COVID-19 Lays Bare the Cruelty of Neoliberalism

Posted in: Government

Last week, 3.3 million people filed unemployment claims, nearly five times the previous record. This week, the number more than doubled. Public health officials announced the United States had more confirmed cases of COVID-19 than any other country in the world, a title it is not likely to relinquish anytime soon. Most of the country has been ordered to stay home. The virus has killed more than five thousand people in the United States so far, and projections for the death toll range from roughly two hundred thousand to substantially more than a million. Even President Trump has begun to take it seriously. There may still be deniers and minimizers, but the facts on the ground have left them behind: the virus is a national crisis.

We have faced crises before, and this too shall pass. For all the pain it has caused and will cause, it is just a virus, not an existential threat to the nation. Yet in critical respects, this crisis is unlike any we have experienced for more than a century. It commands a response and imposes burdens that are very different from those seen by anyone alive today. Before it is over, the virus will touch every aspect of national life. And though we are early in the curve, we can already distill what may be the most important lesson of the crisis into a single sentence: COVID-19 exposes the cruel folly of neoliberal governance.

As I have written here before, neoliberalism is the idea that social problems are better solved by the private sector than by government. But more than an economic or political model, neoliberalism is an ideology, a way to make sense of the world. Government cannot solve social problems (or so the neoliberals argue). It is too inefficient, bloated, and schlerotic. More importantly, it should not. Government support is enervating. It creates dependence and stifles personal drive. People are only truly free when they take responsibility for their own lives.

If a single mother lives in substandard housing or an unsafe neighborhood, if she sends her children to failing schools or is stuck in a low-wage job, she has only herself to blame. The market gave her the same opportunity as everyone else, but she made bad choices—bad reproductive choices, educational choices, housing choices, professional choices. She did not take responsibility for herself and her family, and therefore must endure the consequences. Government should not be in the business of rescuing people from their folly. In short, neoliberal thinking promotes the primacy of individual choice at the expense of communal obligation.

Neoliberalism, meet COVID-19.

Suddenly, we are all statists. Just last week, Congress approved and the President signed into law a $2.2 trillion stimulus package, the largest in U.S. history by more than $1 trillion and more than twice the amount originally requested by the White House. The Federal Reserve announced it was prepared to make unlimited purchases of government-backed debt to stabilize financial markets, which comes on top of the $2 trillion in liquidity it introduced into the banking system the week before in the form of short term loans. And President Trump invoked the Defense Production Act to compel General Motors, one of the largest corporations in the world, to make medical equipment. He had long resisted this move, insisting it was un-American to “nationalize” businesses.

Still, as staggering as these steps are, many observers say they are not nearly enough to cover current and projected losses (e.g., here, here, and here), and many Democrats have already vowed to provide more relief for American workers and families. (Republican politicians, who were the most critical of mandatory paid sick leave, have been more circumspect.) Some are even bandying about the idea of a government-funded jobs program to rebuild the country’s infrastructure, which I think is an excellent idea. We haven’t had this many people look plaintively to the federal government for a lifeline since the New Deal, and everyone is very relieved neoliberals never managed to drown government in the bathtub.

The first and most obvious lesson of COVID-19, therefore, is that despite what neoliberals insist, people immediately and instinctively look to the national government for rescue when their economic or physical health is imperiled. Even more importantly, because the response is universal, we should resist the neoliberal determination to stigmatize it. Now more than ever, we see that government is not the enemy.

Yet, if the virus has made government cool again, it has not imposed its burdens uniformly, and that too is a product of neoliberal governance. Decades of neoliberal policy have shredded social welfare programs, dramatically weakened support for workers, and produced record levels of inequality. The top 1% of households in the United States own 40% of all wealth in the country, more than the bottom 90% combined, a higher level of inequality than at any time since at least 1962. And things are getting worse. Thanks in part to the Trump tax cut of 2017, the 400 richest Americans in 2018 paid a lower total tax rate, including state, federal, and local taxes, than any other income group in the country, a distinction never equaled in U.S. history.

COVID-19 exacerbates this morally obscene inequality. As many have observed, those who are best positioned to weather the COVID-19 storm are the wealthy and the well-paid workers with steady jobs, good benefits, and safe, stable housing. Those who do not have to work or who can work remotely can most easily accommodate the demands recommended by public health officials and ordered by state governments to minimize transmission—viz., shelter in place, and practice social distancing whenever you leave your home.

The poor simply do not have this luxury, especially those whose work is precarious, who are in low-wage hourly or piecemeal employment with few or no benefits. Contract employees. Delivery drivers. Cleaning and janitorial staff. Home health care providers. Many members of the gig economy. The sector is enormous and growing rapidly. One recent study found that by 2015, more than 17% of all workers in the United States were engaged in one of these “alternative arrangements.” Given that precarious work is the fastest growing sector of the American economy, the number is probably significantly higher now. The Bureau of Labor Statistics, for instance, reported in 2019 that 31% of the workers in the private sector did not have access to medical benefits. This number soared to 57% for private sector workers in service jobs.

As I have noted, for many of these workers, financial security is a contradiction in terms. According to a 2015 study by the Pew Research Center, one in five adults in the United States, or just under 50 million people, lives in a household that is in or near poverty, an increase of more than 100% since 1970. According to the Federal Reserve, roughly one of every eight Americans could not cover an unanticipated expense of $400. Nearly three in ten could cover the cost but would have to borrow or sell something to do so. Other surveys capture different pieces of the same picture. Just under three in ten Americans report that they have no emergency savings whatsoever, and nearly six in ten say they live paycheck to paycheck. Worse, the poor are most apt to have the preexisting medical conditions like diabetes and hypertension that make them especially vulnerable should they become infected.

The second lesson of the virus, therefore, is to make plain to the wealthy what the poor have known for decades. Neoliberal policy has brought millions of Americans to the knife edge of financial and physical ruin, and COVID-19 will push them over.

And finally, the virus has exposed the idiocy of our obsession with individualism. In a lengthy interview in 1987 with the British magazine, Women’s Own, Margaret Thatcher famously declared, “There is no such thing as society. There is [a] living tapestry of men and women and . . . the quality of our lives will depend on how much each of us is prepared to take responsibility for ourselves . . .” This was no slip of the tongue; she said the same thing twice during the interview. The comment landed on the British ear with such a clang that the Sunday Times (London) asked for a clarification, which the Prime Minister’s office provided some months later. “[S]ociety as such does not exist except as a concept . . . Her [Thatcher’s] approach to society reflects her fundamental belief in personal responsibility and choice.”

In a public health crisis, it is thinking like this that leads to hoarding. To the shameful spectacle of shelves stripped bare, and people driving off with more canned food and toilet paper than they can possibly need, while their neighbor has none. Neoliberalism insists that there is no communal obligation, no need to consider the wellbeing of anyone else, and certainly no duty to care for the most vulnerable among us. They made their choices. If I got to the store first and bought all the hand sanitizer, it’s because I took responsibility for my welfare and you didn’t. We are not in this together; we are in this alone, and the rest of you be damned. (In fairness, Thatcher said during the interview that people should tend to their neighbors after taking care of themselves, though she left out that sentiment in her carefully scripted explanation.)

Precisely when so many among us are suffering and we most need to be communitarians, neoliberalism conditions us to be individualists.


I am not the first to notice the link between COVID-19 and neoliberalism, and I hope I will not be the last. COVID-19 will not destroy this country, but it has exposed better than even the 2008 financial crisis the cruelty of neoliberal policy. If the virus finally weakens the stranglehold that neoliberalism has on policymaking in this country, perhaps the great suffering it inflicts and sorrow it brings will not be all in vain.

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