All ideologies reach a point where they are perceived to have failed. What can we learn from that fact? I’d argue that there are almost no lessons to be learned.
Capitalism was widely seen to have failed in the early 1930s.
Authoritarian nationalism was widely seen to have failed in 1945.
Liberalism was widely seen to have failed in the 1970s.
Communism was widely seen to have failed in 1989.
Neoliberalism was seen to have failed in the 2010s.
Prediction: Islamic fundamentalism will be seen to have failed in the 2020s.
Just to be clear, I’m a neoliberal. So I don’t believe either capitalism or neoliberalism actually failed, while I do believe that authoritarian nationalism, (1960s) liberalism, communism and Islamic fundamentalism actually did fail. But that’s not the point of this blog post. What I think doesn’t matter.
So what does it actually mean when a modern intellectual says something like, “neoliberalism has failed”. What exactly does that mean?
When people say an ideology like neoliberalism has failed, their thought process is as follows:
1. We have been in the neoliberalism era for a few decades.
2. Problems have cropped up.
3. Ergo, neoliberalism has failed.
That’s it? Surely there must be more to it than that? After all, problems always crop up over time. That’s inevitable. If that were the criterion for failure then every single ideology would eventually fail, except those that have never been tried. It must be more complicated than that!
Nope, it’s that simple. Every single ideology will be seen to have failed after some period of time. There are no exceptions.
One can imagine alternative universes where not all ideologies fail. Thus you could imagine a world where ideologies are judged on a cross sectional basis, not a time series basis. People might compare highly neoliberal places like Switzerland, Denmark and Singapore to less neoliberal places like Greece, Italy and the Philippines, and then those countries could be compared to highly illiberal places like North Korea, Venezuela and Cuba. In that universe, not all ideologies would seem to fail over time.
But that’s not the universe we live in. In our universe, intellectuals use time series evidence to judge ideologies. In this universe, all ideologies are eventually perceived to have failed, because it’s inevitable that problems will eventually crop up. So if you are young then don’t get too attached to your pet ideology. If it’s ever enacted, you will eventually see it get discredited.
READER COMMENTS
Kyle
Oct 18 2020 at 3:36pm
Hi Dr. Sumner,
How do you contrast liberalism with neoliberalism? What are the important differences when you personally view the former as having failed versus the latter?
Thanks.
Daniel Klein
Oct 18 2020 at 4:12pm
I have a question analogous to Kyle’s above: How do you contrast Smithian liberalism with neoliberalism? What does the “neo-” (which means new) signify, exactly, and why should one embrace such signification?
Another question: What will neoliberalism, as you conceive it, be called in 2060? Will it still be new?
Scott Sumner
Oct 19 2020 at 7:25pm
I believe in spirit they are pretty similar, but new issues have popped up and neoliberalism might be a bit more “technocratic”. Smith didn’t have any views on inflation targeting and carbon taxes, AFAIK.
Scott Sumner
Oct 18 2020 at 4:27pm
Kyle, I’d say that 1960s style liberalism (which is coming back into style) puts too much weight on government solutions, and underestimates the negative effect on incentives from various progressive policies (minimum wages, welfare, rent control, high taxes on capital income, fiscal stimulus, etc.)
Kyle
Oct 21 2020 at 7:56pm
Thank you for the clarification on your viewpoint. Really enjoy your writings.
blink
Oct 18 2020 at 4:47pm
Your dates suggest that the lifecycle is getting shorter and the process of ideology churn speeding up. Would you venture predictions for woke/cancel culture ideology?
Scott Sumner
Oct 19 2020 at 7:26pm
Part will be incorporated into our culture, and the excesses will be discarded.
Jose Pablo
Oct 18 2020 at 8:59pm
That’s a very interesting post!
And with a very interesting corollary I think. Needs elaboration but would be something like: you can judge an ideology “success” (whatever that means) not by the problems that “crop up” under it, but by the new “ideology” people dream about to replace it.
When the discussions to replace the ideology fall under the “Arcadia fallacy” comparing the reality we know with an idealized world we can only imagine, then the actual ideology is pretty good. I think “neoliberalism” belongs to this category.
When the replacement people dream about is a proven ideology being used in some other place, then the actual ideology is a failure. Communism belongs to this group since the well-stocked supermarkets that people in Cuba, Venezuela, and North Korea dream about are something that does exist under other ideologies.
[Now I realize that the same criteria can be apply to romantic/sexual relationships, which also (almost) always “eventually (seems to) fail”]
Scott Sumner
Oct 19 2020 at 7:27pm
Good analogy with romances. In addition, people say that all political careers end in failure.
Mark Z
Oct 19 2020 at 12:17am
It feels like the competing ideologies of today are largely reincarnations of past ideologies though. Sure, in certain rarefied topics maybe a small group of specialists’ have seen their views evolve, but for the most part (unfortunately) one could navigate many political discussions without ever having to go beyond Adam Smith; many political discussion aren’t much more advanced than Burke, Hobbes, Marx, and the federalist papers. Seems more like fads going in and out of vogue than ideologies undergoing trial and error. If you’re young enough, you’ll see your pet ideology be discredited and then come back into favor yet again.
Garrett
Oct 19 2020 at 9:00am
It seems like some ideologists abuse this by claiming that the true version of their ideology has never been tried. Socialists/communists are the worst offenders I’ve seen.
robc
Oct 19 2020 at 10:11am
The funny thing socialism/communism have success stories. The problem is, they are at about Dunbar’s Number level. Kibbutzim are a good example.
I think this is true for any ideology, really. The best examples are going to be at small scale voluntary organizations. Galt’s Gulch probably had didn’t have over 150 households.
Jon Murphy
Oct 19 2020 at 10:34am
Robc-
Have you read Hayek’s essay The Atavism of Social Justice? He hits on the same points you do. Namely, socialism requires many virtues that can really only be practiced at the very local level (love, benevolence, etc). Socialism can work in band-man societies, but not anything larger than that. Our moral facilities cannot handle it.
Garrett
Oct 19 2020 at 11:29am
I’m no expert but if Kibbutzim is the best success story that Communism has to offer then that’s pretty weak. Even though they’ve stayed small they’ve still had to incorporate elements of capitalism to survive.
robc
Oct 20 2020 at 8:17am
I agree. I was thinking that from listening to the recentish Econtalk on kibbutzim.
Still, for one generation, it was a success. But in some ways, the 2nd generation was more successful than the Soviet Union, in that they freely allowed people to leave if they didn’t want to follow the same ideology.
Mark Z
Oct 20 2020 at 12:37am
This is why I think that, at first pass, for an ideology to be considered valid, it should be treated as if there’s a monotonic relationship between the ideology and outcome. So, if communism is good, then the closer we get to communism, the better things should get; if libertarianism is good, the more libertarian society gets, the better it should get. ‘Pure’ versions of the ideology shouldn’t be necessary to tell if it’s good. It’s not impossible for an ideology to make things worse at the margin but better if pursued all the way, and the gradient isn’t always clear (e.g., does eliminating a tax on a subsidized good make things more libertarian or less libertarian?), but I think it’s a good heuristic.
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