
Neoliberalism: the idea that swallowed the world - tim333
https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the-world
======
smt88
(The following is not arguing against the article, but just providing some
context. It's about time we see more arguments against neoliberalism, which
serves only a very tiny portion of people at the expense of large masses of
others.)

For those in the US who are used to non-standard definitions of "liberal", the
word "neoliberal" refers to people who support unregulated markets, austerity,
and free trade. Reagan is perhaps the most iconic neoliberal in US history.

Confusingly, many self-professed "liberals" (US definition) are accused of
being neoliberals. Examples include Bill and Hillary Clinton.

Even more confusingly, the word is now used not to describe people who have
any relationship to classical liberals (what libertarians aspire to be), but
rather people who support a strong government that serves the wealthy -- anti-
labor, anti-market, elitism tending toward plutocracy.

~~~
wahern
There are two related but distinct meanings of neoliberalism. The meanings
come from different strains of scholarship.

The meaning that encompasses Bill Clinton is one that appeared (AFAICT) in the
1990s in American political economy circles. It basically describes Tony
Blair's so-called Third Way. The phrases describe a near simultaneous shift by
the Labor and Democratic parties toward classically liberal economic theory.
This was not a coincidence. Both Bill Clinton and Tony Blair effectively
succeeded Reagan and Thatcher, who had completely transformed the political
economy landscape, successfully selling a free market platform to the public.
(Bush and Majors were interim conservative leaders, but nobody talks about
them anymore. Their legacy is overshadowed by their predecessors and
successors.)

Neoliberal and Third Way describe an approach where the government no longer
directly intervenes in the market, but instead rely on muscular but indirect
regulatory regimes.

The older meaning of neoliberal comes from, I think, the 1960s or 1970s to
describe then-radical economists like Milton Friedman who rejected almost all
government intervention, however indirect, in contrast to traditional liberal
economic theory (espoused by the Republican and Conservative parties) which
accepted in theory some significant regulatory role. This older meaning is the
one more widely understood today. But when I was in college in the late 1990s
and early 2000s reading political science, I was most familiar with the newer
meaning of neoliberal.

Third Way is less ambiguous, but Tony Blair took office when Bill Clinton was
beginning his 2nd term. American pundits were, I think, already using the term
neoliberalism before Third Way developed any significant cachet this side of
the pond.

EDIT: So the article says neoliberal was first coined in the 1930s. That makes
sense. The more I think about it, there's really a third meaning to neoliberal
that is probably what most people understand today: an epithet to describe
policies that promote free trade and open markets to the detriment of working-
class whites.

EDIT EDIT: Okay... I should have just read the article first ;) Which seems to
agree with my sentiment.

------
mikhailfranco
The word _neoliberalism_ is dead. It has so many prejudiced interpretations
amongst its opponents, that it ceases to function as a neutral unbiased
concept in a rational discussion. Its enemies deliberately conflate it with
financialization, inequality, rent-seeking, corporatism, cartels, oligopolies,
corruption and cronyism. It is now used mostly as a pejorative term.

In fact, almost all that baggage is completely antithetical to the original
neoliberal ideals. If you add neoconservatism, the military-industrial complex
and militarization of law enforcemnt (esp. in the US), you get something that
should be called what it is: _fascism_ , not neoliberalism.

What has really swallowed the world is social democracy (voting for deficits),
hence an explosion of debt and govt control of monetary conditions:

\- Huge bloated governments (look at govt spending as a proportion of GDP, and
public sector employment, in all westernized nations).

\- High levels of debt in all sectors: personal, corporate and govt.

\- Explicit control of short term interest rates and manipulation of longer
term bond yields through QE.

\- Monetization of govt debt (QE + rollover at maturity + refund of coupon
interest to treasuries).

The distortion and corruption is astonishing. With the Fed owning $1.8tn of US
real estate (MBS) from QE, there's a good chance the Fed is your landlord! In
Europe, companies issue bonds specifically for the ECB to buy at a premium,
using printed money (EUR60bn/month). Then companies use the money to buy back
their own stock, hence increase their share price, and allow execs to earn
handsome profits on stock options - printing money into exec's pockets! The
BoJ prints Yen to buy Japanese shares. The SNB prints CHF to buy US stocks and
now owns $1.7bn of AAPL! Milton Friedman must be spinning in his grave.

Neoliberalism favors small responsible government, with low debts, allowing
markets to set prices, including the interest rate, which is the price of
money. The _neo-_ in the name indicates its deviation from the classic liberal
_laisser faire_ economics of unfettered free markets, because the natural
tendency is to reduce competition (see P.Thiel). Neoliberallism encourages
govt intervention to keep a level playing field and protect fair competition
in the open market, especially to prevent the distortions of asymmetric
information, rent-seeking, cartels, oligopolies and monopolies.

The only minor victory for neoliberalism was the freedom from capital
controls, which is now being rapidly reversed with financial restrictions
enacted in the name of the fake wars on drugs and terrorism (KYC, AML, FATCA,
FBAR...). Next is the war on cash, which will bring a loss of freedom, privacy
and ownership of your money. We already have NIRP, bailins, civil asset
forfeiture, limits on cash transactions and phasing out of large denomination
notes (e.g. EUR 500).

~~~
mikhailfranco
More commentary on the rise of national socialism, involving monetization of
govt debt and stealth nationalization of stock markets by central banks:

 _Central banks hold a fifth of their governments’ debt_ (FT - registration
required)
[http://www.ft.com/content/ae19e60e-81b0-11e7-94e2-c5b903247a...](http://www.ft.com/content/ae19e60e-81b0-11e7-94e2-c5b903247afd)

Unpaywalled commentary from the Mises Institute, so you can see what the
(neoliberal) Austrian School really thinks about current monetary policy:

[http://mises.org/library/are-central-banks-nationalising-
eco...](http://mises.org/library/are-central-banks-nationalising-economy)

And yet more fascism jackbooting over the US constitution:

 _Congress Quietly Passed a Bill Allowing Warrantless Searches of Homes_
[http://thefreethoughtproject.com/congress-passes-bill-
allowi...](http://thefreethoughtproject.com/congress-passes-bill-allowing-
homes-searched-without-warrant/)

