Strengthen neoliberalism & change the world

What sort of traits make someone amenable to neoliberalism? An inherent scepticism about the role of authority? A general optimism with a strong belief in one’s own self-worth?

It feels obvious that such traits are held by just a minority of people in society. Yet, one only needs to look at the scale of government reform that occurred across the developed world during the 1980s and ’90s to see something big was going on. Surely, the extent of policy changes far exceeded what was due to the minority amenable to neoliberalism. What caused this out-sized influence? And what does it suggest about how we can better spread neoliberal ideas?

A brief discussion of banking deregulation in the developed world suggests the sharing of credible policy experiences spreads neoliberal ideas. I support this by describing why I believe having societies share policy experiences acts like a filter, making neoliberal policies the ones more likely to be adopted. Organisations like the Adam Smith Institute devoted to spreading neoliberal ideas should encourage societies to share their experiences of different policies.

By the 1970s, the economic controls of banking put in place during and following the Great Depression were creating a raft of problems across the developed world. As a credible acknowledgement of these problems, some governments started instituting policy changes – it became more pressing for other governments to follow suit. For a 2011 MA thesis, I completed research studying banking regulation in seven developed countries: Australia, Canada, Germany, Norway, New Zealand, the UK and the US. Of these, all 7 significantly deregulated their banking industries between the mid-1970s and the 1990s.

It seems likely that the sharing of policy experiences, made more credible by accompanying policy changes, played a big part in why all 7 of my countries deregulated banking at roughly the same time. What’s to say though, that neoclassical policies will always be an outcome from such sharing? For example, the OECD Secretariat shares policy experiences between governments; neoliberal is not often used to describe the policies it recommends. 

To be effective at promoting neoliberal policies, sharing needs to focus on the people in societies, and not on their governments. Defined broadly, it is societies that experience the full costs and benefits of different policies. Putting societies first acts like a filter generally removing more statist policies. Since intrusive government actions often have unintended consequences, it follows that reductions in the intrusiveness of actions will have fewer unintended consequences. This implies that societies will generally be more positive about and better at sharing policy changes that result in less intrusive government actions.

At the beginning of this post, I asked what factors might strengthen neoliberalism. A description of banking deregulation across the developed world suggests the sharing of credible policy experiences may achieve this. Having societies share policy experiences will act like a filter to ensure it is generally neoliberal policies that are spread. To strengthen neoliberalism, its proponents should encourage societies to share their credible experiences of different policies.