COVID as the (Second) Death of Neoliberalism?

© for the photo: Kaloian

That is not dead which can eternal lie,

And with strange aeons, even death may die.

H. P. Lovecraft

Many influential voices have pointed out, with different degrees of optimism, that the COVID-19 pandemic might finally have ushered in the final days of neoliberalism[1]. Quarantine and physical distancing measures put in place across the world – despite the very strong local variations as to how seriously they have been enforced by authorities and respected by populations – have severely affected economic activity, triggering the deepest global recession in the history of capitalism. As a result, most central banks have shifted gears, moving away from austerity policies and increasing spending: on public health costs, which have risen in response to the pandemic, and on counter-cyclical measures aimed at preventing the economic consequences of the crisis from spiralling (even further) out of control. The erosion of public services and welfare systems produced by decades of neoliberal attacks have made societies more vulnerable to such a virus, as the necessary means of exercising solidarity and care are malfunctioning, underfunded, or simply do not exist.

However, it is worth remembering: this is not the first time we have witnessed the death of neoliberalism. The financial crisis of 2008-9 was also the deepest crisis of capitalism the world had seen by then. Back then, governments “stepped in” to contain market crashes and minimise shareholder losses. In the US alone, the Troubled Asset Relief Program (TARP) allocated US$700 billion for the purchase of “toxic assets” (insolvent bonds) from private banks and other financial operators. Similar policies were pursued in the Eurozone and the UK, with the total sum committed in other forms of economic stimuli by these central banks reaching the trillions of dollars.

Nearly a decade of economic recovery driven by these forms of public investment went by, but not without its consequences. In Western Europe and the US, new social movements and political parties emerged, giving voice to working class discontent at witnessing public money being used to save big financial corporations. The reluctance of these governments to use the increases in public expenditure to improve welfare systems contributed to strengthening other segments of popular discontent voiced by right-wing nationalist movements. Opposing the idea of welfare altogether, the latter have proposed a return to neoliberalism, but not “as usual”. While in some cases these calls have taken the form of a more radicalised and uncompromising defence of austerity, in others right-wing nationalists have been willing to support engage in token welfare measures to maintain popular support. The electoral victories of Trump and the Brexit movement, both in 2016, are only the clearest expressions of this phenomenon. In Latin America, the outcome has also been the return of right-wing political forces to government. There, however, this has come as the ebb of the so-called “pink tide”, as a result of a combination between the late effects of the 2008 crisis in commodity prices (in 2014), and the internal contradictions of many of the regions’ governments.

By late 2019, it seemed like neoliberalism had returned from the grave. Austerity policies were back on the agenda with tax cuts and reduced welfare budgets, appearing, variations notwithstanding, both in the North (Trump, Johnson, Macron) and the South (Bolsonaro, Áñez, Piñera). This (near-)death experience changed neoliberalism, of course; it now wears a more authoritarian aspect, displaying increasingly ruthless police violence, especially against migrants and ethnic minorities, new forms of surveillance through social media and the use of big data, as well as more decentralised practices of managerialism based on the ‘entrepreneurial’ discourse aimed at informal workers. Despite this resurgence in a renewed version, when the second ‘largest crisis ever’ in our lifetimes arrived as a result of the COVID-19 pandemic, neoliberalism seemed to be dying once again. Especially given that, this time, the crisis is not ‘merely’ financial, but much deeper. Production and trade have been affected on a global scale by quarantines and movement restrictions put in place to protect the population against viral contamination.

At first sight, the economic responses to the pandemic have been similar to those presented in 2008, but much larger in scale and impact. In March 2020, the US Federal Reserve announced it would lend money directly to non-financial corporations for the first time since the 1930s. Through the Coronavirus Aid, Relief and Economic Security (CARES) Act, US$4.5 trillion were poured into loans, guarantees, and other investments in large corporations, while the total in direct cash payment and other welfare benefits to the population in general was limited to US$608 billion. Weak restrictions on how companies could use this credit encouraged levels of wealth accumulation that are incredibly at odds with the moment of crisis, disconnected as they are from production, profits and productivity. While unemployment reaches record figures and many sectors have been simply unable to function, the wealth of US billionaires increased in 19 per cent between March and June[2]. The impact of the CARES Act, and similar instruments of economic stimulus elsewhere, on global capitalism cannot be overestimated. But such measures will not end neoliberalism, just like the 2008 global bailout did not.

The idea that these interventions by states in financial markets (and in ‘the economy’ in a broader sense), both in 2008 and in 2020, represent a significant shift away from neoliberalism is based upon a conception of the latter as ‘non-interventionism’, or as ‘free markets’. In other words, since the demise of the Bretton Woods agreement and the decoupling of the value of the US dollar from gold in 1971, we have witnessed a continuous process of financial deregulation and broader liberalisation of financial markets. This was coupled with the attack on public welfare services famously spearheaded by Thatcher and Reagan[3], as well as with the promotion of free trade policies and the privatisation of the economy, in what eventually became known as the ‘Washington consensus’. On the theoretical side, this consensus has been supported by the monetarist response, led by Milton Friedman, to the problems encountered by Keynesian economics in the 1970s, a response which brought back the idea of self-regulating markets as the path to economic growth and development.

That is to say that this image of neoliberalism assumes that the latter is characterized by a divide between politics and the economy. The hallmark of neoliberal times, according to this view, lies precisely in the state’s retreat from the economic sphere, increasing the freedom of self-regulating market mechanisms. The many deaths of neoliberalism are therefore announced every time the state “steps back in”, interfering in the economy, as it has done in the cases discussed above.

However, this notion of neoliberalism overlooks the fact that the state was never “out”. Even in the most shocking examples of “free market” economies, central banks were still in charge of managing inflation and rates of savings and investment through their control over interest rates and other mechanisms of monetary policy. This has been highlighted by recent contributions to the historiography of financial systems. For instance, recent calls for a return to the gold standard are presented as a defence of money (as an essential component of free market relations) from this political manipulation by states and central banks. Pegging the value of currencies to metal is presented, in this argument, as a way of limiting the state’s capacity to “manage” the economy. However, when the gold standard was introduced in the early 19th century, its goal was to prevent fluctuations in exchange rates promoted by financial agencies – the same social actors who celebrated the post-Bretton Woods system of fluctuating currencies in the 1970s. That is, both the creation and the demise of the gold standard have been presented, in different contexts, as “de-politicising money”.[4]

This means that practices of regulation and deregulation can equally well be framed as forms of isolating the “economy” from the influence of “politics”; the ways in which they appear are heavily dependent on the historical context. Capitalism itself relies in some form of separation between these spheres, in the sense that relations of production rely not on direct coercion, but on the dependence of both workers and capitalists on market relations. Since market dependence presupposes the definition and distribution of property, even if “politics” appears as a “sphere” entirely separated from economic relations, it is still an essential condition for practices of accumulation[5]. From this perspective, then, the historical particularity that defines neoliberalism is not exactly “non-interventionism”, but a specific form of politics that promotes and sustains the conditions for market dependence and competition. More specifically, it is a way of upholding this (conceptual) separation between the political “sphere” and the economic one which prevents the latter from being scrutinised and discussed by the former, especially in the context of liberal democracies. This includes shaping “self-entrepreneurial” subjects through managerial practices, and shrouding economic discourse in technical jargon that conceals some of its core assumptions and preconditions. 

If we understand neoliberalism as this set of practices and institutional mechanisms that shield market relations from popular and democratic deliberation, we reach a different conclusion. In these terms, neoliberalism is not dying. If emergency measures to ensure economic security during the crisis are aimed more at safeguarding the profits of banks and large corporations than securing wages and welfare programmes (as has been the case in the US and Brazil[6]), then this crisis is being used as an opportunity to increase wealth inequality, and not to address it as a problem. It is Naomi Klein’s version of “disaster capitalism” all over again[7]. In this sense, COVID is not the end of neoliberalism, but another demonstration of its strength.

This is not to say there has been no resistance. It has appeared, all around the globe. After the 2008–9 crisis, it was present in the form of Occupy movements across the global North and South, in the 2011 social uprisings across Southwest Asia and North Africa, and in many attempts to reform or create new left-wing parties. More recently, the umbrella movement, the gilets jaunes, and many strikes by both formal and informal workers and students across the globe are expressions of popular discontent over economic policy and the placing of further constraints on (already limited) democratic institutions. The demands of these many movements differ in appearance and vary according to their context, but at their core, they are united not by the idea of a more interventionist state but by deep structural reforms that allow for the radicalization of democracy, and of transparency and accountability in relation to economic policy. In other words, they share, to some extent, the ultimate aim of submitting the political exercise of authority (including the management of the economy) to truly democratic control.

The increasingly authoritarian forms of surveillance, control, and repression of these resistance movements are not a new aspect of neoliberalism. In fact, they are not a new aspect of statehood. These are the same kinds of responses with which institutionalised political authorities (states) have historically confronted attempts at transformation that are not conducted within the frameworks previously established by themselves. If we view these responses and these frameworks in light of the colonial origins of modern statehood, we find that the divide between a (supposedly homogenous) ‘nation’ and its “others” is an essential element to understand authoritarian violence not as an innovation within neoliberalism, but as another manifestation of colonial violence. The recent growth of decolonial and anti-racist politics must be understood as an attempt at radical democratisation, shaping new political subjects who are no longer subjected to colonial forms of control. Black Lives Matter is certainly the main example here, with its rallying cries of ‘Defund the police!’ and the ground-breaking establishment of Capitol Hill Autonomous Zone (CHAZ) in Seattle. The centrality of anti-racism in the US (and elsewhere) is a challenge to the narrow limits of political subjectivity in liberal democracies, which relies on a racialised conception of nationhood and citizenship that provides discursive grounds for oppression, inequality, and violence. The resistance against the Bolivian coup, the protests in Chile in 2019-20, and the struggle of indigenous and quilombola communities against Bolsonaro’s genocidal policies are also remarkable examples. The correspondence between the limits imposed on political subjectivity within liberal democracies and colonial forms of violence is not a coincidence. This is the central conflict of our times.

Although the COVID pandemic clearly demonstrates the many vulnerabilities created by neoliberal policies in our societies, the current global political landscape does not give any indication that neoliberalism is about to die any time soon. If we pin our hopes on that happening, we will probably find ourselves declaring yet another death of neoliberalism by the time it reaches the next global crisis. This means neoliberalism must be portrayed as a pervasive and insidious monster, perfectly capable of surviving through its many deaths. This Lovecraftian imagery already evoked in the epigraph is (unsurprisingly) terrifying, but it might also provide grounds for hope. After all, we are indeed living through the ‘strange aeons’ of the capitalocene. Popular resistance has proven to be as resilient as neoliberalism itself, and arguably even more creative in its diversity. For instance, grassroots networks of solidarity continue to expand beyond what it is possible to police, striving to create alternative forms of life beyond the imperatives of productivity, and means of subsistence that are independent of market relations, such as community kitchens and gardens. The proliferation of new forms of political organisation provide means of questioning the colonial limits of subjectivity, on both sides of the colonial divide. These are essential elements of an attack on neoliberalism that manages to go beyond its own definition of ‘economics’, targeting the (colonial) limits it builds around politics, and especially around its own notion of democracy.    

[1] SAAD-FILHO, Alfredo. Coronavirus, Crisis and the End of Neoliberalism. Available at

STIGLITZ, Joseph. The End of Neoliberalism and the Rebirth of History. Available at

[2] BRENNER, Robert – Escalating Plunder. New Left Review 123 (May-June 2020), pp. 5-22.

[3] Although earlier experiments with neoliberal policies should not be discarded, like those under Pinochet in Chile and Suharto in Indonesia.

[4] KNAFO, Samuel. The Making of Modern Finance: liberal governance and the gold standard (London; Routledge; 2013)

[5] WOOD, Ellen. Democracy Against Capitalism: renewing historical materialism (London; Verso; 1995)


[7] KLEIN, Naomi – Shock Doctrine: the rise of disaster capitalism (New York; Metropolitan Books; 2007)