Tuesday, October 18, 2016

Chris Dillow on what's not to like about neoliberalism

I wish the professors at school could reason so fairly and equitably about neoliberalism and free-market capitalism as Marxist Chris Dillow:

I agree that capitalism has been a force for progress – as, of course, did Marx. I agree that hard-core libertarianism is a difficult position to sustain; it always required a very selective reading to suggest that Adam Smith was a libertarian. And I agree on the need for some kind of mixed economy.

However, there are (very roughly speaking!) two types of mixed economy.

In healthy versions, the government corrects market failures whilst the market corrects government failures, and government acts to support entrepreneurship, perhaps in more ways than merely providing stable property rights – for example by ensuring the availability of finance and funding or even conducting fundamental research.

In unhealthy versions, however, we have crony capitalism in which the state supports capitalists at the expense of workers and funnels cash towards favoured clients.

And here’s the problem. For many of us, neoliberalism – insofar as it means anything – is the ideology which helps sustain the latter. Many on the left use “neoliberalism” to describe not just free market economics but also managerialism, hostility to the working class, the crass pursuit of wealth and power and the use of the state to enrich capitalists for example via the too big to fail subsidy to banks. 

I'd go further and say that there's "economics" and then there's "neoliberal propaganda", and a lot of economics Ph.D.s either don't seem to be able to tell the difference which is which, or purposefully teach the latter.

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