Review: The end of neoliberalism
(iStock)…a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than that of slavery itself.
-Pope Leo XIII, “Rerum Novarum” (1891)
American workers are in an increasingly precarious condition. Almost 80 percent of low-wage workers are offered no sick days by their employer. Over half of them have no retirement plan. Millions of employees cannot afford to save any money for retirement and will have to depend on a retirement income from Social Security, but it is virtually impossible to live on its meager benefits. Reports of an improving economy mean next to nothing to millions of workers and retirees. While Tyranny, Inc doesn’t include such figures as these, Sohrab Ahmari supplies a framework and examples of what has shaped the desperate plight of a growing number of Americans.
What adds particular interest to his latest book is that Ahmari has a reputation as a conservative social critic with an extensive publishing and editing background. His support for Donald J. Trump has given way to a realization that supporting him is a dead end, as far as economic justice is concerned. As a Catholic convert, he now seems to share the values underlying the above quote from “Rerum Novarum,” and indeed, he does make a passing reference to this encyclical.
Ahmari begins by pointing to examples of losses of freedoms that Americans abhor in other countries—including forcing workers to attend political speeches and secretly spying on their private emails or bank records—and then shows how those same coercive practices are commonplace in the United States. The difference is that while repressive governments elsewhere coerce their citizens and workers, “private power” sources do much the same in the United States.
In a forceful introduction, Ahmari emphasizes how “private tyranny precisely describes the world we inhabit today: a system that allows the asset-owning few to subject the asset-less many to pervasive coercions that, unlike governmental actions, can’t be challenged in court or at the ballot box.”
He begins with specific accounts of coercion before going on to investigate the forces responsible for them. Among the many instances: A third of America’s 25 million restaurant and retail workers receive only a few days’ notice of their coming week’s work schedule. Such “maximizing control over labor” means “forcing workers to bear the cost of fluctuating customer demand.”
The one-sidedness of employee contracts illustrates coercion from another angle. New employees in a “mid- to mega-sized firm” are given paperwork to sign that gives the “new boss a broad range of ways to surveil, coerce, or silence” them. Companies can demand the right to confiscate and inspect smartphones or personal laptops used for work, or to force workers to waive any right to take legal action against the company if injured, or to prevent them from making any disparaging remarks about the company after ending employment.
A host of such legal protections for employers have few counterbalances to protect employees—except the right to quit, which can be financially disastrous and so not a realistic option. Grievances that go into arbitration are weighted in favor of employers, especially after a 2011 Supreme Court opinion written by Justice Antonin Scalia in AT&T v. Concepcion, which Ahmari characterizes as concluding that the arbitration court “is the bosses’ court.”
Besides taking over corporations, hedge funds and private equity firms have been buying up public services, ranging from fire departments and ambulances to companies that provide school cafeteria workers and janitors, and even public pension funds. These now-privatized services often try to reduce labor costs by cutting pay and discontinuing benefits, and then use employee pension funds to buy up more public companies to repeat the same process.
Bankruptcy laws have become a means of shielding private corporations from public claims. A prime example: In 2022, Johnson & Johnson avoided a huge payout to 34,000 victims of asbestos poisoning from its baby powder. In a legal maneuver widely known as “the Texas two-step,” it created a second corporation into which it placed all its liabilities and which then filed for bankruptcy.
The Sackler family, the billionaire owners of Purdue Pharma, used bankruptcy to protect themselves after more than a half-million people died from addiction to the Oxycontin that the company had peddled as non-addictive. Bankruptcy becomes easier, Ahmari writes, when corporate “debtors” are able to indulge in “judge shopping,” as did both Johnson & Johnson and the Sacklers, making the “corporate bankruptcy regime…an especially insidious component of our system of private tyranny.”
A false faith in “market utopianism has given rise to…a society that is fast taking on the aspects of an economic dystopia,” Ahmari goes on to argue in a surprising departure from his earlier conservative views. Market utopians extolled “perfect competition” even as monopolies were forming in the late 19th century.
Labor had little or no power against such formidable wealth, simply contributing to the “moral degeneracy” so deplored in “Rerum Novarum.” The eventual success of unions that found support from President Franklin D. Roosevelt was subsequently reversed; today, only 10 percent of workers belong to unions—less than a third of the percentage of workers in the 1950s.
Drawing on the expertise of the political theorists David Harvey, Wendy Brown and others, Ahmari argues convincingly that under neoliberalism, the modern successor to laissez-faire economics, government has become “a mere appendage of market power.” Along with its policy mix of “drastic privatization [and] deregulation,” neoliberalism depends on “depoliticization…a systematic attempt to foreclose the very possibility of ordinary people using political power to get a fair shake out of the economy.” Its ideology extends “economic values…into every dimension of human life.” Neoliberalism abets private tyranny by “turning state and law into instruments for promoting market values everywhere.”
Not surprisingly, Ronald Reagan and Margaret Thatcher were neoliberals, but so too, Ahmari notes, were Bill Clinton and Tony Blair.
To battle this private tyranny necessitates taking back politics. Any substantial change from our present circumstances, Ahmari realizes, is especially difficult when even progressives are satisfied with legal tweaks to the system. Tinkering won’t do it. What is needed is support for the power of unionization as a means of “staunching the mindless deluge of workers’ capital into private equity and hedge funds, which use it, in turn, to further erode the real economy and extend the privatization of public goods.”
The declines of industrialization and labor unions, Ahmari writes, are not inevitable; they are the result of “a narrow elite [making] choices in favor of its own interests.” But the Taft-Hartley Act, employer-friendly courts and misleadingly labeled right-to-work laws have made unionizing difficult in today’s political and legal climate.
Ahmari argues that private tyranny has created a “political crisis and requires a political solution.” But overturning such wealth and power will take some doing.
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