It was the best of times, it was the worst of times …
— Charles Dickens
The neoliberal revolution, which began in the 1970s, has produced inequality not seen since the gilded age.1 From circa 1942 to 1978, the top 10% of households held around 33% of the nation’s wealth. Currently, the wealth share of the top 10% stands at 47%. Even more strikingly, the top 0.1% (1 in 1,000) of households increased their share of income from less than 1% in 1978 to roughly 5% in 2008.2 The policies that produced this wealth disparity, including privatization, deregulation, and the promotion of macroeconomic stability, have attracted the opprobrium of critics and the plaudits of apologists. In mainstream discourse, free market encomia and anti-government pabulum are virtual necessities.3 It is considered a badge of virtue to harbor mystical beliefs about the thaumaturgical properties of the free market. Of course, leaving the platonic ether, both progressives and conservatives desire a powerful regulatory apparatus and interventionist state. Progressives prefer that these tools be used to create greater equality; conservatives that they allow income to flow upward.4
Critics of neoliberalism have penned countless works detailing the negative economic and social consequences associated with neoliberal policies.5,6,7 Most progressives are familiar with these critiques and utilize them in discussions, blogs, articles, and books. Unfortunately, there remains a lacuna in progressive critiques which allows apologists to remain untarnished defenders of the faith: the psychological consequences of neoliberal policy have not been rigorously assessed—outside of specialist journals.8 The results are straightforward: the neoliberal enthusiast concedes economic facts but asserts that increased freedom, individualism, and prosperity more than outweigh the costs. Sure, low and non-skilled workers are worse off than they were 30 years ago, but who cares? The apologist then waxes effusive over the unparalleled consumer goods that are available for purchase. He (or she) concludes with a yarn about his working-class neighbor who owns 2 cell phones and a flat screen TV. What if such an argument has validity? If data collected over the past 40 years provided evidence that U.S. citizens are happier and healthier than ever, it would make an outright condemnation of neoliberalism more difficult. Conversely, if the data provided evidence of increasing psychological and physical malaise, this would render it difficult to tout the salubriousness of neoliberalism
Happiness is the meaning and the purpose of life, the whole aim and end of human existence.
Neoliberalism and Happiness
Neoliberal advocates often point to increased prosperity, freedom, and consumer choice to justify their brand of market fundamentalism. Inherent in this argument is the assumption, left conspicuously untested, that consumer choice and wealth are, by necessity, conduits of happiness. Turning to the scholarly research, it is true that higher levels of income cross-nationally are associated with increased happiness. For example, researchers have found moderate to strong correlations (between .50 and .70) between per capita income and average well-being across nations.9 However, once income reaches a moderate level (roughly U.S. $10,000 per capita), the effects of additional income on happiness are marginal or nonexistent.10,11 In the U.S., mean happiness has remained flat since the end of World War II, while the percentage of Americans reporting being very happy stagnated in the 1960s (see figure below).12,13,14
Neoliberal advocates are correct in asserting that a sense of freedom increases subjective well-being; they are wrong in assuming that neoliberal policies maximize perceived freedom.15 Neoliberal policies increase inequality which decreases perceived freedom and is associated with a host of social ills (detailed below). Further, nations possessing the highest life satisfaction—Denmark, Netherlands, Norway, and Switzerland—are all more egalitarian and collectivist than the United States.16 This is consistent with research demonstrating that more generous welfare state policies are associated with higher levels of happiness.17 There are a couple of reasons that relatively collectivist countries with generous welfare policies tend to be happier than the U.S. First, in a hyper-individualistic, competitive social milieu, income becomes a salient social desideratum causing individuals to overrate its importance in generating well-being and to lose sight of more important factors.18 Second, while people generally prefer choice, there is evidence that too much choice is deleterious to well-being. This phenomenon has been given the felicitous label the paradox of choice.19 For an example of the paradox of choice, think of your last trip to the supermarket. Were you overwhelmed by the sundry toothpastes? What is the difference between advanced vivid fluoride and iso-active fluoride? Should you use fluoride or peroxide or baking soda or all three? The paradox of choice occurs because we wish to make rational choices but have limited time and resources. It is often impossible to gather sufficient information for optimal choice. Thus, we are glutted by consumer goods that do little to increase happiness and much to increase anxiety. To the extent that neoliberalism promotes consumerism, it is likely to decrease subjective feelings of well-being.
An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.
Inequality and Psychological Functioning
Inequality has increased dramatically in the neoliberal era—even the most insouciant apologist admits this much. Pollyannaish pundits argue the inequality is irrelevant so long as society is getting richer in absolute terms. They also argue that inequality is the price paid for the freedom to pursue one’s talents. The scientific research, however, tells a drastically different tale. Hundreds of studies demonstrate that inequality is destructive socially and psychologically.20 ,21,22 The table below presents an overview of the effects of inequality on select social and psychological outcomes.23,24,25,26,27
A quick glance at the table reveals that inequality is associated with lower overall population health and mental health as well as a host of social ills. Even social mobility, the cause célèbre of neoliberal aficionados, is negatively correlated with inequality (i.e., the more equal the society, the greater the social mobility). These data further help to understand the lack of a relationship between per capita income and happiness: It is not the income that matters so much as its relative distribution.
We’re the middle children of history… no purpose or place. We have no Great War, no Great Depression. Our great war is a spiritual war. Our great depression is our lives.
— Fight Club
The effects of Growing up Neoliberal
Generation X and the proceeding generations are, in a frightening way, the guinea pigs of neoliberal history. If the advocates of neoliberalism are correct, these generations should be blessed with a happiness and psychological robustness not afforded to previous generations. On the other hand, if the concerns of critics are closer to the mark, we should see cohort trends on a host of psychological and social outcomes that are not in a desirable direction. Here, as Mike Males has eloquently pointed out, we must be careful not to scapegoat younger generations.28 We must also resist the opposite temptation—Males comes dangerously close to writing what amounts to hagiography.29
In the past, all we could rely on to provide evidence about generational trends were animadversions cast on the younger from the armchair of the older. Of course, these do not qualify as unbiased testimonials. Fortunately, in recent years, Jean Twenge and her colleagues have pioneered the use of cross-temporal methods to assess generational trends rigorously and objectively.30,31 The gist of this method is to collect scores on surveys as far as back the data allow. For example, we might collect college students’ scores on a scale measuring self-esteem from 1976 to the present. We can then take the average score of college freshmen from 1976 and compare them with the college freshmen of 1977 and so on up to the most recently published data. The brilliance of this method is that we can perform all sorts of statistical analyses comparing cohorts of college students and we can quantify cohort trends. It may be a bit more challenging than pontificating anecdotally, but it does have the distinct advantage of scientific soundness.
The table below presents a select sample of social and psychological indicators (i.e., empirical manifestations of our general concept of socio-psychological well-being) as well as the general cross-temporal trend. The table also presents the age of the cohort (e.g., college students) the data is taken from as well as the duration (e.g., 1976-1993).32,33,34,35,36,37,38,39,40,41,42,43,44
There has been a decline in social capital since the middle of the 1960s across all age groups. This is manifest in everything from decreased voter turnout to less frequent conversations with neighbors. Within young cohorts there is a trend toward individualistic narcissism as indicated by cross-temporal increases in positive self-view, self-esteem, and narcissistic personality. That is, the youth of today score much higher on scales measuring these than did youth 10 or 20 years ago. While high self-esteem is generally desirable, it is not when it becomes unhinged from external accomplishment. When this occurs, as it currently has, it leads to irrational ambition, competitiveness, defensiveness, and narcissism. The same applies, a fortiori, to positive self-views. Of course, it is desirable to view yourself in a positive light. However, if you believe you are the most intelligent, attractive, and athletic person in the known world, you are less likely to be cooperative and altruistic.
Interestingly, both external locus of control and just world beliefs have risen since the 1970s. External locus of control refers to the belief that it is mostly luck that determines one’s lot in life. Individuals who rate high on external locus of control tend to be cynical as they do not believe their own actions can be efficacious in producing desirable outcomes. Thus, with rising external locus of control, it is likely that sustained activism decreases. Just world belief refers to the inclination to believe that the world is fundamentally just and that people get what they deserve. Individuals who possess just world beliefs tend to justify the status quo and blame others for their failings—even if these are caused by external phenomena (e.g., structural changes in the economy, severe illness). Therefore, youth today are more likely to justify the status quo and blame victims than were youth in the 1970s.
Taken as a whole, the research summarized in the above table is damning for advocates of neoliberalism. Youth today suffer from increased anxiety, depression, and mental illness; exhibit inflated self-views and decreased empathy; believe money is more important than previous generations; and are more likely to accept the status quo with cynical acquiescence. These psychological trends are mirrored by a steady decline in social capital and a rise in crass materialism.45 We must be careful not to blame youth for these trends. They are caused by material and cultural changes, not by changes in innate psychology. These are the outcome of a culture predicated on material values and individualism. In short, these are the predictable results of neoliberal policy.
Conclusion: Neoliberalism is a Health Risk
They made a wasteland and called it peace.
The evidence presented above taken in toto is overwhelming and points to one conclusion: Neoliberal polices are a public health risk. Like cigarettes, neoliberal propaganda should come with a Surgeon’s General Warning: Neoliberalism may cause depression, anxiety, cynicism, and has been linked to declining social capital. Progressive critics of neoliberalism should make use of these findings in blogs, articles, and conversations. It is difficult to believe that the majority of Americans would tolerate neoliberal policies if they were aware of the consequences.
It is hoped that this evidence fills the lacuna discussed in the opening. There is no reason for us to ignore psychology when debating social policies. In fact, it is only through the effects of these policies on flesh and blood humans that we are critical of them. Progressives have, at times, shied from psychology. Unfortunately, the neoliberal apologists have used this to their advantage: As they bloviate about the supposed virtues of free markets and consumer choice, progressives, for the most part, retort with dry statistics about inequality and unemployment. It is not difficult to see which resonates more with the average citizen. Armed with data from psychology, progressives can retort with poignant descriptions of increasing psychological malaise.
While we are possessed of no special wisdom to offer activists advice, it is important to keep in mind that neoliberalism is not written in the stars: There are alternatives.
- Saez, E., & Picketty, T. (1998). Income inequality in the United States, 1913-1998. Quarterly Journal of Economics, 118, 1-39. [↩]
- Saez, E. (July 17, 2010). Striking it richer: The evolution of top incomes in the United States (updated with 2008 estimates). [↩]
- Bo Winegard (March 31, 2011). Synecdoche Wisconsin: Neoliberalism and Economic Inequities in America. Dissident Voice. [↩]
- Baker, D. (2006). The conservative nanny state: How the wealthy use the government to stay rich and get richer. [↩]
- Harvey, D. (2005). A brief history of neoliberalism. New York: Oxford. [↩]
- Chomsky, N. (1999). Profit over people: Neoliberalism and global order. New York: Seven Stories Press. [↩]
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- Diener, E., & Biswas-Diener, R. (2002). Will money increase subjective well-being? A literature review and guide to needed research. Social Indicators Research, 57, 119-169. [↩]
- Frey, B.S., & Stutzer, A. (2002). Happiness and economics: How the economy and institutions affect human well-being. Princeton, NJ: Princeton University Press. [↩]
- Helliwell, J.F. (2003). How’s life? Combining individual and national variables to explain subjective well-being. Economic Modelling, 20, 331-360. [↩]
- Easterlin, R.A. (1995). Will raising the incomes of all increase the happiness of all? Journal of Economic Behavior and Organization, 27, 35-47. [↩]
- Diener, E., & Seligman, M.E.P. (2004). Beyond money: Toward an economy of well-being. Psychological Science in the Public Interest, 5, 1-31. [↩]
- Myers, D.G., & Diener, E. (1995). Who is happy? Psychological Science, 6, 10-19. [↩]
- Inglehart, R., Foa, R., Peterson, C., & Welzel, C. (2008). Development, freedom, and rising happiness: A global perspective (1981-2007). Perspectives on Psychological Science, 3, 264-285. [↩]
- Diener, E., & Biswas-Diener, R. (2008). Happiness: Unlocking the mysteries of psychological wealth. Malden, MA: Blackwell. [↩]
- Pacek, A., & Radcliff, B. (2008). Assessing the welfare state: The politics of happiness. Perspectives on Politics, 6, 267-277. [↩]
- Kahneman, D., Krueger, A.B., Schkade, D., Schwartz, N., & Stone, A.A. (2006). Would you be happier if you were richer? A focusing illusion. Science, 312, 1908-1910. [↩]
- Schwartz, B. (2003). The paradox of choice: Why more is less. New York: Ecco. [↩]
- Sapolsky, R.M. (2005). The influence of social hierarchy on primate health. Science, 308, 648-652. [↩]
- Wilkinson, R.G., & Picket, K.E. (2006). Income inequality and population health: A review and explanation of the evidence. Social Science & Medicine, 62, 1768-1784. [↩]
- There is a wealth of information and documentation supporting specific claims about the effects of inequality at The Equality Trust, a nonprofit group. [↩]
- Kondo, N., Sembajwe, G., Kawachi, I., van Dam, R.M, Subramanian, S.V., & Yamagata, Z. (2009). Income inequality, mortality, and self rated health: Meta-analysis of multilevel studies. British Medical Journal, 339, b4471. [↩]
- Pickett, K.E., James, O.W., & Wilkinson, R.G. (2006). Income inequality and the prevalence of mental illness: A preliminary international analysis. Journal of Epidemiology and Community Health, 60, 646-647. [↩]
- Picket, K.E., & Wilkinson, R.G. (2010). Inequality: An under acknowledged source of mental illness and stress. British Journal of Psychiatry, 197, 426-428. [↩]
- Wilkinson, R., & Pickett, K.E. (2009). The spirit level: Why more equal societies almost always do better. New York: Penguin. [↩]
- Daly, M., Wilson, M., & Vasdev, S. (2001). Income inequality and homicide rates in Canada and the United States. Canadian Journal of Criminology, 43, 219-236. [↩]
- Males, M.A. (1996). The scapegoat generation: America’s war on adolescents. Monroe, ME: Common Courage Press. [↩]
- Mike Males (April 26, 2001). The True “Greatest Generation” of Our Time: X. Los Angeles Times. [↩]
- Twenge, J.M. (2006). Generation me: Why today’s young Americans are more confident, assertive, entitled—and more miserable than ever before. New York: Free Press. [↩]
- Twenge, J.M., & Campbell, W.K. (2009). The narcissism epidemic: Living in the age of entitlement. New York: Free Press. [↩]
- Putnam, R. D. (2000). Bowling alone: The collapse and revival of American community. New York: Simon & Schuster. [↩]
- Twenge, J.M., & Campbell, W.K. (2008). Increases in positive self-views among high school students: Birth cohort changes in anticipated performance, self-satisfaction, self-liking, and self-competence. Psychological Science, 19, 1082-1086. [↩]
- Reynolds, J., Stewart, M., MacDonald, R., & Sischo, L. (2006). Have adolescents become too ambitious? High school seniors’ educational and occupational plans, 1976-2000. Social Problems, 53, 186-206. [↩]
- Twenge, J.M., Konrath, S., Foster, J.D., Campbell, W.K., & Bushman, B.J. (2008). Egos inflating over time: A cross temporal meta-analysis of the Narcissistic Personality Inventory. Journal of Personality, 76, 875-901. [↩]
- Twenge, J.M., & Foster, J.D. (2010). Birth cohort increases in narcissistic personality traits among American college students, 1982-2009. Social Psychological and Personality Science, 1, 99-106. [↩]
- Twenge, J.M., Zhang, L., Im, C. (2004). It’s beyond my control: A cross-temporal meta-analysis of increasing locus of control, 1960-2002. Personality and Social Psychology Review, 8, 308-319. [↩]
- Gentile, B., Twenge, J.M., & Campbell, W.K. (2010). Birth cohort differences in self-esteem, 1988-2008: A cross-temporal meta-analysis. Review of General Psychology, 14, 261-268. [↩]
- Twenge, J.M., & Campbell, W.K. (2001). Age and birth cohort differences in self-esteem: A cross-temporal meta-analysis. Personality and Social Psychology Review, 5, 321-344. [↩]
- Twenge, J.M. (2000). The age of anxiety? Birth cohort change in anxiety and neuroticism,1952-1993. Journal of Personality and Social Psychology, 79, 1007-1021. [↩]
- Twenge, J.M., Gentile, B., DeWall, C.N., Ma, D., Lacefield, K., Schurtz, D.R. (2010). Birth cohort increases in psychopathology among young Americans, 1938-2007: A cross-temporal meta-analysis of the MMPI. Clinical Psychology Review, 30, 145-154. [↩]
- Konrath, S.H., O’brien, E.H., & Hsing, C. (2011). Changes in dispositional empathy in American college students over time: A meta-analysis. Personality and Social Psychology Review, 15, 180-198. [↩]
- Malahy, L.W., Rubinlicht, M.A., & Kaiser, C.R. (2009). Justifying inequality: A cross-temporal investigation of U.S. income disparities and just-world beliefs from 1973 to 2006. Social Justice Research, 22, 369-383. [↩]
- Twenge, J.M., & Campbell, W.K. (2010). Birth cohort differences in the monitoring the future dataset and elsewhere: Further evidence for Generation Me: Commentary on Trzesniewski & Donnellan. Perspectives on Psychological Science, 5, 81-88. [↩]
- Astin, A.W. (1998). The changing American college student: Thirty-year trends, 1966-1996. The Review of Higher Education, 21, 115-135. [↩]