Heavy Hitting Philanthropists Challenge Neoliberalism Economics
Updated: Mar 2
The coronavirus pandemic and effects of climate change are highlighting the widening gap between rich and poor. Larry Kramer, president of the Hewlett Foundation, believes that these inequalities, most recently ignited by the 2008 financial recession, are indications that the neoliberalist market-based view of economics is flawed. As a result, he has committed the foundation, in partnership with the Omidyar Network, to $41 million over the next five years to support heterodox economic thinking.
What Is Neoliberalism?
The most prominent fathers of neoliberalism are Milton Friedman and the Austrian economist Friedrich von Hayek, whose work dates back to the 1940s. Neoliberalism is an intellectual framework that promotes the role of private corporations over governments. Neoliberalist principles have dominated the US and global economic and political debates for close to 40 years, and they've been used to justify the deregulation of markets and the reduction of government debt—and the government itself.
Kramer distills this as a “government is bad, markets are good” notion and wants a new generation of academics to develop an alternative framework as readily encapsulated for the general public. One long-term goal would be to develop a new undergraduate economics curriculum.
Wayne Frederick, president of Howard University, likewise believes the market-based approach has contributed to the social ills we see today. He also believes neoliberalism needs to be challenged to provide society with more options to address current economic and social challenges. As one of the beneficiaries, the Center for an Equitable and Sustainable Society at Howard will use the funds to research how free-market economics has helped lead us to today's income disparities, shelter insecurity, and healthcare gaps.
In addition to Howard’s Center, the Hewlett Foundation and Omidyar Network will be supporting:
· Harvard Kennedy School’s Reimagining the Economy Project
· The Center for Economy and Society at Johns Hopkins
· The Shaping the Future of Work program at MIT
· The Santa Fe Institute
Grants Are Part of Larger Initiatives by Donors
These latest grants from Hewlett, totaling $35 million distributed across four institutions, extend the foundation’s $50 million Economic and Society Initiative established in 2020. Prior beneficiaries of the initiative include the Roosevelt Institute, American Compass, and Repairers of the Breach.
After creating eBay, Pierre and Pam Omidyar set up the Omidyar Network to promote creative thinking about how markets and technology impact us all. Its grant of $6.5 million to the Santa Fe Institute falls under the Network’s Reimagining Capitalism program, which also concerns itself with workers’ rights and the effect of concentration of power in multiple industries. To date, the program has awarded over $60 million in grants.
According to a Hewlett press release, the Ford Foundation and Open Society Foundation are expected to follow the Hewlett Foundation and Omidyar Network’s example. Ford intends to support organizations in Africa, Asia, and Latin America involved in similar initiatives, and Open Society will be promoting new economic thinking through its Open Society University Network.
Kramer points out that other grantmakers, including the Children's Investment Fund Foundation, the Economic Security Project, the Nathan Cummings Foundation, the Rockefeller Brothers Fund, the Skoll Foundation, and the Wallace Global Fund, are involved in similar efforts to question the current political-economic status quo.
Even Hollywood producers want to use the screen to change the perception of how government and the economy interact. As a result, an annual conference is planned in Santa Fe to bring diverse sectors together to share ideas and promote research.
Creating Policy Fast Is Essential
It may appear to be a long road until we see the effects of these initiatives incorporated into policies that impact our daily lives. However, there are indications that the Biden administration is considering new models of engagement with the market, says Kramer. For example, the administration persuaded Jennifer Harris, former head of Hewlett’s Economy and Society Initiative, to accept the position of senior director for international economics and labor on the National Security and National Economic councils.
It’s essential the path from intellectual modeling to policy creation must be shortened, says Kramer. Neoliberalism was conceptualized in the 1940s but wasn’t entrenched in US politics until 40 years later, during the Reagan administration. Not only will it not provide answers to pending issues such as mass job losses from automation technology and deepening wealth divides, but it's a potential threat to democracy, in Kramer's opinion. He believes the hyper-partisan divides we are currently experiencing in US politics result from diverging views of the role of government that stem from outdated neoliberalist views.