For Decades, Philanthropy Pushed Neoliberalism. Can It Help Society Move Past It?
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A homeless encampment under a Downtown Los Angeles freeway. Matt Gush/shutterstock
If part of what philanthropists aim to do is guide society along a path commensurate with their values, private funders’ decades-long campaign to advance neoliberalism must be counted as one of philanthropy’s great success stories. The tale is now quite a familiar one. Starting around the middle of the 20th century, a group of conservative funders rallied to stave off the encroaching tendrils of socialism—then a very real geopolitical threat—by backing an ambitious, long-term intellectual project.
At the time, that project didn’t have some unified vision in mind, nor were its participants united in their political beliefs. In many ways, it was reactive, a way to counter hip academic leftism through the creation of an alternative intellectual infrastructure centered on think tanks. This mode of funding didn’t necessarily net its backers many immediate policy wins. But over time, the ideology that emerged, articulating the primacy of the individual economic actor within a growth-oriented “free market,” became a more attractive way to view political and economic relations than a faltering post-World War II system of frequent government planning and intervention.
Fast- forward to today, and neoliberalism is established dogma. It’s been adopted for the most part by both major political parties and touted for decades with no real opposition—until recently. Of course, philanthropy was only one factor behind the rise of the neoliberal paradigm. But inasmuch as conservative funders played a role, “the funding of free market ideas in the 1950s to ’70s may constitute the single most successful example of effective philanthropy in history.”
That’s a quote from a 2018 memo authored by Larry Kramer, president of the William & Flora Hewlett Foundation, proposing what would become one of Hewlett’s most interesting programs to date, Beyond Neoliberalism. The two-year, $10 million exploratory effort was, in its own quiet, brainy way, an immensely ambitious endeavor. What Hewlett set out to discover was, essentially, can philanthropy help seed the next paradigm now that neoliberalism clearly isn’t working for most Americans?
Now that two years have passed, Hewlett’s answer to that question is a definite maybe. “We need a new way of thinking about policy, law and the proper role of government to shift the underlying terms of debate and open up space for solutions that neoliberalism is currently choking off,” Kramer said. To get there, Hewlett is redoubling its efforts with $50 million for a new five-year program, its Economy and Society Initiative. The successor to Beyond Neoliberalism, the program will fund in a cross-ideological way to help thought leaders begin developing “a new ‘common sense’ about how the economy works, the goals it should promote, and how it should be structured to serve those goals.”
With this new initiative, Hewlett confirms its prominence among a number of philanthropic funders interested in an area of inquiry that is at once nebulous and immensely urgent.
Paradigm shift underway
In true Hewlett fashion, the foundation has put a lot of thought into its approach. Jennifer Harris, the State Department and think tank alum who headed Beyond Neoliberalism and now leads Economy and Society, elucidated its strategic approach in a detailed writeup she co-authored with Kramer. Before diving into the grantmaking, which is well underway, it’s worth taking a brief tour of where Hewlett’s coming from, especially since mainstream liberal philanthropy isn’t in the habit of funding like this.
The strategy overview begins by painting a picture of successive “intellectual paradigms” that have shaped American society over the years. Pre-Depression laissez faire gave way to mid-century government-forward Keynesian thinking, which then found itself superseded in the 1970s and 1980s by neoliberalism. And now, neoliberalism has run its course.
“A paradigm ‘works,’ in short, when the solutions it shapes for policymakers and thought leaders are logically and intellectually consistent with the high-level understanding of ordinary citizens and political leaders and address their problems well enough in practice to reinforce that understanding,” Harris and Kramer write.
According to Hewlett, it’s now becoming clear on both sides of an otherwise polarized political spectrum that neoliberal prescriptions no longer work. Contemporary challenges, like the Great Recession, rampant wealth inequality and the global threat of climate change, are rooted in the neoliberal economic order and have proven impervious to neoliberal fixes. The rise of ethno-nationalist populism with Trump, as well as the anti-corporate jeremiads of Sens. Bernie Sanders and Elizabeth Warren, can be seen as political developments harnessing Americans’ deep distaste for a neoliberal order that no longer makes sense.
Into the breach step Hewlett and allied funders, who see the development of an intellectual successor to neoliberalism not as academic puffery, but as another kind of movement work that expands the bounds of what’s politically possible. In that sense, it’s allied to advocacy and activism for policy solutions to problems like inequality and climate change.
“We believe,” Harris and Kramer write, “That adoption of these policies will remain unlikely—or, at the very least, a great deal more difficult than it need be—unless we reconfigure the broader framework within which they are situated.”
Intentionally transpartisan
When the folks at Hewlett set out to determine who’d be up to try moving beyond neoliberalism, they were pleasantly surprised at the number of takers. In academia, advocacy and the think tank world—not to mention philanthropy itself—they encountered plenty of interest, and discovered numerous places where intellectuals were already beginning to ply those waters. Sustaining that nascent work seemed like the obvious next step for the Economy and Society Initiative.
Harris and the Hewlett team have taken inspiration from philanthropy’s backing of the neoliberal project in the past. “I don’t want to overdraw lessons,” Harris told me, “but [those conservative funders] had a certain way of funding that feels instructive. It’s usually people that have ideas, not organizations. We need to do a healthy amount of both this time around, but the piece that’s not intuitive for most of philanthropy today is backing individuals.”
In addition to centering individual thought leaders, Hewlett’s approach is intentionally transpartisan. Conservative thinkers and organizations will get support alongside progressive ones. Harris said that this arose from a need to move at a quicker pace than last century’s neoliberal backers, necessitating the development of a paradigm with appeal across the board. Several of the program’s initial grantees do hail from the intellectual right, though Harris admitted that for the time being, “it’s not 50-50,” with more grants going to individuals and organizations on the left.
One factor in that equation is a rising willingness among progressive think tanks to examine structural issues in a deeper way, especially in terms of disparities in power. Among them are the Roosevelt Institute, Demos and the Washington Center for Equitable Growth—all Economy and Society grantees.
And on the right, where think tanks have long served as conduits for intellectual thought leadership, Hewlett has also identified grantees looking beyond neoliberalism. Prominent among them is up-and-coming conservative thinker Oren Cass, to whom Hewlett has given money to help seed his new organization American Compass. Cass’ critique of neoliberalism centers on its increasing inability to secure the future of traditional institutions like the family, protect local communities, and provide for workers in the sense that hard work should be a path to a decent living. Other right-leaning grantees include Samuel Hammond at the Niskanen Center, Johnny Burtka at the Intercollegiate Studies Institute and Julius Krein at the American Affairs journal.
Overall, Economy and Society is more concerned with planting the seeds of innovative thinking within academic and professional disciplines rather than making grand interdisciplinary overtures. For instance, it’s funding Economists for Inclusive Prosperity, a loose network of economists interested in how power imbalances—such as between people of different races or genders—distort neoliberal economic models that ignore those distinctions. Hewlett is also backing an effort to challenge neoliberal assumptions in political science, the American Political Economy Project, and one in legal scholarship, the Law and Political Economy Project.
Racial equity is another lens Hewlett favors. Although the foundation’s 2018 memo on Beyond Neoliberalism didn’t really address racial disparities, Hewlett has been more explicit in this second iteration.
“In both politics and policy, neoliberals have downplayed or denied the explanatory power of race-based factors in producing economic inequality,” Harris and Kramer write. And later, “It is unlikely that neoliberalism would have embedded itself so deeply in the intellectual soil of the U.S. were it not for the way that some political leaders have used race to divide poor white communities and poor communities of color.”
Racism may not be an intrinsic feature of neoliberal thought, but neoliberalism’s insistence that every economic actor is equally free to pursue their own self-interest leaves little room to consider how factors like race stack the deck for some while handicapping others. Relevant Hewlett grantees include Rev. William Barber via Repairers of the Breach, economist Darrick Hamilton’s Institute for the Study of Race, Stratification, and Political Economy at the New School, Sandy Darrity’s work to promote diversity in the field of economics, and the think tank Demos.
Picking the best fights
Hewlett has also laid out six areas where it sees progress underway toward breaking down neoliberal assumptions, some of which it’s funding already. Those issue areas are antitrust and wealth concentration, labor and worker power, monetary policy, industrial policy, new forms of taxation including wealth taxes, and international economic policy.
Philanthropy has often been quite allergic to funding advocacy around those topics, seeing as they’re often the site of challenges to a neoliberal order from which the wealthy benefit. But more recently, foundations and even individual donors have found their way into these spaces. On antitrust and wealth concentration, for example, we have the Economic Security Project (ESP), funded in part by Facebook co-founder Chris Hughes. ESP is a key player in the effort to promote public policies that were once beyond the pale, like guaranteed income. ESP also debuted an Anti-Monopoly Fund to oppose the concentration of corporate power. Hewlett is one of its backers.
Labor and worker power, on the other hand, are key priorities for another allied funder, the Omidyar Network. Harris describes Omidyar as among Hewlett’s closest partners, and that makes sense: The eBay founder’s giving vehicle has spent the past year rolling out its Reimagining Capitalism initiative, through which it pursues goals similar to Hewlett’s. There’s a lot of overlap between the two programs when it comes to theory of change, if you will. But there are some differences. For one thing, Omidyar has a more ideologically progressive stance, in keeping with its founder’s politics. As a result, perhaps, it’s funding hard-hitting policy advocacy under Reimagining Capitalism, something Hewlett isn’t doing under Economy and Society.
According to Harris, conversations between funders are invaluable “as people try to figure out which are the most constructive fights to pick.” Hewlett and Omidyar have taken the lead as donor organizers in this space, convening a group of around 25 to 30 funders who share their broad vision. Some of those involved include Chris Hughes, investor and progressive donor Nick Hanauer, the Open Society Foundations and the Surdna Foundation.
The perpetuity of change
When I asked Harris how she might respond to a critic arguing that this intellectual work doesn’t have enough real-world impact, she referenced Richard Nixon’s famous phrase: “We’re all Keynesians now.” She said, “We’re not suggesting the intellectual soil is the only thing that needs funding. A huge amount runs upon policy work. But if you compare the world of difference between [Nixon’s quip] and trying to get a meaningful COVID stimulus through D.C. today, it shows you the power these paradigms exert over society and the necessity of therefore tending to them.”
Beginning with Kramer’s 2018 memo, one of Hewlett’s main arguments has been that philanthropy is well-equipped for the long haul, and that this work requires patience. That’s a quality liberal foundations have often lacked, as they demand minute-by-minute progress reports and fund near-term impact rather than long-term capacity. COVID may have pushed philanthropy in a different direction for the time being, but it’s unclear if that’ll last, and it’s unclear whether funders can truly be expected to overcome their own neoliberal biases—after all, they’re among the winning few.
That said, there is some reason for optimism. As the folks at Hewlett point out, the question isn’t whether a new paradigm will succeed neoliberalism, but what its inevitable successor will look like. Given more extreme alternatives—like full-on authoritarianism—we’re likelier to see funders agitate for moderate revisions more in line with the American norm. And isn’t it a bit neoliberal to assume that all funders will behave according to their rational self-interest all the time?
As for progressive impatience, philanthropic funding around the LGBTQ rights movement is one recent counterexample—patient money deployed across movements, judicial advocacy, even academia, that successfully promoted changes in public attitudes and shifted the politically possible.
However these efforts to revamp the neoliberal paradigm turn out, it does seem fitting that as institutions designed to last in perpetuity (most of them, anyway), philanthropies should play a role in shepherding the transition to new intellectual paradigms. Hewlett’s model is one good counterpoint to the ongoing trend toward more politicized philanthropy. It’s pragmatic, focused on which ideas best fit emergent circumstances amid inevitable change. In spite of all the high-brow discourse, there’s something down-to-Earth about that.
