The same reaction against “Neoliberalism” — the almost-religious faith in free markets — that motivated Occupy Wall Street was also the cause for the citizen antipathy that led to the elections of Trump and Brexit. It’s time for the world to reject the excesses of Neoliberals and to embrace the utility of rational humane governance.
That paragraph is my words, not Metcalf’s. I won’t try to summarize his article — he is very eloquent and my summary would do him injustice — but here are two paragraphs near the end.
Metcalf starts with a link to a pdf paper by senior IMF economists admitting that the IMF’s neoliberal solutions in the 1990’s were wrong-headed:
(Please pardon the economists’ claim that Friedman or Stiglitz won “Nobel” prizes. :
Since many Dopers support “economic libertarianism,” GD is surely the right forum to discuss these articles.
If this “neoliberalism” is the uberdisguise excuse for supply-side economics, and letting morality by controlled by whoever makes money from everything, then it was way past time to dump it when it started.
But wasn’t this kind of thing just recently called neo-conservatism as well? Bush and many other Republicans, who took the US across the world threatening and initiating wars, were said to be neo-conservatives, even as they promoted the same financial policies that are being called neo-liberal here.
I think Neoconservatism refers specifically to a foreign policy which actively promotes activities (including invasion) aimed at “improving” countries like Iraq. Improve how? Forcing them to accept neoliberal economic policies! So the two philosophies do overlap (as symbolized by their embracing the common prefix “Neo”).
I agree that “neoliberalism” can be a confusing term (sometimes trivialized to “a catch-all shorthand for the horrors associated with globalization and recurring financial crises”), and would ask the Mods to change it if there were a better term. But the Metcalf piece does a good job of relating economic neoliberalism with post-modern social and political trends. Both of the papers I cited in OP emphasize “Neoliberalism” in their titles.
No. It is not very interesting to have the Leftist cultural critics educated in the english literature pretending to making economic commentary about economics they do not in fact understand.
It is not the same as to suppor the american libertarianism of course.
What is an effective economic policy that still results in economic growth but also results in reasonable levels of income inequality, lowering of poverty rates, growth in the middle class, sustainable economic growth, governments free from the corrupting influence of money, etc?
Neoliberalism has issues with all these things, but what system provides economic growth while still addressing these problems?
The phrase “Governments free of the corrupting influence of money” = the fantasy land of the humans acting in the way that intellectual fantasies want them to act, it does not matter if it is the Marxist fantasy of the government or the american libertarian fantasy.
The liberal economics have created more economic growth and more poverty reduction than any other approach in the history.
The mixing of the criticisms of the challenges of the ‘short term’ capital flows (the hot money) with the idea of the liberal macro economic policy is only the Leftist non-economic literate confusion, the problematics of the hot money is a discrete problem from market liberalizations.
The trouble with “free markets” is that nobody actually believes in them. Well, not quite nobody, but nobody who has an established position in the market. They will do everything possible to tend to a monopoly. And only the government has the power to stop them. Adam Smith, despite being looked upon as the apostle liberalism understood this perfectly and advocated that the government had to regulate to keep the market free. Once upon a time we had effective antitrust laws. No longer. The laws are there but widely ignored. Even in the farm market I go to regularly, all the farmers are selling at the same price. And how could it be otherwise?
And the idea of a free market in the medical field is absurd.
A Belief has nothing to do with the subject. Unless you are mistaking the American libertarianism as synonmous to the free market economics, which it is not.
the historical economist Adam Smith is indeed a founding thinker for the liberal economic thought (although it is hardly impressive to worship any centuries ago thinker as some ‘apostle’, the analysis long ago surpassed), and there is not one once of contradiction between the free market economics and the acceptance and indeed support for the government regulation to assist in the maintenance or the creation of the conditions needed for the optimal functioning of a market. By your comment you are 100 percent mistaking the american liberatarianism and american politics for the liberal (free market) economics analysis.
The dragging in of the subject of the ‘medical field’ indicates only the narrow american issues, that are not in fact truly related to the subject of ‘neoliberal’ although it is not absurd to analyse the provision of the medical services in the free market framework. However it is clear that many factors for the efficient operating of a market are not present at the loosest assumptions. There is nothing in liberal economic analysis that is disturbed by this (it is only in the inverted-marxist like liberatarian thought of a mostly american fringe that this is disturbing).
The market focused economics have brought more growth to the planet than any other system in the history. Like any other human system, it is not something to be erected as a point of idealized perfection - to make the Marxist Left mistake.
The fact that this writer cited in the OP, with no identifiable education or real knowlege of the economics (but an education in the literature and the rhetoric) mixes the strange Austrians dear to the american libertarian right with the neo classical economics that is the real backing to what he rails against shows either the ignorance or the deliberate rhetorical slight of the hand. The body of the thinking in this tradition which does not reject market regulation is anathema to “Austrian” american school.
The actual discussion of the issue of the capital flows is a thing different from most of the complaints being cited here, it becomes merely a straw man symbol rather than an actually understood subject.
That’s a very absurd statement, there are about 200 nations on earth and some are more corrupt than others. Finding out why some nations are more corrupt and why others are less, and finding ways to reduce corruption is a goal the world has been engaged in for quite a while.
Much global poverty reduction in the last 40 years came from China, which did not engage in neoliberal economics. They used a mix of authoritarian state involvement and market economics.
In Latin America, people feeling left out of the economic growth that was happening on paper is what resulted in the rise of left wing governments all through latin America a decade ago. In America the same thing is happening, the country is getting richer but most people aren’t benefiting from it, resulting in more ideological political movements.
Thanks to Septimus for drawing attention to this article.
Some good quotes:
This is the essential problem with neoliberalism, that it considers nothing to have any value except money.
Other economists “acknowledged as a first principle that society was not the same thing as the market, and that price was not the same thing as value.” Hayek didn’t. His views have prevailed, and this is the basis of all the problems we have today with inequality, exploitation of workers, and out of control corporations.
when you make the straw man about a general corruption versus the idea of the influence in politics, it might be ‘absurd’ but since your statement was the sweeping “Governments free from the corrupting influence of money” (your exact words) it is not at all.
That is a different objective than the plain ‘corrupting influence of money’ which is pure naivete.
Much global poverty reduction across the emerging markets came from the application of the free market economic frameworks and reforms to utilize the market tools for greater economic growth - the absolute reduction of poverty is a global effect on all continents and has come even with the extraordinary population growth. Hand waiving about the PRC is silly (and of course their great growth came after plugging into the greater free market global trade systems).
Just like no one is ever happy about their bank interest rate, no one is ever happy about their economic framework, it is the human condition.
The reduction of the poverty in these markets on the basis of the move away from the failed socialist models is clear (whether these have purely applied the Straw Man set up in the article is not of any interest, it is a straw man). Of course there is not perfection - eitherin the application of the policies or in the results or of course even in the conception as there will always be the flawed information and understanding.
This does not give very much insight of any utility about the application of the free market oriented policies in either the framework of the capital flows internationally or indeed the domestic policy, partiicularly given how limited the application has been.
Of course if the subject is the Straw Man of the supposed Hayek driven economic policy, a fiction of the hard Leftism (and a dream of the American liberatarians), then the effigy, it can be burned very merrily…
Since the Guardian article sets up a virtually charicatured Strawman which takes the Hayek people some how as the drivers of the economic policy when in fact they are a marginal and deirded group, for their lack of empiricism etc., this is essentially a strawman discussion from the start. Et voila, the Left participants will have great fun in knocking down their strawmen and burning the effigies with as much insight as the english studies political author. Not surprising he howls against economic analysis for the preference of the manipulation of the words without the empirical analysis.
Hold on. This mantra, which you have repeated here a couple of times, has not been shown to have any factual support. It is an assertion on your part only.
There is insufficient evidence to support that claim.
A great number of changes occurred in the world during that same time period. New inventions, new banking systems which were NOT designed after an economic theorist conceived of and promoted his ideas. New systems of managing crops, new ways of organizing bureaucracies to manage local governments from remote capitols. New modes of communication which made all of this possible.
None of that happened because some economics theorist made noises. There were individual reasons for each advance, each invention.
Industrialized mass production, which permitted much greater wealth to be created per worker, did NOT occur because of “economic liberalism,” it occurred because a host of inventions and ideas made it possible. Each of those ideas and processes had been tried before capitalism was conceived of and named. They did not come together and result in a rapid expansion of wealth because of an economic concept, they came together because of the arrival of other inventions made it possible for the first time, for all of them to be applied at once.
In fact, as in most cases even today, economic theory isn't so much INVENTED, as it is RECOGNIZED, sometimes even falsely recognized. It is therefore a capital error, to decide to reverse the normal flow of human behavior, and try to force the realities to match the limited theoretical model that someone came up with in an attempt to explain what happened in the past.
Chile’s per capita GDP didn’t grow much from 1950-1990. It wasn’t impressive under Allende or Pinochet. It wasn’t until the 1990s that economic growth started taking off.
I remember how Pinochet apologists would use the fact that he supported free market economics as a justification for his rule by claiming that the economic growth that happened under Pinochet justified his rule, but it didn’t seem to result in any growth in per capita income. That didn’t come until the 1990s. I doubt its connected, but virtually every president since 1990 has been center left and it hasn’t harmed economic growth there. Why did nations like Chile start growing rapidly in 1990?
How would you measure how much “neoliberalism” has been attempted in the United States? The idea that Hayek’s ideas have permeated economic policy is pure fantasy. Is the author even aware of what earned Hayek his “Nobel Prize” in economics?
Adam Curtis touches upon this Neo Liberal model and states that the political establishment pretty much gave up and abdicated power to the financial sector, which is why
a culture of management and managing risk is prevalent today. But that is all the Neo Liberal model offers, however the lack of credible alternatives makes people uneasy rejecting it.
The problem with this is that all of these things happen everywhere, yet economic growth is not the same everywhere. If you take any two similar countries and follow them across a decent interval, the more neoliberal country always grows faster. Compare France and the UK, Argentina and Chile, Bolivia and Peru, in every case the more neoliberal country has grown faster. Then look at Sweden, Australia, Canada, and Germany, each country changed to become more neoliberal in the 80s and 90s and then grew faster than before. Then look at the list of richest countries in the world, Singapore, Hong Kong, Switzerland, and compare them to the poorest countries in the world Cuba, Venezuela, Zimbabwe. Which is more neoliberal?
Neoliberalism has worked everywhere it has been tried, and the alternative more taxes and more spending inevitably leads to Greece or Venezuela.
Arguing about vague ideals like “neoliberalism” is not productive. At best, it’s spinning our wheels on tribal labeling. At worst, it’s distracting us from fixing problems.
Instead, it’s better to focus on particular policies.
Metcalf gives his own definition of “Neoliberalism”:
I’ve often read comments that support blind faith in competition. Our news sources are ideal, one hears; otherwise competition would produce “better” sources. We watch CNN or FoxNews because the free market has worked its magic, we’re told. OTOH I think the public watches TV news the same way a deer stands motionless as a car careens toward it, transfixed by the headlights.
In threads about healthcare here, many say “leave it all to the free markets.” There’s no need to ask if healthcare is a special case, just blind faith that dog-eat-dog rules always produce the best outcome.
What I liked about Metcalf’s article is the way it attempted to connect dots, linking specific financial questions to broader questions about human society. He may be overly reductionist, but his views still have merit
Start with the issue of short-term financial flows. U.S. investors who buy stock, or seek high interest rates, in a developing country are participants in a very free market, and this global financial market is viewed as a wonderful thing. The investors are confident they’re doing the developing country a favor. And yet it was such capital inflows that led to the Asian Financial Crisis of 1997. (And in the aftermath of that crisis it was the countries that defied the IMF that recovered most quickly. Countries that followed the austerity prescriptions dictated by their credit overlords recovered more slowly.)
Some in the thread insist that “neoliberal” policies promote faster GDP growth. Probably so. But insistence that only GDP growth matters is, I think, part of the faulty mindset that Metcalf would argue against. Neoliberal policies promote inequality. Insisting that all values are economic makes leisure worthless, and degrades human culture. Look no further than America for an example: in this country, one of the most developed and prosperous in the world, a huge chunk of the population is now addicted to opioids or angry enough to elect Donald J. Trump.
What is the alternative to more GDP growth? Stagnation. It should be obvious to everyone that wealth is better than poverty. If the US had 1% less growth in GDP each year for the last 100 years than our GDP would be the same as in Mexico. Who are doing better the poor in Mexico or the poor in the US, the middle class in Mexico or the middle class in the US? GDP growth makes medicines better, leisure more fun, education worth more, and lives longer and better. It is not going to solve drug addiction or make people vote smarter but that is like criticizing ketchup for not being a good car wax. An economic policy is supposed to make the economy better for as many people as possible not cure every possible ill of society.
