Over the weekend, when I was not playing poker, I read this long piece on neoliberal economics. It’s a very long, exhaustive and thick read and it took me a while to absorb all the major points. I wanted to distill this excellent critique of neoliberalism into a few distinct points, mostly for myself, but also for those interested who don’t have the luxury of 2-3 hours of undisturbed time.

1. Recent economic order seems to reward paper speculation and penalize work.
2. Governing elite’s response to the recent crises is to double down on old dogmas: reduced government spending, low taxation, worship of markets to cure social ills.
3. Our public life is thus a hostage to neoliberal market idolatry.
4. This ideology, however, never holds any of the elites responsible or accountable for the system failures.
5. Originally, neoliberal thinkers positioned themselves as observers and thinkers above the fray, intellectuals who looked for refuge from the New Deal liberalism. Their early association served as a basis for founding of the Mont Pelerin Society. A few decades later it coalesced around the Austrian anti-Keynesian economic thought, with F.A. Hayek at the helm.
6. Hayek and his contemporary and intellectual comrade Ludwig von Mises, both haunted by the terrors of totalitarianism and exiles from Nazi regime shared their sense that free-market liberalism was the only answer to fascism and communism.
7. However, Hayek drew his inspiration from Karl Popper, another economic philosopher, known for his “open society” ideas, who understood that individual liberty doesn’t have to be antithetical to economic democracy. Such philosophy permitted the adoption of egalitarian, even redistributionist policies.
8. But Hayek chose intellectualism over practicality. He reasoned that an “intellectual adventure” even if it’s utopian in nature is what’s needed, rather than “practical compromises”, which should be left to politicians.
9. The biggest irony is that Hayek’s utopian longings were fully realized, in Reagan’s America and in Thatcher’s Britain, but failed to bring the results he envisioned.
10. Enter Milton Friedman, the monetarist from University of Chicago, who popularized the purely intellectual strain of Hayek’s neoliberalism. He advised Reagan, Thatcher, and Augusto Pinochet, had a regular column at Newsweek, a hit series on PBS, not to mention his association with Cato Institute, Heritage Foundation and American Enterprise Institute.
11. With such an advocate, the free-market gospel has multiplied all over the globe. Along the way, the gospel managed to mutate from simply worshipping the markets to demonizing all public sphere. It is at that point, the 1980-90s, that the suspicion of government, or of anything “public” first took shape. Friedman believed and made others accept it as an axiom that a government, by its very nature, can’t serve the public interest.
12. Regulations and any government involvement is thus to be resisted, or to be rid of, which is what’s been happening since the 1980s, culminating in 2008 crisis. But it’s not the lack of regulations that is the culprit in neoliberal thought. Conveniently, neoliberals are now focusing on a problem of regulatory capture: you see, the regulators rotate between the government and the industry, thus confirming the neoliberal idea of the evils of government.
13. Because government itself is full of “defects”, according to Friedman, it therefore cannot be the one to regulate whatever flaws happen to appear in the markets. Neat logical trick, isn’t it? And that’s where we are today.
14. The neoliberal thought that has enthralled most of today’s politicians, stymies any attempts to stimulate economy through government spending. The entire focus of the elites, nowadays, seems to be revolving around placating the “job creators,” and any suggestions to raise taxes on the rich or to help the poor are to be nipped at the bud.
15. The author gives an example of the destructive force of such an uninhibited capitalism: the factory collapse in Bangladesh that killed more than a thousand workers. What the disaster like this should have demonstrated, is that regulations are “a largely cosmetic watchdog effort funded overwhelmingly by private-sector concerns, far from delivering oversight and accountability.” What aggressive free market delivers is “race-to-the-bottom competitive forces…that ritually sanctify all of this routine dishonesty. In their malignant neglect of worker safety measures, local factory managers are able to cite the same market pressures to maximize production and profit that have prevented the ornamental Western groups conducting audits of workplace safety practices from releasing their findings to the workers at risk of being killed by the neoliberal regime of global manufacturing.”
16. But Chicago and Austrian scholars are unfazed by such misfortunes. It’s just a cost of doing business. Their response was a predictable call to resist the passage of any new laws to improve worker-safety standards or to allow “workers to veer into unionism or other non-market-approved modes of worker self-determination.”
17. The grip of neoliberalism is still strong today, even among liberals. Everyone feels like they have to at least pay lip service to the wisdom of markets, if they still want to be admitted to the discussion.