The Inextricable Link Between Neoliberalism and Fascism: A Growing Threat in Modern Economies
As we delve deeper into the conditions conducive to the growth of fascism, it becomes increasingly evident that neoliberalism and fascism are not merely coincidental or separate phenomena. Rather, they are inextricably linked, with neoliberal economic policies creating the fertile ground in which fascist ideologies can take root and flourish. This connection is particularly alarming in the context of today’s globalized economy, where the hegemony of international finance capital dictates the policies of nation-states, leaving little room for meaningful alternatives.
Neoliberalism, characterized by the deregulation of markets, privatization of public services, and the prioritization of corporate profits over public welfare, has dominated the global economic landscape for decades. This regime of economic policies is not merely an economic approach but a political one, driven by the interests of international finance capital. In a world where capital is globalized but the state remains tied to the nation-state structure, the policies dictated by neoliberalism are imposed on every country, irrespective of the government in power. The underlying threat is clear: any deviation from these policies risks triggering a financial crisis due to capital flight, a phenomenon that has kept nations tightly bound to the neoliberal agenda.
This creates a political “closure” under neoliberalism, where regardless of electoral outcomes, the same set of policies persists. This political stagnation feeds into a broader crisis, as the demands of globalized finance supersede the needs and desires of the populace. The inability of any government to depart from neoliberal policies, without risking severe economic consequences, leads to widespread disillusionment among the electorate. It is within this environment of political impotence and economic disenfranchisement that fascism finds fertile ground.
The Economic Crisis Engineered by Neoliberalism
Neoliberalism does more than create political stagnation; it precipitates economic crises that demand alternative solutions. Yet, under the strictures of neoliberalism, such alternatives are rendered impossible. One of the core drivers of this crisis is the relocation of capital to low-wage countries in the Global South. While this relocation boosts the productivity and profitability of capital, it suppresses wage growth both in these developing economies and in the advanced capitalist countries. The real wages of workers in these regions stagnate or decline, even as productivity increases, leading to a significant shift in income distribution from labor to capital. Thomas Piketty’s research in Capital in the Twenty-First Century highlights this growing inequality, showing how the share of income accruing to the top 1% has skyrocketed, while wage growth for the average worker has remained stagnant or even declined.
This widening inequality is not just an economic issue but a social one. The suppression of wages and the shift of income to capital lead to a demand deficiency in the economy—a situation where the goods and services produced cannot be fully consumed due to insufficient purchasing power among the masses. This creates a chronic tendency toward overproduction, leading to recurrent economic crises.
Ordinarily, such a crisis could be mitigated by state intervention to boost demand. However, under neoliberalism, the state is hamstrung by the need to appease global finance capital, which opposes any significant intervention in the economy that might disrupt its interests. Even in the United States, where the dollar’s global reserve currency status could theoretically allow for more aggressive fiscal policies, the reality is that such intervention would primarily benefit other economies through increased imports, exacerbating trade deficits and external debt.
The Political and Social Fallout: Fertile Ground for Fascism
The economic stagnation and crisis engendered by neoliberalism do not merely lead to economic hardship; they create the social and political conditions ripe for the rise of fascism. As traditional political formations—whether conservative, liberal, or social democratic—fail to address the root causes of economic and social malaise, they lose credibility with the electorate. This disillusionment with the established political order creates a vacuum that fascist movements are quick to fill.
Historically, fascism has thrived in periods of economic crisis and political deadlock. The Great Depression of the 1930s, for instance, provided the conditions that allowed fascist regimes to rise in Germany, Italy, and other parts of Europe. Today, the global economic crisis created by neoliberalism mirrors those conditions, with rising inequality, economic insecurity, and a perceived lack of alternatives creating fertile ground for the far-right.
In the contemporary context, we see this dynamic playing out in various countries. In the United States, the rise of Donald Trump and the far-right can be directly linked to the failures of neoliberal policies. The offshoring of manufacturing jobs, wage stagnation, and the erosion of the middle class have left many Americans feeling abandoned by both major political parties. Trump’s populist rhetoric, which often rails against globalization and the political establishment, taps into this discontent. Yet, his policies largely continued the neoliberal agenda, focusing on tax cuts for the wealthy and deregulation, further entrenching the very issues that fueled his rise.
In Europe, the rise of far-right parties in countries like France, Italy, and Hungary can similarly be traced to the economic and social dislocations caused by neoliberal policies. These movements often combine nationalist rhetoric with a critique of the neoliberal order, positioning themselves as defenders of the “common man” against the global elites. However, like their American counterparts, these parties often perpetuate the same economic policies that exacerbate inequality and social division.
Neoliberalism’s Impact on Class Resistance and the Left
One of the most insidious effects of neoliberalism is its ability to weaken class resistance. By promoting the global mobility of capital, neoliberalism undermines traditional forms of labor struggle, which are typically confined within national borders. Workers in any given country are faced with the constant threat of capital relocating production to lower-wage regions, leading to job losses and wage cuts. This threat effectively suppresses the ability of workers to organize and demand better conditions, as the fear of capital flight looms large.
Moreover, neoliberalism weakens trade unions, which have historically been the backbone of working-class resistance. In the United States, for example, union membership has plummeted from 20.1% of workers in 1983 to just 10.3% in 2021, according to the Bureau of Labor Statistics. This decline is even more pronounced in the private sector, where only about 6% of workers are unionized. The privatization of public sector jobs, where unionization rates have traditionally been higher, has further eroded the power of organized labor.
In the Global South, neoliberalism has unleashed a process of dispossession, driving small farmers and producers off their land and into precarious urban employment. This process of “primitive accumulation” creates a vast reserve army of labor—an underemployed and precariously employed workforce that lacks the power to challenge capital. The result is a weakening of working-class resistance not just in the developed world but globally.
This weakening of class resistance has dire political consequences. With the working class unable to effectively challenge neoliberalism, the Left finds itself in a weakened position. Even social democratic parties, which once championed the interests of workers, have increasingly embraced neoliberal policies, fearing the economic consequences of challenging global capital. This capitulation leaves the political field open for the far-right, which positions itself as the only true alternative to the neoliberal order, even as it often perpetuates the same economic policies once in power.
The Inevitable Link: Neoliberalism and Fascism
The conditions created by neoliberalism—economic crisis, political stagnation, and the weakening of class resistance—are precisely those that historically give rise to fascism. Fascism thrives in times of crisis, offering simple solutions to complex problems and scapegoating marginalized groups for the failures of the political and economic system. Under neoliberalism, as traditional political parties fail to address the root causes of economic and social malaise, fascist movements gain ground, offering a seductive alternative to a disillusioned electorate.
Yet, as long as neoliberal capitalism persists, the rise of fascism will remain an ever-present threat. The inability of neoliberal political formations to transcend their own economic model means that the crises of overproduction, inequality, and political stagnation will continue. And as these crises deepen, the appeal of fascism will only grow stronger.
The only way to truly combat the rise of fascism is to transcend neoliberal capitalism itself. This requires a radical shift in economic and political priorities—a move away from the hegemony of international finance capital and toward a model that prioritizes the needs of the working class. The Left must lead this charge, but it cannot do so alone. It must forge alliances with liberal and progressive forces, uniting against the common threat of fascism while advocating for policies that go beyond the limitations of neoliberalism.
In the end, neoliberalism and fascism are two sides of the same coin. Both represent a response to the crisis of capitalism—neoliberalism through the entrenchment of corporate power and the suppression of democracy, and fascism through the authoritarian repression of dissent and the scapegoating of marginalized groups. To break this cycle, we must reject both neoliberalism and fascism, and build a new economic and political order that truly serves the needs of all people.
Sources
Piketty, Thomas. Capital in the Twenty-First Century. Harvard University Press, 2014.
Economic Policy Institute: The Productivity-Pay Gap
Bureau of Labor Statistics: Union Membership in the U.S., 1983-2021
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