Is there hope for a post neoliberal world?

I grew up in a society where collective will was at the forefront and it is true to say people looked out for each other. The state – at all levels – had various policy structures in place to provide levels of economic protection for the least advantaged members of society. Having grown up in a poor family, those structures were important in allowing me to stay at school and then go onto to university. It also allowed my friends on the housing commission estate (state housing) who had different skills (not academic) to get apprenticeships and build careers that gave them material security in that way. It wasn’t a perfect period – there was racism, misogyny, and xenophobia – but as mass education spread, my generation left a lot of that behind. I was thinking about that when I read the recent article by Robert Reich in the UK Guardian (December 29, 2026) – Americans are waking up. A grand reckoning awaits us – which carried a resonance of some of the things that I have seen emerge in Australia as well as this 4-decade or so neoliberal nightmare reaches some sort of denouement.

When I was young, I read a lot of the writings of Karl Marx, who predicted that the Capitalist system would eventually collapse as a result of its internal contradictions.

His analytical framework taught me to maintain the importance of class struggle in my own work.

That struggle has a number of dimensions.

First, that the workers and bosses are working for different and conflicting ends but need each other in this system.

The workers want to be paid as much as they can get and do as little as possible.

The bosses, conversely, want to pay the workers as little as they can get away with but get as much production out of them as possible.

However, given that the system is defined by the few having control of the means of production and the many requiring access to it to earn and therefore eat there is a restive symbiosis that is ultimately destructive.

The evolution of work places over time has reflected that intrinsic conflict and the manifestations of it as technology expands.

Second, Marx also noted that the capitalists themselves are in conflict with each other (competition) and that reality would, over time, lead to the weaker capital being absorbed by the stronger capital – concentrating wealth in fewer hands, which would push more people into the working class.

Third, the competition among capital would lead to a relentless history of best practice technology to lower production costs, which Marx correctly saw increasing the constant to variable capital ratio.

Constant capital is the plant and equipment and other production materials, while variable capital is largely labour.

The latter (labor) is the ultimate source of profit, because it alone can produce surplus value.

Operating on those assumptions, Marx predicted that the profit rate would eventually decline and precipitate a crisis of stagnation and collapse.

Marx also saw clearly, that as these longer run contradictions were building, the system was also prone to regular crises of overproduction, where the suppression of the purchasing power of workers leads to firms producing too much relative to the sales potential.

In modern parlance we identify that with regular recessions.

Of course, all of his story is yet to play out because there were things that emerged along the way that he could not have foreseen.

For example, the rise of the regulative state that gathered force in the Post Second World War period drove a wedge into the class conflict.

The state became a mediator of the conflict, structuring policy interventions that ensured that the material standards of living of the working class improved overtime and that working conditions provided by capital became safer.

The state used a range of regulative and legislative approaches to sort of humanise capital.

Many of these interventions were disliked by capital but they were tolerated because of the overwhelming political mandate that Post War social democratic governments have been given by the people.

This was the period of my youth.

While the data for the 1950s and 1960s is sketchy to say the least, what we can say for certain is that income and wealth inequality in Australia was much lower during those decades than it is now.

Kids like me were able to achieve upward mobility because the state ensured that we could stay at school (free school supplies etc), and, through education, move further up the ladder than our parents were able to.

All that changed in the 1980s and definitely in the 1990s.

The timing of the change is debated among researchers who do this type of work, but there is no debate that inequality has risen significantly.

And that trend has been global rather than confined to Australia.

Accompanying and driving these trends were key changes in government policy.

A popular narrative that emerged in the 1970s was that the ‘state’ was now much weaker, even powerless, to deal with the emerging global financial markets.

The weak state story was promoted heavily by the emerging neoliberals (who were just part of the team Capital) because it could be used to justify their demands for privatisation (getting their hands on public capital for a pittance), deregulation (allowing them to pay less, offer less secure and safe workplaces), outsourcing (allowing them to get lucrative government contracts to supply essential services (particularly to the less advantaged), while cutting the scope and quality of those services), and access to on-going procurement contracts which essentially underwrote their profits.

First, the role of the state was something that Marx didn’t really get to incorporate into his framework, so it is hardly surprising that we have to modify some of his projections to take into account that that the fiscal power of the state saved capitalism from itself.

At least for a time.

Second, while the neoliberals were selling the line – which the Left bought hook, line and sinker – that the ‘state’ was now powerless, they were at the same time working feverishly to reconfigure the state to act as its agent and abandon the mediating role that it played in the Post War period up to the 1970s and 1980s.

The neoliberals knew damn well that the state hadn’t ‘gone away’ and that to get what it wanted they would have to work through the legislative and regulative powers of the state.

And that is what they did – relentlessly lobbying the state to recast their nations into mechanisms to deliver more profits to the few at the expense of the many.

They supported this putsch by taking over the media, infiltrating the education system (industry scholarships etc – just fancy words for gaining a capacity to manipulate the teaching programs and get cheap research done), and more.

The rest of us were confronted with a daily bombardment of ideological propaganda – ‘state enterprises are wasteful, we can do it better in private hands’; ‘we will deliver better services for less’, ‘the unemployed are lazy and we should provide less income support because it is a disincentive to effort’ and all the rest of the mantras that we were assaulted with .

That was the beginning of a long period of societal decline as neoliberalism became dominant.

Robert Reich’s article considers the current state of the US in this light as well.

He considers the current state to be a “fucking nightmare” but, in an attempt to invoke some sense of hope, he wrote:

But sometimes a nation needs a nightmare before it can fully awaken to long-simmering crises.

While Marx’s predictions have been compromised to some extent by the intervening years, I don’t think the anti-Marxists should be closing the books yet.

With the state in retreat, or better, shifting from mediating the class conflict to becoming an active agent of capital, some of the countervailing mechanisms that were put in place to reduce capitalism’s crisis potential are now gone.

And, now, added to the mix are the problems that a fast changing climate is bringing.

Taken together, capitalism is now approaching a time where the internal inconsistencies are playing out.

Which means, Marx will be proven correct in the end.

Robert Reich portrays an optimism that I don’t share though.

He takes a lesson from the movements in the 1950s that fought against racial injustice and ultimately led to the – Civil Rights Act of 1964 – and the – Voting Rights Act of 1965 which were groundbreaking legislative shifts in America that gave racial minorities new rights and freedoms.

While I do not live in the US, I do understand that these legislative gains were important, especially for African Americans, but the passing of time since then has not delivered the improvements to these communities that were originally hoped for by the framers of the laws and the civil rights movements that pressured for the changes.

Robert Reich draws an analogy about conditions that existed in the 1950s and 1960s, which forced the nation to pressure the political class to make these changes.

He thinks:

A similar dynamic is playing out as Americans witness the nightmare of Trump’s neofascism – its mindless cruelty, blatant attempts to silence critics, wanton destruction of much of our government, open racism and misogyny.

His description of Trump in the article is fairly lurid but one hopes he is correct that “As Americans see all this, outrage has been growing. We are beginning to mobilize – not all of us, of course, but the great majority.”

He predicts change will come.

Of course, when one views the US from outside as an outsider, the Trump phenomenon is a sign that the latest version of capitalism is coming to an end.

There is a massive cleft between the interests of his voting base and the interests of those who funded his rise to political power.

The latter will be the winners.

Trump’s voting public thought he was representing them but that was never the case.

The fact that he authorised an illegal kidnapping the other day as a way of leveraging the oil interests of American companies (and a first step towards destroying Cuba, I think) shows where he interests lie.

They certainly don’t lie in advancing the well-being of the lower income Americans, which is what the voters thought.

Robert Reich considers that the US had to have Trump before they could make progress.

Which is a dramatic indictment of the Democrats in itself.

But his thesis is that:

The US had to come to this point. We couldn’t go on as we were, even under Democratic presidents. For 40 years, a narrow economic elite has been siphoning off ever more wealth and power.

His article then documents his personal experiences growing up in the US, which resonate strongly with the points I noted about Australia in the introductory paragraphs of this blog post.

It was a time when the middle class was emerging from the Great Depression and the Second World War.

Each generation was promised a higher material living standard than their parents.

Pay inequality was significantly lower.

The government offered services to the public rather than “being bribed by campaign donations to do the bidding of big corporations and the super-wealthy.”

And then, in the 1980s, as the Monetarists took over the economics academy and infiltrated the policy making areas of government it all changed:

… the US went off the rails: deregulation, privatization, free trade, wild gambling by Wall Street, union-busting, monopolization, record levels of inequality, stagnant wages for most, staggering wealth for a few, big money taking over our politics.

Corporate profits became more important than good jobs and good wages for all, stock buy-backs and the wellbeing of investors more important than the common good.

Substitute most countries for the US (in the above quote) and the most financial markets for Wall Street, and the statement applies globally.

All the major political parties have been sucked into this neoliberal vortex.

And the growing social dissonance of the resulting inequality and precarity of work has spawned new politicians that have been able to give voice to this angst.

In Europe, the New Right is gaining traction.

In the UK, the madness of Farage.

And in the US, Trump and his cronies – taking advantage of the helplessness of those being left behind by the neoliberal greed.

And Robert Reich considered that:

Trump has precipitated a long-overdue reckoning.

That reckoning has revealed the rot.

It has also revealed the suck-up cowardice of so many CEOs, billionaires, Wall Street bankers, media moguls, tech titans, Republican politicians and other so-called “leaders” who have stayed silent or actively sought to curry Trump’s favor.

America’s so-called “leadership class” is a sham. Most of them do not care a whit for the rest of the US. They are out for themselves.

That is what people in most countries are realising although the extreme nature of Trump has elevated the realisations to a higher degree.

We are all realising that our political class – the large parties and their lobbying machines – only want power.

Something has to give.

And with the climate challenge becoming scarier by the day (Australia is sweltering again this Summer and the bushfires have started as a consequence) will precipitate more instability.

I read today that measles is now spreading throughout the US and that nation is now likely to lose its status as having eliminated the disease.

How can that happen?

RFK Jr.

While my generation is unlikely to be a major force for change, the teenagers coming through now are likely to act quite differently because they have less stake in the system – because it has denied them a stake.

Conclusion

I hope Robert Reich is right.

PS: I did a long discussion (interview) with the Incite Institute recently, which is an interdisciplinary research center at Columbia University and is home to the – Columbia Center for Oral History Research – the oldest center devoted to oral history in the country.

We covered these sorts of topics and how I see Modern Monetary Theory (MMT) fitting into a post neoliberal discourse.

When there is available publications from that project I will provide the details.

That is enough for today!

(c) Copyright 2026 William Mitchell. All Rights Reserved.