Neoliberalism

An extremism of American Domestic Birth

In previous weeks I focused on ideology of religious and secular origin. Today, I want to turn towards economic ideology, and specifically focus on extremes of belief in capitalism. I am a partner in a private practice, which makes me a small business owner. Before you make judgements, understand that I am not anti-capitalist. But we exist in a very specific form of this economic philosophy.

Please comment or share whether you agree or disagree with what I’ve written. I think discussion is the only way for us to understand one another’s perspective and move forward.

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We are taught to fear extremism as something external. It is a danger posed by violent militants, authoritarian regimes, or radical ideologies that threaten freedom. But the most dangerous form of extremism may well be our own: an unexamined, unshakable faith in rabid individualism and fundamentalist capitalism. This faith, so deeply woven into American political and economic life, transcends party lines and unites liberals, conservatives, and even many centrists in the conviction that markets, if left sufficiently free, will deliver justice, prosperity, and liberty. When this belief fails – when inequality deepens, wages stagnate, communities fracture, and ecosystems collapse – the response is not to question the system. Instead, failure is blamed on insufficient faith, and the solution demanded is more of the same: further deregulation, deeper privatization, and greater sacrifice from those already harmed.

Throughout the 20th century and now the first quarter of the 21st, the United States used this ideology to structure not only its domestic economy but also the global order. While neoliberalism became the dominant force after the 1970s, the failings of Keynesianism helped lay the groundwork. Though Keynesian economics allowed for government intervention, it ultimately left in place systems of extraction and inequality. It accepted a baseline of unemployment and unequal wealth distribution as necessary for stability. Its focus was on sustaining capitalism, not transforming its moral architecture. When stagflation, oil shocks, and financial crises hit in the 1970s, Keynesianism failed to provide answers, ceding the intellectual and political field to the apostles of the free market.

Nowhere were the consequences of these policies clearer than in Latin America. In countries such as Guatemala, Brazil, Chile, and Argentina, the United States backed coups against democratically elected governments that sought to pursue redistributive or sovereign development paths. These interventions replaced Keynesian-leaning or social democratic regimes with authoritarian governments that imposed neoliberal reforms at gunpoint. Public assets were sold off, labor movements were crushed, and economies were opened to foreign capital and multinational corporations. Debt became the key mechanism of control. When crises inevitably followed, the IMF and World Bank demanded further privatization, austerity, and deregulation as the price of assistance.

What was tested in Latin America became the blueprint for the global economy. The same logic of market fundamentalism and social engineering was exported to Asia, Africa, and Eastern Europe. Russia, after the fall of the Soviet Union, provides one of the clearest parallels. In the 1990s, neoliberal shock therapy transformed the country overnight. State industries were sold off at bargain prices, creating an oligarch class that looted national wealth. Social protections were dismantled, wages collapsed, pensions were devalued, and millions were pushed into poverty. Life expectancy for men plummeted as the social fabric was shredded.¹ Debt and IMF conditionality locked the country into a cycle of austerity and dependency. The chaos of shock therapy disrupted the fledgling democracy even further. Just as neoliberalism in Latin America often required dictatorship to sustain it, in Russia it paved the way for authoritarian resurgence. Vladimir Putin emerged as a strongman promising order, stability, and the restoration of national pride – combining nationalist rhetoric with capitalist structures that continued to enrich elites while reasserting state control over key sectors.

Meanwhile, at home, the United States began to apply the same neoliberal toolkit to its own working class. The tools of financialization, deregulation, privatization, and union-busting that had been deployed abroad were turned inward. Real wages stagnated or declined even as productivity rose. Secure manufacturing jobs vanished as production was offshored to exploit cheaper labor abroad. Public goods like education, housing, water, and healthcare were commodified, turning necessities into vehicles for profit rather than human well-being. The Keynesian promise of shared growth evaporated as market fundamentalism took hold.

In this system, even life’s essentials became weapons against working people. Food was industrialized and processed for profit, contributing to chronic disease and environmental degradation. Water was contaminated by deregulated industries and privatized for corporate gain. Air was poisoned by fossil fuel dependence, with the worst impacts inflicted on marginalized communities. Housing became a speculative asset, with families driven into debt or priced out of secure shelter. These harms were rationalized in the language of freedom, as if the erosion of social protections and the commodification of basic needs were the natural price of liberty.

The crises that neoliberalism produced abroad did not stay abroad. They arrived at the doorstep of the United States in the form of migration driven by desperation – a direct and predictable result of U.S. economic and military policies in Latin America. NAFTA flooded Mexico with subsidized U.S. agricultural products, decimating small farmers and driving millions from the land. In Guatemala, El Salvador, and Honduras, U.S. support for military regimes and neoliberal programs created societies marked by deep inequality, violence, and economic dependency. When these economies collapsed under the weight of debt, austerity, and exploitation, people moved in search of survival. Migrants at the southern border are not the cause of America’s working-class struggles; they are among the most visible human consequences of the same global system that hollowed out U.S. communities and enriched corporate elites. Yet neoliberalism’s architects deflect accountability by turning migrants into scapegoats, fracturing solidarity among the oppressed.

The invasions and occupations of Iraq and Afghanistan represent perhaps the most extreme expressions of neoliberalism enforced through military power. After the destruction of these states’ basic infrastructure, what followed was not true reconstruction but the wholesale privatization of public functions, the looting of national wealth, and the hollowing out of state capacity. Essential services – from electricity to water to security – were outsourced to foreign contractors, many of them American or international corporations, who extracted enormous profits while delivering inadequate results. By 2011, U.S. operations in Iraq and Afghanistan had cost over $1.3 trillion, with more than $200 billion paid directly to private contractors. Halliburton and its subsidiary KBR alone secured over $39 billion in contracts during the wars. Blackwater, DynCorp, Bechtel, Lockheed Martin, and Raytheon likewise received billions. Audits revealed massive waste: the Special Inspector General for Iraq Reconstruction estimated more than $8 billion simply vanished, unaccounted for. Far from shrinking the state, neoliberal militarism repurposed it as an engine for corporate enrichment – socializing risk and privatizing profit on a scale that dwarfed most domestic programs.

When the initial invasion failed to impose sufficient “creative destruction” for neoliberal reforms to take root, the United States escalated through the 2007 Troop Surge. The Surge, while marketed as a stabilization effort, was in reality a deeper shock strategy – an effort to dismantle the remaining civic and nationalist cohesion of Iraqi society to enable privatization. Entire neighborhoods were walled off, populations were displaced, and communities were split along sectarian lines. These divisions served not national security but economic restructuring. As legitimacy shifted from the occupiers to local clerics and regional networks, many Iraqis turned to religious figures for aid and governance. Though these networks filled the void left by U.S. contractors and local corruption, they also intensified sectarian division and undermined prospects for national unity. In the process, they helped catalyze the conditions for extremism, much of it fueled by rage over foreign exploitation and the erosion of sovereignty.

While extremism slowly fermented by these policies, catastrophe loomed from economic collapse. The 2008 financial crisis should have been the reckoning neoliberalism could not escape. But instead of reversing course, the crisis deepened its grip. While millions of people lost their homes, jobs, and retirement savings, governments and central banks rescued the very institutions that caused the collapse. Austerity followed in Europe, deepening misery and inequality. In the United States, the Federal Reserve’s quantitative easing program flooded markets with liquidity, inflating asset prices and further enriching the already wealthy. The resulting recovery was, in effect, a transfer of wealth upward on an unprecedented scale. The people who bore the consequences of austerity and economic collapse were those least responsible for it.

These cycles of enrichment and impoverishment are not accidental. They are engineered outcomes of a system designed to exploit. This is not the invisible hand; it is a clenched fist, repeatedly punching down. Economics, contrary to its presentation, is not a hard science but a form of social engineering. It shapes behavior through incentive, regulation, and ideology. Even corruption, in this system, is a form of cooperation – one that occurs openly through legalized lobbying, campaign financing, regulatory capture, and tax avoidance. Our version of corruption does not hide in shadows; it signs defense contracts and builds oil pipelines.

This is why neoliberalism is best understood as a kind of faith; a fundamentalist belief system impervious to evidence, sustained by rituals of deregulation, privatization, and punitive austerity. When the system fails, its apologists do not question its morality or efficacy. Instead, they blame the victims for lacking faith. If the economy is unequal, it is because we regulated too much. If social services collapse, it is because we were too generous. This is the logic of economic Calvinism: an ideology in which suffering is a sign of moral failure, and prosperity a mark of divine favor.

Yet there are alternative models that disprove the inevitability of neoliberalism. Costa Rica abolished its military in 1949 and reinvested in health, education, and social welfare, resulting in some of the highest human development indices in Latin America. In Bolivia, nationalization of natural gas under Evo Morales significantly reduced poverty and funded major infrastructure projects. While critics may argue this flirts with socialism or communism, these efforts did not eliminate markets or private property – they reoriented the economy toward public good. These examples do not argue for communism; they demonstrate that markets can coexist with moral accountability and strategic public ownership.

Globally, new frameworks such as Doughnut Economics and True Cost Accounting offer blueprints for sustainable economies that respect ecological limits and human dignity. Degrowth advocates have called for a redefinition of prosperity, shifting away from GDP fetishism toward well-being, resilience, and shared equity. In a world hurtling toward climate catastrophe and resource depletion, these visions are not utopian. They are necessary.

To understand the full scope of harm, we must quantify neoliberalism’s toll on the American worker. Since the 1970s, labor productivity has increased by over 60%, but real wages have barely moved by comparison.² Union membership has plummeted from over 30% of workers to just over 10%. Life expectancy in many working-class U.S. counties is declining, driven by opioid deaths, suicides, and chronic disease – what economists have labeled “deaths of despair.” Personal debt has soared, while employer-based benefits have withered. These are not isolated failures. They are the architecture of an economic theology that holds the market sacred and the worker expendable.

The 2020s only magnify these failures. The COVID-19 pandemic exposed the brittleness of global supply chains and the consequences of decades of underfunded public health systems. While ordinary people lost jobs and loved ones, corporations saw record profits. Even as climate-driven disasters intensified, fossil fuel companies expanded operations, shielded by subsidies and greenwashing ESG campaigns designed more for investor optics than environmental responsibility.

We are told that extremism is a foreign contagion. But we have our own: an extremism of markets, profit, and denial. The New Deal once showed that government could be a force for dignity. The Marshall Plan demonstrated that public investment could rebuild shattered societies. These were not perfect efforts, but they were morally legible. Today, by contrast, we strip the bus of its safety features, replace the driver with an unregulated algorithm, and call the resulting crash a failure of faith, blaming the parents of the children who died for not praying hard enough.

Which extremism should we fear more: the one that rose in response to our exported neoliberal devastation, or the extremism that caused it? The latter wears a suit, speaks of markets and freedom, and leaves behind a trail of war, debt, environmental collapse, and broken promises. It is time to recognize that our greatest threat may be the one we sanctified with the language of liberty.

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References/Further Reading

• Congressional Budget Office. The Long-Term Implications of Current Defense Plans. 2011.

• Economic Policy Institute. The Productivity-Pay Gap. 2023.

• Klein N. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books; 2007.

• Mazzucato M. The Value of Everything. PublicAffairs; 2018.

• Piketty T. Capital in the Twenty-First Century. Harvard University Press; 2014.

• Rand A. Atlas Shrugged. Random House. 1957

• SIGIR. Hard Lessons: The Iraq Reconstruction Experience. 2009.

• Stiglitz JE, Bilmes L. The Three Trillion Dollar War. W.W. Norton; 2008.

1. This does not detract from the devastating effects of Soviet style communism. The number of individuals imprisoned or murdered by the USSR during the 69 years of its existence is incomprehensible. However, what I want you to understand is that bringing capitalism to Russia was designed to further exploit its resources and not help its people. In my opinion, it is this reason that it took only nine years (1991 to 2000) to go from the fall of an autocratic regime to the creation of another.

2. I am aware of the ‘k’ shaped curve when observing wages and productivity as well as some of the weaknesses surrounding this argument. Yet you still get the same ‘k’ shaped curve even if you incorporate total compensation which includes paid leave and medical benefits. The cost of health insurance has significantly risen over the same period as wages have stagnated. Medical benefit costs have been demonstrated to suppress wage growth as companies shift these expenses onto their employees. Paid leave is also fairly unequal across sectors, forms of employment, and by wage.