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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

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?
  - zwerdlds 10y ago
    The IMF is a lender of last resort. Governments aren't forced to utilize them, and evidence shows that currency devaluation is often a better strategy. Having unfavorable terms, as you've described, makes the bitter pill of devaluation look a little sweeter. But in response to your question, I'm not sure how it's not free market. Can you describe specifically what doesn't get covered from the "it's not forced lending" argument?
    - elgabogringo 10y ago
      One government overspends, gets bailed out by a quasi-government entity that is funded by other governments. This is government intervention in currency in debt markets, by definition not laissez faire.
      - zwerdlds 10y ago
        It seems like you have an issue with government-level intervention in general. Is that the case?
Bombthecat 10y ago
And removing the government would give the rich 100% control. So what would be a solution?
- elgabogringo 10y ago
  The government in this case isn't restraining the rich. It's protecting them.
  - collyw 10y ago
    Its enriching them even further. https://www.theguardian.com/business/2015/apr/26/recession-rich-britains-wealthiest-double-net-worth-since-crisis https://www.theguardian.com/business/2015/apr/26/recession-r...
- ende 10y ago
  The rich are the government. To limit government is to limit the source of power of the rich.
marricks 10y ago
You're blaming government regulations! That's absurd given many people at this point have said that the deregulation of the 90's on the financial sector is what lead to much of our housing financial crisis, not to mention the widening pay gap. Your comment might actually be a good representation of how Neoliberal ideas of deregulation will continue to flourish despite them hampering to middle and lower classes. People will just say it's different sorts of regulations causing the problem, going even further down that path... EDIT: What's scary to consider is the era of strong wage increases and financial regulation from the 50's to 80's only started by a cataclysmic event, the Great Depression. Given how many large corporations and well off people benefit from the current system it's hard to imagine how we will see real increase in financial regulation similar to the Glass–Steagall Legislation until something of similar magnitude happens. Given climate change is only going to get worse, I guess a pretty big catastrophe coming our way and causing similar change soon-ish isn't that far fetched.
- kiruwa 10y ago
  > You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actually a valid argument. Most of the people in your consensus have been journalists, not economists. (economists are mostly trying to get people to understand that the causes are way more complex than the journalists want to believe)
  - marricks 10y ago
    1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indication. Of course your right though in the sense it's many things happening together, and the finger can never be pointed at one person let alone one group of policies. Still many people see the increased volatility caused by that regulation as a pretty big part of the cause. [0] http://www.nytimes.com/2008/09/27/business/27sec.html http://www.nytimes.com/2008/09/27/business/27sec.html
djsumdog 10y ago
Markets don't exist without States. You cannot have a market without a State, and therefore you cannot have a "free market". They don't exists. The idea that there is or can be a free market is one of the great myths of our civilization (along with the idea that humans started out with barter based economies. We didn't. The earliest economies in human history were based around credit). I highly recommend the book Debt: The First 5000 Years. It's pretty life changing.
- Snargorf 10y ago
  Markets don't exist without states? Do you not believe that markets existed 1000, 2000, 5000 years ago, in areas that were tribal or feudal or in anarchy? Do you not believe that markets exist in Somalia and other conflict zones today, where there is no functioning government? Markets exist any time there are two or more people with goods that they could and would trade.
  - generj 10y ago
    1) Tribes/Feudal Lords ARE government, albeit often not effective/efficient government. 2) You'll find that in an anarchy situation, mysteriously there is some market governing force...like a tribe, or guilds, or even just a shared understanding of how the market/society is to function. Even mob justice is a sort of governance, and the definition of what the mob will allow before uprising is the law of the land... 3) While there are markets in conflict zones, they aren't free markets. Free markets by definition require things like homogeneous products and perfect information. Perfect information has never existed in a conflict zone, and it never will. 4) In order for a market which approaches "free" to exist, there must be some governing entity to setup and enforce rules of trade, fund basic infrastructure which the market relies upon, provide peace which minimizes volatility for the market, etc. Even the staunchest of free market economists have made this point for centuries. Adam Smith and Friedman both are very much in favor of governments in some fashion or another. I guess you could say that markets exist without governments, but they certainly aren't efficient ones.
    - andrenth 10y ago
eli_gottlieb 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. Then why do IMF economists refer to it as a real thing that the IMF actually practiced? >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. Then why is the IMF's usual advice to almost all countries to cut "excess" government spending on social programs while privatizing the kinds of revenue-making national resources/firms that keep the government from having to tax too much?
clarkmoody 10y ago
Thank you for this clarification. Hand-wavy editorials about economic busts always come across half-baked and incoherent when they blame the "free market." Inequality remains a massive red herring. Instead we should be concerned about the absolute standard of living and the level of corporate-government corruption.
- elgabogringo 10y ago
  Inequality isn't a red herring - not IMO. It's the natural outcome of our fed policies, which have existed largely to recapitalize banks. They've hampered growth (hitting the middle class) while causing asset inflation (and how owns assets? The rich.) So inequality is real, but not for the reasons most think.
  - clarkmoody 10y ago
    Don't want to have a back-and-forth about inequality. But at it's most basic level, what does it matter to me if someone else has lots of money/wealth? As long as they can't buy off government officials either through lobbying or cash bribes, then I don't care. Also, large and growing inequality is usually a symptom of a more deeper issue in an economy. Pushing to "fix inequality" is just patching a symptom, and proposed solutions usually involve giving more power to the state (which is probably the root of the inequality problem). And modern "inequality" in Western economies is nothing compared to what it was in the past, hence my comment about absolute standard of living. Historically, inequality meant that the aristocracy rode around in carriages while the peasants walked barefoot. Now, the rich have fancy cars / jets, and the "poor" have cheap cars. But everyone has cars! (or access to mass transit for most Europeans -- I'm coming from a US-centric view). Absolute standard of living has increased to an unbelievable level: 200 years ago, we worked outside on farms doing back-breaking labor from sunup to sundown. Now, a vanishingly small proportion works the farms, and even the tractors are air-conditioned. And absolute standard of living continues to rise for much of the world. So what if there's inequality? We are so much better off than we have ever been, in absolute terms.
    - elgabogringo 10y ago
wfo 10y ago
Of course it is an explicit ideology that many associate themselves with (though not by name, since it's become something of a slur because it's so obviously religious about the "free market" and hated because of this). It's explained clearly in TFA. Of course, the classic rabid libertarian answer -- any time any economic failure happens, blame regulations. When we free the markets, and the markets fail to provide anything we want (income equality, fairness, a middle class, a healthy society) -- the obvious conclusion? The markets aren't free enough. Deregulate, so the wealthy can make a killing abusing the poor more than they already do.
- pdeuchler 10y ago
  Ahhhh yes, the wonderful false dichotomy of "accept the ruling class' protectionist regulations" or "no regulations whatsoever" Didn't expect to see that come up on a thread about neoliberalism...
- icebraining 10y ago
  Noam Chomsky, that rabid right-wing libertarian: What’s called the capitalist system is very far from any model of capitalism or market. Take the fossil fuels industries: there was a recent study by the IMF which tried to estimate the subsidy that energy corporations get from governments. The total was colossal. I think it was around $5 trillion annually. That’s got nothing to do with markets and capitalism. https://www.jacobinmag.com/2015/09/noam-chomsky-bernie-sanders-greece-tsipras-grexit-austerity-neoliberalism-protest/ https://www.jacobinmag.com/2015/09/noam-chomsky-bernie-sande... -- The problem is that capitalists use the language of free markets, but are not actually proponents of its wide application, just where it benefits them. Or to put it more pithily: capitalists don't like capitalism. So you get localized deregulations and strong regulations (example [1]) where it benefits them. But we should distinguish the cases. [1] http://www.wsj.com/articles/trade-groups-for-chemical-firms-in-a-twist-seek-more-u-s-regulation-1450348202 http://www.wsj.com/articles/trade-groups-for-chemical-firms-...
  - bubbleRefuge 10y ago
    OMG. Very true. The hypocrisy is sickening and finally people are waking up to it. For example, look at Paul Ryan. Tea Party, no-liberal , yada, yada, yada comes from a privileged wealth family owning a construction business fed from government contracts.
pdeuchler 10y ago
Exactly. This is merely more gamesmanship for the long con. What do you do when vocal critics of your policies seem to be gaining steam? Agree with them! Use their ill defined terminology to label the failures not intrinsic to your plans as the "bad" things, say you won't do them anymore, and double down on your true ideology. The real tell here is there is no mention of the economic colonialism of Africa and Asia. No mention of Iraq, Libya, Yemen, ISIS, etc. etc. As an aside, I think a lot of commenters on this thread don't seem to realize you can be a proponent of government regulation and still criticize the crappy (some would say purposefully crappy) job that's being done in their name.
dv_dt 10y ago
To me there is an inherent contradiction in the concept of a 'free market'. They work very poorly unless there is protection of a number of market attributes. One fundamental attribute is the protection of property rights - otherwise that market would be chaos and whoever could muster the most force could automatically take everyone else's property and destroy the 'free market.' But the very act of 'protecting property rights' isn't as simple as just the enforcement of who owns what physical thing. There are fuzzy lines all over the place e.g. if I buy a beautiful plot of land to live on, and a neighbour sells their land for use as a garbage dump - how is that resolved? So when someone criticizes that its not the 'free market' that failing, I think that's partially right and partially wrong. What often fails is our many rules (i.e. regulation) to try and build this abstraction of a 'free market', but when someone says the free market isn't failing because it can't because of gov't regulation - well .. this is wrong too, because without some form of framework of regulation (formal or informal) I don't believe you'd find any stable large scale free markets. The other issue here is when people say 'free markets', I think they unconsciously mean efficient free markets. And then there are a number of other attributes that really need to be there in the abstraction for it to work (e.g. reasonable information equity between sellers/buyers).
coupdetaco 10y ago
You seem confused. neoliberalism is a term used to critique what certain people told us they were doing. The term is Very Necessary to understand the United States right now. But don't take my word for it! http://majority.fm/tag/wendy-brown/ http://majority.fm/tag/wendy-brown/
coupdetaco 10y ago
Ah! You see, you have entered into a disagreement amongst them! Plenty of neoliberals, aka folks who think competition is the best and that competition brings out the best in everything, still believe that you still have to first organize markets and make sure they are competitive, i.e. It is not the natural state of things in each and every realm of life.

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?
- zwerdlds 10y ago
  The IMF is a lender of last resort. Governments aren't forced to utilize them, and evidence shows that currency devaluation is often a better strategy. Having unfavorable terms, as you've described, makes the bitter pill of devaluation look a little sweeter. But in response to your question, I'm not sure how it's not free market. Can you describe specifically what doesn't get covered from the "it's not forced lending" argument?
  - elgabogringo 10y ago
    One government overspends, gets bailed out by a quasi-government entity that is funded by other governments. This is government intervention in currency in debt markets, by definition not laissez faire.
    - zwerdlds 10y ago
      It seems like you have an issue with government-level intervention in general. Is that the case?

Bombthecat 10y ago

And removing the government would give the rich 100% control. So what would be a solution?

elgabogringo 10y ago
The government in this case isn't restraining the rich. It's protecting them.
- collyw 10y ago
  Its enriching them even further. https://www.theguardian.com/business/2015/apr/26/recession-rich-britains-wealthiest-double-net-worth-since-crisis https://www.theguardian.com/business/2015/apr/26/recession-r...
ende 10y ago
The rich are the government. To limit government is to limit the source of power of the rich.

marricks 10y ago

You're blaming government regulations! That's absurd given many people at this point have said that the deregulation of the 90's on the financial sector is what lead to much of our housing financial crisis, not to mention the widening pay gap. Your comment might actually be a good representation of how Neoliberal ideas of deregulation will continue to flourish despite them hampering to middle and lower classes. People will just say it's different sorts of regulations causing the problem, going even further down that path... EDIT: What's scary to consider is the era of strong wage increases and financial regulation from the 50's to 80's only started by a cataclysmic event, the Great Depression. Given how many large corporations and well off people benefit from the current system it's hard to imagine how we will see real increase in financial regulation similar to the Glass–Steagall Legislation until something of similar magnitude happens. Given climate change is only going to get worse, I guess a pretty big catastrophe coming our way and causing similar change soon-ish isn't that far fetched.

kiruwa 10y ago
> You're blaming government regulations! That's absurd given many people at this point have said that 1) That's not actually what he said. He said that the regulatory apparatus is currently working to assist rent-seeking and pushing wealth to the "1%". Regulation has been used to protect the wealth of the wealthy from the consequences of a free market, at everyone else's expense. 2) Argument from consensus isn't actually a valid argument. Most of the people in your consensus have been journalists, not economists. (economists are mostly trying to get people to understand that the causes are way more complex than the journalists want to believe)
- marricks 10y ago
  1) I'm discussing the narrative, the poster only cites over-regulation as a problem, which I haven't seen bail-outs called before. The language implies government rules are the problem. 2) Many notable economists actually blame deregulation, such as Alan Greenspan & the SEC [0]. I think the man who oversaw much of the deregulation while it was happening calling it a problem in hindsight is a pretty darn good indication. Of course your right though in the sense it's many things happening together, and the finger can never be pointed at one person let alone one group of policies. Still many people see the increased volatility caused by that regulation as a pretty big part of the cause. [0] http://www.nytimes.com/2008/09/27/business/27sec.html http://www.nytimes.com/2008/09/27/business/27sec.html

djsumdog 10y ago

Markets don't exist without States. You cannot have a market without a State, and therefore you cannot have a "free market". They don't exists. The idea that there is or can be a free market is one of the great myths of our civilization (along with the idea that humans started out with barter based economies. We didn't. The earliest economies in human history were based around credit). I highly recommend the book Debt: The First 5000 Years. It's pretty life changing.

Snargorf 10y ago
Markets don't exist without states? Do you not believe that markets existed 1000, 2000, 5000 years ago, in areas that were tribal or feudal or in anarchy? Do you not believe that markets exist in Somalia and other conflict zones today, where there is no functioning government? Markets exist any time there are two or more people with goods that they could and would trade.
- generj 10y ago
  1) Tribes/Feudal Lords ARE government, albeit often not effective/efficient government. 2) You'll find that in an anarchy situation, mysteriously there is some market governing force...like a tribe, or guilds, or even just a shared understanding of how the market/society is to function. Even mob justice is a sort of governance, and the definition of what the mob will allow before uprising is the law of the land... 3) While there are markets in conflict zones, they aren't free markets. Free markets by definition require things like homogeneous products and perfect information. Perfect information has never existed in a conflict zone, and it never will. 4) In order for a market which approaches "free" to exist, there must be some governing entity to setup and enforce rules of trade, fund basic infrastructure which the market relies upon, provide peace which minimizes volatility for the market, etc. Even the staunchest of free market economists have made this point for centuries. Adam Smith and Friedman both are very much in favor of governments in some fashion or another. I guess you could say that markets exist without governments, but they certainly aren't efficient ones.
  - andrenth 10y ago

eli_gottlieb 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. Then why do IMF economists refer to it as a real thing that the IMF actually practiced? >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. Then why is the IMF's usual advice to almost all countries to cut "excess" government spending on social programs while privatizing the kinds of revenue-making national resources/firms that keep the government from having to tax too much?

clarkmoody 10y ago

Thank you for this clarification. Hand-wavy editorials about economic busts always come across half-baked and incoherent when they blame the "free market." Inequality remains a massive red herring. Instead we should be concerned about the absolute standard of living and the level of corporate-government corruption.

elgabogringo 10y ago
Inequality isn't a red herring - not IMO. It's the natural outcome of our fed policies, which have existed largely to recapitalize banks. They've hampered growth (hitting the middle class) while causing asset inflation (and how owns assets? The rich.) So inequality is real, but not for the reasons most think.
- clarkmoody 10y ago
  Don't want to have a back-and-forth about inequality. But at it's most basic level, what does it matter to me if someone else has lots of money/wealth? As long as they can't buy off government officials either through lobbying or cash bribes, then I don't care. Also, large and growing inequality is usually a symptom of a more deeper issue in an economy. Pushing to "fix inequality" is just patching a symptom, and proposed solutions usually involve giving more power to the state (which is probably the root of the inequality problem). And modern "inequality" in Western economies is nothing compared to what it was in the past, hence my comment about absolute standard of living. Historically, inequality meant that the aristocracy rode around in carriages while the peasants walked barefoot. Now, the rich have fancy cars / jets, and the "poor" have cheap cars. But everyone has cars! (or access to mass transit for most Europeans -- I'm coming from a US-centric view). Absolute standard of living has increased to an unbelievable level: 200 years ago, we worked outside on farms doing back-breaking labor from sunup to sundown. Now, a vanishingly small proportion works the farms, and even the tractors are air-conditioned. And absolute standard of living continues to rise for much of the world. So what if there's inequality? We are so much better off than we have ever been, in absolute terms.
  - elgabogringo 10y ago

wfo 10y ago

Of course it is an explicit ideology that many associate themselves with (though not by name, since it's become something of a slur because it's so obviously religious about the "free market" and hated because of this). It's explained clearly in TFA. Of course, the classic rabid libertarian answer -- any time any economic failure happens, blame regulations. When we free the markets, and the markets fail to provide anything we want (income equality, fairness, a middle class, a healthy society) -- the obvious conclusion? The markets aren't free enough. Deregulate, so the wealthy can make a killing abusing the poor more than they already do.

pdeuchler 10y ago
Ahhhh yes, the wonderful false dichotomy of "accept the ruling class' protectionist regulations" or "no regulations whatsoever" Didn't expect to see that come up on a thread about neoliberalism...
icebraining 10y ago
Noam Chomsky, that rabid right-wing libertarian: What’s called the capitalist system is very far from any model of capitalism or market. Take the fossil fuels industries: there was a recent study by the IMF which tried to estimate the subsidy that energy corporations get from governments. The total was colossal. I think it was around $5 trillion annually. That’s got nothing to do with markets and capitalism. https://www.jacobinmag.com/2015/09/noam-chomsky-bernie-sanders-greece-tsipras-grexit-austerity-neoliberalism-protest/ https://www.jacobinmag.com/2015/09/noam-chomsky-bernie-sande... -- The problem is that capitalists use the language of free markets, but are not actually proponents of its wide application, just where it benefits them. Or to put it more pithily: capitalists don't like capitalism. So you get localized deregulations and strong regulations (example [1]) where it benefits them. But we should distinguish the cases. [1] http://www.wsj.com/articles/trade-groups-for-chemical-firms-in-a-twist-seek-more-u-s-regulation-1450348202 http://www.wsj.com/articles/trade-groups-for-chemical-firms-...
- bubbleRefuge 10y ago
  OMG. Very true. The hypocrisy is sickening and finally people are waking up to it. For example, look at Paul Ryan. Tea Party, no-liberal , yada, yada, yada comes from a privileged wealth family owning a construction business fed from government contracts.

pdeuchler 10y ago

Exactly. This is merely more gamesmanship for the long con. What do you do when vocal critics of your policies seem to be gaining steam? Agree with them! Use their ill defined terminology to label the failures not intrinsic to your plans as the "bad" things, say you won't do them anymore, and double down on your true ideology. The real tell here is there is no mention of the economic colonialism of Africa and Asia. No mention of Iraq, Libya, Yemen, ISIS, etc. etc. As an aside, I think a lot of commenters on this thread don't seem to realize you can be a proponent of government regulation and still criticize the crappy (some would say purposefully crappy) job that's being done in their name.

dv_dt 10y ago

To me there is an inherent contradiction in the concept of a 'free market'. They work very poorly unless there is protection of a number of market attributes. One fundamental attribute is the protection of property rights - otherwise that market would be chaos and whoever could muster the most force could automatically take everyone else's property and destroy the 'free market.' But the very act of 'protecting property rights' isn't as simple as just the enforcement of who owns what physical thing. There are fuzzy lines all over the place e.g. if I buy a beautiful plot of land to live on, and a neighbour sells their land for use as a garbage dump - how is that resolved? So when someone criticizes that its not the 'free market' that failing, I think that's partially right and partially wrong. What often fails is our many rules (i.e. regulation) to try and build this abstraction of a 'free market', but when someone says the free market isn't failing because it can't because of gov't regulation - well .. this is wrong too, because without some form of framework of regulation (formal or informal) I don't believe you'd find any stable large scale free markets. The other issue here is when people say 'free markets', I think they unconsciously mean efficient free markets. And then there are a number of other attributes that really need to be there in the abstraction for it to work (e.g. reasonable information equity between sellers/buyers).

coupdetaco 10y ago

You seem confused. neoliberalism is a term used to critique what certain people told us they were doing. The term is Very Necessary to understand the United States right now. But don't take my word for it! http://majority.fm/tag/wendy-brown/ http://majority.fm/tag/wendy-brown/

coupdetaco 10y ago

Ah! You see, you have entered into a disagreement amongst them! Plenty of neoliberals, aka folks who think competition is the best and that competition brings out the best in everything, still believe that you still have to first organize markets and make sure they are competitive, i.e. It is not the natural state of things in each and every realm of life.