
Neoliberalism – the ideology at the root of all our problems - wycx
http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot?CMP=share_btn_tw
======
wycx
I am going to reproduce a relevant comment (not mine) from a discussion of
this article at macrobusiness
[http://www.macrobusiness.com.au/2016/04/weekend-
links-16-17-...](http://www.macrobusiness.com.au/2016/04/weekend-
links-16-17-april-2016/#comment-2580002).

"Part of the reason for neoliberalisms success is the lie (which Monbiot has
repeated) that Keynesianism was proved wrong during the stagflation period of
the 70’s and 80’s. Keynesians like Tobin (who Samuelson called the greatest
economist of his generation ie. better than Samuelson) were actually proved
right. It the late 60’s early 70’s, before the oil shocks and fed easy money,
they had already worked out an adjusted Phillips curve where inflation was a
function of unemployment and lagged or entrenched inflation. Everything that
happened from 1972 until today has vindicated this view. In the early 80’s
inflation was brought down from an entrenched high rate, only through a
dramatic increase in unemployment. And once it was reduced it stayed there,
even while unemployment stayed high. This vindicated Tobin, and contradicted
Friedman, who said inflation should keep falling as long as unemployment
remained high (it didn’t). Likewise in the post 2008 world – Tobins Phillips
curve has been spot on, high unemployment yet stable although very low
inflation. Again Friedman proved wrong. Keynesianism didn’t fail in the 70’s
and 80’s. Economics failed, and has failed ever since. Unfortunately dimwitted
journalists and liberal academics always need a black and white over
simplified narrative of epoch changing events where one ideology replaces
another. Keynesianism figured it out in 1933 and has been correct ever since."

~~~
entee
Generally I agree with the Keynesians, but I'm skeptical that the explanation
for the stagnation in median wages (employment has gone up and down, was down
to 4% in the late 90's) we have observed for past several decades is due to
Neoliberalism. There are a lot of drivers including massive technological
change and the complex effects of a reduction in trade barriers that have all
played a role.

Perhaps economics is failing, but I think it's not entirely because of a
Neoliberal vs. Keynesian dichotomy, it's at least as much because the economy
is shifting and we haven't come up with a good economic paradigm for coping
with these rather important shifts.

That said, I think a more Keynesian approach to economics is well warranted.
Largely they have had a much better approach to monetary policy in the recent
crisis.

------
xiaopingguo
Invoking a vague ideology as the root cause feels like a diversion in itself
from the basic problem of rich people getting richer while the poor get poorer
and more indebted. The obvious solutions, debt forgiveness and plain old
money/land handouts are for some reason being resisted by the elite in favor
of promoting some form of normativity, "this is the way things always were and
should be" and leading us back to feudalism.

~~~
setra
Modern progressives cite neo liberalism as the cause of the wealth divide you
mention. The solution you advocate is specifically not neo liberial. I
personally am most annoyed of the nasty habit of the government creating a
regulatory institution, and that institution becoming legal anti entryist
enforcement. e.g the FDA makes market penetration impossible because only the
super corporations can afford the process. The medical industry is generally
like this,

~~~
xiaopingguo
There really doesn't seem to be anything new about the divide. The only thing
that seems new to me is the resistance to the solutions.

In any case it may all just be a matter of time. The current Greek tragedy
that's playing out looks to be the bellweather of how it will be dealt with.

------
fleitz
yes before neoliberalism the world was perfect and had no problems.

~~~
wycx
well yes.

The years of Keyensian dominance in the post depression/post WW2 years were
when the middle class was ascendent.

One of the core components of Neoliberal ideology is the primacy of the rights
of capital above all others. If you have lots of capital, you can use your
capital as a force to impose your will, and gain power over others.

For example, you want to breathe some air? Too bad. I own the air here. You
must pay rent to me for the utility the air you are breathing delivers, as I
own the rights to it.

This is where Neoliberals would like to take the world. Feudalism without
heredity or Noblesse Oblige. Neofeudalism.

