
The neoliberal era is ending. What comes next? - paulpauper
https://thecorrespondent.com/466/the-neoliberal-era-is-ending-what-comes-next/61655148676-a00ee89a?f
======
Areibman
This was posted here about a month an half ago. Unfortunately, this article
causes comment sections to erupt into flames. I find it problematic since it
spreads misinformation about economics as a profession.

Economist Russ Roberts does a great job addressing most of the points in this
article [0].

Although Hayek and Friedman may have been intellectually very interesting, I
have a hard time believing they had much influence on the trajectory of public
policy (at least, not nearly as much as OP's article implies).

Speaking anecdotally, I studied economics in my undergrad, and I never
encountered Friedman or Hayek in my curriculum. In fact, I can count the
number of students I met familiar with their ideas with one hand.

[0] [https://medium.com/@russroberts/the-economist-as-
scapegoat-9...](https://medium.com/@russroberts/the-economist-as-
scapegoat-91b317a6823e)

~~~
woodandsteel
During the housing price bubble 2001-2007, the economics profession on the
whole, lead by University of Chicago economists (which is where Friedman
taught) told us everything was fine, due to efficient market theory.

~~~
me_me_me
People in the future will be asking themselves, how the whole 'school of
Chicago economics' wasn't tried for crimes against humanity.

And I am not only talking for spreading this silly not notions of invisible
hand adjusting markets and utopia will arrive.

Those people destroyed south American countries in their little free market
playgrounds. And all they 'learnt' was that those models failed because the
markets were not free enough.

------
bryanlarsen
IMO, the vast majority of HN is neoliberal in the traditional sense. Which we
can oversimplify as "Liberal goals, Conservative means". In other words they
wish to guide corporations and markets towards goals that traditionally would
be provided by big government.

UBI is the ultimate neoliberal mechanism. Provide money directly to people to
let the market work rather than a massive bureaucracy. Carbon taxes are also
very neoliberal for a similar reason.

In fact, I think carbon taxes are the true neo-liberal litmus test. A
socialist doesn't trust the market so thinks that heavy regulation is better
than a carbon tax. Conservatives either disagree with the goal of the carbon
tax or are just allergic to taxes in general. If you're pro-carbon tax you're
probably ideologically somewhat neoliberal.

Politically neoliberalism was supposed to be this great compromise ground
between liberals and conservatives that gave them both what they want.

In reality, it got totally co-opted by conservatives and corporate interests.
It's way too easy to pay lip service to the "liberal goals" while
concentrating on the "conservative means". Even somebody who truly has liberal
goals in mind is only acting through the conservative means.

Ironically it's the conservatives who abandoned this compromise position first
with the Tea Party and Trump.

Now neoliberalism is just a swear word that means "corporate shill".

------
jahaja
One simple thing is for sure, if inequality continues to rise, or even just
the perception of it, social unrest will follow. At some point, if you want a
peaceful and free society, the low-income worker and up needs to _feel_ that
they can live a dignified life.

Remember the quote from the Communist Manifesto? "We got nothing to lose but
our chains". At the time that was written it was certainly true for most
workers, and we know of the revolutionary decades that followed. This
perception can certainly take hold again, and there's no reason why
revolutionary times wouldn't follow again.

~~~
vosper
You're being downvoted, but no-one cares to say why they disagree with you.
FWIW, I think you're right that "there's no reason why revolutionary times
[c]ouldn't follow again". History is strewn with revolutions, plenty of them
(like the Russian revolution) motivated in part, or in whole, by huge issues
of inequality. I don't see how anyone can conclude we'll never see another
one, or that it won't affect us personally.

------
rawgabbit
The NY Times and Business Roundtable addressed this issue last year. A society
that values profits over people is a failed society.

[https://www.nytimes.com/2019/08/19/business/business-
roundta...](https://www.nytimes.com/2019/08/19/business/business-roundtable-
ceos-corporations.html)

Nearly 200 chief executives, including the leaders of Apple, Pepsi and
Walmart, tried on Monday to redefine the role of business in society — and how
companies are perceived by an increasingly skeptical public.

Breaking with decades of long-held corporate orthodoxy, the Business
Roundtable issued a statement on “the purpose of a corporation,” arguing that
companies should no longer advance only the interests of shareholders.
Instead, the group said, they must also invest in their employees, protect the
environment and deal fairly and ethically with their suppliers.

“While each of our individual companies serves its own corporate purpose, we
share a fundamental commitment to all of our stakeholders,” the group, a
lobbying organization that represents many of America’s largest companies,
said in a statement. “We commit to deliver value to all of them, for the
future success of our companies, our communities and our country

------
treefrogleap
Neoliberal in the last 30 years meant corporation shedding any sense of Moral
decency or obligation to its country and citizens. And sell its soul for the
cheapest labor. This is how you end up with American companies purchasing
hairs from Uighurs in concentration camps in China.

Neoliberal in the last 30 years meant laughing and deriding your fellow
citizens because they lived in a state that was hollowed out by globalization
and money concentrating in the states that exploited cheap labors.

Neoliberals are dead? Thank goodness!!! We welcome back nationalism

------
unnouinceput
I'll wait for the vaccine to come out. Then we'll see if this article was just
a stir in a pot or real deal. My bet is for stir.

Sure, something will change even after vaccine, but not to such significance
as the article's author is saying.

~~~
dougmwne
This pandemic is a faint shadow of the real crisis that's coming, climate
change. The idea that the world will just go back to normal once we have our
miracle medicine is fundamentally flawed. That's because "normal" was a
speeding freight train to environmental collapse. There is an opportunity in
our current tragedy, for as sad as the COVID death toll is, it will be small
potatoes to the crisis that's coming. Maybe this was unthinkable in the west
until now, but how's your grocery shopping been over the past few months, seen
any shortages? You ain't seen nothin' yet. No Ecosystem == No Soil == No Food.

~~~
unnouinceput
+1, 100% agree on climate change. As for coming back to former 2019 status, I
did said some changes will happen, just not that radical ones.

Hopefully this will include slow down of climate change. Some things are
better even now, for example destruction of ozone layer and the hole over
Australia/Antarctica, it's smaller now then was in 90's.

------
throwawaysea
Reminder that Sweden, with their relatively lax COVD restrictions, are a month
past no excess mortality: [https://www.reuters.com/article/us-health-
coronavirus-sweden...](https://www.reuters.com/article/us-health-coronavirus-
sweden-mortality/sweden-records-first-week-with-no-excess-mortality-since-
pandemic-struck-idUSKBN23F1WK)

~~~
coffeefirst
There were a few places I went to in Europe (not Sweden, maybe one day) where
I was absolutely shocked how high the level of trust was. If you have trust,
you don’t need rules, because you tell people to be safe and wear masks and
they do it because they want to beat the virus.

The US is the opposite. The results speak for themselves.

~~~
jdminhbg
And by "the results," you mean fewer deaths per million than Sweden (or
France, or Italy, or the UK...)?
[https://www.statista.com/statistics/1104709/coronavirus-
deat...](https://www.statista.com/statistics/1104709/coronavirus-deaths-
worldwide-per-million-inhabitants/)

~~~
majewsky
You should read past the first page of that table. Germany and Denmark have
1/3 the death per capita of the US. The Czechs have 1/10 of it.

~~~
jdminhbg
I’m not saying the US has the best outcomes. I’m saying European high-trust
culture has nothing to do with the results. European countries have done much
better and much worse.

~~~
coffeefirst
They absolutely have, I didn't mean to suggest "trust is a magic bullet that
solves your problems." Of course not, that'd be ridiculous.

I'm saying in a higher trust culture, you'll see better compliance on
everything we ought to be doing even without imposing strict rules. That's an
advantage, and it means how strict the rules are doesn't necessarily match how
people changed their behavior.

That's all.

------
CryptoPunk
There was never a neoliberal era.

One example: financial privacy.

The AML regime started in the 1970s with the passing of the Bank Secrecy Act,
and accelerated after the 911 attack.

Many developed countries instituted programs in the 1990s and 2000s to begin
overtly mass surveilling all private economic interactions, or deputizing
banks to do so. For example, FINTRAC was created in Canada in 2000.

Financial privacy is a cornerstone of financial liberty. Without it, power
concentrates in the hands of the state, which is what we see, with Washington
D.C. real median household income increasing 66% over the last 20 years, while
the rest of the US saw it increase 5.23%.

Another example: healthcare.

Many developed countries created national healthcare programs in the 1960s,
like the US with Medicare in 1966.

These programs steadily grew in size in the decades since.

Regulations in the US healthcare system steadily increased since the 1970s as
well. This expansion of regulations was so significant that it caused the
number of hospital administrators to increase 3,200% between 1975 and 2010,
compared to a 150% increase in the number of physicians:

[https://www.athenahealth.com/insight/expert-forum-rise-
and-r...](https://www.athenahealth.com/insight/expert-forum-rise-and-rise-
healthcare-administrator)

Yet another example: occupational licensing. Only 5% of jobs in the US in 1950
required an occupational license. Today that number is around 29%.

And another example: land-use rights. In major cities, regulations on land-use
have accumulated since 1960:

[https://eml.berkeley.edu//~moretti/growth.pdf](https://eml.berkeley.edu//~moretti/growth.pdf)

>>As described by Glaeser (2014), since the 1960s coastal US cit- ies have
gone through a property rights revolution that has significantly reduced the
elasticity of housing supply: “In the 1960s, developers found it easy to do
business in much of the country. In the past 25 years, construction has come
to face enormous challenges from any local opposition. In some areas it feels
as if every neighbor has veto rights over every project.”

No less than the White House's Council of Economic Advisors has blamed this
rise in restrictiveness in housing in major coastal metropolises for rising
rental rates, and spatial misallocation of labor, leading to lower wage growth
and increased income inequality:

[https://nlihc.org/resource/obama-administration-releases-
hou...](https://nlihc.org/resource/obama-administration-releases-housing-
development-toolkit)

Government spending also massively rose, as a percentage of GDP, since the
1970s.

In the US, social welfare spending increased at an annualized rate of 4.8%
between 1972 and 2011:

[https://fivethirtyeight.com/features/what-is-driving-
growth-...](https://fivethirtyeight.com/features/what-is-driving-growth-in-
government-spending/)

The end result is a much higher fraction of economic output being
redistributed by government, and thus controlled by political forces.

In the US at least, any broad-based measure of how regulated the economy is,
or how much of it is constituted by government spending, shows the economy
moving away from market-based liberalism and towards centralized government
throughout the last 50 years.

------
caiobegotti
For the first time in almost a decade on HN I see ALL parent comments (six, as
of now) greyed out. This can't be right... 32 comments stemming from these
downvoted ones can't be a good sign for discussions. Sometimes
economically/politically sensitive news are depressing in the comments section
and I think we can do better. I don't even know how to comment about the
article now, fearing random rage of someone else.

------
UncleOxidant
"Turns out, high taxes need not be bad for the economy. On the contrary, high
taxes can make capitalism work better. (In 1952, the highest income tax
bracket in the United States was 92%, and the economy grew faster than ever.)"

If you ask most of the MAGA folk about what era they think America was
greatest and most of 'em will cite the 1950s. When you point out what the tax
rates were back then they're generally incredulous and figure you're making it
up.

~~~
dmitrygr
In 1912 the federal income tax rate was zero in USA

------
dvt
The thesis of the article is, essentially:

> If there was one dogma that defined neoliberalism, it’s that most people are
> selfish. And it’s from that cynical view of human nature that all the rest
> followed – the privatisation, the growing inequality, and the erosion of the
> public sphere. [...] Now a space has opened up for a different, more
> realistic view of human nature: that humankind has evolved to cooperate.
> It’s from that conviction that all the rest can follow – a government based
> on trust, a tax system rooted in solidarity, and the sustainable investments
> needed to secure our future.

This is naive and, in my opinion, false. At the outset, I should say that I am
a fan of Kissinger and his _realpolitik_ , but even if I weren't, you needn't
look further than China or Russia to easily counter that thesis. This idea of
a kumbaya moment is cute and sounds good from the ivory tower of your typical
Oxbridge academic, but the real world is nasty and grim. And people, for the
most part, will act selfishly. Capitalism (and the markets) function based on
the same premise. I don't really see that changing.

> The going assumption – on both sides of the political aisle – is that most
> wealth is “earned” at the top by visionary entrepreneurs, by men like Jeff
> Bezos and Elon Musk.

The air-quotes around "earned" are unfair. I mean, a _ton_ of people use
Amazon, or Facebook, or have Teslas, or what-have-you. Is Bregman trying to
imply that this wealth isn't really earned? I don't really get it. Yes,
there's a disparity, but I remain unconvinced that this disparity is somehow
immoral. Bregman throws shade at Bezos but, as it turns out, Mazzucato (quoted
by Bergman) mostly criticizes big pharma. There's a difference between tech
and pharma, and the author disingenuously throws the baby out with the
bathwater.

~~~
andrepd
> At the outset, I should say that I am a fan of Kissinger and his realpolitik

Let me tell you a quick story. I have a branch in my family who was entirely
wiped out (save for one boy) in the genocide in Timor-Leste, which killed
150,000 to 200,000 people (if that doesn't seem that much to you, the
population of Timor was _688,000_ ). That invasion was approved by the US
(Kissinger and Ford met with Suharto on the eve of the invasion to give the
OK), financed by the US, with troops trained by the US and armed by the US.
The reason? The people of the freshly liberated country were on the verge of
holding their first democratic elections, choosing a left-wing party, and
declaring independence.

So pardon me if I'm not "a fan of his realpolitik". Disgusting mass murderers
is what they are, it's not because they wore a suit that murder becomes
something else. "Ivory tower" indeed.

~~~
abcdefedcba
My condolences.

I believe OP was supporting the idea of realpolitik as the theory which
explains diplomatic relations. Whether the outcomes of this theory are just is
not under consideration. The OP understands that nations negotiate under these
realpolitik principles.

------
fallingfrog
If I could venture a guess: what comes next is an era of some kind of
communalism. In an era where natural resources are becoming expensive and
climate change is becoming a daily reality, the way to maintain a high
standard of living is through sharing things. You can see it happening through
coliving spaces, coworking spaces, renewed interest in mass transit, and I
think you’re going to see the growth of sharing economies of various kinds.
This way to live abandons the total individualism of the market but without
being a totalizing system like Soviet style communism. Obviously this is all
guesswork on my part- but consider: this solves the problem of poverty (if
most things are shared then they are available to all) it removes much of the
overhead of huge militaries and policing (no poverty means much lower crime,
and moving decisions down to the more local level removes incentives and
opportunity for waging war), it allows a much higher standard of living with
much lower environmental impact, if investment decisions are made on the
communal level then financial engineering becomes much less prevalent- it just
seems like localizing and democratizing decision making solves a lot of
problems (no doubt it will create new ones but that’s the next generation’s
problem). And as the article says, new ideas start on the margins and make
their way inward, and I can tell you that these are the ideas on the margins
right now.

------
incommoditas
Utopians like the author are simply unbearable. Socialist fail to see that
business will dry up with making everyone comfortable and free market
capitalist fail to see that there aren't many new frontiers to gain profit
from to increase everyone's wealth. Growth and ingenuity is slowing in the
only remaining frontier, the technology sector, as well. No growth lasts
forever, the greater physical universe is bound to the stipulation of limited
growth as well.

The west is in decline and it may take the rest of the world with it. If you
want to survive learn useful skills, become more self-reliant, and protect you
and yours. Utopia is impossible, unlimited wealth and happiness is impossible,
matter cannot be created or destroyed, only transferred.

~~~
hyperdunc
There's plenty of knowledge and technology left to discover, plenty of
resources to transform, and plenty of space to grow into (including off-
planet).

We just lack the will to do what's required because we're used to comfortable
lifestyles and are unwilling to take risks.

------
1996
> In the space of just three weeks, nearly 17 million people in the United
> States applied for economic impact payments.

Maybe that wouldn't have happened if the government hadn't forced businesses
to close? As in, if you make it illegal to go to work, people will be without
a job.

> In the 2008 financial crisis, it took two whole years for the country to
> reach even half that number.

Morale of the story: the government could in 3 weeks destroy the economy to a
level that in the 2008 crisis took 2 years for the private market to achieve.

Scary, and I'm not sure it speaks for more government.

Unfortunately, this is not what the pro-state pro-intervention crowd that
dominates HN wants to hear. I long for the old days of the libertarian
hackers...

~~~
castratikron
Would it have been scarier to have let this virus rip through the population?

~~~
1996
People die. It's sad a fact of life.

Now people will still die + their families will be without a job.

This virus has a higher mortality than the flu, indeed. But the jury is still
out to see if the current scenario will be better that the alternative (after
you factor in suicides, depressions, overdoses, etc)

But personally, I would have much preferred to live in the alternative world
where the virus would have spread freely and we'd already be in herd immunity
(and with the economy not destroyed)

~~~
castratikron
As long as nothing bad happened to you, right?

The mortality is around 1%. So in the US alone that would leave over 3 million
dead. Due to this 50 state lukewarm solution I think we'll ultimately see 1
million dead. The economy is made up of people, by the way.

~~~
UncleOxidant
In addition to the mortality we're seeing people with permanent damage to
lungs, kidneys, heart and other organs. There are people in their 20s and 30s
who didn't have "serious" cases (as in they didn't need to be hospitalized)
that are still having symptoms 3 months after onset that prevent them from
working. There are estimates that up to 10% of people who have covid have
symptoms lasting longer than 3 weeks. There could be additional economic
consequences if a largish number of people end up with permanent disabilities
due to covid-19.

~~~
asdf21
From the get go, it was estimated that 80% of the world population would be
infected within 18-24 months.

All the shutdown was intended to do was to "slow the spread" from the 18
months to 24 months, and to hopefully keep hospitals from being overwhelmed.

Once we knew how infectious it was, Covid was always expected to infect nearly
everyone eventually, whether the economy was shut down or not.

~~~
UncleOxidant
The Chinese military has already given the go ahead to start injecting a
vaccine developed by CanSino Biologics into military personnel. That's
potentially 2 million people. [https://fortune.com/2020/06/29/china-
coronavirus-vaccine-mil...](https://fortune.com/2020/06/29/china-coronavirus-
vaccine-military/) This vaccine has already gone through their phase1&2
trials. Whereas in the US a vaccine probably won't be available for about a
year, it's quite possible that other countries will follow China's lead and
accelerate their vaccine development & trials.

Slowing the spread was to keep hospitals from being overwhelmed (flatten the
curve) but it was also to minimize the number of people infected before either
a vaccine or effective treatments became available. In the US a vaccine is
likely still a year off, but we already know more about how to treat this than
we did 4 months ago. And in another 4 months we'll likely have even better
treatments and protocols.

It's not inevitable that 80% have to be infected within 18-24 months. Other
countries have slowed the spread with Hong Kong, S Korea and Taiwan being 3 of
the more notable examples.

------
malwarebytess
>Just how hard it is to change the world was brought home to me yet again by
the book Difficult Women, which I read recently during lockdown. Written by
British journalist Helen Lewis, it’s a history of feminism in Great Britain,
but ought to be required reading for anyone aspiring to create a better world.

>By “difficult”, Lewis means three things:

> It’s difficult to change the world. You have to make sacrifices.

> Many revolutionaries are difficult. Progress tends to start with people who
> are obstinate and obnoxious and deliberately rock the boat.

> Doing good doesn’t mean you’re perfect. The heroes of history were rarely as
> squeaky clean as they’re later made out to be.

>Lewis’s criticism is that many activists appear to ignore this complexity,
and that makes them markedly less effective. Look at Twitter, which is rife
with people who seem more interested in judging other tweeters. Yesterday’s
hero is toppled tomorrow at the first awkward remark or stain of controversy.

#MeToo is going to burn itself out. It's a witch-hunt. The only good that
could come from it would be a society where failures aren't permanent brands,
but I don't think that's going to happen. The twist that cancel culture
prevents change is ironic. Then again, I wonder if the people who are super
into cancelling were the type to revolt to begin with?

~~~
IfOnlyYouKnew
You're equating the "being difficult" of revolutionaries with the "being
difficult" of rapists.

And, yes, these two groups do share the distinction of being publicly
criticised.

But "let's just stop complaining" as a strategy to support the good
revolutionaries, and to start doing so by giving sexual predators a break, is
almost too incoherent to be intended in all its cynical might.

Plus, obviously, the "difficult revolutionary's" modus operandi is to
complain/"cancel"/whatever: how, exactly, do you want them to be "difficult"
and changing-things while not annoying you and refraining from exerting any
power?

------
gutino
If you look closely you will find the state behind all major economical
crisis. In 2008 the State incentive to give subprime loans to people lead to
the disaster. If you have a truly liberal economy, without central banks, no
poverty or economical problems should arise, especially in the tech era.

~~~
waheoo
Do you mean truly neoliberal or truly liberal? Not that it matters much.

Blaming the state for something a bunch of bankers lobbied for is a bit rich.

You want to fix things in america? Take money out of politics. Get rid of the
myopic two party system.

Political decisions arent on a sinle spectrum and ignoring this leads to an
unavoidable escalating osciliation between too extremes when the majority
wants anything but that outcome.

