The Limits of a President: Obama and the Neoliberalism

The Limits of a President: Obama and the Neoliberalism

To talk about Neoliberalism we first have to define the word “Liberty”, it commonly means to be free from certain restrictions on behaviour or opinion imposed by an authority, therefore it is considered a privilege, a right of a human being, liberty is what we trade in the law. In the Enlightenment, philosophers theorised that the Law is a social contract between men. We don’t have to forget the influence of culture on the rules of our society. Neoliberalism is the concept that from the past shapes our preset. 

The South Korean economist Ha-Joon Chang briefly explains in his book that Neoliberalism “has been the dominant economic view since the 1980s” and it derives from the older concept of Liberalism, where individual’s freedom had the priority over the power of the government that is reduced to a condition of “minimal state”.* Neoliberalism is also known with the name of Washington Consensus because supported by three most powerful economic organisations based in the capital city of the U.S. That’s where we are going to focus since the 240-year-old nation is one of the main influencers of the global economic attitude and trend.

Economics is a powerful tool to understand how the world works. As you may be aware, we are in an financial crisis, called also Great Recession, related to the burst of the housing bubble in 2007. It was caused principally by Wall Street’s careless behaviour dealing with the subprime mortgage. To put it ignorantly simple, they created a separate market where to sell what can be considered basically financial garbage, for example the risk attached to a certain investment, in order to make the transaction safer for banks. (Money, Power and Wall Street - Frontline Documentary)

In 2009 Barack Obama assumed the office of 44th President of the United States facing this huge chaotic economic situation, at the same time his campaign and his victory were a symbol of hope and change. There were a lot of expectations especially after the dire governments of Clinton and Bush Jr., it is peculiar how one of Obama's political defining quality during the campaign was the elusive character of his economic agenda. He surrounded himself with economic advisors who defined themselves as market-friendly pragmatists. Obama wanted to protect the workers but at the same time he shared Hayek's conception of market as best system to allocate resources and produce profits. In this view freedom in the market is strictly linked to the general sense of freedom. 

Obama economic politics is also defined by Jamie Peck as Nudge-ocracy in a way it “synthesises the New Democratic faith in the utility of markets with the Old Democratic emphasis of reducing inequality.” Obama realised that the smartest thing to do wasn’t trying to force the market to his wishes but to shape their views in a way to lead them to believe that their interests were the same as the government’s one. His actions were a mixture of activist government and market rationality “in which smart interventions are deployed to various nudge incrementally in the direction of a more egalitarian and sustainable trajectory.” °

The question that we can ask ourself on the day of the new general elections is not whether Obama changed things, generally cool competence after disastrous decisions helps alone, but if without his policies things will be worse. How a man elected President in a country where individual independence in a free-market is a fundamental value could have had the power to change drastically the declining economic situation without intervening aggressively. 

Thank you for reading! 

Giulia Gambardella

Bibliography: 
* Economics: The User’s Guide, Ha-Joon Chang, 2014, A Pelican Introduction (p.69-70)
° Constructions of Neoliberal Reason, Jamie Peck, 2012, Chapter 6

Further reading:
President Obama Weighs His Economic Legacy - The New York Times