The William and Flora Hewlett Foundation and the Omidyar Network announced today that they are allocating more than $40 million in grants to support the creation of five multidisciplinary academic centers aimed at rethinking and replacing neoliberalism.
An influential paradigm that developed in the West around the middle of the last century, neoliberalism has come to dominate economic and political thought in Western circles since the 1980s. It preaches the value of the free market and advocates a growth at all costs in matters of economic and social policy, considering competition as the essential characteristic of human relations.
With its do-it-yourself beliefs, neoliberalism sees citizens primarily as consumers, whose choices should be limited or minimally influenced by the hand of government. On the contrary, consumer behavior is and should be determined by “market” forces. Competition must be encouraged. Regulation should be minimized.
Where possible, public services should be replaced by presumably more efficient private companies. Economic success is equated with merit, while financial failure is attributed to individual deficiencies. It is a philosophy of prosperity for the fittest. We all get what we each deserve.
This account has been the subject of strong criticism (see for example the account of Kurt Anderson Evil Geniuses: The Destruction of America, A Recent Story), and the Covid-19 pandemic has exposed many of the limitations of market fundamentalism and associated austerity policies. For example, cutting public spending on health care in favor of privatizing these services doesn’t work very well when it comes to containing a deadly pandemic. And neoliberalism is blamed in some quarters for worsening other social problems such as the climate crisis, wealth inequality and social injustice.
But this initiative takes a big step beyond simple criticism. It seeks to institutionalize an alternative to neoliberalism and “articulate a better approach to political economy…and find systemic solutions that build a more equitable and resilient society based on a new set of economic values.”
The Hewlett Foundation will fund the creation and growth of four of the new Centers for Policy and Research – at Harvard University’s Kennedy School, Howard University, Johns Hopkins University and the Massachusetts Institute of Technology (MIT ).
Grants will range from $6.5 million to $10 million per institution. They will be paid out all at once and recipients will have considerable flexibility in how they spend the funds for the centres. Universities are expected to seek additional funding to support ongoing center operations.
These academic centers should employ additional academics and/or administrative staff, open up new avenues of research, enrich course offerings, and organize conferences where academics, policymakers, and other stakeholders can explore new ways of think about the economy.
- Harvard Kennedy School Economics Reinvention Project will focus on taking a more active empirical approach to analyzing local labor market data to better understand the implications of policy-making on local economies.
- Howard University Center for an Equitable and Sustainable Society will study racial and economic inequalities in order to develop solutions that address these issues.
- Johns Hopkins Center for Economics and Society will explore the benefits of past versions of liberalism and foster debate between current versions of liberalism that could lead to remedies for the shortcomings of neoliberalism.
- the MIT Department of Economics Shaping the Future of Work Program study the erosion of job quality and labor market opportunities for workers without a university degree – including technology, commerce, rent-sharing and management practices – and examine institutional, technological and policies that can change this trajectory.
Explaining his belief that neoliberalism is ill-suited to today’s economy and society, Larry Kramer, President of the William and Flora Hewlett Foundation, said in a press release: “This joint effort reflects our interest common to replace outdated 20th century thinking – individualist vs. collectivist, central control vs. free markets, freedom vs. equality, etc., with new ideas that can lead to broader economic justice and prosperity for people around the world .
“This is a first step in supporting forward-thinking scholars, students and thought leaders who can emerge from a clearly failing neoliberal paradigm, with its ossified left-right divides, and help shape a bold new vision of what people should expect from their governments and their economies.
The Omidyar Network, a philanthropic investment company focused on social change, funds the University Center of Santa Fe Institute, a highly regarded private research institute focused on the multidisciplinary study of complexity.
He will apply mathematical and computational theory to study the emergence of alternative political economies, in particular the interplay between “different forms of inequality, economic and market institutions, smart technologies, and cultures of invention and innovation”.
“In the decades since economists like Milton Friedman and Freidrich Hayek first developed their economic theories, our understanding of the world and the behavior that drives it has improved exponentially. ..Yet the economic models and assumptions used by many academics, economists and policy makers have not remotely kept pace with this progress,” said Mike Kubzansky, CEO of Omidyar Network. “Now, more than ever, it is imperative that we prioritize interdisciplinary scholarship to update our knowledge of complexity to better understand our economy.”
Additional investments in similar centers are planned. The Ford Foundation is expected to award grants to institutions in Africa, Asia, and Latin America to be announced later in 2022. The Open Society Foundations are exploring how best to stimulate new economic thinking through the Open Society University Network, a global partnership of educational institutions that integrate learning and the advancement of knowledge.
The creation of the new centers is likely to be applauded by many university professors, who have denounced what they believe to be the growing commodification of higher education and the corresponding neglect of the public good it should promote. Both outcomes are often criticized by progressives as byproducts of neoliberal orthodoxy.
The centers will also be seen as a partial counterweight to many privately funded conservative and libertarian centers at schools such as George Mason University (supported by the Koch brothers), law and economics programs funded by Olin Foundation at elite universities such as Yale, Stanford, and the University of Virginia, and independent think tanks like the Manhattan Institute, the Heritage Foundation, and the Cato Institute. And they might even throw sharp elbows at the Federalist Society, perhaps the most influential advocacy group in legal circles today.
It remains to be seen to what extent the new centers will rebalance any inclination toward libertarianism and conservative legal policies. But at least expect the intellectual sparks to fly as they begin to articulate a new progressive vision for our economy and the kind of society it should support.