One of the most frustrating things when discussing economics or politics in the modern United States is trying to explain neoliberalism to people. Most of the time, you can get the gist of it across by describing it as an economic view that markets are usually more efficient than the government and, therefore, the classic post-World War II mixed-economy characterized by strong unions and growing social welfare benefits and regulatory interventions ought to shift power from the public sector and unions back to the private sector.
However, whenever you talk about it with anyone who is well read in political history or the history of economic thought, or who is simply pedantic, it becomes much more complicated. There are people far better equipped than me to define the term and the associated ideology. If you want the long version, read such experts. Here are a couple to get you started.
But the important point is that neoliberalism prizes growth and economic expansion as a way to improve the lives of everyone. Reaganomics/Trickle Down economics is probably the least varnished statement of the thesis: who cares about inequality when the whole pie is growing?
But Reagan was far from the only neoliberal during the end of the 20th century. An outwardly milder version was adopted, especially throughout the anglophone world, by “Third Way” politicians. Third way politics was meant to be a compromise, embracing free market economic policy as its means, but paired with stated progressive ends. Not left, not right, but a third path. The US’ Bill Clinton and the UK’s Tony Blair are the ur-examples, while France’s Emmanuel Macron is perhaps the best current example.
For the most part, “Third Way” politics took over mainstream center-left parties like Labour in the United Kingdom and Australia and the Democratic Party in the United States, rather than creating a wholly new entity. (Macron here is a notable exception with En Marche.) As a result, the rise of neoliberalism also corresponded to a weakening of the Left. The fall of the Soviet Union set a backdrop against which market-driven political economy seemed to claim total victory, so parties willing to criticize or temper market forces quietly shut down those critiques.
As the major center left-leaning parties internationally shifted toward economic conservatism, those on the left—ranging from communists to garden variety social democrats— often found themselves perpetually locked out of politics. Indeed, part of why neoliberalism was able to flourish was because of recent failures from Clinton and Blair’s predecessors to contend with conservative parties’ reembrace of laissez-faire style policy, losing spectacularly to figures like Margaret Thatcher and Ronald Reagan.
This shift in how policymakers and politicians understood political economy resulted in a wave of deregulation throughout the last decades of the 20th century. But those policy shifts were downstream of a mindset shift. With the market lionized as the paragon of efficiency, the post war consensus model of government became seen as inefficient almost by definition.
In short, neoliberalism is an economic perspective where markets are the benchmark. It includes privatization of state services, but also specific ways of thinking of government “like a business:” pursuing efficiency and evaluating success in market terms through cost-benefit analysis. It involves a subordination of ideals of public good under this framework. Obviously, programs were always evaluated for costs and benefits; what the neoliberal turn changed was how things are evaluated. Harms that cannot be readily converted into monetary costs are frequently secondary under our modern neoliberal analyses.
For instance, it is actually the case that increasing wealth disparity among the rich will make the less well off possess less relative economic power and feel less positively about their given level of material wealth, even if the gains come solely from a new pie (and even if their overall wealth still increases in an absolute sense), and not the old one. (Think about how people assess the audio or visual quality of their stereo or television in a world in which they know people can pay for significantly better, versus thinking what they have is about the best imaginable. 19 inch cathode ray TVs didn’t get worse in the 2000s, but perception of them did change. Or how kids wearing noticeably less trendy clothing can be made to feel at economically diverse schools)
Cost-benefit analysis, the definitive neoliberal framework, sounds great in theory. The problem is figuring out how to apply it in practice. When we build an oil pipeline, we can generally predict the economic benefits quite well; oil companies will see increased supply and efficiency, boosting their prices and lowering costs. That’s easy to measure, because it’s already in monetary terms.
But how do you put a price on the long-term medical effects of oil drilling on a community? We can guesstimate the medical costs of the expected increase in cancer and other chronic illnesses (though even that is far from certain). However, there’s not really a way to add in the pain and suffering of area residents’ more belabored breathing. You can calculate increases in missed work days and potentially (but not necessarily likely) compensate impacted community members, but you can’t return the easier days before illness shrunk their world.
Again, this is an oversimplification; whole volumes have been dedicated to defining neoliberalism as precisely as possible within the broader historical and ideological context. However, when you need something succinct, while remaining relatively substantive, this will hopefully serve you well.