Understanding Neoliberalism: Doctrine, Political Project, and Governing Rationality

Hello. This short course approaches neoliberalism from three angles: the ideas used to defend markets, the political changes made in their name, and the effects of treating market competition as a model for wider social life. Later lessons will turn to Hayek, Britain’s turn to Thatcherism, and Wendy Brown’s account of democracy. First, we need a way to tell apart three meanings of neoliberalism that often appear in the same conversation.

By the end of this lesson, you should be able to say whether someone is describing an economic policy doctrine, a class or political project, or a governing rationality—and explain what that choice brings into focus. Allow about 40 minutes, including the selected reading and video passages.

One word, three questions

Consider a British government proposing to sell a publicly owned service. Someone might call the proposal neoliberal because it favours private ownership and competition. Someone else might use the same word to ask who will gain control of an asset and who will lose bargaining power. Brown might ask a different question: why has it come to seem natural to judge a public service primarily by commercial measures of performance?

These are not simply three opinions about whether the sale is good. They identify different things to explain:

This distinction matters because evidence for one claim does not automatically establish the others. A government can introduce competition without proving that it has deliberately set out to enrich a particular class. Equally, showing that a reform benefits investors does not, by itself, explain why teachers, officials, or service users begin to describe their activities in commercial terms.

In The Uses and Abuses of “Neoliberalism”, the author separates even more meanings than our three. Read the selected passages to see why that extra precision is useful; we will group its account of ideas and policies under the doctrine heading while keeping the difference between them in view.

Doctrine: the case for organizing through markets

As an economic doctrine, neoliberalism gives markets a central role in coordinating activity and treats competition as a powerful way to discipline producers and allocate resources. Its familiar policy proposals include privatization, deregulation in some sectors, and exposing public services to competition. Arguments for these measures commonly invoke efficiency, incentives, consumer choice, or economic freedom.

It helps to distinguish the argument from the measure. “Competition will improve a service” is a claim about how an economy works. Selling a public enterprise is a policy. The policy might be justified by that claim, but whether it produces competition—and whether the resulting service improves—remains an empirical question. A private firm can, after all, face little competition.

Nor does a market-centred doctrine mean that the state disappears. Governments establish property rights, write contracts, design regulations, and can create markets where none previously operated. A proposal to introduce competitive bidding for a public service requires extensive public decisions about who may bid, what counts as acceptable performance, and who bears risk. The question is often what the state is organized to do, not whether it acts at all.

The doctrine lens is particularly useful when a debate turns on the reasons offered for reform. It is less sufficient when the issue is why certain proposals prevail over others, despite contested results or unequal consequences. For that, we need to examine political power.

Project: the struggle over who holds power

The class-project interpretation, associated with Marxist political economy and writers such as David Harvey, understands neoliberalism through changes in the balance of power between capital and labour. On this account, reforms do more than pursue efficiency: they can strengthen owners and investors, weaken collective bargaining, and shift resources or decision-making away from public institutions. It asks who could promote a reform, who could resist it, and who gained from its implementation.

Calling neoliberalism a project need not imply that every participant followed one secret plan. Different politicians, firms, officials, and voters can support the same measure for different reasons. The analytical point is that policies take shape amid unequal political resources and can change those inequalities further. The relevant evidence includes ownership, wages, union power, access to decision-makers, and the distribution of gains and losses.

Brown sets this account beside a different one in the following lecture. She is contrasting approaches, not claiming that policies or class relations are unimportant.

This is also a useful guard against a common misunderstanding: the class-project view does not deny the importance of ideas. It may ask how talk of freedom or choice helps win support for policies whose benefits are unequally distributed. Its distinctive emphasis is that ideas must be understood alongside material interests and political power.

Rationality: when economic reasoning travels

A governing rationality is a pattern of reasoning through which conduct is directed and judged. In the account Brown develops from Michel Foucault, neoliberalism is not confined to a list of economic policies. It extends an economic model into domains that need not be markets at all. A school, for instance, may be discussed chiefly in terms of measurable returns and competitive standing; a person may be encouraged to treat education, relationships, or health chiefly as investments in their future prospects.

The crucial distinction is between selling something and judging it economically. Education does not have to be privatized for pupils or institutions to be assessed mainly by their prospective economic value. This is why Brown speaks of economization: market-style reasoning can shape decisions even where no straightforward purchase or sale occurs.

The rationality interpretation asks what becomes harder to say or do when one measure of value dominates. If a public service is discussed only in terms of individual choice and efficiency, questions about shared obligation or equal standing may struggle to register. That does not mean everyone accepts the model or that economic reasoning explains every action. It identifies a pressure shaping institutions and expectations, not a total description of every person. Later lessons will examine why Brown thinks this pressure matters for democratic citizenship.

Seeing all three in a British example

The 1984 sale of British Telecom offers a compact way to keep the interpretations distinct. Through the doctrine lens, ask what case was made for private ownership and improved service, and whether the arrangements actually encouraged competition. Through the project lens, ask how the sale changed ownership and whose ability to shape decisions increased or decreased. Through the rationality lens, ask whether—and how—the purposes of a communications service came to be expressed in terms of commercial performance rather than public provision.

These are lines of inquiry, not three conclusions established by the fact of a sale. A fuller historical judgement would require evidence about the reform’s design, its outcomes, and the language used to defend and administer it.

For another view of the British turn, watch the selected passage from Damon Silvers’s lecture. Treat its account of changes to union power as an interpretation to evaluate, rather than as a substitute for that evidence.

In a book-club discussion, precision pays off. Instead of asking only “Was this neoliberal?”, you can ask: Are we arguing about the policy’s economic justification, the political interests it served, or the way it changed what seemed sensible to value? The answers may reinforce one another, but they need not be identical.

Where this leaves us

Neoliberalism as doctrine centres on arguments for market organization and their policy expression. Neoliberalism as project centres on struggles over ownership, distribution, and political power. Neoliberalism as governing rationality centres on the spread of economic standards into institutions and ways of living. Keeping them distinct does not prevent you from connecting them; it lets you see exactly what each connection needs to explain.

Next, we will look more closely at Hayek’s defence of markets and freedom. That will give the doctrine its historical setting before we examine how the crisis of Britain’s post-war settlement opened the way for Thatcherism.