Identity and Neoliberalism

Neoliberalism, Mark Lilla, Franklin D. Roosevelt, civil rights, NAFTA, Hillary Clinton, Ronald Reagan, Brexit 

Mark Lilla in his The Once and Future Liberal (2017) raises two fundamental questions relating to liberalism ~ a) the basic policies that benefit citizens and how these can be executed; and (b) what are the factors that unite rather than differentiate citizens. In this context, he mentions the black movement in the USA, an extreme example of identity politics. This emphasis on race, gender, sexual practices and identity divides the electorate is a sure recipe for losing elections.

Lilla asserts that elections are not prayer meetings in which personalised or narrow group interests build walls against the vast majority, restricting politics within self-defined groups. For the survival of liberal and meaningful politics, identity politics has to be abandoned. Concentrating on the evolution of 20th century US politics, he analyses the changes from Franklin D. Roosevelt’s New Deal order to its total reversal by the Reagan presidency. The revival of positive liberal politics demand the end of sectarian and often divisive identity.

There has to be an emphasis on the duty of the citizen. The political platform should be address substantive issues for an enduring coalition. Liberalism ought to reflect the real issues of social justice and must avoid actions which disunite.


Lilla refers to the New Deal era as the golden age of liberalism as it incorporated the principles of solidarity, hope, pride and most importantly a spirit of self-sacrifice. This, according to Lilla, is a time-tested recipe of electoral success. In the 1960s, radical feminism’s slogan that ‘personal is political’ became a catalyst to focus attention on identity politics. It opened a new chapter in broadening the ambit of social enquiry by expanding new areas of political analysis and also reinforcing civic action. But the consequence was just the opposite as instead of broadening the social arena it was a journey of insularity ignoring the utter necessity of concentrating on electoral politics.

The social movements like feminism and civil rights became forums of “aimless self-expression” with an understanding that solutions may not be available within the ambit of electoral and democratic politics. This has proved to be counter-productive as instead of concentrating on the political process it moved away from it. Issues concerning women and the like allowed the democratic support-base to get dispersed. Instead of serious politics, the focus was shifted to specific issues. Instead of efforts to put more democrats in office, the concentration was restricted to believers, beyond the realm of electoral politics.

Lilla argues that diversity must be subordinated to a common vision of citizenship. Instead of social movements, the emphasis has to be on electoral politics, free speech in an age of impersonal and structural conflicts. The need is not to organise more demonstrations and processions, but to occupy offices in the decision-making process. Identity politics has to be subordinated to larger causes.

Instead of highlighting differences, the focus ought to be on shared political values. Within the differences, the task is to find a common platform. The liberals must never miss an opportunity to advance within electoral politics. Lilla concentrates on one aspect of disruption of democratic coalition by overemphasis on identity politics, but he ignores the other or probably more vital cause of democratic disarray by moving from the New Deal project to championing the principles of neo liberalism.

Ross Perot, the third-party candidate in the 1992 presidential election, opposed NAFTA as he feared that it would create a ‘giant sucking sound’ and drain out highly paid manufacturing jobs outside the US. But Clinton enacted the necessary legislative measures to implement the same. But as Ryan Cooper points out, Perot was correct in his observations both on economic and political grounds. A bigger event that had an adverse effect on US jobs and balance of payments deficit was the trade deal with China in 2000.

This led to large-scale outsourcing and decentralization of a highly industrialized country by which it maintained its unchallenged superiority over the rest of the world. The free market initiative worked well in the 1990s and early 2000s, but subsequently it had a catastrophic effect and was largely responsible for Hillary Clinton’s defeat in 2016. Trump successfully made it an election issue and declared his intention to get rid of such “bad deals”. The very basis of Clinton’s neo-liberalism is now being dismantled with considerable local support.

Historically, the Democratic presidential nominees since 1976 had tilted towards a neoliberal order. It was realised that such policies would not only be suitable for economics but for politics as well by facilitating electoral advantages. This policy was endorsed by Tory Blair’s New Labour and Gerhard Schroeder’s CDF in Germany. It was expected to bring about a new age of prosperity with a combination of a broad welfare state mechanism with neo-liberalism as popularised by Ronald Reagan and Margaret Thatcher. But as Cooper has pointed out, this new philosophy overlooked the fact that “old New Dealers would not have allowed bond traders to have a veto over economic policy, whereas Clinton’s Democratic Party had come to accept, or even champion the idea that one could not meddle with the financial system without causing a disaster”.

The important consideration is growth and jobs. Clinton went ahead with NAFTA against majority opinion in the US and even within his own party. With a new emphasis on work, his policy signalled “a pay check and not a welfare check”. Two cornerstones of this new policy were free trade and deregulation. It was a structural adjustment doctrine where economics and not the political economy triumphed as the doctrine of economic necessity became the guiding force. One negative effect was the rise of extreme poverty by about 150 per cent.

However, Clinton weathered the storm by the increasing demand and profitability of high tech industries with low inflation and low unemployment level which continued for two decades. But the euphoria was short-lived as these new untested policies did not address deep structural drawbacks which came to the surface much later.

One inevitable outcome of neoliberalism, as Stiglitz points out convincingly, is increased inequality with maximum profits to corporate executives and shareholders. Its spillover effect was reflected in biases of the media, think-tanks and campaign funding. It was intensified by George W. Bush jr and culminated in the Obama Administration.

The crash of 2008 exposed the vulnerability of neoliberalism. Cooper mentions the seamier side of this policy as it protected the rich and the upper class with a veto over the rule of law itself, the bedrock of liberal democracy. He has pointed out “that criminal law essentially no longer applied to the economic elite” and that “virtually no one went to jail as a result of the 2008 crisis”.

The crux of the matter is that the policies that led to the present policy of neoliberalism is comparable to the economic disaster of the 1920s in three crucial sectors ~ increasing inequality, a vulnerable financial sector and large-scale economic collapse. Wall Street was regulated in the 1930s, monopolies were brought under increased regulation and broken up and with the enhanced taxation for the rich, the state regained its legitimacy.

The hope of neoliberals that the project would be successful the world over with the regulatory powers of the international organizations have not proved to be correct. In fact, neoliberalism under-estimated the worldwide spread and strength of the 1648 Westphalian state system. Any economic policy has to accept the pivotal importance of the nation-state based world and formulate policies accordingly. The earth is neither flat nor does it reflect a clash of civilizations.

In reality, the nations are the primary actors with each perceiving its national interest and comparative advantage from its own perception and needs. A happy blending in such a situation must focus on the issues of general concern beyond any identity. This is reaffirmed by the Trump victory in America, the post-Brexit Britain, and the post-Congress India. The end of history triumphantly declares the sanctity of Hegel’s theory of recognition, but it also vindicates his assertion that nation-states display the almost final form of history as it is reflects rationality within a larger reality.

The writer is retired Professor of Political Science, University of Delhi.