The US is now a rogue state. One example is the conduct of the US…
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.
The fact that Reich was the labor secretary under Clinton doesn’t exactly speak to his credibility. As you say, the point often seems to get lost among our right-wing democratic party that Franklin Roosevelt saved capitalism from itself. But I wonder what Reich thinks the reckoning is gonna look like, since even modern democrats seem to view the New Deal as extremist, and they sure aren’t offering any serious alternatives.
To me the question isn’t, will the US fall? The question is, will it fall to the left or the right?
I agree with “The latter (labor) is the ultimate source of profit, because it alone can produce surplus value.” but only where “labor” is understood to mean work in the sense of exploited energy and not labourers/workers/people. This understanding is being driven home to us today with the advance of robotics and the very visible dark factories in China. Productivity goes up (as people involved are reduced) but what happens to distribution of those advances in productivity when there are fewer labourers involved in production?
The world has moved on from the time of Marx to a point where we can now see the reality that production is ultimately tied back to energy exploitation, whether that be of workers or machines or some combination thereof. It is the linking of energy, as a necessity to production, that provides the appreciation which drags the dismal science of economics out of its existing orthodox neoclassical theology into the world of an actual science adjacent study.
The state is all powerful in our society. The issue is who controls the state and to what end. Sorry to say, but I see the likes of Robert Reich as just another voice of the well meaning shitlibs that are more of a problem than an assist for paradigm change. The oligarchic vested interests will fight to the death of the proletariat to maintain their control. Trump, as puppet of the oligarchy, has made visible what was previously masked. At least we can thank him for that?
Sean
further to your “The fact that Reich was the labor secretary under Clinton doesn’t exactly speak to his credibility.”
Exactly.
I do read Reich’s columns, there is occasionally something he says that I concur with, but I usually find myself dissatisfied with what he writes: he always stops to short of coming to – what I reckon – is the obvious conclusion to what he has offered in his pieces.
Reich’s pieces appear in the Guardian, not known for challenging the status quo, let alone airing alternative views (I cannot recall any article on MMT appearing under their masthead); and it was also the outlet for what Bill described as “the worst economics article of the year” 2025.
[https://billmitchell.org/blog/?p=62809]
Marx was a philosopher before he was a political economist and theorist of “scientific socialism”. It is vital to understand this.
“(Marx) received a doctoral degree in philosophy from the University of Jena in 1841. A Young Hegelian, he was influenced by the philosophy of Georg Wilhelm Friedrich Hegel, and both critiqued and developed Hegel’s ideas in works such as The German Ideology (written 1846) and the Grundrisse (written 1857–1858).” – Wikipedia.
Marx’s doctoral thesis was “The Difference Between the Democritean and Epicurean Philosophy of Nature (German: Differenz der demokritischen und epikureischen Naturphilosophie), completed in 1841. One way of looking at this thesis is that Marx was contrasting Democritean (atomistic) determinism with Epicurean non-determinism and the implications for human free will and agency. Later in his “Theses on Feuerbach” he stated his position on human material world and social world agency: ““The philosophers have only interpreted the world, in various ways. The point, however, is to change it.”
“Epicurean non-determinism refers to the philosophical concept, originating with Epicurus, that the universe is not entirely deterministic due to an unpredictable, occasional deviation of atoms from their expected paths, known as the “swerve” (Latin: clinamen). This idea was introduced specifically to allow for human free will and moral responsibility in an otherwise material and naturalistic world.” – Google (LLM) AI. (In this blog post, I allow myself the latitude of Wikipedia and AI quotes.)
We can quickly note that the human free-will debate is still alive today, still undecided by philosophy and science and perhaps forever undecidable by both. I won’t go into it too much here. Where Epicurus sought the source of free will in the occasional non-determined “swerve” of the atom, theorists today, including some neurologists, suggest that quantum non-determinism in some structures of the brain small enough to permit such phenomena, may be related to the experience of free will and the great complexity and variety of human behaviour.
More importantly, after I “buried the lead” above, I must state that Marx was a complex systems philosopher and perhaps the first materialist complex systems philosopher, albeit with a dated terminology compared to modern systems philosophy and systems science. Simply, but quite correctly, we can say Hegel was an idealist systems philosopher and Marx became a materialist systems philosopher who emphasized the agency of humans and their technologies in dynamically “feeding back” (modern term) into and changing society and environment. Marx can most definitely and defensibly be read in this way.
Marx’s ideas are still very powerful (while of course not infallible in all matters) to those who know how to think both philosophically and scientifically. They are still powerful precisely because the complex systems materialism of Marx’s ideas lines up and accords with much of what we have discovered since in all the major sciences and in complex systems science. It also lines up with any and all value systems in moral philosophy which value all humans and supports equal human rights.
I can blog further on these ideas if people are interested in me doing so here. Of course, it is hard to say much in short blog form. I can even outline why I think philosophy is just as important as and fully connected to political economy and science. Indeed, you cannot do political economy or science properly without having a fair appreciation of philosophy. By the way I am emphatically NOT a post-modernist, just in case there is ever a misunderstanding on that score.
I thought I should also address the proper question of the post. Is there hope for a post neoliberal world?
There will be a post neoliberal world. We can say that with near certainty because neoliberal, “endless growth” capitalism is running into and crossing planetary boundaries for maintaining a safe, relatively stable ecosystem and civilization. Neoliberal capitalism is running into the limits of growth of its system and program. Whether there is any hope of quality survival, or even plain survival, in this future for humans is another question.
The chances for human quality survival now look slim and will depend crucially on how much damage neoliberal capitalism has already done and will still do before it is abolished, if it is abolished. It will depend on whether we pass, or have passed, the point of no return where the damage is irreparable on any human civilizational timeframe by any human mediated methods. I mean as the earth biosphere threatens to shift or shifts to a new state or states (most likely inimical to human life and very unstable).
Was it just bad timing, a case of anti-serendipity, that programmatic neoliberalism took hold at about the same time or shortly after the Club of Rome’s Limits to Growth was published? Whatever the real case was, neoliberalism as market fundamentalism, anti-welfarism and anti- ecological thinking (except for token, inadequate efforts) took hold just as scientists and the scientifically literate minority of the population began to understand the profound dangers implied by the limits to growth and posed by the environmentally destructive and unsustainable system of capitalism, especially as late neoliberal capitalism.
Neoliberalism has become entrenched and is currently (I would argue) at its zenith and apotheosis, plus or minus 5 years, as it mutates essentially into outright crony capitalism with dominating features of kakistocracy (government by the worst. least qualified and most unscrupulous people) and kleptocracy (government by corrupt politicians and officials who use power to steal national resources, international resources and public funds in general “for personal enrichment, making corruption the fundamental characteristic of governance, often leaving citizens impoverished while leaders live lavishly.” [1].
Neoliberalism will imminently destroy itself. It is unsustainable ecologically, socially and economically. The question is can we save anything? Will we save civilization or some part or aspect of it or will we collapse into barbarism, chaos and finally extinction? The situation is truly that dire. The physical sciences, climate science and earth systems science clearly indicate it. Arguments from disbelief about this are worthless. The science is clear about the critical and imminent dangers we face.
All that can be done is fight to end neoliberal capitalism by any cogent path possible. MMT does look like a cogent, feasible and practicable possibility. Whether MMT is a destination or a way-point on a longer journey to human survival and sustainability long term is another question. I personally think it is a way-point, not a final destination. I think more radical concepts, more socialist understandings and other understandings will prove necessary.
But this is an MMT blog so it’s not my place to attempt to hijack debate further unless invited to do so by the site owner, in which case it would not be a hijack of course.
1. Wikipedia – Kleptocracy.
Having grown up in the 1990s and achieved a level of education higher than my blue collar parents, paid tens of thousands toward my education, lived in share housing and moved remote for opportunities, my level of material wealth is a fraction of what my parents and immigrant grandparents were able to achieve.
I’m fortunate enough to have all I need and am on a path to having housing security. Amongst my peers of a similar age (late 30s), unless they received assistance, they are left paying exorbitant rents or high mortgages that take up most of their wages.
Not having a stake in the system and then being punished for it will surely cause greater class conflict. (Pernicious welfare system, working poverty, housing insecurity etc..) Where it ends up is another guess?
All the best
No, private capital will continue to control policy direction through the usual methods, media, lobbying, think tanks, party donations.
Yes, there is some limited hope for a post neoliberal world. The only thing you can be really sure of is that the rich will probably lead the way and the workers will attempt to make the world liveable for them. The collapse of the biosphere into something less hospitable and supporting, well that’s another thing entirely. So far we have had little net success in marshalling the forces of neoliberalism in ensuring a better and more predictable future, not that we ever expected that to work. Ultimately we may simply be living in a continuous high speed experiment in human communal living…one which is about to hand down its findings in the next decade or two.
The only hope for a post-neoliberal world is if it can be superseded by a system operating on oikonomic principles. I don’t hold out much hope for that given that the present system is simply a modern form of institutionalised chrematistics (IC) and IC has existed in various forms since human beings developed agriculture, and this led to the rise of the ruling psychopaths, who’ve been running the show ever since. Humankind has been on its current path for about 11,000 years. There is no sign of it getting off this path, which is headed for the edge of a cliff.
There are some oikonomic elements in every IC system – they are the concessions that ruling psychopaths make to stabilise an otherwise inherently unstable system, which is necessary for psychopaths to maintain their wealth and power. The prevalence of oikonomic features probably peaked in the immediate post-WW2 period (so, if you’re a baby-boomer, count yourself lucky) due to an unprecedented series of extreme and closely related global events (WW1, Great Depression, WW2), which destroyed a lot of the psychopaths’ wealth and power, and the existence of political institutions that gave the long-suffering masses some political power, but never true democracy because these institutions were created long ago by the ruling psychopaths. But the post-WW2 period was still largely chrematistic in character because it was based on growth for growth’s sake, the use of fossil fuels, ecological destruction, and no plan for a transition to a renewable resource-reliant, post-industrial society (fully oikonomic society). These are some of the main reasons why the post-WW2 period of quasi-oikonomia came to an end in the 1970s.
We need political institutional reform (and discussion and activism about it) as much as we need anything to dilute power and possess a true democracy (a form of sortition democracy?) where the government sector acts as a powerful resource-transferring agent of the masses. There will be little point in a lot of people having the solutions to a post-IC world if our political institutions allow the ruling psychopaths to continue to pull the strings and push the buttons, which is likely to happen, and why we probably won’t move to an oikonomic system when the present system collapses. In fact, I think this is presently happening – the current form of IC is coming to an end, and the worst possible people will be in charge to establish the next version of IC, which will probably be worse than the existing one, made all the more horrendous by it occurring on a sick planet.
Surely on the balance of power we are further away from Marxist revolution than at any point
Since Marx wrote the communist manifesto of 1948.
Bourgeois never so strong proletariat never so weak.?
Much has been written about Marx over the years, but few realise he had a highly admired younger sister, Onya, an incredible athlete and Olympic runner, tragically killed in her prime. As a mark of respect, her name is still read out before every race.