Neoliberalism is collapsing but where will the new leaders come from?

The agents of change may not yet be visible, but they must emerge, for the alternative is a continuation of a system that has failed.

The neoliberal economic experiment, promoted by the Chicago School of Economics and championed by figures such as British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan, the one that promised a world of growth, prosperity, and fairness, has failed, and has reached its endpoint.

Its central tenet, the so-called “trickle-down effect,” assured the masses that if wealth was concentrated at the top, its benefits would eventually seep down, lifting everyone in the rising tide of economic expansion. Over four decades later, the results are indisputable: the tide has risen, but it has swamped the many while lifting up only the few.

Inequality has soared to unprecedented levels. In the shadow of growing GDPs and expanding economic pies, a significant portion of the population has found themselves with shrinking slices, and the promise that everyone would share in the bounty has been exposed as a falsehood. Instead of broad-based prosperity, neoliberalism has entrenched systemic inequities. Wealth has concentrated in the hands of a small elite, while the majority are left grappling with stagnant wages, precarious employment, and a rising cost of living that erodes any semblance of economic security.

The human toll of this economic philosophy is obvious. Life expectancy, a basic measure of societal wellbeing, has stagnated or even declined in many advanced economies. Housing, once considered a cornerstone of stability and wealth-building, has become unattainable for millions. The dream of homeownership has faded into a cruel mirage, replaced by the relentless grind of paying escalating rents while trying to save for an unattainable future. The narrative that hard work and effort would lead to upward mobility has become a hollow story as workers toil longer hours, often juggling multiple jobs, yet find themselves unable to afford even a modest standard of living.

Neoliberalism’s failure is not just an economic one; it has also eroded the very social fabric that sustains communities. By prioritising markets over people, this model has dehumanised economic relationships. Policies that prioritise privatisation, deregulation, and austerity have systematically dismantled public services, undermining access to essential resources like healthcare, education, and social safety nets. The result is a society that prioritises profit over people, leaving the most vulnerable to bear the brunt of systemic failings.

The onset of the COVID-19 pandemic in early 2020 could have been a moment of reckoning and reflection. For a brief period, it seemed as though the world might turn away from neoliberal orthodoxy, the crisis exposing the fragility of systems built on efficiency at the expense of resilience. Governments around the globe, faced with unprecedented challenges, adopted measures that were antithetical to neoliberal dogma: massive public spending, direct payments to citizens, and expansive state intervention. Money that we were always told was unavailable for the benefit of society, suddenly did become available: governments didn’t have an option and the money that had always been there now how to be spent on public resilience. These policies at the time not only mitigated the economic fallout but also demonstrated an alternative path forward – one that prioritised human wellbeing over market imperatives.

Yet, despite these temporary deviations, the neoliberal order remains largely intact. Structural change has been elusive, and the window of opportunity for transformative economic thinking appears to be closing. The lack of strong advocates for a new economic paradigm is also a concern: unlike the early 1980s, when neoliberalism had charismatic champions to drive its global adoption, today’s economic discourse is fragmented and devoid of a unified vision. In the United States, for example, the political landscape remains mired in partisanship, with little appetite for the bold reforms needed to address systemic inequalities.

The persistence of neoliberalism is not a testament to its efficacy but to the inertia of entrenched power structures. The myth of trickle-down economics has been debunked, yet it continues to shape policy because it serves the interests of the few who benefit from it. Capitalism, as currently practiced, is not about efficiency or innovation; it is about consolidating wealth and power. The lie of “efficiency” masks the reality of a system designed to extract value from the many for the benefit of the few. This is not an accidental outcome but the inevitable result of a philosophy that prioritises profit above everything else.

The path forward requires a radical rethinking of economic priorities. Money must be reclaimed as a tool, not an end in itself – it should serve the public good, facilitating universal access to education, healthcare, and meaningful employment – and the goal should not be perpetual growth but sustainable and equitable development. Policies that emphasise full employment, progressive taxation, and robust public investment are not just morally imperative; they are economically sound. When resources are directed toward those who need them most, the benefits ripple upward, creating a more stable and prosperous society for all.

Neoliberalism has reached its logical endpoint, and the results have been catastrophic. It has failed to deliver on its promises and has instead exacerbated the very problems it claimed to solve. The future of world economies depends on our ability to learn from the failures of the past and to forge a path that works for everyone, not just the privileged few.

The search for transformative leadership in a post-neoliberal world

The question of where the agents of change will emerge from is as critical as it is dispiriting. In the early 1980s, Thatcher and Reagan represented the ideological vigour and unyielding determination from the theories of conservative economist Friedrich Hayek that propelled neoliberalism to global dominance. Their charisma, their ability to articulate a vision – no matter how flawed or self-serving – created the momentum needed to reshape economies and societies for decades. But where are today’s equivalents, leaders who can articulate a new, transformative vision for economic and social reform?

The global stage today is bereft of such figures: Keir Starmer, with his cautious and technocratic approach, has failed to present himself as a leader of transformative economic thought in the United Kingdom, despite commanding a historic parliamentary majority. Across the Atlantic, Joe Biden’s presidency has been defined more by preservation than bold reimagination, constrained by his age, political circumstances, and the entrenched inertia of the U.S. system. Even if Kamala Harris had won the 2024 U.S. Presidential election, she seemed incapable or unwilling to break with the neoliberal framework. On the far-right, incoming President Donald Trump and his Republican movement are focused not on economic justice but on consolidating power through crony capitalism, a system that privatises profit and socialises risk on a breathtaking scale.

This absence of transformative leadership may well be neoliberalism’s final and most devastating legacy: the creation of systems so thoroughly dominated by private interests and entrenched stakeholders that meaningful reform seems impossible. Governments, starved of the resources and authority they once wielded, find themselves incapable of mounting the structural changes needed to address systemic inequities. Instead, they tinker around the edges, placating impatient electorates with short-term measures that neither resolve nor confront the deeper issues.

The slow-moving nature of economic change also compounds the problem. Just as neoliberalism took decades to take hold, reversing its effects will require persistent effort over years, if not decades. Yet, the electorate is in no mood to wait. In an age of instant gratification and immediate consequences, patience is a virtue few voters possess, particularly as wages stagnate, housing becomes ever more unaffordable, and the cost of living continues to rise. Governments are caught in a near-impossible bind: tasked with delivering rapid results in systems that are designed for incrementalism. This is the position the Albanese government currently finds itself in.

The conservative mainstream media complicates matters further. Instead of fostering nuanced debate about the structural barriers to economic reform, mainstream outlets often default to simplistic narratives, vilifying incumbent governments for the failings of a system they inherited. Progressive parties are routinely held to higher standards than their conservative counterparts, with little recognition of the immense structural and political constraints they face. This asymmetry fuels public disillusionment, erodes trust in democratic institutions, and perpetuates the status quo.

Even when leaders with bold visions for reform do emerge, they face monumental challenges in translating those visions into reality. The Hawke and Keating governments in Australia achieved significant reforms in the 1980s and 1990s – albeit influenced by neoliberal philosophy – but these were hard-won victories, achieved over multiple terms and with the loss of considerable political capital. Similarly, the damage wrought by John Howard’s extreme neoliberal agenda in Australia took years to unfold, demonstrating the long-term nature of both reform and destruction.

In today’s context, however, the stakes are even higher. The urgency of the climate crisis, the persistence of systemic inequality, and the discontent of electorates around the world mean that the cost of inaction is measured not just in economic terms but in social and environmental collapse.

To break this cycle, courage and creativity are essential. Leaders must step forward who are willing to articulate a bold new vision for the future – one that recognises the failures of neoliberalism and charts a course toward more equitable, sustainable, and inclusive economies. This vision must be backed by policies that prioritise public investment, reduce inequality, and place the wellbeing of people and the planet above the pursuit of profit. Just as importantly, it must be communicated effectively, with an emphasis on the long-term benefits of change and the collective sacrifices needed to achieve it.

But when will these leaders arrive and where will they come from? Or do we need to wait for the public to take matters into their own hands, as Luigi Mangione recently did in the U.S., when he shot (allegedly) the UnitedHealthcare CEO Brian Thompson, in an act that seemed to reflect the depth of American anger about their broken and corrupt health care system?

While the current landscape may seem bleak, history offers a reminder that paradigms can and do shift. Neoliberalism itself emerged at a time when Keynesianism seemed unassailable. It succeeded not because it was inherently superior but because its proponents were relentless in their advocacy, strategic in their alliances, and unyielding in their belief in its necessity. The same qualities will be required to dismantle neoliberalism and replace it with a system that serves the many rather than the few.

The process will be neither quick nor easy, but it is necessary. The cost of inaction – continued inequality, environmental degradation, and social fragmentation – is just too high. The question is not whether change is possible, but whether we are willing to fight for it. The agents of change may not yet be visible, but they must emerge, for the alternative is a continuation of a system that has failed us all.