A Defense-Industrial Anti-Neoliberalism (1985-2002)

• In Event: A History of Anti-Neoliberalism: US Developmentalism, and Neoliberalism Reconsidered 1970-2005

Abstract

While many intellectual histories of neoliberalism and its critique center on academia as the main source of neoliberal resistance, the defense-industrial nexus arguably offered a more potent version. The defense industry’s experience with Reagan-era financial deregulation and the ideological-material prioritization of financial returns that emerged in the late 1970s and 1980s convinced them of the problems with financialization. Likewise, defense cuts, consolidation, and the collapse of parts of the state in the 1990s radicalized them against the ideological turn of many of their former fellow travelers on the right. These events precipitated a new politics of the defense industry that permeated forms of governance thereafter. This shift manifested in the creation of government venture capital outfits like In-Q-Tel, which offered a new model of industrial policy insulated from politics and oversight. Notably, these government VC firms do not have to return money to the treasury, and can guarantee long term lucrative government contracts to follow their traditional investments. Like regular VC firms, they sit on the boards of the firms they fund but unlike traditional VCs, can provide government resources for tech assessment. In-Q-Tel specifically can account for the success of a new crop of defense-tech firms like Palantir, Sydio, and Anduril. These government VCs proliferated in 2015 and have significantly warped the political economy of Silicon Valley around defense. At the same time, this defense-industrial critique of neoliberalism has produced a new politics in the Democratic Party: the center-left articulation of anti-neoliberalism and China-Hawkishness in the 2010s and 2020s. This wing of the democratic party notably gained power after Hillary Clinton’s defeat and built the coalition around Bidenomics. This paper will examine the political-economic transformation of the defense industry from the 1980s-2010 and its resultant political efforts and critiques. It will tie these events and reactions to the proliferation of anti-democratic forms of industrial policy and to the post-Trump turn against a certain articulation of neoliberalism across the political spectrum. Similarly, it will suggest the limits and perils of such a defense-industrial anti-neoliberalism.

Author

• Susannah Glickman