On Neoliberalism

First things first: I absolutely loathe the term ‘neoliberal’ and its derivatives. For one thing, neoliberals are much more akin to classical liberals than traditional leftists, and there’s an obvious dissonance between ‘classical’ and ‘neo’. In some sense, ‘neo’ makes it sound like something of an upstart, usurper ideology rather than a throwback to an older form of liberalism.

This leads me to a very smart post in the ongoing Great Neoliberalism Debate of 2011 from Noah Millman, who rightly observes:

The broad point is: alternatives to neoliberalism won’t be as liberal. They be less-likely to prioritize efficiency. They will also be less-likely to prioritize positive-sum solutions. They will also be less-likely to prioritize basic fairness or democratic principles or whatever else. They will assign a higher priority to increasing the economic and political power of the people they are trying to represent (or their designated representatives).

And Will Wilkinson, who writes:

Purist libertarians, who profess to envision a feasible path to libertopia, regularly argue that moderate libertarians entrench state power and impede the path to a truly free society by supporting taxpayer-funded school-voucher schemes, or government-mandated “personal account” retirement savings programmes. If social-democratic welfare-state capitalism and libertarian laissez faire capitalism are terminal positions on a continuum of liberalisms, it seems that “neo-liberalism” is something of a catchall that applies to pretty much everyone a sufficient distance from these poles. Perhaps this helps explain why pragmatic, non-utopian progressives sometimes sound like savage libertarians to their idealistic social-democratic comrades, while pragmatic, non-utopian classical liberals sometimes sound like liberal fascists to their purist libertarian friends.

This debate inevitably stretches back to the old debate over pity-charity liberalism vs. union liberalism (or leftism, really) that puts the revitalization of organized labor at the heart of its project. For a while I was quite enamored with this idea, partly because I found the argument that front-end distribution of resources (negotiated between employee and employer) was preferable to back-end distribution of resources (welfare benefits). And how better to achieve this than a more vital labor movement?

There are problems with this idea, however.

1) Organized labor creates a labor cartel, restricting the supply of jobs and wages and limiting the opportunities of non-union workers. The argument against this is essentially ‘a rising tide lifts all ships’. Non-union workers, the argument goes, benefit from the competitive wages at union firms. I think this is true to some degree, but I think it’s also true that in order to create a system wherein organized labor has clout, artificial labor scarcity has to be created. To do that you have to limit the number of slots. This was traditionally done by excluding women and minorities from many jobs. In other countries it has been politically feasible to push full-employment policies. I doubt that it is either politically or culturally feasible in this country.

2) Critics of pity-charity liberalism argue a few things. One is that work gives people more dignity than welfare. This is true enough, but I would direct you to the previous point. If policies lead to artificial labor scarcity, that may lead to fewer people with meaningful work.

Critics also argue that what the state gives, the state can take away. A welfare program that benefits the poor is vulnerable since the poor are ill-represented in our political system. This is true as well. The problem is, favorable labor laws are also vulnerable, as are state-backed unions. We may as well call it pity-charity unionism. The difference, of course, is that once you have a bunch of organized workers you also have an organized political bloc that will be easier to mobilize.

I think that last point is a strong one in favor of the anti-neoliberals, and I think it’s what they mean, at least to some degree, when they argue that neoliberalism can’t create a sustaining politics.

3) I find Kevin Carson’s free-market unionism quite compelling, but the sort of organized labor movement that the anti-neoliberals are talking about tends to be quite different in nature than anything Kevin is talking about, more along the lines of corporate unionism or the sort of pro-business unionism you see in social democracies in Europe. I find this breed of organized labor very illiberal, actually, and far less likely to expand opportunity to the most Americans possible.

In any case the question inevitably becomes, what policies will reinvigorate organized labor, and what will be the cost of those policies? If the cultural and political will to push full-employment policies via increased unionization don’t exist in this country, what would happen if labor laws were strengthened? How would this even work outside of the public-employee realm?

This is where the neoliberal project begins to make more sense. Lane Kenworthy writes:

Here’s what we know from the experiences of the world’s rich democracies: Relative to other nations, those in which labor is highly organized are more likely to have an influential social democratic and/or Catholic center-right (emphasis on center) political party, a proportional representation electoral system, well-organized employers, formal or informal-but-institutionalized participation by labor and business associations in the policy-making process, generous social insurance programs and complementary programs to help households that fall between the social insurance cracks, expansive public services, similar long-run economic growth, a fairly egalitarian distribution of individual wages and household incomes, reliable economic security, extensive economic mobility, and generous holiday and vacation time.

Sorting out the causality is a bit tricky, but it seems probable that labor organization has contributed to most, if not all, of these outcomes. If you want progressive policies, the comparative historical evidence suggests it’s very helpful to have a strong labor movement. Indeed, after democracy, it might well be the single most valuable thing to have.

But what if you live in a country with labor unions that are weak, and getting weaker? What if your country is the United States?

You might choose to focus on strengthening the union movement. Or you might seek an alternative view (“theory of politics”) about conditions for feasible and sustainable progressive policy change. Is there any such view? I think so.

Forge whatever electoral coalition you can, including but not necessarily centered on unions. Organize sympathetic interest groups into single- or multi-issue movements and coalitions. Build up a network of think tanks, journalists, bloggers, and other organizations and individuals to identify and expose the strategies and plans of opposing forces. Offer worthy, workable policy ideas and try to get them (or some acceptable version of them) passed when possible. Aim for big policy advances in rare favorable moments and small ones the rest of the time. (Examples of big ones in American social policy: universal public K-12 schooling, Social Security, unemployment insurance, AFDC, minimum wage, Medicare, Medicaid, Food Stamps, Affordable Care Act. Examples of smaller ones: Head Start, indexing of Social Security benefits to inflation, EITC (it later got big), expansion of EITC and indexing it to inflation, child tax credit, S-CHIP, periodic minimum wage increases.) If your favored programs work well, people will like them. They’ll therefore be difficult — not impossible, but difficult — for the other side to weaken or remove when it’s in power. This last element of the strategy, avoiding policy reversals, is critical, and it’s aided by the array of veto points in the American policy-making process (though there’s also this).

This is a second-best strategy, to be sure. But in the American context it may be the only practicable one.

I don’t agree with Lane’s assessment of the relationship between organized labor and rich democracies. Or, rather, I don’t think the cause-and-effect is at all clear. The countries in question are invariably small, prosperous, and fairly homogenous at least in comparison to the United States. Those that are more diverse still have a fairly homogenous political culture, which allows them to pass consensus policies much more easily. And the history of labor in these countries is quite different, with labor/business relations much more sympathetic than in the American context. Either way, I agree with his conclusions, at least insofar as they are the most practical steps liberals can take in the American system.

One other thing that’s bothered me about this debate is that you have on the one hand the anti-neoliberals arguing that the neoliberals are market-friendly technocrats. But how are anti-neoliberals any less technocratic? In what sense is someone like Matt Yglesias any more technocratic than his critics to the left? They may be more ideological, and they may be critical of markets, but they are just as technocratic, at least so far as I can tell.

I prefer a less-technocratic, more market-friendly “bottom-up” liberalism myself, but I also believe there is a great deal of space between the libertarian purism and the leftist purism that Wilkinson describes, and within that space there is a great deal of policy debate to be had. How the social safety net functions, monetary policy, deregulation, climate change, the tax code – these are the inevitable battlegrounds of policy wonks and legislators. Political philosophy helps us define where we’re coming from, and helps us spy our end-goals, but Matt is still right that policy is where those ideologies collide and where the real meat of the discussion happens.

To the question of a sustaining politics, I would simply say well of course neoliberalism can be sustained. It offers a broad tent with many different interests represented, including immigrants and minorities and women and social liberals and so forth. Really, I see the inevitable lines drawn much differently than many leftists do. I see the broadly neoliberal movement on one side, and a more nativist, protectionist right emerging on the other (somewhere down the road). Either way, there are only so many choices. I don’t see how liberals will gain more converts by pushing pro-union policies when they are doing fairly well on social issues, immigration, and the welfare state.

I would go on, but I’ve run out of digital ink. There are a lot more smart pieces floating around on this subject. Mike Konczal, Kevin Drum, Elias Isquith, Ned Resnikoff and many others have weighed in, and you should read them all.

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114 thoughts on “On Neoliberalism

  1. “I don’t agree with Lane’s assessment of the relationship between organized labor and rich democracies. Or, rather, I don’t think the cause-and-effect is at all clear. The countries in question are invariably small, prosperous, and fairly homogenous at least in comparison to the United States. Those that are more diverse still have a fairly homogenous political culture, which allows them to pass consensus policies much more easily. And the history of labor in these countries is quite different, with labor/business relations much more sympathetic than in the American context. Either way, I agree with his conclusions, at least insofar as they are the most practical steps liberals can take in the American system.”

    However, we see a similar pattern in the US and (IHMO) the UK.

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  2. A Pew chart series about attitudes towards unions:

    http://people-press.org/2011/02/17/labor-unions-seen-as-good-for-workers-not-u-s-competitiveness/

    If younger people favoring unions is a demographic trend, the Left could focus on building a broader non-union coalition and have unionism be their long term strategy when the next financial crisis hits. This might help them bang out a unifying narrative very quickly, like the Tea Party, and if they organize their subgroups properly they could have a very disciplined party in the future.

    For now, my money would be on some grand unified theory education as a center issue for the Left. Everybody goes to school, and you have the useful hot buttons: think of the children, xenophobia, populism, all that good election year stuff.

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      • Erik, I have a question: to what extent would your new-found antipathy for unions be changed by recognizing that economic institutions, even under liberty loving governments, will always perform at suboptimal levels (according to a favored metric) and by recognizing that democratically determined policy will definitionally be imperfect (again, according to some favored metric)?

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          • Unions are imperfect creatures, institutionally. There is corruption at the top, leverage against employers to retain ineffective non-productive employees, ability to disrupt the economy by striking, etc. But how are these factors any different than other economic institutions? More importantly, to what extent can the corruption, market-inefficiencies, coercive leverage against markets and governments, be entirely and wholesale eliminated from our broader economy? If it cannot be, then isn’t the level of corruption and waste generated by unions balanced , to some extent, by the benefits (potentially, lets at least admit that much) that accrue to union members?

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          • And to add even more: If the answer to that is ‘yes’, or even a conditional ‘maybe if’, then why doesn’t the broader program to rehabilitate economic institution without dismantling them apply to unions?

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            • why doesn’t the broader program to rehabilitate economic institution without dismantling them apply to unions?

              Unions are organised for the very purpose of making the labour market more rigid. Union goals are successful when

              1. employers increase the worker’s wages em mass

              2. Government increases the minimum wage

              3. Employers decrease the number of hours worked

              4. Government reduces the official no of hours in a work week

              5. Employers offer more benefits

              6. Government sets a floor below which benefits may not fall

              etc…

              i.e. courting unions as a political faction gives us policy outcomes 2, 4 and 6 which increase the labour market rigidity.

              And labour market rigidity reduces the gains to the worst off from economic growth.

              http://www.eastwestcenter.org/fileadmin/stored/pdfs/ECONwp060.pdf

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                  • Since I decided it was so in my opinion. Just like I believe health care and education is a basic. As I’ve said before, I’m a proud social democrat. Some of my ideas may seem off-center.

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                    • Kudos to you Mr. Ewiak, It says so in the declaration of independence. “all men are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” Without insurance you might be denied life, without education you might not have liberty, and without minimun wage you might be denied happiness.

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                    • Let’s not talk about legal value because

                      1. I don’t exist in the same legal regime as you guys.

                      2. Just because something is legally declared a right doesnt mean it ought to be legally declared as a right

                      3. Rights talk cannot be the sort of things that people use as premises. Instead, at best, rights talk is the sort of thing that you come to as a conclusion, and if then, only by carefully specifying its applicability or by spelling out the principles to be used when determining said applicability

                      4. Arbitrary rights talk is a lot like saying because God says so. Whether or not its true, it plays no part in public reasoning.

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              • Unions are organised for the very purpose of making the labour market more rigid.

                Well of course! I would counter all the points above by saying that union goals are successful precisely to the degree that the labor market is rigid! I don’t think that’s even disputable (is it?). What’s disputed is the efficacy of unions – and ascendant unionism – in rectifying particular economic problems devolving from the contemporary economy. Look, there was a time when not only 2, 4, and 6, but also 1, 3, and 5 were the result of unionization and the resulting leverage unions had in determining economic outcomes.

                Now, I’m not saying that those models ought to be adopted as a paradigm, or blue print, for solving current problems. Rather, it’s two things: when I hear smart people talking about ‘labor flexibility’ as the solution to problem X, I reflexively wonder who’s funding that research. More substantively, it’s that ‘capital flexibility’ has had pretty devastating effects on huge sectors of laborers. So when people talk about wanting to rehabilitate ‘capital flexibility’ on the presupposition that labor rigidity is muy malo tout court, I merely wonder why. If we’re in fairy dust land where bottom up political pressure can change the prerogatives of the most powerful market players, who determine governmental policy, why not go all in and say labor deserves institutional support of its own, not merely the scraps off the floor.

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                • More substantively, it’s that ‘capital flexibility’ has had pretty devastating effects on huge sectors of laborers.

                  i.e. captial flexibility has benefited capital and at best not improved the lot of labour or at worst devastated huge sectors of labour. By analogy, labour flexibility should benefit labour.

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                    • That’s part of where my subjective experience has lead me. I got my first post-college job by essentially saying “The job is posted for $40k. Pay me $25k to start (and this being an EAW state, we all know you can fire me whenever you want if you do not like the results).”

                      My most recent “real” job prior to this one involved a contracting position that wouldn’t be allowed in a union regime. I helped get my current contracting job with concessions and filling a gap that would be difficult to pull off if everything were structured by union (they’d say “Don’t contract to this guy on this basis. Hire someone for real.” Which they might! Or they might let the work go undone.

                      There was also a job in between where I got in during one of the firing!/hiring! waves that would have been more difficult under a less flexible labor regime.

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                    • Murali, compare

                      Capital flexibility benefits capital and labor flexibility benefits capital.

                      to

                      capital flexibility benefits labor and labor flexibility benefits labor.

                      The primary distinction I perceive here is that labor flexibility/rigidity applies to a necessarily circumscribed region or location X with a fairly stable and determinate labor pool, whereas capital flexibility entails that one and the same corporate entity can relocate its capital center outside of region X.

                      So capital flexibility may good for labor in some abstract sense – like the workers of the world – but it isn’t beneficial to labor within a region from which capital has fled. The same cannot be said about labor flexibility, which almost definitionally benefits capital.

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                    • The same cannot be said about labor flexibility, which almost definitionally benefits capital.

                      Labour flexibility is attractive to owners of capital who will prefer to relocate to more flexible labour markets. They work hand in hand. If capital were completely rigid, no inducements could cause capital to move. In such a situation labour rigidity could help labour by putting a stranglehold on capital. Just or not, this is an unstable equillibrium. It is easy to mess this equilibrium up, and said destruction of equillibrium is inevitable. Growth is stagnant and the economy becomes increasingly vulnerable endogenous and exogenous shocks.

                      Increasing flexibility of capital allows capital to move away to more flexible labour markets. This causes capital as well as the economy in general to grow. However at least some of labour fails to reap the benefits of said growth and some are actually harmed by the flight of capital. Labour flexibility which is the major pull factor for capital flight induces the return of capital or the attraction of foreign capital.

                      Moreover, with the global expansion of the capital class, the supply of capital increases which in turn provides more opportunities for labour.

                      This is a more stable equillibrium: a reality that any current policy effort must deal with when it tries to work out how to improve the position of the worst off.

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                    • Indeed. My duty was to stay unemployed for The Greater Good.

                      Well, that would be good citizenship. However when public charity becomes a “right,” that concept of good citizenship goes out the window.

                      And that’s the US, or at least the chunk “trapped” in the cycle of poverty.

                      I have no doubt that many in these ideal socialistic societies, relatively small and ethnographically homogenous, WT’s concept of citizenship and public charity are in play. I’m not sure these socialist paradises are sustainable [Norway on one hand but Greece on the other], but I don’t dismiss the possibility they can work.

                      However, I strongly doubt it can work under the “rights”/entitlement mindset, and this is becoming the dominant ethos in the US—on the part of its recipients, and sold as an ideology by, um, sorry, the left.

                      And that, my friends, is the nub of the Heritage thingee, that the US is a morally decent country and its poor have a lot of nice things to assuage their misery.

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              • It’s worth noting that it wasn’t that long ago when EDK was big on unions and organized labor (particular teaching, but also others). You had him, but you lost him. I’d be interested to know what changed his mind on the subject. Whose arguments, etc.

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                • Will/Chris –

                  I’m *not* against unions. I’m less optimistic that they can do what I hoped they could do; more so, I’ve lost my belief that they can be revitalized in this country in a way that would benefit the most people, and not just union workers. In countries where full employment is a reasonable policy goal, this is not such a concern. Here…I dunno. I think it would just pile on another layer of special interests and favoritism if we tried to really revamp unions. How would we go about it? I mean, in purely practical terms what do we do to revive labor?

                  I just don’t see it happening, at least not through more laws. Fewer laws maybe…and that I could get behind. Repeal Taft-Hartley, get rid of right-to-work laws. All that is 100% okay by me.

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                  • I mean, in purely practical terms what do we do to revive labor?

                    This can be done via changes in the tax code, which is a less outlandish proposal than eliminating state/private collusion in international trade.

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                    • The key in many ways is a cutural shift. If we are to reconceive of union leaders as managing a team of workers and whose responsibility it is to make sure that the worker’s skills are up to date and that the workers are more efficient than the competitors. The union leaders would then contract with capital.

                      Capital gets to benefit by not having to concentrate on training workers and unionised labour benefits by being able to market itself as more efficient and skilled than its competitors.

                      The organisational structure I envision basically encourages labour to work its way up to capital. This enlarges capital and/or unionised labour and at the same time provides more opportunities for labour.

                      It also effectively undercuts all non-unionised labour.

                      But in order to do that we need to radically restructure unions from within.

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          • Well, you said us silly kids only like unions because we’ve never been in contact with them. So, asking if ya’ know, you have any actual experiences with unions is a reasonable question.

            Just like if someone said the only reason people are OK with the idea of a war is because they don’t have to fight, asking if they’ve ever been in the military is a reasonable question.

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              • The left would say it goes back to Barry’s answer, because they think their unionless situation sucks. The right would argue it’s because they don’t appreciate how unions might have prevented whatever job they have.

                I’ve personally never had a union job. It’s possible that my perspective would be different if I had. Instead, I’ve replaced people that were fired or let go that might not have been let go if a union had been able to prevent it. Or I’ve had a contract position that might not have existed if unions successfully prevented contract labor. That sort of thing.

                Which makes my view of unions more skeptical than some.

                On the other side, some people I’ve worked with thought that everything would be the same – they would have their job or one like it – but with union benefits and with a wage not so ridiculously crappy. Maybe so. Maybe not.

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              • The easy answer is that kids are pro-union because younger people are more leftist. That would be the narrative, but is it actually the case in general? Does anyone have statistics on this, if so I’d be very interested.

                Kain’s point about lack of contact with unions ties in to the larger point of the study, that people in general have a more negative opinion of unions than they have in the past. Also, it is known that union participation has been on the decline. It is reasonable to conclude that if the younger people are left leaning they would be more pro-union on abstract principles than actual policy.

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              • For precisely the reason Jesse mentions. It seems odd to speculate (and it’s nothing more than speculation) that someone, or worse, some group, is pro-union because they haven’t been in a union when you yourself have no experience with one. That makes it not just speculation, but blind speculation.

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  3. Purist libertarians, who profess to envision a feasible path to libertopia, regularly argue that moderate libertarians entrench state power and impede the path to a truly free society by supporting taxpayer-funded school-voucher schemes, or government-mandated “personal account” retirement savings programmes.

    This is one thing that bugs me.

    I do not believe in “libertopia”. There is no perfect society out there, there is no ideal state that can someday be achieved, there is no final place.

    What I am hoping to achieve is to get people to stop prying themselves into the lives of others, imprisoning them, forcing them to become “better” (by whatever measurement) under threat of law, and otherwise meddling.

    This will not lead to any type of ‘topia. There is no “end” goal. That’s not the point.

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    • Just because you don’t…doesn’t mean other people don’t. The fact that you really want progress in the direction of less meddling, and not, say, a very specific economic system based on mineral exchange and handicrafts, means you are basically not the kind of purist he’s talking about at all.

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  4. A small irony.

    Michael Moore came out with a movie in the late 90’s (maybe it was 2000) called “The Big One”.

    It was a cute enough movie. Among other things, he explored renaming the US (hence the title), changing The National Anthem to “We Will Rock You”, and spent time at a big box bookstore called “Borders” and celebrated the creation of a union at one of the stores.

    For one reason or another, I’ve been thinking about that this week.

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  5. I thought that “neoliberal” was what leftists called real liberals (i.e., libertarians). But over the past few weeks I’ve been seeing it used to refer to a certain kind of leftist. When did this change?

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    • I think the term came into use during the Clinton years, maybe even arising from the Reagan Democrats of the 80s, to describe liberals who favored deregulation, entitlement reforms (namely welfare reform in the 90s), and were generally considered “pro-business”, while still holding socially liberal views, wanting to do good for the environment, pro-immigration, (some wanted)higher marginal tax rates on the wealthy, etc. They basically pushed against the New Deal, working class, union Democrats from rust belt areas, as they tended to come from suburban, tech and finance driven areas on the east coast. In many ways they embodied the part of the Clinton administration, think Robert Rubin, that declared “the era of big government is over.” Read this story (http://www.washingtonmonthly.com/magazine/julyaugust_2011/features/friends_like_these030379.php) from the Washington Monthly. It paints a fairly negative picture of New Democrats, or neoliberals, because of their fight against the health care law’s IPAB and the idea of letting Medicare negotiate drug prices directly with the Pharma industry, but it’s a good read on this wing of the Dems.

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        • I guess it’s all semantics here… you’re right that the term “liberal” as it relates to classical economics would mean Friedman’s Chicago School, the Reagan/Thatcher revolution, even supply side econ, etc….but I’m thinking liberal as in the way it is defined politically post-new deal..so I think of neoliberals as being analogous to New Democrats, moderate Dems, Clinton Dems, etc. I can see why there’d be confusion.

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      • Umm.
        The Washington Monthly was founded by Charles Peters in 1969 as a critic within the skunkworks. The term ‘neoliberal’ used to describe a mainline Democrat with a number of complaints about the modus operandi of Democratic politicos appeared around 1981. Charles Peters embraced the term and claimed to have founded this tendency of political commentary.

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        • That’s interesting, I did not know the history of the Washington Monthly…I only linked to that article because it goes into the history and politics of the New Democrats, which seems to be a partial embodiment of neoliberalism. Hence, it’s surprising that the magazine started by the man who “embraced neoliberalism” would publish such a scathing indictment of those who practice it (to some degree).
          Although, I’m starting to see a difference now between the neoliberalism of the 1980s and the New Democrat activities of the later 1990s.

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  6. What differs neoliberal and neoconservative?
    For that matter, do any of these terms have any meaning left?
    Conservative used to mean small government, military restraint, balanced budgets, personal responsibility, staying off my property and out of my bedroom, etc.
    I don’t talk about conservative, liberal, socialist, communist, fascist, etc. until after getting agreement on definitions.

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      • When force is used to open markets, that’s where I draw the line. And yes, one faction of the broader neoliberal movement has done just that. I think neoliberalism is not without its faults. I would not support coercive globalization measures for any reason.

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        • I take it you mean military coercion in the above comment. The problems run deeper, in my mind. The WTO has codified principles which essentially prohibit the domestic policy of member nations from imposing quality assurances, envirnomental and other regulations, subsidies for domestic sectors of the economy, and restrictions of any kind on imports. If a country enacts these policies, they violate WTO law and can be sued. I would say that that is an example of coercion wrt keeping markets ‘open’.

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          • If I meant military coercion I would say that. No, I mean all forms including the WTO and the many, many other ways that states work to undermine third world countries and build up the infrastructure of resource depletion and so forth.

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            • I guess we look at this differently. WTO principles are designed with foreign access to domestic markets in mind. They take domestic regulation out of the equation entirely, since no single actor can impose regulations on imports that give unfair advantage or disadvantage to any particular market participant.

              The baseline is about as low as it can go, until all member nations decide to act on a specific regulatory principle.

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              • Well yes, precisely. Unless you have something very unpleasantly like the WTO in place then all you end up with are an endless parade of tariffs by other names or other inventive barriers to trade being generated by governments that have strong electoral incentive at home to try and shield various constituencies from foreign competition.

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                • We need only worry about our own policies. We should drop all tariffs and other protections, all trade barriers, all subsidies, and do away with these international broker institutions altogether. Other countries would eventually follow suit.

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                  • Mr. Kain, I think dropping all trade barriers is a very silly idea. America already has a trade inbalance that is unsustainable. We, as a country are already sending over 750 billion a year to foreign nations. It will only get worse with more free trade. Either or make a loaf of bread in America cost a nickleand a decent apartment around 40 a month, then one could live off 50 cents per hour.

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                    • 45 or so years ago, the US was the world leading importer of raw materials and the world leading exporter of manufactured goods. In the early 2000s, the US was the world leading exporter of raw material, and the leading importer of manufactured goods. I’m not sure how increasing open trade policies would rectify this problem.

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                    • Stillwater – I wouldn’t trade now for 45 years ago, would you? Nor am I sure we have a problem. We have a good deal more technology than we did 45 years ago, and a much different economy. I think breaking down all tariffs and subsidies would result in a massive increase in investment here, and major job growth, as well as far cheaper goods for Americans.

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                    • Erik, I admittedly don’t know the finer points of economics – the nose, the high notes, etc. But isn’t the biggest stumbling block to reinvestment in the US that labor rates are still too high?

                      Happy to be wrong about this.

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                    • Stillwater, the only ~only~ way I have ever read that one could expect to recapture the US’s manufacturing dominance of 50 some years ago would be via bombing the industrial centers of the rest of the world into rubble and/or chaining them up with centralized economies. The problem isn’t that the US doesn’t manufacture (it does, an enormous amount) but that the rest of the world does so too and with robotic plants you just don’t employ the numbers of people that manufacturing once did.

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                    • Thank you to Mr. North for reminding us all that world trade is not zero sum. From 1945 to 2011, America got much wealthier. From 1945 to 2011, Japan, Germany, China, France, and Britain went from being completely bombed out holes in the ground to not quite as wealthy and productive as the U.S. but pretty damn close and certainly even enough on a per capita basis. I’ll throw my lot in with Erik. Now is the time to loosen up world trade.

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                  • No, they’d flood us with cheap crap than install their own trade barriers against us. For thirty years of proof on this topic, I direct you to the People’s Republic of China.

                    That doesn’t even going into the fact that a nation protecting it’s nascent industries via protectionism has only been going on since the beginning of time.

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                  • I dunno E.D. I think free access to ones market is a valuable good that shouldn’t just be given away wholesale but liberally exchanged as part of foreign dealings. Reciprocal free trade agreements strikes me as more fair and useful.

                    I will allow that in theory blanket opening of our markets might get us ahead in the long run but in practical and political terms it strikes me as impractical in the short term and politically I fear it could generate a backlash that’d end up leaving us with even less liberal trade than we started.

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          • The WTO has codified principles which essentially prohibit the domestic policy of member nations from imposing quality assurances, envirnomental and other regulations, subsidies for domestic sectors of the economy, and restrictions of any kind on imports.

            You are mistaken, WTO rules allow trade restrictions for environmental and health reasons. All a country needs to do is A) show scientific evidence of a threat B) subject domestic and imported goods to the same restrictions. All WTO rules stop you from doing is engaging in protectionism while using the environment as an excuse.

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        • I should say, rather, that any of the above activities which are deemed to give domestic market participants an economic advantage, or are deemed to give a foreign participants in the domestic economy a disadvantage, are subject to legal action.

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          • While I was at university I actually read a paper that discussed the WTO’s approach to these cases. The WTO’s attitude is that the rules have to be consistent – you can’t impose harsher standards on foreign goods than domestic ones. Disparate impact is not a problem, avoiding WTO sanction is as simple as using the same rules for foreign and domestic goods, and applying the rules consistently.

            Also, if the WTO finds against you for inconsistency, you can avoid sanction by bringing your environmental laws into line.

            I don’t see how these requirements could be problematic.

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  7. Purist libertarians, who profess to envision a feasible path to libertopia, regularly argue that moderate libertarians entrench state power and impede the path to a truly free society by supporting taxpayer-funded school-voucher schemes, or government-mandated “personal account” retirement savings programmes.

    Precisely as communists argued that social democrats were the true enemy, since that sort of amelioration of capitalism would only delay the revolution.

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  8. Neo-liberals, to my understanding, aren’t classical anythings. They’re modernist technocrat tinkerers who happen to think (among many other things; this is not a credal or necessarily even central belief) that lightly regulated (but regulated!) markets are mechanisms that tend to produce the best policy outcomes in the modern global capitalist system we happen to exist in; hence they think that the right default approach to governance in this context is to rely on markets to do the heavy lifting of making policy come out the best it can (because they think that, with limited government help, they will do this, not because of adherence to classical liberal principles), but that further improvements can and should be be made after that through wise, preferably light-handed government interventions. They depart most strongly from classical liberals when, despite their beliefs about the presumptive best approach being a market-oriented one, they will depart from that presumption with no twinge of principled guilt when in a given case they see a compelling reason to approach a problem from a fundamentally different, perhaps more intervention-inclined posture.

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    • …By the way, does anyone rally to the name, Neo-Liberal? Is anyone willing to say, I’m a neo-liberal, and here’s what that is? Or is it just a purely perjorative name that some people have applied to a body of ideas they don’t like? In which case it would seem it could be pretty much anything within a general proximity to the kind of ideas it was initially coined to “describe.” If no one’s going to say, “Yeah, I’m one of those, and you’ve got it all wrong,” then who knows what it is? It is whatever the people who want to talk about it (with sour looks on their faces) are going to say it is since it isn’t actually anything itself (my above comment, which is just my impression of the term and the ideas of the people to whom I have seen it applied, notwithstanding).

      Just an observation about problems with words and names, ie strings of letters. What’s in a name? Conservative. Liberal. What’s in a name? Names are words. What’s in a word? Oh, yeah: letters.

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  9. >For a while I was quite enamored with this idea, partly because I found the argument that front-end distribution of resources (negotiated between employee and employer) was preferable to back-end distribution of resources (welfare benefits). And how better to achieve this than a more vital labor movement?

    The better way to achieve this is to convince people that they should work less, causing a scarcity of labour not by a restriction on who is allowed to work, but by reducing the total amount of work a given number of people want to do.

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