In my approach to governance, I have attempted to re-connect modern and late-modern politics by distinguishing democracy from good governance, or politics-policy from policy-politics. In a recent article in Critical Policy Studies, David Marsh provided a sympathetic and relevant criticism of this approach. It is his view that I overrate the impact of late-modern network governance and participation by failing to see that communicative and interactive network politics operates in the dark shadows of hierarchy and bureaucracy on the one hand, and of economic and social class relations on the other hand. I do not, in fact, deny the importance of these. What I am attempting to illuminate, however, is how the neoliberal form of modern democratic government is in the process of undermining its own legitimacy and effectiveness due to the casting of these dark shadows on the whole of everyday life. Neoliberalism is reducing itself to a modern rational interest politics, replacing its moral and ideological appeals to legality and legitimacy with a contract-politics that is, in contrast, based on brusque commands and threats. In leaning more and more heavily on the principal–agent model for governing those institutions and networks that are in charge of actual delivery, however, neoliberalism is undermining the very transformative capacities on which it depends for reaching its policy goals. Everyday institutions and networks simply cannot do all that has to be done to improve the welfare and wellbeing of the population if these institutions and networks are subordinated to a coercive, hierarchical authority draining them of their communicative and interactive powers. With its politics of threats, neoliberalism likewise creates a hatred of ‘big’ politics in the population. This negative attitude threatens democracy's continued existence because it makes popular support solely dependent on people's fear of the consequences of non-compliance and their positive assessment of the system's ability to deliver. There is a substantial need for a new critical-political response to neoliberalism, one that begins with the assumption that politics need not be hierarchical and coercive in order to get things done in a wise and effective manner.