After the Second World War, most countries were in a parlous financial position. There was no question of going back to the gold standard. Thus America created the Bretton Woods system of fixed exchange rates such that officials and bureaucrats, but also some trained economists, had greater salience than financial markets. Once the Bretton Woods system collapsed- because America financed the Vietnam war by printing money and also OPEC wanted a better deal- Milton Friedman, who advocated floating exchange rates, gained an international following. Hayek had previously attracted some attention by attacking bureaucratic controls on the economy. He too was vindicated as it became apparent that the Soviet Union was very inefficient and sclerotic. The left-liberal economists in the Academy never really recovered from this blow- more particularly as China embraced free markets and the Soviet Union collapsed. One liberal who didn't get the memo was Stiglitz who once again argues the toss in his latest book- 'Economics and the Good society'.
Political debates often don’t take on quite the sophistication and complexity of the intellectual debates that lie behind them and, in part, motivate them.
Equally, they may be less crazy.
With the Iron Curtain coming down in 1991 and China declaring that it, too, was going to be a market economy, albeit “with Chinese characteristics” (whatever that meant),
We know what that meant. The ruling party would retain 'residuary control rights' over the economy- not to mention the populace.
there was a broad consensus that the extremes of socialism/communism with government ownership (and implicitly, control) of everything, on the one hand, and a totally unfettered market (of the kind that the Mont Pelerin Society had been advocating), on the other, were things of the past.
Or the future. The Hayekian argument re. information asymmetry might be overcome by computer technology. By the end of the Sixties, Communists thought that Command Economies could use networked computers to solve the resource allocation problem more efficiently. Equally, 'mechanism design' using 'Big Data' might enable mixed economies to achieve anything Command economies could do without abolishing private property.
Political scientist and economist Francis Fukuyama could even celebrate this as “the end of history,” as our understanding of economic and political systems had converged into the “correct solution”—market economies and liberal democracies.
Stiglitz knows there was an earlier 'convergence hypothesis' championed by Tinbergen and Galbraith. Socialist and Capitalism economies would look more and more similar with 'administered pricing' displacing open markets.
There was a search for the best “third way” between the far left and far right, since there was a lot of space between the extremes of the Mont Pelerin Society and communism.
That 'third war' had been around from even before there was a Bolshevik revolution.
It made a big difference exactly where between the two one situated oneself. Politically, this was reflected in battles within and between the center left and center right.
There was no battle. The thing was as boring as shit.
The political debate shaped up most clearly during the presidency of Bill Clinton—
what fucking debate occurred at that time? Clinton did a U-turn shortly after taking power and embraced 'workfare' and 'three strikes' thus outflanking the Republicans on the right.
for instance, between those in Clinton’s administration focused on the environment, inequality, and making the economy more competitive, and those focused on debt, interest rates, deregulation, liberalization, and growth.
in other words, boring shitheads vs even more boring shitheads. What mattered was if elites could make a lot of money out of what looked like giving Blacks and Women and working class people a better deal.
For the most part, the latter group won out.
Nobody won. Some got rich. Others got richer.
The system that evolved in the last quarter of the twentieth century on both sides of the Atlantic came to be called neoliberalism.
Because 'Classical Liberalism' was about propertied White men- preferably with a gentlemanly acquaintance with the prose of Cicero.
“Liberal” refers to being “free,” in this context, free of government intervention including regulations. The “neo” meant to suggest that there was something new in it; in reality, it was little different from the liberalism and laissez-faire doctrines of the nineteenth century that advised: “leave it to the market.”
The Classical Liberal was skeptical about the advisability of giving the vote to women and workers. Also, darkies ought not to be granted Independence.
Indeed, those ideas held such sway even into the twentieth century that, decades earlier, the dominant economists had said “do nothing” in response to the Great Depression.
To be fair, they were also saying 'don't do stupid shit'- e.g. banning private ownership of gold
They believed the market would restore itself relatively quickly as long as the government didn’t fiddle around and mess things up.
For example, by cutting the salaries of civil servants and raising taxes.
What really was new was the trick of claiming neoliberalism stripped away rules when much of what it was doing was imposing new rules that favored banks and the wealthy.
Everything is a trick. Did you know that the Patriarchy caused some people to have dicks. Since dicks cause RAPE- including rape of the environment- it follows that NOT UNTIL DICKS ARE BANNED can we prevent the Globe from getting very hot and bothered.
What really was new was the trick of claiming neoliberalism stripped away rules when much of what it was doing was imposing new rules that favored banks and the wealthy.
Also, neoliberalism was aiding and abetting Patriarchy by causing some peeps to have dicks. +
For instance, the so-called deregulation of the banks got government temporarily out of the way, which allowed bankers to reap rewards for themselves.
Previously bankers worked on a voluntary basis. They lived in homeless shelters and queued up at the soup kitchen. Neoliberalism caused some bankers to have dicks which they used to RAPE the economy. That's how come bankers with names like Rothschild or JP Morgan were able to buy fancy clothes and mansions and such like.
But then, with the 2008 financial crisis, government took center stage as it funded the largest bailout in history, courtesy of taxpayers.
The Government made a profit on the bailout. Taxpayers were very angry that the Government hadn't permitted the economy to implode. Also the Government failed to ban dicks even though dicks cause RAPE.
Bankers profited at the expense of the rest of society.
Some bankers had dicks which they used to RAPE the economy and the environment and also large swathes of the Milky Way.
In dollar terms, the cost to the rest of us exceeded the banks’ gains.
The fact that there is an economy costs the rest of us and arm and a leg. This is because in a state of nature, everybody would have three arms and three legs. Patriarchy persuaded Neoliberalism to cut off the third arm and leg and give some people dicks. But dicks cause RAPE.
Neoliberalism in practice was what can be described as “ersatz capitalism,” in which losses are socialized and gains privatized.
Whereas, what we want is a state of nature where losses are individualized- i.e. people who fall sick or who lose their job quickly starve to death- whereas all gains are confiscated by the State. Thus if you and your partner have a baby- the Government confiscates the baby and eats it.
Neoliberal economists constructed a theory to support their views, not surprisingly called neoclassical economics.
Nonsense! Neo-classical econ is 'marginalist'. Marshall was one but he turned against women's suffrage. Pareto was another. His followers tended to be cool with Fascism. Abba Lerner, in the Thirties, was trying to convert Trotsky to marginal cost pricing. It was only after the war that you have a neo-liberalism which does not give a privileged place to upper class gentlemen- preferably those with considerable inherited wealth, vast ancestral estates, and a University education- belonging to the right Race and Christian sect.
The name evoked nineteenth-century classical economics, with the “neo” emphasizing it had been put on firmer foundations, which in practice meant putting it into mathematical scribbles.
Calculus. This is because it is the rate of change, at the margin, is what is important.
Some neoclassical economists were slightly schizophrenic, recognizing that markets often don’t generate full employment on their own, so Keynesian policies are sometimes required;
It is obvious that there is an externality effect to aggregate consumption as well as Investment.
but once the economy is restored to full employment, classical economics prevails. This idea, pushed by my teacher Paul Samuelson, was called the neoclassical synthesis.
IS-LM curves. Sadly, they aren't stable.
It was a highly influential assertion, with no basis in either theory or empirics.
Just like Stiglitz's own silly assertions.
The call for a return to liberalism with the new name neoliberalism, in the middle of the last century, flew in the face of what had happened during the Great Depression. It was akin to Hitler’s Big Lie.
Samuelson would personally push Jews and Homosexuals into cattle trucks.
In light of the Great Depression, the economic argument that markets on their own were efficient and stable seemed absurd.
Because externalities and non-convexities exist.
(It was a Big Lie in another sense: the reality was that the government was taking on a large role, no matter how one measured it—share of GDP or share of employment.
Because public and club goods have high income elasticity of demand. So long as, by 'Director's Law', the median voter benefited, the State's share of GDP rose if National Income was rising.
Over time, democratic political systems had identified areas in which markets were not delivering what societies wanted and needed,
or else immigrants or colored people were disproportionately benefiting
like retirement benefits,
these can be curtailed- as the Greeks realized
and countries had figured out ways of doing so publicly.)Belief in the market (and the materialism associated with it—the more GDP, the better) became, for many around the world, the late-twentieth-century religion.
No. The late twentieth-century religion was religion. It turns out religion has high income elasticity of demand though if the Established Church is boring and goes in for virtue signaling, evangelical sects gain market share.
But memories are short, and a quarter century after that dramatic event, with the trauma of World War II and the beginning of the Cold War intervening, the Right was ready to move on and once again celebrate the alleged efficiency of free markets.
They needed merely to point at bureaucratic waste and Red Tape to make their point. Once feather-bedded Unions held the Nation to ransom, the public sided with Reagan and Thatcher.
When confronted with theory and evidence to the contrary, they closed their eyes and reasserted their faith, as I saw personally in my repeated interactions with Milton Friedman and his colleagues, both at the University of Chicago and at their West Coast citadel, the Hoover Institution, on the Stanford University campus.
Friedman made money and gained influence- at least for a time. Stiglitz shat the bed when he thought the IMF should prop up the dictator Suharto. Then he praised Chavez. The guy lost all credibility. To be fair, it was Krugman who sullied the good name of Nobel Prize winning economists.
When the 2008 financial crisis happened,
Stiglitz & Co. thought all their Christmases had come at once. Sadly, nations moved even further to the Right. 'Sub-prime' was about helping colored people- by fucking bankrupting them.
it seemed impossible that these conservatives would hold on to their market fundamentalist religion, that markets on their own were efficient and stable.
Markets helped China to rise. It now appears that the West's 'exorbitant privilege' is under threat. Biden is spending a lot of money to reduce America's dependence on global supply chains in strategic commodities- e.g. silicon chips.
But they did, which confirmed that it was, in a sense, a fundamentalist religion, the truth of which is virtually unshakable by reasoning or, as here, events.
Stiglitz has a fundamentalist religion of a Manichaean type. All the other economists are very evil. Also voters are stupid. Why can't they elect crazy dictators like Chavez?
And they continued to believe in it even as the failures of neoliberalism described below became more and more evident.
To Stiglitz. Why did Obama not destroy the American economy? Was it because he was bleck? No. It was because he had a penis. Penises cause RAPE.
They closed their eyes not only to the big failures but to the smaller ones that make life for so many so difficult—airlines with myriad delays and lost luggage,
young people listening to that Satanic 'rap' music
cell phone and internet services that are unreliable and expensive,
my cell phone and internet service just keeps getting better- probably because young people who listen to Satanic 'rap' music just keep getting smarter and smarter.
and in the US, a healthcare system that, while the most expensive by far in the world, is impossible to navigate and results in the lowest life expectancy of any of the advanced countries.
More particularly because everybody keeps eating burgers and taking opioids. Also they have guns. Way too many guns. Why can't Americans just knife each other like civilized folk?
In this new religion, markets are always efficient and government always inefficient and oppressive.
Whereas the truth is Cuba is fucking paradise.
We simply weren’t appreciating fully the efficiency benefits of the two-hour holds on the telephone with our internet provider or our health insurance company.
Probably because young people are listening to Satanic 'rap' music.
There was another way in which this “economic religion” was similar to more conventional religions: proselytization.
Stiglitz thinks Varoufakis is a genius. Shame his 'proselytization' has failed dismally in Europe.
Conservatives’ faith was assiduously spread through the media
the Government should nationalize all TV stations and newspapers. There should be a Ministry of Truth.
and, to a considerable extent, through higher education,
why are young people being taught stuff that Stiglitz does not approve of? The result is that they listen to Satanic 'rap' music.
effectively ushering out of the public and political zeitgeist any remnants of an alternative and more humane economic vision that had first emerged in the 1930s
under Stalin?
and then flowered again in the more turbulent period of the late 1960s and early 1970s.
Maoism?
There was still one more way in which neoliberalism was like a fundamentalist religion: There were pat answers to anything that seemed contrary to its tenets.
e.g. the pat answer they gave to the question 'why is Stiglitz such a moron?'. The answer was 'he has shit for brains'.
If markets were unstable (as evidenced in the 2008 financial crisis), the problem was the government—central banks had unleashed too much money.
Does Stiglitz really not know about Quantitative Easing?
If a country that liberalized didn’t grow in the way the religion said it should, the answer was it hadn’t liberalized enough.
Which is why America has fallen so much further behind Venezuela.
As we have seen, with a post-Depression generation in charge in the last part of the twentieth century, governments around the world adopted one version or another of neoliberalism.
Not Venezuela. Why does Stiglitz not emigrate there?
It pleased the capitalists, and the simplistic argument that free markets would deliver both economic success and freedom seduced large numbers of people.
Only because dicks exist. Dicks cause RAPE.
I’ve highlighted the role of the Right in pushing the neoliberal agenda; but the Right was enormously successful in creating the mindset of the time. I’ve described the embrace of neoliberalism by Clinton, Schröder, and Blair.
Stiglitz is stuck in a time warp.
There were, let me emphasize, large differences over the details of neoliberalism between the center-left and center-right that dominated political and economic debates, especially in rhetoric.
Not really. You had deficit hawks on both sides of the aisle.
The former tried to put a human face on the reforms,
as opposed to the face of a camel. That's like Islamophobia dude.
asking for assistance for those who lost their jobs as a result of trade liberalization.
They may have promised such assistance. They were lying.
The latter focused on incentives, worried that any adjustment assistance might weaken efforts of people to do their own part. Only around half of Americans born after 1980 could hope to have earnings higher than their parents (down from ninety percent for the cohort born in 1940).
Because of immigration. Angus Deaton now feels bad about having championed it.
The Right talked about trickle-down economics:
They preferred 'Supply side'
if we made the economic pie larger, all would eventually be better off.
We must shrink the pie. Everybody should be fucking miserable.
Democrats and European social democrats weren’t so sure that trickle-down would work, or work fast enough. But in the end, in spite of these differences and much rhetoric, the center-right and the center-left were both wedded to neoliberalism.
Many married people have dicks. Dicks cause RAPE. Ban weddings now!
We’ve now had forty years of this neoliberal experiment that began under Reagan and Thatcher. Its rosy promises of faster growth and higher living standards that would be widely shared have not been borne out.
Why aren't we living in a world where everybody has gone on strike to protest Gaza?
Growth has slowed, opportunity diminished, and the fruits of what growth has occurred have gone overwhelmingly to the people at the top.
Rather than to people entering the country without papers.
The results were perhaps the worst in the United States, with its greater reliance on markets and where financial liberalization was taken to the most extreme.
This is why so many Americans are trying to escape to Venezuela.
The country experienced the largest economic recession in three-quarters of a century with the 2008 financial meltdown, a crisis that it exported to the rest of the world.
Parts of it. India and China were hardly affected.
By the early years of this century, America had become the country marked by the highest level of inequality and some of the lowest levels of opportunity of any of the advanced countries.
Only because Biden has built a wall to prevent Americans escaping to Venezuela- or Cuba.
Wages at the bottom, adjusted for inflation, hovered at the same level that they had been more than a half century earlier.
The immigration reforms of 1965 were a mistake. Also 'Operation Wetback' was discontinued.
The American Dream had become a myth, with the life prospects of a young American more dependent on the income and education of her parents than in other advanced countries.
Did you know that fifty percent of biological parents have dicks? Dicks cause RAPE.
Only around half of Americans born after 1980 could hope to have earnings higher than their parents (down from ninety percent for the cohort born in 1940). This loss of hope also had political consequences, witnessed so clearly in the election of Donald Trump as president.
Only people named Chavez or Castro should be elected.
Statistics do not tell the full story. That unfettered markets, or even inadequately regulated markets, lead to socially undesirable outcomes should be obvious to anyone living through the late twentieth or early twenty-first century.
We need unfettered Communism like in North Korea- right?
Think of the opioid crisis, created in no small measure by drug companies and pharmacies exploiting people in pain;
If you were on Medicaid and had a low income, you could buy 240 oxycodone pills for a dollar and sell them for up to 4000 dollars. Was that the fault of the market?
think of the cigarette companies making addictive, lethal products;
They were doing so in the Thirties and Forties and Fifties which Stiglitz thinks off as a golden age.
think of the multiple scams that prey on the elderly and others;
think of young people listening to Satanic 'rap' music
think of the food and drink companies pushing their unhealthy products so aggressively and for so long that the country faces an epidemic of childhood diabetes;
Venezuela has no such problem. One third of infants show stunted growth.
and think, too, of the oil and coal companies making billions of dollars as they endanger the planet.
Under FDR, Americans didn't drive cars. Everybody had a horse.
It is hard to think of a corner of our capitalist system in which some form of scam or exploitation is not going on.
Also, young people are listening to Satanic 'rap' music.
It is not just the costs imposed on those directly experiencing the dark sides of capitalism; all of us are constantly on guard lest we be taken advantage of. The economic costs are large; the costs to our psyches far larger.
Not to mention our anal cherries. Stiglitz himself is often scammed by sodomists. Ban dicks NOW!
They reflect systemic failures with major consequences—for example, the relatively poor health conditions (compared with other advanced countries) noted earlier.
Your health would be poor if you were constantly being scammed by sodomists.
The consequences of the neoliberal project elsewhere in the world are no better. In Africa, Washington Consensus policies led to a process of deindustrialization and a quarter century of near-zero growth in per capita income.
Chavez was a neo-liberal appointed by the Washington troika.
Latin America experienced what is widely called the Lost Decade in the 1980s.
Cuba experienced great affluence- right?
In many countries, the rapid influx and then outflow of capital under the policies of capital market and financial market liberalization led to crisis after crisis—more than a hundred around the world. Friedman and Hayek were the intellectual handmaidens of the capitalists.
They used to give merchant bankers hand jobs. Stiglitz tried to reason with them but they scammed and sodomized him. Sad.
The inequalities that marked the US were a shadow of what occurred elsewhere. Foisted on the countries of the former Soviet Union, Washington Consensus policies led to deindustrialization.
Worse yet, the Washington Consensus invented death. Previously, everybody was immortal.
A once-powerful Russia was reduced largely to a natural resource economy roughly the size of Spain’s, controlled by a small group of oligarchs who resented how the West had guided the country’s path away from communism. It set the stage for the rise of Putin and everything that followed.
Did you know that Putin had a vagina? Evil Capitalists tore down the Berlin Wall and forced KGB agents to grow dicks. But dicks cause RAPE.
But what about the theory that markets would lead to efficient outcomes?
It is very evil. It is obvious that if markets exist, then people will be scammed, sodomized, and will end up selling their own immortality in return for some opioids.
Conservative economists picked up on Adam Smith’s “invisible hand” but left behind the qualifications he put on the idea.
He said invisible hand should not be used for wanking. Also he warned against permitting dicks to exist. Dicks cause RAPE.
When economic theorists attempted to prove that competitive markets were efficient, they ran into a dead end.
Because economic theory is a dead end.
The conclusion was only true under very limited conditions, so limited as to be irrelevant to any economy. Indeed, these attempts to prove that the market was efficient highlighted the limitations of the market—what came to be called market failures.
Command economies don't fail. This is because anybody who thinks they are failing is very quickly killed- unless, like Gorby, they aren't in which case the Command economy collapses.
Such failures include limited competition (where most firms have some power to set their prices); absent markets (one can’t, for instance, buy insurance for most of the main risks we face);
which is why death exists
and imperfect information (consumers don’t know the qualities and prices of all goods in the market, firms don’t know the characteristics of all their potential employees, lenders don’t know the likelihood that a potential borrower would repay, and so on).
But these problems also exist for Command economies or traditional ones.
So committed were conservative economists like Friedman to their ideology that they were reluctant to accept these fundamental theoretical results.
They gained salience because their rivals had fucked up. The Keynesian solution to stagflation was Prices and Incomes Policy which can only work if you are prepared to shoot Trade Unionists.
I recall a conversation with Friedman at a seminar I gave in the late 1960s at the University of Chicago showing the failure of markets to handle risk efficiently
Sadly, we have Knightian Uncertainty- i.e. we don't know future states of the world or their probability. Still, there are 'coevolved' solutions- e.g. a market for insurance or 'hedges' of various types.
—a result I established in a series of papers that have not been refuted in the half century since they were written. Our conversation began with his assertion that I was wrong, and that markets were efficient. I asked him to show me the flaws in my proofs. He reverted to his assertion and his faith in the market. Our conversation went nowhere.
No conversation with Stiglitz goes anywhere though, no doubt, scammers end up sodomizing him.
Though writing earlier than Friedman, Hayek’s reasoning in many ways was more subtle. Hayek seems to have been more influenced by evolutionary thinking, that somehow the struggle for survival resulted in the “fittest” firms (those that are most efficient and most successful at meeting consumers’ needs) outlasting their competitors. His analysis was even less complete, based simply on the hope (or the belief) that evolutionary processes would yield desirable outcomes.
Hayek was right about one thing- Communism sucked ass big time. People ran away from it.
Darwin himself had realized that this might not be the case, that the experiments on the isolated Galápagos Islands had led to quite different, and sometimes rather bizarre, evolutionary outcomes.
The fitness landscape determines outcomes.
Today, we realize that there is no teleology in evolutionary processes.
Which is why Stiglitz's Manichaean world view is nonsense.
Put in economic terms, that there can be no presumption that they result in the overall long-run dynamic efficiency of the economy.
Yet we can see that some countries are more dynamic than others. If we want to rise up, we should adopt 'Tardean mimetics'- i.e. imitate the superior exemplar.
Quite the contrary. There are well-known shortcomings, of which the major failures described in earlier paragraphs are only the most obvious. Natural selection does not necessarily eliminate the least efficient.
If efficiency means 'reproductive success', yes it does.
Firms that die in an economic downturn are often as efficient as those that survive; they simply had more debt.
Which turned out to be an inefficient way to finance its growth. Productive efficiency does matter. Chances are some other company will copy or take over the more efficient units.
Friedman and Hayek were powerful rhetoricians who made seemingly persuasive arguments.
Stiglitz isn't persuasive. He writes like shit.
The strength of modern mathematical economics is that it forces greater precision in both assumptions and analyses, which is also its weakness because such precision requires simplifications that may ignore essential complexities.
Aristotle called this the fault of 'akreibia'. We should aim at 'economia'.
Economic theorists, working in both the equilibrium tradition (to which Friedman belonged) and the evolutionary one (to which Hayek belonged) have shown that their analyses were incomplete and/or incorrect, as I’ve just explained.
Sadly, they have also shown that all cats are dogs.
Economic theory predicted that unfettered markets would be inefficient, unstable, and exploitive,
if there are externalities or non-convexities or information asymmetry.
and, without adequate government intervention, would be dominated by firms with market power that would give rise to large inequalities.
Only if there were non-convexities or barriers to entry.
They would be shortsighted and not manage risks well. They would spoil the environment.
Also true of command or traditional economies
And shareholder value maximization would not, as Friedman claimed, lead to the maximization of the well-being of society.
Sadly, we don't know what truly maximizes well-being- till too late.
These predictions by the critics of unfettered markets have been validated.
No. The rise of China shows that open markets can lift billions out of absolute poverty.
Looking back on their economics from the perspective of three-quarters of a century of research, Hayek and Friedman simply didn’t get it right and, unfortunately, didn’t even set the right research agenda. They were great polemicists whose ideas have had, and still have, enormous influence.
Not really. Monetarism was played out by about 1982. On the other hand there was a 'Marxist-Hayekian' school- e.g. Meghnad Desai, Varoufakis etc- which may be said to have triumphed under Deng Xiaoping.
How could such bright minds have gotten it so wrong?
They weren't bright. They taught a low IQ subject. Still, they were right about Communism being shite. Arrow and Samuelson were on the wrong side of history.
The answer is simple. Friedman and Hayek examined the economy from an ideological perspective, not a dispassionate one.
Stiglitz isn't dispassionate.
They attempted to defend unfettered markets and existing power relations,
No. They were against the power wielded by bureaucrats and 'price czars'. The breakdown of Bretton Woods opened the door to their ascent.
including as reflected in the distribution of income and wealth.
Voters in advanced countries stopped caring about this by the end of the Sixties.
They were not really attempting to understand how capitalism actually worked.
Many capitalists have dicks. Dicks cause RAPE.
They assumed markets were essentially always highly competitive, with no firms having power to set prices, when it was obvious that critical markets were not competitive. They assumed in much of their work that there was perfect information, or at least that markets were informationally efficient—conveying costlessly and instantaneously all the relevant information from the informed to the uninformed and aggregating all the relevant information to be perfectly reflected in prices.
Arrow Debreu certainly assumed that as did Stiglitz in his earlier work.
These were convenient assumptions, which helped to get the desired results on the efficiency of the market economy. And they were convenient in another way: they simply didn’t have the mathematical tools necessary to analyze markets with imperfect information.
Who did? Not Kantarovich. That's for sure.
But when shown analyses based on those more advanced tools, which showed that markets weren’t and couldn’t be informationally efficient, they and others in their camp looked the other way.
Neither was particularly mathsy. They were effective polemicists- back in the Seventies.
They didn’t want to engage with analyses that might lead to a conclusion that differed from their unfailing allegiance to the market.
Also they refused to emigrate to behind the Iron Curtain. How very bigoted of them!
Friedman and Hayek were the intellectual handmaidens of the capitalists.
Not really. Capitalists wanted cozy deals with the bureaucracy so as to entrench themselves and gain economic rent. Friedman and Hayek appealed to Goldwater supporters, not people like Nelson Rockefeller.
They wanted a smaller role for government and less collective action.
Less industrial action by crazy Trade Unionists.
They blamed the government for the Great Depression (poorly managed monetary policy)
and fiscal policy. Cut taxes during a recession.
and for every other seeming failure in the economy. And they claimed that government intervention in free markets was itself the road to totalitarianism,
Total Wars are that road though some countries- e.g. UK- could bounce back to a Liberal political order
ignoring the historical reality of the economic conditions that had led to fascism and communism.
Russia turned Bolshevik because it lost a war. Fascism rose so as to beat up the Reds in the streets. But the Reds thought their real enemy was the Social Democrats.
It is too little government—government not doing enough about the critical problems of the day
sadly, Governments (and voters) tend to be wrong about the 'critical problem of the day'. The war on terror was a bad idea. NATO can topple a regime but it can't install one to its liking.
—not too much government that has led to populism and has repeatedly set society on the road to authoritarianism.
If there is too little government, those in authority have too little authority to become authoritarian. If the State has little power no one can use State power to kill off their rivals.
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