9 ms·

The death of neoliberalism from within

60 points by musha68k 10y ago

doctorcroc 10y ago
The big question then is what replaces laissez faire economics and how? How do we take the best of the free market while ensuring that governments and public sectors are also robust? I feel like software and technology must have a huge role here, but don't know enough to be able to point out specific solutions.
- maxerickson 10y ago
  I think free markets are fine. We just need a huge revaluation of capital. Downwards.
  - kaoD 10y ago
    Isn't the "death of neoliberalism from within" just the market adjusting itself? I think the situation completely fits what free markets propose. The problem is not that the system isn't working but rather that it is working too well and we're witnessing the painful consequences of self-adjusting markets. Self-regulation is cool on paper but in the end we're talking about real people suffering real consequences and, even if the system is adjusting itself, the slowness of "the markets" to realize capital has to trickle down for them to survive (and the resistance of the current capital holders to do so) is producing a lost generation (at best) in the transition. Of course, the fact that nations (the entities supposed to backpressure the power of capital accumulation) are underlyingly controlled by the very same people not interested in changes to the status quo isn't helping at all. The system is working as advertised. The society just wasn't told what it all really meant.
    - kiruwa 10y ago
      The more severe problem is that there is a rather strong argument being made by the "Mises brand of neoliberal" that the primary cause of these problems is the lack of neoliberalism in the central-banking world. Their argument is essentially that the economy-wide boom/bust paradigm is driven by the motivations of the central banks. Normally individual industries and companies would experience fluctuation, but it would not be nearly as damaging without the central banks attempting to 'synchronize' the economy.
    - theseatoms 10y ago
      > painful consequences of self-adjusting markets. The consequences are only painful for certain parties/demographics. Others reap the benefits of change. (If we're going to continue speaking in these broad generalities.)
- marricks 10y ago
  I think the argument is that what we had before this wave if Neoliberalism, pre 1908s with Keynesian economics is part of the answer. More regulations on the financial sector, stronger unions, etc. Maybe even a bit more protectionism.
- elgabogringo 10y ago
  We have to actually have laissez faire economics before we can replace it with something.
- rqebmm 10y ago
  It's important to remember that "free market" does NOT mean "no regulation". A market inherently requires regulations (i.e. contracts, trademarks, currency policy, etc). Even Adam Smith knew this. [0]http://economistsview.typepad.com/economistsview/2010/03/adam-smith-and-the-role-of-government.html http://economistsview.typepad.com/economistsview/2010/03/ada...
kiruwa 10y ago
> Two British examples [of neoliberalism], suggests Will Davies – author of the Limits of Neoliberalism – would be the NHS and universities “where classrooms are being transformed into supermarkets”. Without taking a bit of Davies' argument into the article, that seems to badly undercut the argument. I'm not sure I can imagine a segment of society less neoliberal than either of them. (particularly by comparison to other western democracies)
- elgabogringo 10y ago
  Exactly, there's nothing free-market about government run Health Care or Schools. This is another case of people using words they don't understand.
  - andybak 10y ago
    (Disclaimer: I haven't read the article in depth) My interpretation: neo-liberals have tried to bring market forces to bear on the NHS and Universities - and this is the 'overreach' he is referring to. i.e. the fault isn't with the author - it's with those with overly expansive interpretations of market economics.
    - elgabogringo 10y ago
      I'd say your right about the author of the study (which I am not going to waste time reading) and his NHS/Uni examples - but wrong about the author of the editorial - because it's definitely an editorial, not a piece of reporting.
  - URSpider94 10y ago
    As a general rule, I'd be very cautious before assuming that a columnist for The Economist doesn't understand what he is talking about. You may disagree with his conclusions, but that's a different matter. What I believe he's talking about is the introduction of free market dynamics to schools and single-payer health care, two institutions that have been resolutely socialist (in the classical sense of the word) for a long, long time. His belief is that these "modernizations" are destroying the institutions.
rwmj 10y ago
http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/04/over-estimating-neoliberialism.html http://stumblingandmumbling.typepad.com/stumbling_and_mumbli... points out that "neoliberalism" isn't a thing, ie. not a coherent philosophy. It's just a name for ad hoc greed by many diverse individuals.
- fulafel 10y ago
  well argued opposing view: http://www.perc.org.uk/project_posts/the-difficulty-of-neoliberalism/ http://www.perc.org.uk/project_posts/the-difficulty-of-neoli... "The reason ‘neoliberalism’ appears to defy easy definition (especially to those with an orthodox training in economics or policy science) is that it refers to a necessarily interdisciplinary, colonising process. It is not about the use of markets or competition to solve narrowly economic problems, but about extending them to address fundamental problems of modernity – a sociological concept if ever there was one. For the same reasons, it remains endlessly incomplete, pushing the boundaries of economic rationality into more and more new territories."
dragonwriter 10y ago
Related to this, I've separately submitted the actual IMF paper [0] referenced (but not linked, the link goes to a Financial Times story about the report) in the article, which has more depth than the somewhat broader-but-fuzzier Guardian article. [0] https://news.ycombinator.com/item?id=11831092 https://news.ycombinator.com/item?id=11831092
elgabogringo 10y ago
Neoliberalism is not a school of economic thought. It's not an actual ideology that anyone associates themselves with. It's a word without any concrete meaning thrown around in order to avoid real discussion. The free market is not failing. Current markets that are failing are hardly "free." What is failing is a system of government regulation and control that supports wall street and the rich at the expense of the middle class. The governments and their federal banks created every single problem called out in the article. To turn around, blame free-markets, and propose more government as the solution is disgustingly disingenuous. The IMF itself is not a proponent of the free market. It exists precisely to support excess government spending and to bail rich bondholders who make donations to politicians. Nothing lassiez faire about that. The laissez faire solution to an overspending government would be bondholders losing money, currency depreciating, and poor leaders being held accountable - to which the IMF is diametrically opposed.
- zwerdlds 10y ago
  To be fair, it is the IMF - their inherent mission is to lend, it's even in their name.
  - kiruwa 10y ago
    Lend to 3rd world plutocrats, then hold their countries responsible for the debt when they run off with the money.
    - zwerdlds 10y ago
      I'm not agreeing with the strategy, it just seemed like the OP had a problem with what the IMF does. For the IMF to stop, it would have to dissolve.
  - elgabogringo 10y ago
    What does lending government money to other governments have to do with the free market?
    - 10y ago
riphay 10y ago
We're seeing more and more of these types of articles coming up, but they're all talking about different aspects of the same issue: inability to share growth with wide swaths of the population. In the west, our quality of life has never been higher and products/services have never been cheaper. This has been caused in large part by automation, lean manufacturing, globalization, etc. and each one of these is net positive for society. The problem seems to be that it's become difficult to share these gains with labour in the classical sense; and our society, taxation system, social contract are all based around this meaning of labour. When I see articles about: - Austerity, - Wage growth, - Universal basic income, - Death of middle class, - Rise of right-wing parties, - Anti-free trade lobbying, - Donald Trump and Bernie Sanders; I read all of them with same lens. I know my knowledge of economics is medium at best, but I'm starting to look twice at ideas such as UBI. Maybe there needs to be a rethink of the Western social contract around labour.
- caseysoftware 10y ago
  Forget about the content of the articles and instead look at the themes. The current system is fundamentally broken and levers that governments have to "fix" things aren't working as they (claim to) want. Everyone is looking for someone to blame instead of debugging what's there and seeing if there is a way to change things before they go (more) catastrophic.
- ethbro 10y ago
  The biggest problem, when I look at the American labor market, is that it seems physically unjust. The sweat of a person's brow and the wear and tear on their body should have some intrinsic value above and beyond what the market will bear. That someone working as a farm hand, mover, framer, or roofer gets paid a pittance compared to what I earn for sitting in a climate controlled office, moving my fingers, and thinking? I can't reconcile that with any definition of "fair." UBI is perhaps one way to address this. Wealth transfer to increase robotics usage and physical mechanization / automation application is perhaps another. But no one should end up with a broken body at 65 just because we stopped aspiring to do better by each other.
  - 10y ago
tim333 10y ago
The article seems a bit vague as to what it means by neoliberalism. It seems to mean the belief that unregulated free markets won't go wrong which I'm not sure anyone really had. Some bits seem to work OK like letting people trade goods and services and some lead to problems like German banks lending to property speculators in Greece and then wanting to be bailed out when the whole thing tanks. The latter was more straight dumb than anything else, at least with hindsight. I'm not sure there's anyone saying I'm a neoliberal and funding the Greek bubble was a good idea. It's a bit of a strawman.
lewis500 10y ago
I am glad the author cites Red Plenty. That is a really excellent book that I think a lot of HN readers would like. It really takes you into frame of mind since lost, with poignance and good characters. It is important to note we live in an age of diminished expectations not just for what capitalism can do but for what government can do, too. Thus, I'm not sure if the fact neoliberalism is disappointing actually means we need a new system. Do we need bigger government, than the current trend, in the US? The government is projected to grow quite a lot as is. We spend more and more money on education and health care every year, with disappointing results. Look at the Medicaid experiment in Oregon: Finkelstein et al (2015) find very little positive health impacts. Obamacare has cut the number of uninsured, but I would guess its impact on actual health will turn out to be very mild. Access to health care and spending on health care are not very much correlated with health outcomes, as the more costly health care is based on deliberate obfuscation or sloppy statistics or promises meager gains (e.g., slightly shrinking a tumor) in the first place. Neither charter schools, on average, nor public school reforms seem to have helped close the opportunity gap much. The Iraq/Afghanistan wars cost like $2 trillion. Many of the largest public pension plans around the US do not have enough assets to make ends meet, even counting on delusional 7 percent returns! Prisons exploded, and nobody seems happy with that. That land-use regulation has become baroque and suffocating shakedown is something I don't think I need to convince anyone in the Bay of. The best cars are made in non-union shops (e.g., tesla and all the new southern factories). It is interesting that things generally are moving slowly on all fronts, but I don't think that's necessarily a reason to change course. If you are stuck in a slow left lane of traffic, it doesn't necessarily mean you should get in the right lane.
moridinamael 10y ago
"fiscal waterboarding"
puranjay 10y ago
the thing about capitalism is that capitalism has no ideology, only the profit motive (nothing wrong with that) if tomorrow the capitalists of the world were to figure out that communism is more profitable and efficient for conducting business, they would change their ideology accordingly. capitalism can't die because capitalism is innate to human beings; it is infinitely adaptable and flexible
- wfo 10y ago
  Profit motive above all else is literally the prototypical example of an ideology, just not one that most people would publicly espouse.
  - vixen99 10y ago
    No, it's one that everyone and all life espouses. All human interactions are transactions which express this 'ideology' as you misleadingly call it. Eric Berne understood this in 'Games People Play'. You transact because you get value; you profit. Only dead people don't transact which is why we dispose of their bodies. The profit motive is why we're alive and why evolution of life on this planet has arisen. It's deep within our genes.
    - wfo 10y ago
      A beautifully expressed fundamentalist ideology; you are incapable of even comprehending that there exist views other than your own.
- dmfdmf 10y ago
  > the thing about capitalism is that capitalism has no ideology I beg to differ. What is capitalism? http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952 http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/045114795... What is its ethical base? http://www.amazon.com/Virtue-Selfishness-Centennial-Ayn-Rand/dp/0451163931/ http://www.amazon.com/Virtue-Selfishness-Centennial-Ayn-Rand... You may disagree but no one can say it has not been said.
areyoucrazy 10y ago
Communists have been saying neoliberalism(nonsense term, which serves as an insult)/capitalism is going to fall, but it ain't happening. It's stronger than ever. They're like Christians expecting rapture.
- djsumdog 10y ago
  Are you serious? Capitalism has been failing most of this planet! You just don't think it's failing because you live in a mid-to-high income nation. One day those nations will run out of others to have war with and steal from. The earth has a lot of resources, but it's finite. This will all end one day.
  - vixen99 10y ago
    You need to check your facts. 'World poverty is shrinking rapidly, new index reveals'. http://www.theguardian.com/society/2013/mar/17/aid-trade-reduce-acute-poverty http://www.theguardian.com/society/2013/mar/17/aid-trade-red... 'Some of the poorest people in the world are becoming significantly less poor, according to a groundbreaking academic study which has taken a new approach to measuring deprivation. The report, by Oxford University's poverty and human development initiative, predicts that countries among the most impoverished in the world could see acute poverty eradicated within 20 years if they continue at present rates.' Why is this happening? Because our world has enabled people to trade with each other; that's another term for capitalism. As Tim Worsfall has put it: 'Choice, consumers, consumption, these are not things to be disdained from the comfort of an Islington eyrie, they are the entire damn point of having a society or an economy in the first place.' The basic problem with your view: Today one can literally go from kindergarten to becoming a graduate student seeking a Ph.D., without ever hearing a vision of the world that conflicts with the vision of the left.
  - generj 10y ago
    That is so very far removed from the historical reality. Look up a chart of Global real GDP/capita over time. You may suspect that all this wealth goes to the wealthy (unlikely even from a historical perspective, look at all the servants Bill Gates doesn't have that even a slightly well-off English family would have). If you think this, you can lookup a chart of GDP/capita growth per country across the world. Failing this, there are charts with real GDP growth split across income levels (though not for all countries). Failures in capitalism are usually a failure in governance. It's no surprise at all that countries with repressive or unstable regimes have the worst economies. Many countries which were once poor are now rich - even over the lifespan of people still living. The Asian tigers went from terrible conditions to skyscrapers in less than 30-40 years. People's grandchildren could expect to make 7 to 8 times as much as their grandparents. Every country is better off today than it was in the 1500s, 1600s, 1700s, 1800s, and the start of the 1900s. Wars are less frequent for almost the entire globe. You have a failed understanding of economics. We don't compete/steal from others when our quality of living goes up. Instead, we raise the quality of living of others. Look at China: when they started making our consumer goods, many people's quality of living went from mud huts to apartment high-rises with Starbucks downstairs. And we didn't really lose out - on average, we found new types of jobs, mostly service jobs, which it turns out we can do more productively than we could produce consumer goods. Look, the Earth has many more resources than we are currently using. We could produce food for the world with only a tiny fraction of the world's irrigated land. If we run low on a particular resource, we will pivot past that rarity with engineering, both social and physical. Malthusian predictions have thus far all failed spectacularly. In fact, the more population we have, the more specialized we can be, and the better off we are. It's not theory - it's what history has shown us, over and over again, across the world.
lucozade 10y ago
Somewhat tangentially, I wonder if the kind of misrepresentation* present in this article is going to get better or worse in the future. The fact that, in a lot of cases, it's trivial to go read the source [0] makes me feel that it should dwindle. However, it seems that, with the substantial increase in content available, having more strident views is required to be heard. * by misrepresentation I mean that the article was by no means a denial of "neo-liberalism". It was generally very positive about free market economics but looked at 2 niche areas and concluded that 1) short term capital controls may sometimes be worth doing and 2) deficit reduction isn't that valuable in very prosperous countries but is in weaker economies. Not quite what Mr Chakrabortty said it said. [0] http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm
EGreg 10y ago
Reminds me of this: http://m.youtube.com/watch?v=qOP2V_np2c0 http://m.youtube.com/watch?v=qOP2V_np2c0 I personally believe it is all the automation and outsourcing that is changing the fundamentals and causing a drop in the demand for human labor - thus undermining our trusty wage-based mechanisms to get money to the masses, who then spend it back on necessities. The drop in demand means less investment and lending. So the money supply shrinks. The "Great Depression" was coined as a term by Hoover because it sounded calmer than the term commonly used at the time: FINANCIAL PANIC. A lot of it was caused by automation leading to overproduction by farmers while simultaneously laying off their workers. It took years to build up a manufacturing economy, and it helped that after WW2 the USA had no competitors. So we became #1.
joshuaheard 10y ago
The author correlates low growth with high inequality, that is, the money is being held at the top and if only it were redistributed to the middle, the growth floodgates would open. But look where else the growth is: emerging markets in the developing countries. So, the rich are not taking from the middle class, the middle class is losing its value to the developing countries. As low-friction information gets to developing countries, they are able to supplant the western middle class in the manufacturing and service sectors. This problem will be exacerbated as western businesses continue to automate. The solution here is not protectionism or the stricter regulation of markets, but is for the western middle class to adapt to the changing paradigm. How to do that is the essential policy question.
emblem21 10y ago
We are witnessing the death of the hypervisor (global banking), not the virtual machine (nation-state agreements) or the underlying operating system (cultural norms) or the underlying hardware. (nature)

60 points by musha68k 10y ago

The big question then is what replaces laissez faire economics and how? How do we take the best of the free market while ensuring that governments and public sectors are also robust? I feel like software and technology must have a huge role here, but don't know enough to be able to point out specific solutions.

maxerickson 10y ago
I think free markets are fine. We just need a huge revaluation of capital. Downwards.
- kaoD 10y ago
  Isn't the "death of neoliberalism from within" just the market adjusting itself? I think the situation completely fits what free markets propose. The problem is not that the system isn't working but rather that it is working too well and we're witnessing the painful consequences of self-adjusting markets. Self-regulation is cool on paper but in the end we're talking about real people suffering real consequences and, even if the system is adjusting itself, the slowness of "the markets" to realize capital has to trickle down for them to survive (and the resistance of the current capital holders to do so) is producing a lost generation (at best) in the transition. Of course, the fact that nations (the entities supposed to backpressure the power of capital accumulation) are underlyingly controlled by the very same people not interested in changes to the status quo isn't helping at all. The system is working as advertised. The society just wasn't told what it all really meant.
  - kiruwa 10y ago
    The more severe problem is that there is a rather strong argument being made by the "Mises brand of neoliberal" that the primary cause of these problems is the lack of neoliberalism in the central-banking world. Their argument is essentially that the economy-wide boom/bust paradigm is driven by the motivations of the central banks. Normally individual industries and companies would experience fluctuation, but it would not be nearly as damaging without the central banks attempting to 'synchronize' the economy.
  - theseatoms 10y ago
    > painful consequences of self-adjusting markets. The consequences are only painful for certain parties/demographics. Others reap the benefits of change. (If we're going to continue speaking in these broad generalities.)
marricks 10y ago
I think the argument is that what we had before this wave if Neoliberalism, pre 1908s with Keynesian economics is part of the answer. More regulations on the financial sector, stronger unions, etc. Maybe even a bit more protectionism.
elgabogringo 10y ago
We have to actually have laissez faire economics before we can replace it with something.
rqebmm 10y ago
It's important to remember that "free market" does NOT mean "no regulation". A market inherently requires regulations (i.e. contracts, trademarks, currency policy, etc). Even Adam Smith knew this. [0]http://economistsview.typepad.com/economistsview/2010/03/adam-smith-and-the-role-of-government.html http://economistsview.typepad.com/economistsview/2010/03/ada...

kiruwa 10y ago

> Two British examples [of neoliberalism], suggests Will Davies – author of the Limits of Neoliberalism – would be the NHS and universities “where classrooms are being transformed into supermarkets”. Without taking a bit of Davies' argument into the article, that seems to badly undercut the argument. I'm not sure I can imagine a segment of society less neoliberal than either of them. (particularly by comparison to other western democracies)

elgabogringo 10y ago
Exactly, there's nothing free-market about government run Health Care or Schools. This is another case of people using words they don't understand.
- andybak 10y ago
  (Disclaimer: I haven't read the article in depth) My interpretation: neo-liberals have tried to bring market forces to bear on the NHS and Universities - and this is the 'overreach' he is referring to. i.e. the fault isn't with the author - it's with those with overly expansive interpretations of market economics.
  - elgabogringo 10y ago
    I'd say your right about the author of the study (which I am not going to waste time reading) and his NHS/Uni examples - but wrong about the author of the editorial - because it's definitely an editorial, not a piece of reporting.
- URSpider94 10y ago
  As a general rule, I'd be very cautious before assuming that a columnist for The Economist doesn't understand what he is talking about. You may disagree with his conclusions, but that's a different matter. What I believe he's talking about is the introduction of free market dynamics to schools and single-payer health care, two institutions that have been resolutely socialist (in the classical sense of the word) for a long, long time. His belief is that these "modernizations" are destroying the institutions.

rwmj 10y ago

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2016/04/over-estimating-neoliberialism.html http://stumblingandmumbling.typepad.com/stumbling_and_mumbli... points out that "neoliberalism" isn't a thing, ie. not a coherent philosophy. It's just a name for ad hoc greed by many diverse individuals.

fulafel 10y ago
well argued opposing view: http://www.perc.org.uk/project_posts/the-difficulty-of-neoliberalism/ http://www.perc.org.uk/project_posts/the-difficulty-of-neoli... "The reason ‘neoliberalism’ appears to defy easy definition (especially to those with an orthodox training in economics or policy science) is that it refers to a necessarily interdisciplinary, colonising process. It is not about the use of markets or competition to solve narrowly economic problems, but about extending them to address fundamental problems of modernity – a sociological concept if ever there was one. For the same reasons, it remains endlessly incomplete, pushing the boundaries of economic rationality into more and more new territories."

dragonwriter 10y ago

Related to this, I've separately submitted the actual IMF paper [0] referenced (but not linked, the link goes to a Financial Times story about the report) in the article, which has more depth than the somewhat broader-but-fuzzier Guardian article. [0] https://news.ycombinator.com/item?id=11831092 https://news.ycombinator.com/item?id=11831092

elgabogringo 10y ago

Neoliberalism is not a school of economic thought. It's not an actual ideology that anyone associates themselves with. It's a word without any concrete meaning thrown around in order to avoid real discussion. The free market is not failing. Current markets that are failing are hardly "free." What is failing is a system of government regulation and control that supports wall street and the rich at the expense of the middle class. The governments and their federal banks created every single problem called out in the article. To turn around, blame free-markets, and propose more government as the solution is disgustingly disingenuous. The IMF itself is not a proponent of the free market. It exists precisely to support excess government spending and to bail rich bondholders who make donations to politicians. Nothing lassiez faire about that. The laissez faire solution to an overspending government would be bondholders losing money, currency depreciating, and poor leaders being held accountable - to which the IMF is diametrically opposed.

zwerdlds 10y ago
To be fair, it is the IMF - their inherent mission is to lend, it's even in their name.
- kiruwa 10y ago
  Lend to 3rd world plutocrats, then hold their countries responsible for the debt when they run off with the money.
  - zwerdlds 10y ago
    I'm not agreeing with the strategy, it just seemed like the OP had a problem with what the IMF does. For the IMF to stop, it would have to dissolve.
- elgabogringo 10y ago
  What does lending government money to other governments have to do with the free market?
  - 10y ago

riphay 10y ago

We're seeing more and more of these types of articles coming up, but they're all talking about different aspects of the same issue: inability to share growth with wide swaths of the population. In the west, our quality of life has never been higher and products/services have never been cheaper. This has been caused in large part by automation, lean manufacturing, globalization, etc. and each one of these is net positive for society. The problem seems to be that it's become difficult to share these gains with labour in the classical sense; and our society, taxation system, social contract are all based around this meaning of labour. When I see articles about: - Austerity, - Wage growth, - Universal basic income, - Death of middle class, - Rise of right-wing parties, - Anti-free trade lobbying, - Donald Trump and Bernie Sanders; I read all of them with same lens. I know my knowledge of economics is medium at best, but I'm starting to look twice at ideas such as UBI. Maybe there needs to be a rethink of the Western social contract around labour.

caseysoftware 10y ago
Forget about the content of the articles and instead look at the themes. The current system is fundamentally broken and levers that governments have to "fix" things aren't working as they (claim to) want. Everyone is looking for someone to blame instead of debugging what's there and seeing if there is a way to change things before they go (more) catastrophic.
ethbro 10y ago
The biggest problem, when I look at the American labor market, is that it seems physically unjust. The sweat of a person's brow and the wear and tear on their body should have some intrinsic value above and beyond what the market will bear. That someone working as a farm hand, mover, framer, or roofer gets paid a pittance compared to what I earn for sitting in a climate controlled office, moving my fingers, and thinking? I can't reconcile that with any definition of "fair." UBI is perhaps one way to address this. Wealth transfer to increase robotics usage and physical mechanization / automation application is perhaps another. But no one should end up with a broken body at 65 just because we stopped aspiring to do better by each other.
- 10y ago

tim333 10y ago

The article seems a bit vague as to what it means by neoliberalism. It seems to mean the belief that unregulated free markets won't go wrong which I'm not sure anyone really had. Some bits seem to work OK like letting people trade goods and services and some lead to problems like German banks lending to property speculators in Greece and then wanting to be bailed out when the whole thing tanks. The latter was more straight dumb than anything else, at least with hindsight. I'm not sure there's anyone saying I'm a neoliberal and funding the Greek bubble was a good idea. It's a bit of a strawman.

lewis500 10y ago

I am glad the author cites Red Plenty. That is a really excellent book that I think a lot of HN readers would like. It really takes you into frame of mind since lost, with poignance and good characters. It is important to note we live in an age of diminished expectations not just for what capitalism can do but for what government can do, too. Thus, I'm not sure if the fact neoliberalism is disappointing actually means we need a new system. Do we need bigger government, than the current trend, in the US? The government is projected to grow quite a lot as is. We spend more and more money on education and health care every year, with disappointing results. Look at the Medicaid experiment in Oregon: Finkelstein et al (2015) find very little positive health impacts. Obamacare has cut the number of uninsured, but I would guess its impact on actual health will turn out to be very mild. Access to health care and spending on health care are not very much correlated with health outcomes, as the more costly health care is based on deliberate obfuscation or sloppy statistics or promises meager gains (e.g., slightly shrinking a tumor) in the first place. Neither charter schools, on average, nor public school reforms seem to have helped close the opportunity gap much. The Iraq/Afghanistan wars cost like $2 trillion. Many of the largest public pension plans around the US do not have enough assets to make ends meet, even counting on delusional 7 percent returns! Prisons exploded, and nobody seems happy with that. That land-use regulation has become baroque and suffocating shakedown is something I don't think I need to convince anyone in the Bay of. The best cars are made in non-union shops (e.g., tesla and all the new southern factories). It is interesting that things generally are moving slowly on all fronts, but I don't think that's necessarily a reason to change course. If you are stuck in a slow left lane of traffic, it doesn't necessarily mean you should get in the right lane.

moridinamael 10y ago

"fiscal waterboarding"

puranjay 10y ago

the thing about capitalism is that capitalism has no ideology, only the profit motive (nothing wrong with that) if tomorrow the capitalists of the world were to figure out that communism is more profitable and efficient for conducting business, they would change their ideology accordingly. capitalism can't die because capitalism is innate to human beings; it is infinitely adaptable and flexible

wfo 10y ago
Profit motive above all else is literally the prototypical example of an ideology, just not one that most people would publicly espouse.
- vixen99 10y ago
  No, it's one that everyone and all life espouses. All human interactions are transactions which express this 'ideology' as you misleadingly call it. Eric Berne understood this in 'Games People Play'. You transact because you get value; you profit. Only dead people don't transact which is why we dispose of their bodies. The profit motive is why we're alive and why evolution of life on this planet has arisen. It's deep within our genes.
  - wfo 10y ago
    A beautifully expressed fundamentalist ideology; you are incapable of even comprehending that there exist views other than your own.
dmfdmf 10y ago
> the thing about capitalism is that capitalism has no ideology I beg to differ. What is capitalism? http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/0451147952 http://www.amazon.com/Capitalism-Ideal-Ayn-Rand/dp/045114795... What is its ethical base? http://www.amazon.com/Virtue-Selfishness-Centennial-Ayn-Rand/dp/0451163931/ http://www.amazon.com/Virtue-Selfishness-Centennial-Ayn-Rand... You may disagree but no one can say it has not been said.

areyoucrazy 10y ago

Communists have been saying neoliberalism(nonsense term, which serves as an insult)/capitalism is going to fall, but it ain't happening. It's stronger than ever. They're like Christians expecting rapture.

djsumdog 10y ago
Are you serious? Capitalism has been failing most of this planet! You just don't think it's failing because you live in a mid-to-high income nation. One day those nations will run out of others to have war with and steal from. The earth has a lot of resources, but it's finite. This will all end one day.
- vixen99 10y ago
  You need to check your facts. 'World poverty is shrinking rapidly, new index reveals'. http://www.theguardian.com/society/2013/mar/17/aid-trade-reduce-acute-poverty http://www.theguardian.com/society/2013/mar/17/aid-trade-red... 'Some of the poorest people in the world are becoming significantly less poor, according to a groundbreaking academic study which has taken a new approach to measuring deprivation. The report, by Oxford University's poverty and human development initiative, predicts that countries among the most impoverished in the world could see acute poverty eradicated within 20 years if they continue at present rates.' Why is this happening? Because our world has enabled people to trade with each other; that's another term for capitalism. As Tim Worsfall has put it: 'Choice, consumers, consumption, these are not things to be disdained from the comfort of an Islington eyrie, they are the entire damn point of having a society or an economy in the first place.' The basic problem with your view: Today one can literally go from kindergarten to becoming a graduate student seeking a Ph.D., without ever hearing a vision of the world that conflicts with the vision of the left.
- generj 10y ago
  That is so very far removed from the historical reality. Look up a chart of Global real GDP/capita over time. You may suspect that all this wealth goes to the wealthy (unlikely even from a historical perspective, look at all the servants Bill Gates doesn't have that even a slightly well-off English family would have). If you think this, you can lookup a chart of GDP/capita growth per country across the world. Failing this, there are charts with real GDP growth split across income levels (though not for all countries). Failures in capitalism are usually a failure in governance. It's no surprise at all that countries with repressive or unstable regimes have the worst economies. Many countries which were once poor are now rich - even over the lifespan of people still living. The Asian tigers went from terrible conditions to skyscrapers in less than 30-40 years. People's grandchildren could expect to make 7 to 8 times as much as their grandparents. Every country is better off today than it was in the 1500s, 1600s, 1700s, 1800s, and the start of the 1900s. Wars are less frequent for almost the entire globe. You have a failed understanding of economics. We don't compete/steal from others when our quality of living goes up. Instead, we raise the quality of living of others. Look at China: when they started making our consumer goods, many people's quality of living went from mud huts to apartment high-rises with Starbucks downstairs. And we didn't really lose out - on average, we found new types of jobs, mostly service jobs, which it turns out we can do more productively than we could produce consumer goods. Look, the Earth has many more resources than we are currently using. We could produce food for the world with only a tiny fraction of the world's irrigated land. If we run low on a particular resource, we will pivot past that rarity with engineering, both social and physical. Malthusian predictions have thus far all failed spectacularly. In fact, the more population we have, the more specialized we can be, and the better off we are. It's not theory - it's what history has shown us, over and over again, across the world.

lucozade 10y ago

Somewhat tangentially, I wonder if the kind of misrepresentation* present in this article is going to get better or worse in the future. The fact that, in a lot of cases, it's trivial to go read the source [0] makes me feel that it should dwindle. However, it seems that, with the substantial increase in content available, having more strident views is required to be heard. * by misrepresentation I mean that the article was by no means a denial of "neo-liberalism". It was generally very positive about free market economics but looked at 2 niche areas and concluded that 1) short term capital controls may sometimes be worth doing and 2) deficit reduction isn't that valuable in very prosperous countries but is in weaker economies. Not quite what Mr Chakrabortty said it said. [0] http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm

EGreg 10y ago

Reminds me of this: http://m.youtube.com/watch?v=qOP2V_np2c0 http://m.youtube.com/watch?v=qOP2V_np2c0 I personally believe it is all the automation and outsourcing that is changing the fundamentals and causing a drop in the demand for human labor - thus undermining our trusty wage-based mechanisms to get money to the masses, who then spend it back on necessities. The drop in demand means less investment and lending. So the money supply shrinks. The "Great Depression" was coined as a term by Hoover because it sounded calmer than the term commonly used at the time: FINANCIAL PANIC. A lot of it was caused by automation leading to overproduction by farmers while simultaneously laying off their workers. It took years to build up a manufacturing economy, and it helped that after WW2 the USA had no competitors. So we became #1.

joshuaheard 10y ago

The author correlates low growth with high inequality, that is, the money is being held at the top and if only it were redistributed to the middle, the growth floodgates would open. But look where else the growth is: emerging markets in the developing countries. So, the rich are not taking from the middle class, the middle class is losing its value to the developing countries. As low-friction information gets to developing countries, they are able to supplant the western middle class in the manufacturing and service sectors. This problem will be exacerbated as western businesses continue to automate. The solution here is not protectionism or the stricter regulation of markets, but is for the western middle class to adapt to the changing paradigm. How to do that is the essential policy question.

emblem21 10y ago

We are witnessing the death of the hypervisor (global banking), not the virtual machine (nation-state agreements) or the underlying operating system (cultural norms) or the underlying hardware. (nature)