• De
Speaking of

Neoliberalism? Hardly. We’re actually living in an era of neo-mercantilism

For almost all economic, many social and even some health problems of our time, an astonishing number of contemporaries only know one scapegoat. The blame lies with "evil neoliberalism". But what about the characteristics attributed to it, deregulation, austerity, social cuts and global competition? A fact check.

Gerhard Schwarz
Verteufelte «Neoliberale»: der amerikanische Präsident Ronald Reagan und die britische Premierministerin Margaret Thatcher (White House Photographic Office, Public domain, via Wikimedia Commons)
Demonized “neoliberals”: American President Ronald Reagan and British Prime Minister Margaret Thatcher (White House Photographic Office, Public domain, via Wikimedia Commons)


The claim that the “triumph of neoliberalism” is to blame for almost all the ills of the present in Western industrialized countries is one of the most perfidious distortions of fact in political history. Even halfway liberal-minded people unthinkingly accept this thesis. A majority of those surveyed worldwide by the Edelman Trust Barometer believe that today’s capitalism does more harm than good. As a reminder: Ronald Reagan was the 40th President of the USA from 1981 to 1989, Margaret Thatcher was Prime Minister of Great Britain from 1979 to 1990.

Greed and materialism?

Their opponents demonized the liberal reform policies of the two, which had a global impact, as “neoliberal”. Under the banner of deregulation, privatization and globalization, they argued, it was leading to a bankruptcy of the state and social cuts, promoting materialism and greed, neglecting the common good and forcing merciless competition.

But are we really living in this kind of capitalism? The facts say no. The fiscal quota, i.e. the share of annual value added (GDP) that the state and compulsory social security schemes claim for themselves, has doubled in Switzerland since the 1950s, rising from around 23% to 40% since 1980. The majority of this increase is due to social security contributions. For decades, employment in the state has also been growing faster than in the private sector.

Thanks to the debt brake

Thanks to the debt brake, Switzerland’s gross public debt at the end of 2022 was slightly below the 1970 level at 27.6% of GDP, but if you include the unfunded obligations that the state will face from the AHV, the debt is well over 100%. Switzerland is also living on credit. In Germany, the debt mountain has even grown from 240 billion euros to over 2500 billion euros since 1980, the ratio is around 65 percent, in the EU it is over 80 percent, in France over 110 percent and in the USA over 120 percent.

The situation is the same for regulation. Since the “neoliberal” 1980s, the volume of regulation in national and international law in Switzerland has doubled from 35,000 pages to almost 70,000 pages by 2015 – and has not stopped there. Centralization is also on the rise. The Confederation is encroaching on the constitutional responsibilities of the cantons, with a corresponding loss of diversity, but also of economical use of money.

The ugly head of protectionism

Finally, protectionist industrial policy rears its ugly head. Under Reagan and father and son Bush, the USA largely saw itself as a guarantor of open global trade. Since Donald Trump, “America first” now applies, Joe Biden has gone one better with enormous subsidies such as the Inflation Reduction Act, and the EU has no intention of following suit.

So-called neoliberalism has not triumphed. The left-wing populists should look for another scapegoat. Perhaps without Reagan and Thatcher, we would have ended up even faster in the current, anything but liberal neo-mercantilism, with its penchant for state expansion, national debt, regulation and protectionism.

Translated with DeepL