In This Article

• Why is today’s political chaos just the latest round in a much older battle?
• What do fire, farming, and finance have in common?
• How did the postwar dream of fairness get hijacked?
• Why is neoliberalism less a policy and more a modern aristocracy?
• What might come next — collapse or cooperation?

When Neoliberalism Collapsed And Took Democracy With It

In every collapsing civilization, there comes a moment when the people no longer remember how the decay began. It is easy to believe that today's anger and polarization — tearing through elections, parliaments, and communities — are sudden creations of modern life: the product of social media, corrupt politicians, or a misinformed public. But the truth is older, deeper, and more human.

The struggle between power and fairness, between domination and cooperation, is as old as life itself. It ignited with the first campfires, took root with the invention of farming, and grew more complex as humans built kingdoms, empires, and economies.

Neoliberalism, the dominant ideology of our modern world, is not some accidental invention. It is the latest mutation of an ancient instinct: the urge for a few to seize abundance for themselves, while the many serve or starve. Every leap in human progress — from fire to farming to factories — has carried this hidden price. The real story of civilization isn’t just innovation. It’s who controls it, who benefits, and who is left behind.

The invention of farming unlocked abundance — but it also unlocked hierarchy. Where once humans lived mostly in small, cooperative bands, agriculture allowed surpluses to form, and with them, elites who claimed ownership of land, food, and labor.

Kingdoms and empires rose on the backs of farmers and soldiers who lived and died for rulers they would never meet. Later, feudalism cemented inequality into law and custom, binding peasants to lords in a rigid system of inherited power. Even when feudalism weakened, the rise of global trade and colonial empires simply exchanged one master for another: merchant capitalists and early corporations built wealth through conquest, slavery, and extraction.

Each revolution in human productivity promised greater freedom; each time, those best positioned seized the new tools to entrench their dominance. By the 19th century, industrial capitalism had created dazzling technological progress — railroads, factories, telegraphs — yet life for the working majority remained precarious and brutal. The Gilded Age had dawned, and with it, a new aristocracy cloaked in the language of innovation and merit.

It was only in the aftermath of disaster — the Great Depression, two world wars, and the horrors of unchecked economic exploitation — that democracy fought back in earnest. The mid-20th century brought the rise of social democracy: a fragile, hard-won consensus that ordinary people deserved security, dignity, and a fair share of prosperity.

Public institutions were built, unions were legalized, and governments took a more active role in regulating markets and redistributing wealth. For a few short decades, it seemed possible that humanity had finally learned from its ancient mistakes. But even in those years of progress, powerful forces were regrouping. The oil crises of the 1970s, the backlash against civil rights and anti-colonial movements, the corporate counteroffensive outlined in the Powell Memo — all signaled the beginning of a new chapter.

By the 1980s, under leaders like Margaret Thatcher and Ronald Reagan, neoliberalism surged to dominance, sweeping away the postwar social contract. Markets were unleashed, governments shrank, public goods were privatized, and globalization accelerated without safety nets. The old patterns had returned, dressed in the language of freedom and innovation — but the result was the same as it had ever been: the concentration of wealth, the erosion of democracy, and the betrayal of the majority.

Today’s political polarization is not an accident. It is the inevitable consequence of a cycle that humanity has repeated for ten thousand years — a cycle we now live once more, at unprecedented scale, and at unimaginable risk.

The Gilded Age: Where Innovation Met Inequality

By the end of the 19th century, the world looked like it had finally conquered scarcity. Steamships stitched continents together. Telegraph wires flashed messages across oceans. Railroads turned vast frontiers into bustling economies. The future seemed limitless — if you squinted hard enough.

But beneath the shiny patina of progress, the Gilded Age was little more than feudalism with smokestacks. A handful of industrial titans — Carnegie, Rockefeller, Morgan, Vanderbilt — controlled the economy with iron fists hidden inside velvet gloves. Ordinary workers, lured into cities by promises of factory wages, found themselves crammed into filthy tenements, working sixteen-hour days for poverty pay.

Democracy, such as it was, bent easily under the pressure of money. Senators were bought like cattle, labor organizers were crushed with hired thugs, and the Supreme Court obligingly declared corporations to be people, with rights somehow superior to those of actual people. Progress, it turned out, had a steep cover charge — and most would never afford it.

But gilded ages never last. The bill for inequality always comes due — and when it does, it isn't the rich who pay first.

The Brief Pause in the Endless Game

Catastrophe on an unimaginable scale shattered the illusion. The stock market crash of 1929 obliterated faith in the idea that markets could police themselves. Breadlines, Hoovervilles, mass unemployment — the old myths crumbled. For a brief, extraordinary moment, governments remembered that their legitimacy came not from pleasing the powerful, but from protecting the people.

Franklin Delano Roosevelt, armed with nothing but polio-weakened legs and a stubborn sense of justice, declared war on economic royalists. Social democracy was born in fire: New Deal programs, public works, labor protections, Social Security. After the bloodbath of World War II, the West doubled down, constructing the welfare state, regulating banks, building highways and hospitals, funding education.

For a few glorious decades, it seemed the old script had been burned. Wealth was shared more fairly. Middle classes grew. Children born poor had a shot at something better. Progress, for once, wasn’t a rigged game. But history teaches a brutal lesson: no advantage goes unchallenged forever.

How They Took It Back

While average citizens enjoyed their new suburban homes and televisions, the aristocracy was plotting its comeback. The oil crises of the 1970s handed them a golden opportunity. Rising inflation, energy shocks, and social unrest were blamed not on corporate greed or imperial overreach, but on the supposed excesses of government itself.

Enter the Powell Memo: a blueprint for a quiet coup. Written in 1971 by future Supreme Court justice Lewis Powell, the memo urged corporate America to infiltrate universities, media, law, and politics — to reshape public opinion and dismantle the New Deal consensus.

And boy, did they listen. When Margaret Thatcher sneered that "there is no such thing as society," and Ronald Reagan joked that "the nine most terrifying words in the English language are: I'm from the government and I'm here to help," they weren’t just making quips. They were lighting the funeral pyre of social democracy.

Taxes were slashed for the wealthy. Regulations were gutted. Labor unions were demonized and dismantled. Public goods — schools, hospitals, transportation — were handed over to private companies with the moral compass of a pickpocket.

Free trade agreements gutted industrial towns in the U.S., Canada, and Europe, offshoring jobs in the name of "efficiency." Global finance, no longer tethered by national loyalties, swelled to monstrous proportions, trading abstract wealth back and forth at the speed of light.

The rich got richer; the poor got lectures about personal responsibility. But the game was back — and this time, the players had algorithms, lobbyists, and armies of think tanks to make sure they kept winning.

Neoliberalism: The Con That Sold You the World — Then Stole It Back

Neoliberalism isn’t just an economic theory. It’s the con of the century — the belief that markets are wise, government is dangerous, and if you’re struggling, it’s your fault. It’s the idea that everything — housing, education, even the air you breathe — should be for sale to the highest bidder. It wrapped raw greed in the language of freedom, telling us that taxing billionaires would destroy innovation, and that deregulation would set us free. Free to do what? Mostly, to fail alone.

And it used globalization — a potentially powerful force for good — as its sharpest tool. Global trade can be a rising tide. It’s why an all-electric car can be built for $13,000 — just not for you, not in America, not yet. But under neoliberalism, globalization wasn’t used to spread prosperity. It was used to offshore jobs, defang labor, and pump up corporate profits. The communities left behind were offered nothing but platitudes and the gig economy.

This wasn’t inevitable. We could have taxed the winners to help the displaced. We could have subsidized innovation without surrendering our manufacturing base. We still can. Imagine a ten-year declining subsidy to help American automakers catch up on EV production — not to protect them from competition, but to give them time to compete fairly. Real progress needs both a runway and a safety net. Neoliberalism gave us neither.

Collapse in Real Time

Neoliberalism didn’t fail. It succeeded — spectacularly. Just not for you. Wages stagnated even as worker productivity soared. The cost of housing, education, and healthcare skyrocketed, trapping entire generations in debt. Rural areas and former factory towns decayed into ghost towns.

Meanwhile, megacities bloomed into gilded fortresses of tech millionaires and finance barons. In place of solidarity, we got slogans. In place of security, we got side hustles. And when people finally noticed they’d been robbed blind, the political center — the great, sensible moderate middle — offered little but finger-wagging and more austerity.

It’s no accident that political polarization exploded during this time. When institutions stop delivering, faith collapses. When democracy becomes a game rigged by billionaires, people stop playing by the rules. Some rage against immigrants. Some rage against elites. Some simply rage against reality itself. But rage, once unleashed, doesn’t politely wait for permission. It burns through systems like wildfire through dry grass.

History Doesn’t Repeat —It Rhymes Loudly

If this all sounds familiar, it should. Rome fell the same way. So did the great empires of Mesopotamia, the Maya, and countless forgotten kingdoms. When wealth concentrates and the social contract collapses, chaos follows — every time.

What makes this era different isn’t human nature; it’s scale. Never before has the collapse of one economic system threatened to destabilize the entire biosphere itself. Climate change, mass extinction, global pandemics — these aren’t random. They’re the result of systems designed to extract, exploit, and discard with no thought for tomorrow.

Neoliberalism wasn’t built to save the world. It was built to strip-mine it. And now that the mine shafts are collapsing, the architects are either cashing out or peddling conspiracy theories to the ruins they leave behind.

The Road Ahead: Rebirth or Regression?

So here we are, standing at the crossroads with smoke rising everywhere. We can cling to the myths of market salvation a little longer, pretending that if we just deregulate enough, disrupt enough, or privatize enough, the magic will return. Or we can admit the obvious: the game is over. The cycle of domination and betrayal has played out once again. But recognizing the pattern gives us a fighting chance to break it.

Real democracy — not the corporate-managed spectacle we’ve settled for — requires more than voting every few years. It requires rebuilding community, reasserting public power, reweaving the shredded fabric of social trust. It means remembering that we are not customers of civilization. We are its creators. The end of neoliberalism is not the end of the world. It’s the end of a long lie. What comes next is up to us — if we dare to imagine it.

The future won't be delivered by algorithms or billionaires. It will be built — painfully, stubbornly, joyfully — by people who refuse to give up on each other.

About the Author

Robert Jennings is the co-publisher of InnerSelf.com, a platform dedicated to empowering individuals and fostering a more connected, equitable world. A veteran of the U.S. Marine Corps and the U.S. Army, Robert draws on his diverse life experiences, from working in real estate and construction to building InnerSelf with his wife, Marie T. Russell, to bring a practical, grounded perspective to life’s challenges. Founded in 1996, InnerSelf.com shares insights to help people make informed, meaningful choices for themselves and the planet. More than 30 years later, InnerSelf continues to inspire clarity and empowerment.

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Article Recap

Neoliberal collapse has triggered a global wave of political polarization, not as a fluke, but as the inevitable outcome of systems designed to concentrate wealth and power. From ancient agriculture to industrial barons to modern financiers, the cycle of dominance and rebellion has shaped human history. We stand again at the turning point, and the choice is clear: rebuild with justice, or watch civilization crumble under its own lies.

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