Blog Symposium on Law & Political Economy after COVID

Neoliberalism after COVID-19: Some Caution and Counter Arguments

Prof. Rashmi Venkatesan

The beginning of the pandemic was surreal – the lockdowns turned bustling cities like New York into ghost towns, overrun hospitals and mounting casualties became the reality of rich ‘developed’ nations, and with cross-border movement of goods and people coming to a grinding halt, the mighty globalisation project seemed to be unravelling by a humble unthinking virus. The world as we knew it truly seemed to be dismantling, triggering anxious conversations about a ‘post COVID-19 world’.

One of the questions that has repeatedly come up for consideration is regarding the future of neoliberalism ‘post COVID-19’. Just this week, The Economist featured a programme asking ‘Will COVID kill globalisation?’. The dominant view portends a rather bleak future for neoliberalism, some even predicting its inevitable end, based on the fact that the pandemic has laid bare the bankruptcy and unsustainability of the economic system. (See here, here, here, here and here) In this essay, I present five reasons why, despite the known inequities of its policies, the neoliberal global order is more likely to either continue, perhaps with some modification, or even intensify – much like a caricatured and despised politician who continues to win elections and hold office.

[1]. The pandemic did not ‘expose’ neoliberalism. Its present fall-outs were never hidden or unintended. There is no doubt that many of the grotesque consequences of the pandemic are a direct consequence of neoliberal policies. However, does ‘exposing’ neoliberalism mean that its reign as the dominant economic ideology is over?

Neoliberalism rests on a core set of economic ideas – that the market is inherently efficient and freedom enhancing, that austerity and fiscal discipline is absolutely necessary and desirable, that public goods are most efficiently delivered when run on a profit motive by private enterprise, or that inequality is desirable for it incentivises innovation. However, it is misleading to think of neoliberalism as an ‘amoral economic ideology’. [1] Rather, it was its ‘distinctive morality’ that proved central to its rise. [2] For neoliberal ideologues like Hayek, an ideal market society was individualistic and which “sanctioned wealth accumulation and inequality, promoted individual and familial responsibility, and fostered submission to the impersonal results of the market process at the expense of the deliberate pursuit of collectively formulated ends”. [3] He considered any form of redistribution as immoral and dangerous and believed it would lead societies down the ‘road to serfdom’. [4] Hence, neoliberalism has embraced inequality and argued that any social upheaval or dislocation that it might cause, is either transient or necessary. Or that in any case, all other systems will be much worse off. [5] Therefore, its social costs are not unintended consequences of an economic strategy but very much a part of its moral and political  design.

What has transpired in this pandemic is simply the logic of neoliberalism unfolding in dramatic detail, none of which was ever hidden or seriously avoided. Despite growing criticism, one sees it played out every single day, in big ways and small – it is seen each time thousands of poor American become homeless in a hurricane, when young women work in global sweatshops or factories relocate chasing cheaper wages, when lack of public health forces the poor into debt, or hundreds of farmers are pushed into economic penury. The cracks have always been visible for anyone who cared to see and the pandemic has not revealed anything ‘new’ or unexpected. It has brought a mirror to our crumbling market society, not a hammer.

[2]. We’ve been here before, and seen neoliberalism pass through its many moments of crisis.

The pandemic is not the first, but only the most recent, in a long line of existential crisis that neoliberalism or more generally, market capitalism, has had to face in the past. Beginning with the Enclosure Movement in England, capitalism has constantly had to battle fierce critics who’ve questioned its moral legitimacy and economic sustainability for the social dislocation and upheaval it causes.

Karl Polanyi, writing The Great Transformation towards the end of the war, boldly asserted, “nineteenth-century civilization has collapsed”. [6] He showed how the rise of capitalism had led to the second world war and argued the impossibility of sustaining a market society as imagined under capitalism. [7] However, far from collapse, capitalism has survived ‘the spectre of communism’ to become reigning economic logic globally in the last few decades. The Asian financial crisis in the 1990s, and most recently the 2008 financial crisis, all have provoked portends of neoliberalism’s eventual doom in the past. If anything, the 2008 crisis was a bigger challenge to neoliberalism than the current pandemic because it was internal to the working of the financial markets and cannot be easily dismissed as an ‘external’ unpredictable threat like a deadly virus.

Nonetheless, free-market ideology has overcome these challenges in the past, sometimes with necessary changes. As Block shows, market fundamentalism is a resilient, agile and powerful ideology that has successfully adapted itself with times. [8] It has ‘reformed’ itself and made strategic concessions to its critics by including ‘the social’ within the fold. [9] But most importantly, all other social movements and counter-hegemonic discourses, have either been diluted or co-opted within the logic of the market. For instance, trade unions, which have long acted as the most important bulwark against the untrammelled power of capital, are today politically weak and in shambles the world over. Similarly, other counter-movements like feminist movements, at least its dominant strains, are articulating gender equality and freedom within the logic and space of the market. [10] Hence, at this point, it seems more likely than not, that neoliberalism might evolve but not radically change post-COVID.

[3]. The lessons of the pandemic are varied and complex. While neoliberal policies are centrally implicated in many of the miseries of COVID-19, one cannot draw simplistic conclusions. One the one hand, while we have countries like the USA and the UK which failed to meet the challenge of the pandemic, others like Australia and New Zealand, also advanced capitalist countries, fared much better. Similarly, comparatively smaller economies like South Korea, Vietnam, Taiwan etc. also were lauded for their approach. Further, different approaches have yielded different results depending on the country and the method in which it was carried out. For instance, within the social democracies of Europe, Germany and Sweden followed extremely different approaches to control the virus. Similarly, China controlled the pandemic by widespread surveillance techniques and harsh lockdown measures whereas New Zealand achieved spectacular results with democratic measures.

More than the professed ideology of a particular economy or its ‘development’ status, the capability of individual leaders, the agility of public administration and the capacity of the health care system has determined the outcome of the pandemic. Hence, while many of the policies of neoliberal have been brought under scrutiny, there are no clear ‘winners’ and ‘losers’ in this ongoing battle against the coronavirus.

[4]. The pandemic may have weakened some aspects of neoliberalism but has also strengthened others. As argued earlier, the pandemic certainly revealed the fault lines of neoliberalism but it has also intensified some other aspects. The neoliberal orthodoxy of privatising essential public goods like health on the grounds of efficiency and slashing safety nets citing fiscal austerity, both ring hollow in the wake of the pandemic. Much of the human cost in the last few months could have been avoided if vulnerable people enjoyed social security nets and public healthcare was geared towards best serving the interest of the public rather than the market.

Having said that, other aspects of neoliberalism have also intensified during this pandemic. Technology giants like Google and Facebook, online retailers like Amazon and big pharma like Astra Zeneca, Pfizer and J&J have all made tremendous strides in this pandemic. Ian Goldin, Professor of Globalization and Development at the University of Oxford also predicts that globalisation of financial flows are likely to intensify, as countries struggle to recover from the pandemic. Relatedly, even while Bezos, Ambani and other millionaires accumulate personal wealth at an alarming rate, corporations and millionaires in general, through their philanthropic donations have only gained public legitimacy.

The pandemic has not challenged neoliberalism per se. Breaking neoliberalism into its constituent economic, political and social parts, one finds that the pandemic has only questioned some aspects of its economic orthodoxy like privatisation of public goods while leaving the political, moral and social aspects of neoliberalism relatively unscathed. Even during the migrant exodus in India, the blame was placed on the migrants for being impatient and irresponsible, rather than see it as a failure of a system that gives absolutely no protections to its most vulnerable populations.

[5]. The future of neoliberalism depends on who controls the future. What sort of ‘post COVID-19’ world we forge will depend on who is in control of making this world. The pandemic is likely to accelerate the processes that currently define our world rather than prompt a change in course. The economy that was already showing signs of slowdown will plummet further. Big tech, that was already on the path of dominating commerce and controlling information will get there faster. On the other hand, the critical momentum against neoliberalism that was already building up will also intensify. This is best understood in Polanyian terms, as economic and political systems constituting a ‘movement’ towards capitalism and a ‘counter-movement’ against it.

Therefore, if one looks at Nation-States as the leaders of constructing the ‘post-COVID world’, there is every reason to believe that they will use the pandemic to further unpopular market reforms and further intensify neoliberalism. This is crystal clear in the case of India. The ‘stimulus package’ that was rolled out, the recent passing of the Farm Bills and the labour codes in the Lok Sabha bypassing Parliamentary debate, shows India is hopelessly hastened on the path of what Klein calls ‘disaster capitalism’.[11] Instead of being a moment to evaluate the current economic policies, the pandemic has both given the opportunity and also the justification for intensifying market reforms as the only way to economic recovery post-COVID.


The coronavirus does not have any ideological preference. It is not socialist, Keynesian or liberal. It only exposes the fault lines of the society it befalls. For instance, the Spanish Flu in India exposed the apathy of the colonial government and strengthened the anti-colonial movement. Similarly, COVID-19 has undone the present moment. If this situation had arisen four or five decades ago, it would’ve shown the vulnerabilities of Keynesian and developmentalist economies.

Nonetheless, what kind of change a crisis precipitates, ultimately depends on how strong pre-existing critical voices are and how well they can consolidate their critique during a moment of flux. There will continue to be a movement towards greater consolidation of the market and there will be counter-movement against it. A future of neoliberalism post-COVID will depend on which way the balance tilts. So the pandemic is a tremendous opportunity to sharpen one’s critiques and evaluate our collective choices, but one shouldn’t expect change to be either easy or automatic. 

[1] Whyte, J. (2019). The morals of the market: Human rights and the rise of neoliberalism (London, New York: Verso Books) p 19.

[2] Ibid, p. 21.

[3] Ibid, p. 24.

[4] Hayek, F. A. (2014). The road to serfdom: Text and documents: The definitive edition (London: Routledge); Hayek, F. A. (2011). The Constitution of Liberty: The Definitive Edition. Edited by Ronald Hamowy (Chicago: The University of Chicago Press).

[5] Harvey, D. (2007). A brief history of neoliberalism (Oxford & New York: Oxford University Press).

[6] Polanyi, K. (1944). The great transformation (Boston: Beacon press) p. 1.

[7] Ibid.

[8] Block, F., & Somers, M. R. (2014). The power of market fundamentalism (Cambridge & London: Harvard University Press).

[9] Rittich, K. (2004). The future of law and development: Second generation reforms and the incorporation of the social. 26 Michigan Journal of International Law 1, pp. 199 – 243.

[10] Kapur, R. (2018). Gender, alterity and human rights: Freedom in a fishbowl (Edward Elgar Publishing).

The recent debate over Zomato’s granting ‘period leave’ to its employees is a good example. Not only are corporations the new champions of gender equality but this equality is sought within the space of the market. While the leave itself is noteworthy, gender equality rests more crucially on issues like equality of real wages, enhancing incomes to living wages, changing hiring policies to make workplaces safe and accessible to all genders, provision of child care facilities, provision of reasonable maternal and paternal leave and other benefits – all of which is often resisted by companies or neglected. Further, accessing work itself depends on providing ‘public’ goods such as education, health and transport – all of which are increasingly leaving the public domain and governed by private enterprise within neoliberalism.

[11] Klein, N. (2007). The shock doctrine: The rise of disaster capitalism (Macmillan).

The author is an Assistant Professor at the National Law School of India University, Bangalore.

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