Advances in Applied Sociology
2013. Vol.3, No.1, 79-84
Published Online March 2013 in SciRes (http://www.scirp.org/journal/aasoci) http://dx.doi.org/10.4236/aasoci.2013.31010
The Neoliberal Pea and Thimble Trick: Changing Rhetoric of
Neoliberal Champions across Two Periods of Economic History
and Two Hypotheses about Why the Message Is Less Sanguine
Anthony M. Gould, Mélanie Robert
Relations Industrielles, Université Laval, Quebe c City, Canada
Received November 30th, 2012; revised Dec ember 29th, 2012; accepted January 15th, 2013
Neoliberalism, or faith in the capacity of markets to solve social and economic problems, is a key element
of the prevailing public policy orthodoxy in G20 countries. Throughout the 1980s, key proponents of the
Neoliberal message such as UK Prime Minister Margaret Thatcher and American President Ronald Regan
spoke optimistically about the philosophy’s inevitability and its benefits. During that period, the metaphor
of a “rising tide lifting all boats” was offered as a way of envisaging the natural consequence of a sup-
ply-side strategy deployed with little or no state intervention. This project examines the shifting neoliberal
message through two epochs: the closing decade of the industrial age from approximately 1980 to the
early 1990s; and the period of the post-industrial age of e-commerce and the Internet. These eras can be
viewed as steps along a path of diminishing comparative commercial advantage for G20 countries relative
to emerging economies in Asia, and Latin America. Insofar as neoliberalism is concerned, early propo-
nents of the ideology have realized their objective of reduced state involvement in Western countries but
generally have not been able to produce evidence that a “rising tide lifts all boats”. Against this back-
ground, the modern G20 neoliberal message has changed from being one of optimism, opportunity and
growing advantage to being one of survival. This paper explores why the message has changed and offers
two interpretations of the relevance of a less bullish view of the advantages of neoliberalism.
Keywords: Neoliberalism; Regan; Thatcher; Globalization; Post-Industrial
Introduction
In 2012 neoliberalism, or the widespread operation of mar-
kets with minimal state intervention, is the prevailing public
policy orthodoxy in G20 countries. This approach has trium-
phed in the war of ideas and decision makers mostly view it as
a default option for myriad problems. Indeed, within public po-
licies circles it has become unfashionable, or even imprudent,
to propose an alternative to the market in matters of social and
economic development. Braedley and Luxton (2010) make this
point more bluntly. They say,
“Neoliberalism is no longer an alternative to hegemonic po-
litical thought as it was in the mid-20th century. It is hegemonic
political thought.”
(Braedley & Luxton, 2010: p. 10).
Although widespread embrace of neoliberalism is relatively
recent, the idea itself is not new. There is debate about when it
first emerged. A milestone date is sometimes cited as 1978
when the California legislature passed Preposition 13 which
capped property taxes; an intervention which ultimately caused
a funding crisis in higher education (Ong, 2007). In the 1980s
neoliberalism, a new and perhaps more refined form of 19th
century liberalism, was consolidating itself as a partisan way of
approaching public policy. At the time, the views of Margaret
Thatcher and Ronald Reagan represented only one perspective
amongst a competing array of social and political ideologies. In
that era, philosophical approaches to public policy development
could be approximately placed on a left-right continuum. In
countries like Canada, Australia and New Zealand, the consen-
sus was that elements of the Neoliberal prescription were ex-
cessively harsh and generally unsuitable for a national culture
which emphasized values such as equality and providing for the
socially and economically disadvantaged. However, even for
those countries, the market-based solution soon became the
mainstream orthodoxy. For example, throughout the 1980s,
Australia deregulated product and financial markets (and floa-
ted its dollar); abolished tariffs; and corporatized or privatized
public utilities such as banking, telecommunications, and, the
national airline (Briggs, 2005). These changes were followed
by deregulation of the Australian labour market which began in
earnest with the 1988 Industrial Relations Act that deempha-
sized centralized wage-fixing in favour of enterprise-based
workplace bargaining over terms and conditions of employment
including wages (Hall, 2006). Soon after Australia took its first
tentative steps towards installing a market based view of em-
ployment relations, New Zealand’s conservative Bolger gov-
ernment upped the ante with its Labour Contracts Act (1991).
In the aftermath, individual bargaining, lessened union legiti-
macy, and a watered-down social safety-net became points of
reference for future Australian and New Zealand public policy.
These elements—individualised wages, a shift from industrial
relations to a human resource management perspective, declin-
ing union density and increasing income disparity have also
become the norm in Britain, Germany, Italy, Japan, Sweden
and the United States over approximately the same timeframe
(Katz & Darbishire, 2000).

A. M. GOULD, M. ROBERT
Throughout the 1980s as the political spectrum was shifting
to the right in the lead-up to globalization, the neoliberal hoopla
for working people and the lower-middle class was mostly op-
timistic. For example, Margaret Thatcher’s message was that a
market-based approach to delivery of public services would
lower costs and, in so doing, free-up disposable income which
could then be used—in the form of tax-cuts—to grow the pri-
vate economy. Her prescription for a better life was not just
about privatization but about habitually using the invisible-hand
principle to optimize solutions (Braedley & Luxton, 2010). At
the same time, she was encouraging entrepreneurship for those
who had only ever worked for others and therefore had en-
trenched employee status (Connell, 2010). She pushed the
message that labour unions—far from furthering the interests of
working people—were in fact preventing them from advancing
their material circumstances (Connell, 2010). Across the Atlan-
tic, Ronald Reagan, was also vigorously promoting free enter-
prise. His message was similar to that of his friend, the British
Prime Minister: markets are the best strategy for improving the
circumstances of ordinary people; a sentiment embodied in Pre-
sident Kennedy’s iconic phrase (often repeated in the 1980s) “A
rising tide lifts all boats.”
Modern champions of free markets say that their operational
benefits can only flow in the absence of regulatory influences.
However, over the last 30 years, deregulation has been substan-
tially implemented in many sectors of G20 economies, includ-
ing the labour market, and the neoliberal approach, aided and
abetted by the proliferation of technology, is mostly the way
things are done. In this article it will be argued that, in circum-
stances where key elements of the neoliberal agenda are pre-
vailing in public policy, the message offered by neoliberals
should, all things being equal, be the same as it always was or
evolve to be even more optimistic. According to the axiom if
some is good, more should be better, the benefits brought by a
ubiquitous market-based approach should flow and compound.
However, there is data addressing indices of growing gaps be-
tween the rich and the poor and a downward drift of less afflu-
ent people living in Western countries (e.g. Kersley et al., 2006;
Mishel et al., 2009; Murray, 2012). This article only briefly ad-
dresses these. Rather, it argues that neoliberal rhetoric has
changed and that the modern message is not the same as the one
that was being promoted in the 1980s. Specifically, contempo-
rary neoliberals in G20 countries speak of survival and exis-
tence rather than of growth and prosperity. In short, the article
argues that the triumph of Neoliberalism in the Western world
is associated with a less bullish view of its benefits. It will
mostly use examples from the labour market to make the case.
In the discussion and conclusion it will present two competing
hypotheses about why rhetoric may have changed and offer a
methodology for drawing a conclusion about which of these re-
presents the optimal interpretation.
Neoliberal Rhetoric: Its Antecedents and Its
More Recent Metamorphosis
Neoliberalism is an approach to public policy founded on the
idea that the unbridled operation of markets is the most efficient
and ethical way to distribute the aggregate benefits of society’s
effort (Braedley & Luxton, 2010). The philosophy has else-
where been viewed as a project to visualize a free-market uto-
pia involving the downsizing of the nation state to enlarge the
space for private accumulation, individual entrepreneurial ac-
tion and, the operation of the principle of the market (Tickell &
Peck, 2003). This view has been consolidated as antithetical to
socialism; a philosophy which is sometimes perceived as re-
stricting freedom, redistributing wealth in arbitrary and inef-
ficient ways, and limiting the expression of human potential in
an effort to unburden individuals from economic necessity
(Hayek, 1944). Neoliberalism echoes the sentiments of classical
18th and 19th century liberalism as espoused by philosophers
such as De Toqueville, Hume, Locke and Smith. Indeed, there
is such similarity between modern Neoliberalism and its prede-
cessor ideology that it is reasonable to ask whether neolibera-
lism really is “neo” in any meaningful sense or whether it is
better described as old wine in new bottles.
Those who view neoliberalism disdainfully often point out
that that there is a disconnect between liberalism and neoliber-
alism. For example, Brodie (2007) says neoliberalism takes the
principle of the market to facets of life where it does not belong;
drinking water, air for breathing, playgrounds for children and
even body parts and the management of outer space. There are
studies which provide empirical evidence that, at least in rela-
tion to certain assets, markets hinder access, exacerbate ine-
quality and do not advance the public good (e.g. Mishel et al.,
2009). On the other hand, certain scholars, such as those from
the Chicago School of Economics including the late Milton
Friedman, appear to genuinely believe that markets are inevita-
bly, and in all cases, the preferred way of efficiently apportion-
ing benefits. Neoliberal proponents are frequently first and
foremost critiques of socialism. The substance of their rhetoric
is often better described as intuitively appealing macro-phi-
losophy rather than reports of empirical findings (Braedely &
Luxton, 2010: p. 11).
Critiques of neoliberalism do not only come from analysts
who demonstrate with data that the theory doesn’t translate well
into practice. There are also cynics; scholars who consider that
neoliberalism does not qualify as an economic theory but
merely is a strategy that wealthy people use to advance their
interests. For example, economist Joseph Stiglitz says
“Neo-liberal market fundamentalism was always a political
doctrine serving certain interests. It was never supported by an
economic theory. Nor, it should now be clear, is it supported by
historical experience. Learning this lesson may be the silver
lining in the cloud now hanging over the global economy”
(Stiglitz, 2008).
In this article, Neoliberalism1 is viewed as distinctively mo-
dern (and therefore not the same as liberalism) in the sense that
it ruthlessly applies the principle of the market as ubiquitously
as possible and, in particular, as a remedy for social problems
such as poverty and inequality. According to this perspective a
point of discontinuity between liberalism and neoliberalism
concerns the commodification of labour. The 19th century lib-
erals, despite their extensive discussion of division of labour
and their use of language which characterized factory workers
as inputs into the production process, did not focus their efforts
on the supply and demand dynamic—of what is now identified
as—a labour market (Duncan, 1999). On the other hand, in the
modern western world neoliberals push to deregulate labour
markets and have mostly won debate about this issue. In the 30
years prior to 2012 in G20 countries there is a trend towards
less State intervention in the employment relationship and to-
wards, what Hall (2006) calls, a market-based approach. Mod-
1Sometimes called supply-side or trickle-down economics when referring to
its predicted effects on the disadvantaged.
80

A. M. GOULD, M. ROBERT
ern neoliberals, in keeping with their broader philosophy, sug-
gest that wages in the long term can only be set by market
forces and are limited ultimately by a society’s level of afflu-
ence. In taking the view that neoliberalism is different to liber-
alism, this article does not take exception to Neoliberalism as a
sound guiding principle for developing public policy2. Rather it
focuses on examining how the message has been changing over
the last 30 years and draws conclusions about why such change
is occurring.
Since the 1980s, the neoliberal message has become simul-
taneously more ubiquitous and more sanguine. There appear to
be three main influences on this phenomenon. First, neoliberal
policies have been applied to a greater range of public services
within G20 countries. Second, proponents of neoliberalism
have attenuated their message about the advantages of the ap-
proach. Third, neoliberal philosophy, particularly in the 1990s,
became intertwined with technological advances. For example,
as a consequence of the Internet and Internet-based technolo-
gies, there emerged a new and non-ideological impetus for the
State’s role to become more marginalized. Specifically, it was
becoming more difficult for jurisdiction-bound governments to
regulate comm erc e.
The Proliferation of Neoliberal Policies
Neoliberalism has been gaining traction since the 1980s and,
in more recent times, has had the serendipitous advantage of
promoting a message that is well adapted to a context of bor-
derless trade (Cerny, 2007). The Neoliberal project has taken
different forms throughout the world but has, at its core, dis-
tinctive elements which are increasingly present in public pol-
icy. These include economic deregulation, the displacement of
traditional state forms, and the reorganization of economic
activity guided by the maxim that the apparatus of government
is constraining and negative (Rainnie & Fairbrother, 2006).
The implementation of Neoliberal policy in G20 countries
mostly started with deregulation of capital and financial mar-
kets but more recently has become a quest to broaden existing
markets and create new ones. Along the way—and as part of
the agenda—government assets and institutions have become
privatized. For example in Australia, the national airline, tele-
communications carrier, bank and wheat marketing system
have been reestablished as publicly listed companies and floa-
ted on the stock exchange. Similar trends have occurred in New
Zealand, Canada and Great Britain where key national assets
have been privatised and launched into increasingly deregulated
oligopolistic industry structures (Katz & Darbishire, 2000).
Even where privatization has not occurred, a market-based ap-
proach has replaced earlier notions of public service. For ex-
ample, in the education sector of most G20 countries state-
based subsidies have been used to establish public and private
schools on an equal-footing with the goal of forcing all institu-
tions to compete for students and funds. At the same time, pub-
lic universities have been defunded and forced to levy fees
(Marginson, 1997). Similar strategies have been applied with
welfare where service provision is now routinely put out for
tender and public agencies that formerly provided the function
now compete with non-government entities (Braedely & Lux-
ton, 2010). These kinds of approaches have been adopted with
healthcare and public housing (Braedely & Luxton, 2010). To
support trade liberalization and financial and capital market
deregulation, Western governments have mostly unified their
exchange-rates, lowered taxation (and simplified tax systems),
reduced spending, introduced labour flexibility initiatives and
dismantled social safety nets (Tickell & Peck, 2003).
The Changing Message
This article’s principal message is that Neoliberal rhetoric
has changed since the 1980s. In particular, a qualitatively dif-
fering message has emerged from approximately the early
1990s and, hence, two distinctive eras are discernible: the clos-
ing years of the industrial age; and, the first two decades of the
post-industrial age.
In the last part of the industrial-age, neoliberalism within
G20 countries was one putative solution amongst others which
generally could be arranged on a left-right axis. Insofar as the
labour market was concerned, countries such as New Zealand,
Canada, and Australia, adopted either a liberal reformist or
orthodox pluralist perspective of the employment relationship
in the early 1980s. Public policy of the time placed emphasis on
elimination of inequality and injustice or, at least, balancing
efficiency considerations with notions of equity and social jus-
tice (Godard, 2011). In the 1990s, debate shifted to being about
whether managerialism was unduly extreme. On the other hand,
the neoliberals of the 1980s in the western world had a couple
of high profile leaders, such as Margaret Thatcher and Ronald
Regan, who were both heads of government and ideological
figureheads. Their message was up-beat and confident. It was
marketed as an assured path to rising prosperity for everyone,
including the very poor. It typically included two elements.
First, the market solution generally leads to greater prosperity.
Second, such greater prosperity will impact the lives of each
social/economic class. A third, and perhaps less explicit, article
of neoliberal faith during the 1980s was that rising levels of
wealth will differentially benefit each social strata; the rich will
become much richer and the poor only a little bit more affluent.
Put more technically, the dividend of economic growth is shar-
ed but not in equal increments3. These three elements are overt-
ly present in the following quotes which come from the stal-
warts of the 1980s.
“Growth, of course, is not enough. It must be the vehicle of a
better standard of living for all the people. Again, economic
and political freedom are inseparably linked”.
Ronald Reagan, (August 3, 1987).
In this context growth was identified as resulting from the
unbridled application of the market principle.
A key theme of Regan’s second inaugural address was that
markets are a solution to social problems and represent a strat-
egy for making the lives of ordinary people better.
“And if we meet this challenge, these will be years when
Americans have restored their confidence and tradition of pro-
gress… when America courageously supported the struggle for
individual liberty, self-government, and free enterprise through-
out the world and turned the tide of history away from totali-
tarian darkness and into the warm sunlight of human freedom.”
“At the heart of our efforts is one idea vindicated by 25
straight months of economic growth: Freedom and incentives
unleash the drive and entrepreneurial genius that are the core
3Neoliberals do not generally see rising inequality as a problem if it occurs
in a context wher e everyone’s material circumstances are improving (Br aed-
ley & Luxton, 20 10).
2Something which has been done by others such as Braedely & Luxton
(2010).

A. M. GOULD, M. ROBERT
of human progress. We have begun to increase the rewards for
work, savings, and investment; reduce the increase in the cost
and size of government and its interference in people’s lives.
We must simplify our tax system, make it fairer and, bring the
rates down for all who work and earn.”
“We must think and move with a new boldness, so every
American who seeks work can find work, so the least among us
shall have an equal chance to achieve the greatest things—to
be heroes who heal our sick, feed the hungry, protect peace
among nations, and leave this world a better place. The time
has come for a new American emancipation—a great national
drive to tear down economic barriers and liberate the spirit of
enterprise in the most distressed areas of our country”.
Ronald Regan. Second Inaugural Address (January 21,
1985).
At about the same time, Great Britain’s Margaret Thatcher
said.
“The only one way to get prosperity and a higher standard of
living in this country is to get our industries running as effi-
ciently as any of those in the rest of the world.”
Margaret Thatcher (January 16, 1985).
During the 1980s the exuberance of Neoliberal rhetoric from
its British and American champions influenced the policy di-
rection of non-conservative governments in Australia, New
Zealand and Canada. These countries had not emphasised the
market solution as always and inevitably being the best public
policy option. For example, in 1983 the incoming Australian
labour government mostly resisted the market solution in key
facets of public policy. Indeed, Bob Hawke’s first accord has
been viewed as an explicit way of avoiding exposure to the
market (Gould, 2010; Hall, 2006). Similarly, in New Zealand,
during the time of the Lange government, the Prime Minister
repudiated the previous government’s flirt with privatization.
Early in his term, he said
“The election of a labour Government has ended the move
towards privatisation of state ventures by the National Govern-
ment.”
David Lange (1984).
However, possibly influenced by Regan and Thatcher, the
Australian and New Zealand Labour governments of the 1980s
appeared to move towards embrace of the neoliberal message
during the first few years of their mandates4. Like their more
zealous American and British counterparts, these leaders did
not speak about maintenance of a standard of living or survival
in a zero-sum world arena. Rather, perhaps spurred by strong
economic growth in the late 80s in particular, they ultimately
spoke of making the cake bigger. The emerging idea was that
neoliberalism is the way of the future; not because there is no
choice but rather because—it presents a great opportunity to
make things even better. Specifically, the changing rhetoric of
labour leaders such as Australia’s Bob Hawke and New Zea-
land’s David Lange, embodied the aforementioned two ele-
ments; markets improve lives and the advantages that markets
bring are shared, albeit unevenly, amongst everyone. For ex-
ample:
“There is quite wide appreciation within Australia that it will
be necessary gradually to reduce Australian protection levels if
we are to achieve the goal of a more efficient, export-oriented
manufacturing sector”.
Bob Hawke (February 4, 1984).
In a speech to Centre for European Policy Studies, Hawke
said also
“From Australian Industry we seek acceptance of the need to
reduce protective walls around the small domestic market. And
in this we have had some success. It is enlightened self-interest
to recognize that protective measures impose a cost for the eco-
nomy as a whole. They put upward pressure on prices in the
protected market and through the rigidities and distortions
which they introduce they ultimately reduce employment and
export opportunities. We have to break loose from the notion,
inherent in the negotiation framework, that one’s own trade
liberalization is concession granted to others.”
Bob Hawke (February 4, 1985).
Across the Pacific, New Zealand’s David Lange—soon after
being elected—was also changing his tune about neoliberalism.
For example, he said in 1984 that
“It has been decided that New Zealand has no business being
run like a Central European (i.e. Socialist) economy, and that
the Government departments and activities will be progres-
sively sold and privatised. The sale proceeds will be used to
pay off the National (overseas) debt and, in so doing, enhance
our opportunities.”
David Lange (1984).
At about the same time, members of Lange’s cabinet were
echoing similarly optimistic sentiment about markets, deregula-
tion and small government. For example, Richard Prebble, the
Minister of State-Owned Enterprises, used the sale of state-
owned assets as a means of retiring debt. He said that the re-
sulting efficiency-gains would be given back to taxpayers and
translated into overall enhanced prosperity (Prebble, 1984).
Like Hawke and Lange, Jean Chrétien, Canada’s Prime Min-
ister, went from being an opponent to a convert of the neolib-
eral cause. His conversion was accompanied by optimism and
enthusiasm.
“Notre gouvernement est persuadé que la libéralisation des
échanges est le levier international le plus efficace qui soit
pour promouvoir l’emploi et la croissance. Notre pays est
tributaire de ses exportations. Notre prospérité future dépend
de la capacité qu’ont les gens des autres pays d’acheter ce que
nous produisons. C’est pour cette raison que le commerce a
été—et continuera duêtre—tout aussi prioritaire pour nous. Et
ce n’est pas seulement prioritaire pour notre pays, pour les
membres du G7 ou pour les pays industrialisés. Cela est
prioritaire pour tous les pays.” and “On ne peut pas faire fi de
la technologie. On ne peut pas effacer les trente dernières
années. On ne peut pas avoir la nostalgie du bon vieux temps.
Il faut faire face aux réalités actuelles.”
Jean Chrétien (June 14, 1995).
In the post-industrial era and in particular since 2008’s fi-
nancial crisis, the neoliberal message has become simultane-
ously more mainstre am and less optimistic. Contemporary neo-
liberals present the principle of the market as the last hope for
G20 countries to maintain the status-quo. In the 15 years prior
to 2012, the message about free and deregulated markets has
typically centered on three elements. First, the Western stan-
dard of living is deteriorating and/or under threat. Second, those
who have promoted state intervention throughout the 20th cen-
tury have created the crisis or, at a minimum, made countries
less able to cope with it. Third, an unbridled emphasis on mar-
kets is the only hope of saving the West. Notions of improving
4It is not suggested here that this was the only influence. Another key justi-
fication for enhanced emphasis on the principle of the market was the
mid-1980s terms of trade crisis which saw Australia and New Zealand
becoming less competitive in ternationally (Gould, 2010).
82

A. M. GOULD, M. ROBERT
material circumstances and/or bettering living standards is
conspicuously absent from the narrative. These three elements
are present in the following quotes which come from Western
leaders during the 1990s and early part of the 21st century.
“(Australia) needs a new style of government, one which acts
strongly within the realms of the possible, one with a disposi-
tion towards individuals finding their own solutions... Only in
this way will we have the strength to face the future, to face the
challenges of globalization.”
John Howard, Australian Prime Minister when speaking
about globalization and limited government (Howard, 1997
cited in Shanahan, 1997).
“… at the heart of the public policy towards the new econ-
omy is the idea that helping people… is not about protection
but empowerment. The pace of reform has to match the pace of
change. Societies that are open, flexible, able easily to distin-
guish between fundamental values which they must keep and
policies which they must adapt, will prosper. Those that move
too slowly or are in hock to vested interests… will fall be-
hind… and because they will, the task of New Labour in power
is clear… Supporting wealth creation. Tackling vested interests.
Using market mechanisms.”
Tony Blair, British Prime Minister (January 28, 2000).
“But you know look, times are going to be pretty tough over
the next three years, our ability to spend up large in our budg-
ets is very heavily reduced, I mean it’s largely nonexistent.
We’ll be spending under half what the government has spent in
the last four or five years for new budget spending initiatives.
So we are going to need to stop some programs and find some
savings in order to fund some new initiatives that the govern-
ment believes are very important.”
John Key, New Zealand Prime Minister (December 12,
2008).
The Changing Context
As the industrial age was replaced by the Internet-enabled
post-industrial era, there emerged new reasons why it would be
more difficult, in practice, for national governments to regulate
markets and constrain commercial activity. At about this point,
those who had been neoliberal ideologues were confronted with
an altered context and, in particular, the prospect of incorporat-
ing overseas trading partners into their conception of the private
sector. For G20 countries, the terrain was formally altered in
two ways. First, they were henceforth to deal with less affluent
nations with lower cost structures and vast populations (Wailes,
2000). These poorer countries, such as India and more recently
China and Indonesia, were industrializing and/or emerging
from centrally planned and controlled economies (Bamber, et
al., 2011). Second, the idea of a Western national government
regulating commercial activity was beginning to seem less
practical; a phenomenon which is elsewhere identified as mar-
ginalization of the nation-state (Katz & Darbishire, 2000). In
short, advances in communications and computing technology
combined with previous ideological exuberance on the part of
charismatic leaders seemed to be moving the market-principle
from the far-right of the political spectrum into the center.
Countries had been pre-primed for neo-liberalism and the arri-
val of the Internet transformed the philosophy from an appar-
ently attractive option into seemingly the only option. As part
of this transformation, neoliberal heroes such as Thatcher and
Reagan became historical visionaries without a modern equi-
valent.
A weakened concept of jurisdiction-based authority as a re-
sult of e-commerce based strategies creates methodological pro-
blems in determining whether neoliberalism can deliver on its
promises. Globalization has created a milieu where markets and
supply-chains extend across national borders. Insofar as indi-
vidual countries are concerned, local cultures and lifestyles are
being, at least, influenced by systems of economic exchange
which bind together parties which have different standards of
living, cost structures, and expectations (Kochan et al., 1997).
This context makes longitudinal comparisons of the neoliberal
message inapt. For example, it would be misleading to compare
the impacts of labour market deregulation pre-NAFTA on Ame-
rican auto-workers with how it affects the average of American
and Mexican auto-workers post-NAFTA. The object of analysis
would be different in each of these cases and, in the short-term,
there may be catch-up for the relatively poorer group, a phe-
nomenon that has sometimes been described as the race to the
rising bottom (Moody, 2007).
Discussion and Conclusion: Two
Interpretations of Changing Neoliberal Rhetoric
When Stiglitz (2008) said that neoliberals have no real inter-
est in helping poor people but instead promote the market solu-
tion only to advance their own interests, he was implicitly sug-
gesting, not just that their philosophy doesn’t work, but that
they are disingenuous. It is difficult to empirically test this hy-
pothesis using a time-series analysis because relevant contex-
tual elements have changed as the world has moved from the
industrial to the post-industrial age. For example, in the late
20th century, the Internet forced countries with different cost
structures to trade with each other and integrate their supply
chains. At least one mainstream line of reasoning suggests that
rich countries will be disadvantaged by this form of organiza-
tion in what some have described as a race to a rising bottom
(e.g. Spulber, 2007; Moody, 2007). Neoliberals are well poised
to point out that there is nothing wrong with their philosophy
but the situation has worsened for G20 countries and the best
that can now be hoped for is that ordinary people can maintain
their living standard. Hence, according to them at least, the
neoliberal message has had to be attenuated. In light of the
Stiglitz charge of disingenuousness, there are two possible
ways to interpret the changing neoliberal message. First, weal-
thy and powerful people want others to adopt an ideology that
will only benefit them and which they know will not work for
anyone else. Second, quintessential neoliberalism really does
work for everybody; and, a rising tides does lift all boats (in-
cluding dinghies). The question for researchers is how to dis-
tinguish between these competing interpretations of the
changed message.
The key to resolving the two-interpretations dilemma lies in
finding data about the impact of neoliberal policies in circum-
stances where those policies have been applied in the industrial
age. Such data exist and are briefly reviewed here. For example,
when Reagan left office in 1985, he had extended the principle
of the market to areas of society where it had never been before
and the impact of his philosophy had, at that time, been felt.
Mishel et al., (2009) provide and analyse data about class mo-
bility and affluence through the 1980s. Some of their key find-
ings include: the top one percent of American wage earners had
a 324 percent increase in their annual earnings between 1979

A. M. GOULD, M. ROBERT
84
Gould, A. M. (2010). The Americanization of Australian workplaces.
Labour History, 51, 363-388. doi:10.1080/0023656X.2010.508373
and 1989 whereas the bottom 90 percent had a 16 percent in-
crease in their earnings over the same period; from 1983 until
1989 the median annual growth in productivity in the US
economy was 1.6 percent per year and the median annual in-
crease in compensation was 0.2 percent per year5; and, racial
differences in annual median family incomes for 1979 to 1989
where 0.7 percent for whites, 0.6 percent for blacks and, 0.0
percent for Hispanics. Percentage-point changes for non-wage
income sources (i.e. dividends paid on shares on sale of prop-
erty etc.) reflect proportions for wage-related income but have
greater magnitudes of difference (Mishel et al., 2009). From
1979 to 1989 the effective Federal tax rate declined for Ameri-
can households but the trend differentially impacted each in-
come group. For example, from 1979 to 1989, the lowest 20
percent of income earners received a federal tax decrease of 0.1
percent (i.e. from 8 percent to 7.9 percent) whereas the top 1
percent of income earners received a tax decrease of just over 8
percent (i.e. from 37 percent to 28.9 percent).
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In light of data about US society during the 1980s, it appears
that explanations which invoke foreigners eating our lunch as
the reason for neoliberal failure are inadequate. It is therefore
argued here that the Stiglitz account of the origin and purpose
of neoliberalism is closer to the mark than the neoliberalism
account. This conclusion requires that key metaphors about the
unbridled application of the market principle be revised. One
such revision is suggested here—a rising tide lifts the big boats
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5Suggesti ng that worker s gener ally had to work 16 per cent hard er each year
to get a 0.2 percent wag e increase .