illiteracy. The hypocrisy is evident in their invocation of Christianity to justify policies—like denying abortion access or discriminating against marginalized groups—that contradict Jesus’s teachings of compassion and equality.

The environmental and educational consequences of neoliberal policies are equally dire. Republicans’ denial of climate change and deregulation of polluting industries have exacerbated environmental degradation, threatening ecosystems and public health. Their dismantling of public education, from defunding schools to eliminating free college, has saddled young Americans with $2 trillion in student debt, stifling economic mobility and innovation. Meanwhile, their refusal to address gun violence—despite America’s unique status as the only nation where it is the leading cause of childhood death—reflects a callous indifference to human suffering, driven by profits from weapons manufacturers and NRA donations.

The Slide Toward Authoritarianism

Since Donald Trump’s return to power, the United States has entered what Hartmann describes as the “Chilling Stage” of tyranny, where dissent is suppressed, and democratic norms are eroded. Trump’s actions—raiding the homes of critics, deploying troops to American cities, defunding public media, and threatening to seize voting machines—signal a dangerous shift toward authoritarianism. His administration’s economic policies, such as demanding a share of corporate revenue or stock (e.g., 10% of Intel), mirror the crony fascism of regimes like Hungary and Russia, where private enterprise serves the state’s leader rather than the public. The media landscape is also under siege, with CBS installing monitors in newsrooms, ABC settling lawsuits to appease Trump, and NPR and PBS facing defunding.

This authoritarian turn is enabled by a Republican Party that has abandoned any pretense of conservatism in favor of consolidating power and wealth. The silence of Republican leaders, who once decried Obama’s Jade Helm exercise* as a prelude to tyranny, is deafening in the face of Trump’s actual abuses of power, such as sending thousands of "agents" from ICE, other agencies, soldiers from the National Guard and even the Marines to Blue cities in the name of restoring order, even though 1. crime in those cities has fallen significantly in recent years, and 2. certain Red cities have much higher crime & murder rates. The Supreme Court’s granting of near-total immunity to Trump further emboldens his lieutenants, who operate with impunity, aware that accountability is unlikely. Meanwhile, protest is stifled, with students facing expulsion and debt-driven fear, and the construction of “FEMA camps” raises chilling questions about future repression.

*Jade Helm involved 1200 personnel from four branches of the US military, and was designed to train soldiers to operate in overseas combat environments, including maneuvering through civilian populations.

The Zenith of Capitalism and the Coming Decline

The broader context of these developments is a global economic system on the brink of collapse. Humanity’s overconsumption of resources, from fossil fuels to agrichemicals, has driven the planet toward an ecological crisis. The capitalist system, designed for perpetual growth, is incompatible with the inevitable decline signaled by shrinking oil and copper production, bursting debt bubbles, and potential global conflict. 

The year 2025-30 may mark the “zenith” of Western capitalism, a plateau followed by a precipitous fall. Tim Morgan’s observation that the global economy is shifting from growth to contraction underscores the urgency of rethinking our economic model.

Neoliberalism, with its emphasis on deregulation and privatization, has accelerated this decline by prioritizing short-term profits over long-term sustainability. The United States, once a beacon of economic stability, now faces a future where its infrastructure crumbles, its education system falters, and its social fabric frays. The Republican Party’s greed-driven policies have exacerbated these trends, leaving the nation ill-equipped to address climate change, economic inequality, or public health crises.

The Likely Outcome: A Fractured Democracy and Economic Decline

The cumulative effect of US policies and actions, rooted in neoliberalism and Republican greed, points to a troubling future. Without significant intervention, the United States is likely to see:

1. Deepening Economic Inequality: The continued prioritization of tax cuts for the wealthy and deregulation will widen the gap between the ultra-rich and the working class. As factories close and jobs vanish, the middle class will shrink further, leaving millions in poverty or precarious employment.

2. Erosion of Democratic Institutions: Trump wants to be dictator for life. Though it looks like that will be short, when Trump dies or is incapacitated, J.D. Vance will inherit the new, authoritarian system.

3. Environmental and Social Collapse: The failure to address climate change and resource depletion will exacerbate environmental disasters, while the neglect of public health and education will deepen social inequities. Red states, already plagued by poverty and illiteracy, will bear the brunt of these failures.

4. Global Decline in Influence: As China and other nations with strategic economic policies outpace the US, America’s global economic and political influence will wane. The US will be vulnerable to economic shocks and geopolitical instability.

The antidote to neoliberalism lies in reviving Hamilton’s American Plan, with its emphasis on government-led industrial policy, strategic tariffs, and robust public investment.  How about some neo-FDR Green New Deal projects to give people purpose, self-respect, money to buy food? Grassroots resistance, as urged by Hartmann, can amplify progressive voices and increase the turnout that Democratic leaders like Gavin Newsom and JB Pritzker need to prevail in their fight to regain constitutional democracy in the United States.