When Neoliberalism Was Young: A Lookback on Clintonism before the Clintons

by Corey Robin on April 28, 2016

Yesterday, New York Magazine’s Jonathan Chait tweeted this:


It was an odd tweet.

On the one hand, Chait was probably just voicing his disgruntlement with an epithet that leftists and Sanders liberals often hurl against Clinton liberals like Chait.

On the other hand, there was a time, not so long ago, when journalists like Chait would have proudly owned the term neoliberal as an apt description of their beliefs. It was The New Republic, after all, the magazine where Chait made his name, that, along with The Washington Monthly, first provided neoliberalism with a home and a face.

Now, neoliberalism, of course, can mean a great many things, many of them associated with the right. But one of its meanings—arguably, in the United States, the most historically accurate—is the name that a small group of journalists, intellectuals, and politicians on the left gave to themselves in the late 1970s in order to register their distance from the traditional liberalism of the New Deal and the Great Society. The original neoliberals included, among others, Michael Kinsley, Charles Peters, James Fallows, Nicholas Lemann, Bill Bradley, Bruce Babbitt, Gary Hart, and Paul Tsongas. Sometimes called “Atari Democrats,” these were the men—and they were almost all men—who helped to remake American liberalism into neoliberalism, culminating in the election of Bill Clinton in 1992.

These were the men who made Jonathan Chait what he is today. Chait, after all, would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.” We know this because he recoils in horror today so resolutely opposes the far more tepid versions of that liberalism that we see in the Sanders campaign.

It’s precisely the distance between that lost world of 20th century American labor liberalism and contemporary liberals like Chait that the phrase “neoliberalism” is meant, in part, to register.

We can see that distance first declared, and declared most clearly, in Charles Peters’s famous ”A Neoliberal’s Manifesto,” which Tim Barker reminded me of last night. Peters was the founder and editor of The Washington Monthly, and in many ways the éminence grise of the neoliberal movement. In re-reading Peters’s manifesto—I remember reading it in high school; that was the kind of thing a certain kind of nerdy liberal-ish sophomore might do—I’m struck by how much it sets out the lineaments of Chait-style thinking today.

The basic orientation is announced in the opening paragraph:

We still believe in liberty and justice for all, in mercy for the afflicted and help for the down and out. But we no longer automatically favor unions and big government or oppose the military and big business. Indeed, in our search for solutions that work, we have to distrust all automatic responses, liberal or conservative.

Note the disavowal of all conventional ideologies and beliefs, the affirmation of an open-minded pragmatism guided solely by a bracing commitment to what works. It’s a leitmotif of the entire manifesto: Everyone else is blinded by their emotional attachments to the ideas of the past. We, the heroic few, are willing to look upon reality as it is, to take up solutions from any side of the political spectrum, to disavow anything that smacks of ideological rigidity or partisan tribalism.

That Peters wound up embracing solutions in the piece that put him comfortably within the camp of GOP conservatism (he even makes a sop to school prayer) never seemed to disturb his serenity as a self-identified iconoclast. That was part of the neoliberal esprit de corps: a self-styled philosophical promiscuity married to a fairly conventional ideological fidelity.

Listen to how former New Republic owner Marty Peretz described (h/t Tim Barker) that ethos in his lookback on The New Republic of the 1970s and 1980s:

My then-wife and I bought the New Republic in 1974. I was at the time a junior faculty member at Harvard, and I installed a former student, Michael Kinsley, as its editor. We put out a magazine that was intellectually daring, I like to think, and politically controversial.

We were for the Contras in Nicaragua; wary of affirmative action; for military intervention in Bosnia, Rwanda and Darfur; alarmed about the decline of the family. The New Republic was also an early proponent of gay rights. We were neoliberals. We were also Zionists, and it was our defense of the Jewish state that put us outside the comfort zone of modern progressive politics.


Except for gay rights and one or two items in that grab bag of foreign interventions, what is Peretz saying here beyond the fact that his politics consisted mainly of supporting various planks from the Republican Party platform? That was the intellectual daring, apparently.

Returning to that first paragraph of Peters’s piece, we find the basic positions of the neoliberal persuasion: opposition to unions and big government, support for the military and big business.

Above all, neoliberals loathed unions, especially teachers unions. They still do, except insofar as they’re useful funding devices for the contemporary Democratic Party.

But reading Peters, it’s clear that unions were, from the very beginning, the main target. The problems with unions were many: they protected their members’s interests (no mention of how important unions were to getting and protecting Social Security and Medicare); they drove up costs, both in the private and the public sector; they defended lazy, incompetent workers (“We want a government that can fire people who can’t or won’t do the job.”)

Against unions, or conventional unions, Peters held out the promise of ESOPs, where workers would forgo higher wages and benefits in return for stock options and ownership. He happily pointed to the example of Weirton Steel:

…where the workers accepted a 32 percent wage cut to keep their company alive. They will not be suckers because they will own the plant and share in the future profits their sacrifice makes possible. It’s better for a worker to keep a job by accepting $12 an hour than to lose it by insisting on $19.

(Sadly, within two decades, Weirton Steel was dead, and with it, those future profits and wages for which those workers had sacrificed in the early 1980s.)

But above all, Peters and other neoliberals saw unions as the instruments of the most vile subjugation of the most downtrodden members of society:

A poor black child might have a better chance of escaping the ghetto if we fired his incompetent middle-class teacher.

The urban public schools have in fact become the principal instrument of class oppression in America, keeping the lower orders in their place while the upper class sends its children to private schools.


And here we see in utero how the neoliberal argument works its magic on the left.

On the one hand, Peters showed how much the neoliberal was indebted to the Great Society ethos of the 1960s. That ethos was a departure from the New Deal insofar as it took its stand with the most desperate and the most needy, whom it set apart from the rest of society. Michael Harrington’s The Other America, for example, treated the poor not as a central part of the political economy, as the New Deal did. The poor were superfluous to that economy: there was America, which was middle-class and mainstream; there was the “other,” which was poor and marginal. The Great Society declared a War on Poverty, which was thought to be a project different from from managing and regulating the economy.

On the other hand, Peters showed how potent, and potently disabling, that kind of thinking could be. In the hands of neoliberalism, it became fashionable to pit the interests of the poor not against the power of the wealthy but against the working class that had been made into a middle class by America’s unions. (We still see that kind of talk among today’s Democrats, particularly in debates around free trade, where it is always the unionized worker—never the well paid journalist or economist or corporate CEO—who is expected to make sacrifices on behalf of the global poor. Or among Hillary Clinton supporters, who leverage the interests of African American voters against the interests of white working-class voters, but never against the interests of capital.)

Teachers’ unions in the inner cities were ground zero of the neoliberal obsession. But it wasn’t just teachers’ unions. It was all unions:

In both the public and private sector, unions were seeking and getting wage increases that had the effect of reducing or eliminating employment opportunities for people who were trying to get a foot on the first run of the ladder.

And it wasn’t just unions that were a problem. It was big-government liberalism as a whole:
Too many liberals…refused to criticize their friends in the industrial unions and the civil service who were pulling up the ladder. Thus liberalism was becoming a movement of those who had arrived, who cared more about preserving and expanding their own gains than about helping those in need.

That government jobs are critical for women and African Americans—as Annie Lowrey shows in a excellent recent piece—has long been known in traditional liberal and labor circles. That that fact has only recently been registered among journalists—who, even when they take the long view, focus almost exclusively, as Lowrey does, on the role of GOP governors in the aughts rather than on these long-term shifts in Democratic Party thinking—tells us something about the break between liberalism and neoliberalism that Chait believes is so fanciful.

Oddly, as soon as Peters was done attacking unions and civil-service jobs for doling out benefits to the few—ignoring all the women and people of color who were increasingly reliant on these instruments for their own advance—he turned around and attacked programs like Social Security and Medicare for doing precisely the opposite: protecting everyone.

Take Social Security. The original purpose was to protect the elderly from need. But, in order to secure and maintain the widest possible support, benefits were paid to rich and poor alike. The catch, of course, is that a lot of money is wasted on people who don’t need it.

Another way the practical and the idealistic merge in neoliberal thinking in is our attitude toward income maintenance programs like Social Security, welfare, veterans’ pensions, and unemployment compensation. We want to eliminate duplication and apply a means test to these programs. They would all become one insurance program against need.

As a practical matter, the country can’t afford to spend money on people who don’t need it—my aunt who uses her Social Security check to go to Europe or your brother-in-law who uses his unemployment compensation to finance a trip to Florida. And as liberal idealists, we don’t think the well-off should be getting money from these programs anyway—every cent we can afford should go to helping those really in need.


Kind of like Hillary Clinton criticizing Bernie Sanders for supporting free college education for all on the grounds that Donald Trump’s kids shouldn’t get their education paid for? (And let’s not forget that as recently as the last presidential campaign, the Democratic candidate was more than willing to trumpet his credentials as a cutter of Social Security and Medicare, though thankfully he never entertained the idea of turning them into means-tested programs.)

It’s difficult to make sense of what truly drives this contradiction, whereby one liberalism is criticized for supporting only one segment of the population while another liberalism is criticized for supporting all segments, including the poor.

It could be as simple as the belief that government should work on behalf of only the truly disadvantaged, leaving everyone else to the hands of the market. That that turned out to be a disaster for the truly disadvantaged—with no one besides themselves to speak up on behalf of anti-poverty programs, those programs proved all too easy to eliminate, not by a Republican but by a Democrat—seems not to have much troubled the sleep of neoliberalism. Indeed, in the current election, it is Hillary Clinton’s support for the 1994 crime bill rather than the 1996 welfare reform bill that has gotten the most attention, even though she proudly stated in her memoir that she not only supported the 1996 bill but rounded up votes for it.

Or perhaps it’s that neoliberals of the left, like their counterparts on the right, simply came to believe that the market was for winners, government for losers. Only the poor needed government; everyone else was made for capitalism. “Risk is indeed the essence of the movement,” declared Peters of his merry band of neoliberal men, and though he had something different in mind when he said that, it’s clear from the rest of his manifesto that the risk-taking entrepreneur really was what made his and his friends’ hearts beat fastest.

Our hero is the risk-taking entrepreneur who creates new jobs and better products. “Americans,” says Bill Bradley, “have to begin to treat risk more as an opportunity and not as a threat.”

Whatever the explanation for this attitude toward government and the poor, it’s clear that we’re still living in the world the neoliberals made.

When Clinton’s main line of attack against Sanders is that his proposals would increase the size of the federal government by 40%, when her hawkishness remains an unapologetic part of her campaign, when unions barely register except as an ATM for the Democratic Party, and Wall Street firmly declares itself to be in her camp, we can hear that opening call of Peters—”But we no longer automatically favor unions and big government or oppose the military and big business”—shorn of all awkward hesitation and convoluted formulations, articulated instead in the forthright syntax of common sense and everyday truth.

Perhaps that is why Jonathan Chait cannot tell the difference between liberalism and neoliberalism.

Update (April 29)

I wrote a follow-up post here, in which I respond to Chait’s response.

{ 188 comments }

1

Rich Puchalsky 04.28.16 at 2:13 am

I’ll get in my usual comments at the beginning of the thread: whatever its original sources, by now neoliberalism is best characterized as the ideology of the global managerial class. That’s what makes it more than specifically American or British and links it to the world system that it dominates.

And the gay rights part of that that you notice in that early document are part of a theme that continues later. Neoliberalism is against any discrimination based on accidents of birth except those involving how much money your parents had.

2

Bruce Wilder 04.28.16 at 2:27 am

I have seen the claim that electing Clinton will be great because we would then have a “liberal” President.

Whether the advocate for this view failed to understand what “liberal ” means in an American context or failed to understand who Hillary is, I could not say.

I do think there is a campaign underway to claim “liberal” for the Clintons and to use it in substitution for the tarnished epithet, neoliberal.

3

John Quiggin 04.28.16 at 2:30 am

SNAP!

4

RNB 04.28.16 at 2:33 am

OP: “Or perhaps it’s that neoliberals of the left, like their counterparts on the right, simply came to believe that the market was for winners, government for losers.” That’s why I find Kocherlakota’s recent column so clever (see DeLong thread). If neo-liberalism is about freeing the market from political interference, then the US state should be allowed to respond the market demand that it issue more debt and pursue an expansionary Keynesian policy. Neo-liberals would have the government not respond to market signals as any business would. Hypocrites!

5

Andrew Richey 04.28.16 at 2:36 am

“Moderate liberals might not agree with Sanders’s ideas, but they can appreciate that his presence changes for the better a political landscape in which support for things like Mitt Romney’s old positions on health care and the environment were defined as hard-core liberalism.”

“Sanders’s worldview is not a fantasy. It is a serious critique based on ideas he has developed over many years, and it bears at least some relation to the instincts shared by all liberals.”

http://nymag.com/daily/intelligencer/2016/01/case-against-bernie-sanders.html

“[Chait] recoils in horror today at the more tepid versions of that liberalism that we see in the Sanders campaign.”

Seriously?

I’d be a hypocrite not to make allowances for rhetorical flourishes, but… where exactly in the cite is he recoiling in horror? Is he “horrified” by single-payer, or does he express skepticism that Sanders can overcome the obstacles of divided government and Make A Better Deal on single-payer through force of personality? Is he “recoiling” from raising taxes on the rich and spending the money on the poor, or is he expressing doubt that the numbers of Sanders’s specific plan add up?

6

LFC 04.28.16 at 3:02 am

BW @2

The Dem Party’s center-of-gravity is now somewhat to the left of what it was in the ’90s during the Bill Clinton era. ISTM HRC, whatever her ‘real’ inner propensities, has not run, and will not run in the general election, as a Bill Clinton-style DLC Democrat. She will not give a speech drawn from Charles Peters’ manifesto. And this holds even taking into account whatever tacking to the putative ‘center’ she may do for the general election. Actually I think the key to running against Trump will not be so much ideological placement as pointing out his inconsistencies, raising questions about his temperament, and using a lot of his incautious past statements vs. him.

It will be important for HRC to come across as a or the voice of sanity vs Trump, to be distinguished from coming across as the voice of the Establishment, which she should avoid. That may be easier said than done, however.

So much for free tactical campaign advice.

7

Bruce Wilder 04.28.16 at 3:11 am

LFC @ 5

Clinton is the sin eater, the scapegoat for all that follows. That she will win the general election is a foregone conclusion.

But then, she must govern and she — to coin a phrase — has no theory of politics. Obama held back the deluge, . . . next time fire. Lupita wins the thread and she has not even posted yet.

8

LFC 04.28.16 at 3:15 am

Lupita wins the thread and she has not even posted yet.

I’m sure that’s only a matter of time. However, I must shut off the computer now.

9

Ponfed 04.28.16 at 3:28 am

It always seem like it’s better to let a hundred people starve than to let one person get a dollar he didn’t “deserve”.

I try very hard to shy away from these comparisons, but it seems really peculiarly protestant. Like the idea of some people getting something for nothing really unnerves them, whatever the situation.

They are the judge of suffering, and they decide whatlevel of suffering deserves succor. And it’s an awful lot it turns out.

10

The Temporary Name 04.28.16 at 3:35 am

The weird thing is that Clinton, if Trump is the sort of disaster that influences other races, might actually have a shot at getting something good done.

I expect to spend a Clinton presidency complaining, but what might happen that would make people happy?

https://www.hillaryclinton.com/issues/

11

Chris Mealy 04.28.16 at 3:41 am

“Only the poor needed government; everyone else was made for capitalism.” Ugh, that’s what I thought back when I was in college. Nobody taught me that, but if you major in econ it’s way too easy to come to that conclusion on your own.

I think the neoliberal theory of politics is you publish a magazine that appeals to a liberalish billionaire, and they give you money (Warren Buffett was the money behind Washington Monthly).

12

JeffreyG 04.28.16 at 3:46 am

“but what might happen that would make people happy?”

Actively avoiding getting embroiled in conflict overseas while also maintaining a relatively scandal-free administration.

13

Daragh 04.28.16 at 5:26 am

Similarly to Andrew Richey @5, I think Corey is not only vastly overstating Chait’s opposition to ‘Sanders liberalism’, he’s doing much the same with the unions. Criticising certain aspects of the US trade union movement does not amount to ‘loathing.’ Indeed, there’s a solid left-wing critique to be made of the US trade unions movement, from closed shops to the support of Nixon (in many cases for rather unsavoury reasons). Even though I’d agree with Corey – presumably – that the decline of the American labour movement is a deeply negative phenomenon for the country both economically and politically, I’m not sure neoliberalism is the culprit.

14

Corey Robin 04.28.16 at 6:07 am

Andrew Richey at 5: You’re right. I was reading the column through the lens of another column he wrote, where he associated Sanders with the magazine Jacobin and the more general rise of socialism as an ideal, and there he did seem to be recoiling at the whole schmear. But his case against Sanders in the piece I linked to here is much less emotive. I’ve revised my phrasing. Thanks for pointing out the error.

15

Hidari 04.28.16 at 6:15 am

Modern American unions support Nixon for President? Do they not realise he’s dead? What fools they are! No wonder they’re on the way out.

16

Peter T 04.28.16 at 7:02 am

I have to be with Daragh on this one. All organisations with a record of support for Nixon or with restrictive memberships need to be eliminated from the political and economic system.

17

JM Hatch 04.28.16 at 7:55 am

“never the well paid journalist or economist or corporate CEO—….”

Just a note that there are not too many well paid journalist left, and their number is decreasing. It’s pundits who don’t do journalism,well maybe yellow journalism, who are well paid. Pundits are an entertainment industry for the entire range of political issues, usually with no training in journalism. It is they who in the guise of news/journalism, offering up commentary that temporarily relieves pain from frustration by re-enforcing and then manipulating biases. The audience perceives someone has listened to them, understand and expresses their inner feelings that they dare not let out in mixed company, while at the same time the audience becomes further radicalized and estranged from the commons. Like a good comedian, they are paid well, the unmentionable, the difference is comedians usually speak a simple truth to power, while pundits simply or simply make up overly simplified fairy tales solutions with no fact checking.

18

novakant 04.28.16 at 8:34 am

Kind of like Hillary Clinton criticizing Bernie Sanders for supporting free college education for all on the grounds that Donald Trump’s kids shouldn’t get their education paid for?

The resistance to the idea of free college education within the US has always amazed me – it’s perfectly doable and wouldn’t cost the earth.

You can study for free (or for very little) in e.g. Germany, France, Norway, Finland, Sweden, Brazil, Italy, Austria, Belgium, Greece, Spain, Czech Republic etc.

19

engels 04.28.16 at 8:58 am

“Americans,” says Bill Bradley, “have to begin to treat risk more as an opportunity and not as a threat.”

Whenever I hear crap like this, it makes me think of The Simpsons

Neddy doesn’t believe in insurance. He considers it a form of gambling.

20

casmilus 04.28.16 at 9:32 am

This:

https://www.amazon.co.uk/New-Enlightenment-Peter-Clarke/dp/0333441834/ref=sr_1_1?s=books&ie=UTF8&qid=1461835765&sr=1-1&keywords=the+new+enlightenment

was a controversial series on BBC TV in the mid 80s, especially as it was on Channel 4, at that time the cultural flagship for all “alternative” and anti-Tory movements. Not many viewers appreciated a show that lauded what Thatcher was doing and said it needed to go further.

A lot of it relates to what was called “neo-conservatism” at the time (with no association to military action in the Middle East), and we can now see it as charting the neoliberal evolution over the next 30 years. Blair took up many of the policies that would have been seen as too extreme for Thatcher.

21

Tim Worstall 04.28.16 at 10:02 am

I take the neoliberal/liberal distinction in its American guise to be most useful. To take Delong as an example, I would call him, in that American sense, a neoliberal. He shares most of the liberal goals, greater equality and so on. Yet thinks that at least some of them can be best reached through market processes rather than, say, regulation or more direct government control or funding.

Whether he’s right in that belief or not is another matter of course. But I do think it’s a useful short hand distinction to be able to make.

For example, think of climate change for a moment. JQ and many others insist that a carbon tax is the obvious and likely to be successful solution (as do I for what little that counts). A Pigou Tax isn’t wholly and entirely a pure free market solution: but it’s very much more toward the market end of the range of possible solutions than a command and control economy based upon environmental considerations would be.

We might thus call the carbon tax the neoliberal climate change solution: and thus JQ of course a neoliberal on this point.

I don’t say that neoliberals are right, either sometimes or always. But as a useful descriptor of the difference between those advocating market solutions and more statist ones toward the same progressive goals it looks like a useful distinction.

22

reason 04.28.16 at 10:03 am

Brett
do you mean freedom for people or freedom for capital. They are not exactly the same thing you know. It was Libertarians who distorted the meaning.

23

Ebenezer Scrooge 04.28.16 at 10:46 am

As a recovering neoliberal myself, I think that their sins were of a different class. They (I!) became enamored of simple economics, but downplayed empiricism and political economy. Mea culpa.
Or to rephrase it differently, I can still argue with a good conscience that a neoliberal world is a first-best world. But we don’t live on a uniform spherical first-best planet. Given what we have to work with, neoliberalism is a far worse second-best world than old-fashioned New Deal liberalism.

24

Rich Puchalsky 04.28.16 at 11:16 am

“Yet thinks that at least some of them can be best reached through market processes rather than, say, regulation or more direct government control or funding.”

Neoliberalism: everything has to be managed, but nothing can be managed in a way that might put you into direct conflict with your fellow managers. So neoliberals love market signals.

25

JPL 04.28.16 at 11:19 am

When one is faced with the task of describing and understanding a reality that is what it is independently of the language used to understand and describe it, and when the effectiveness of the conventional categories used to understand and describe this reality is called into question, one needs to have a way of describing this reality that is an alternative to the usual ways of describing it, which may be problematic. One needs to discover what is the coherent phenomenon in reality that has a role in the dependency structure of the world, that has some objective existence, and one needs to allow for an alternative interpretation, i.e., categorization, of the objective phenomena in question. One needs a way of describing this reality without the categories that are in question.

I try to state this as a general principle applicable to all attempts to make sense of the world of our common experience. As applied to the particular case at hand, we have on the one hand a body of political discourse produced by people who are more practical political activists and pundits than political theorists in the social science or philosophical sense (e.g., Chait, Clinton, Peters, Peretz, etc.). On the other hand, we have a set of terms for categories (‘neoliberal’, conservative’ and the like) that people have been using to talk about this political discourse and the “movements” associated with them; and the effectiveness of these terms for thinking about the realities (the patterns of thought, the attempts at justification of claims, etc.) has recently been the subject of much debate, incl. at the USIH blog, and I think Corey is concerned here to defend his understanding of the category ‘neoliberal’ as he has done previously with the category ‘conservative’, as comprehending a crucial coherent phenomenon, a system of thought that has some practical impact on the course of the functioning of governments, etc.

I don’t want to weigh in on the question of the effectiveness of Corey’s categories; I only wanted to make an observation about general problems of the use of language to accurately describe reality. Amartya Sen says somewhere, in response to Marx’s aphorism, that if one wants to change the world in an effective way for the better, one can only do so on the basis of an adequate understanding of the objective realities, and, I would include, an adequate understanding of the ethical principles governing “market” interactions and the role of governments vis-a-vis their citizens. It doesn’t look to me, judging from their discourse, the way they attempt to justify their programmatic assertions, as if either those who are called “neoliberals” or those who are called “conservatives” have such an adequate understanding of either of these realities.

(I’m sorry for posting this just to have a record that I can come back to later to see if what I said makes any sense. I’m trying to work out some things.)

26

gbh 04.28.16 at 11:19 am

You can’t make this stuff up. “Red Guard” and ” indoctrination centers”. I remember when Mao was on SNL

27

Rich Puchalsky 04.28.16 at 11:42 am

This thread is starting to be annoying. Other than a tiny number of intellectuals — the early ones, as noted above, funded by a liberal billionaire — there is no mass neoliberal bloc anywhere. People don’t talk about politics to each other and say “I’m a neoliberal.” Yet the whole world system runs on neoliberalism, from China to Europe to the U.S.

Does that mean that the term is simply a pejorative? No. It means that these politics are meaningful to a numerically very small group of people: the elite technocrats. They never really bothered to get a mass following because they didn’t need to. They control enough of the system to keep their places: they don’t control enough of it to solve any problems, but that’s OK because they don’t really solve problems.

28

signsanssignified 04.28.16 at 11:46 am

Corey, I think this post is, overall, really interesting. Beyond being irritated by various neoliberal arguments & positions for a long time, I’d never given them serious attention & was therefore unaware of the founding statements you quote above. In re the sources of their political stance, I think first of a statement by Henry Adams: “The vast majority of men choose interest when deciding morals.”

That said, I was confused by one statement you made about “Hillary Clinton supporters who leverage the interests of African-American voters against the interests of white working-class voters…” What exactly is the nature of this leveraging to which you refer? (Apologies in advance if I’m missing the obvious.)

29

David 04.28.16 at 11:55 am

I always find it helpful, when people try to make the “liberal/neoliberal” distinction to ask how some of the originators of Liberal thought (Locke, Hamilton, Mill) would have thought of any given idea put forward today as “liberal”. These individuals, with due allowance for nitpicking exceptions, essentially favoured exactly the combination of complete freedom of economic activity (especially for the wealthy), together with a repressive state apparatus to protect property, that we see in neoliberalism today. The fact the Liberals as a political force subsequently became interested in social reform has a lot to do with the influence of the Church (nonconformist in Britain, Catholic in Europe) which led ultimately to the rise of the Christian Democrat tradition after 1945. Likewise, many liberals changed their ideas under the influence of the Depression and WW2, and the success of the Soviet regime in its immense structural transformations of the economy and society. The New Deal and Great Society actors were not liberals but social democrats, as were many US politicians of later decades, even up to Sanders. Since the end of the Cold War, classic liberalism has steadily reasserted itself. Neo-liberals (paleo-liberals might be a better term) are just liberals who no longer feel the need to appear nice.

30

William Timberman 04.28.16 at 11:56 am

Rich Puchalsky @ 30

The neoliberal claim to omniscience has always seemed like a nightmare non-sequitur to me. We’re the only ones who know how to make things work. Trust us. (Yeah, but things aren’t working.) Nasty, scary Republicans. Give us money. Nasty, noisy Socialists. They can’t help you. More foreign interventions, more financial engineering. More Uber drivers and Walmart Associates. Your future lies with us.

31

Z 04.28.16 at 12:22 pm

People don’t talk about politics to each other and say “I’m a neoliberal.”

Oh well, depending on where and when you find yourself, you might actually find 5 to 25 percent who do. But that is just a nitpick; I completely agree with the substance of your comment.

Also, I find David’s comment currently @31 very perceptive. I would add that just like actually existing mass liberal politics has historically been inseparable with moral and social movements, mostly of religious nature, the current disappearance of religion in developed western countries (the hypocritical posturing of the United States in that respect notwithstanding) explains much of the mutation (or reversion) of liberalism into neoliberalism. In retrospect, I would grant that phenomenon more importance than the disintegration of the Soviet Bloc (and indeed, empirically, the first wave of transition to neoliberalism was completed well before the collapse of the USSR).

32

Rich Puchalsky 04.28.16 at 12:40 pm

Ze K: “Not a mass following, but a quasi-totalitarian suppression of any alternative view, is what happened. “

This is so commonly referred to that it has its own acronym: TINA for There Is No Alternative. It’s not totalitarian: neoliberals aren’t totalitarians. It’s that every possible alternative is supposed to be worse. Sometimes this is even the case, depending of course on your definitions of “possible” and “worse”. Look at the microcosm of discussion here about HRC and Trump.

Z: “actually existing mass liberal politics has historically been inseparable with moral and social movements, mostly of religious nature”

Yes. This is why I kept trying to get people in the Brad de Long thread to read back what he wrote about the abolitionists. Everyone now agrees that the abolitionists were right, because slavery is bad. But when people look at who the abolitionists actually were and how they thought and behaved, their being right is no defense against the same exact charges that neoliberals like to bring against people today.

33

bruce wilder 04.28.16 at 1:51 pm

One of the better dissections of neoliberalism as a set of ideas was Bill Black’s review last year of Tony Blair’s May 26, 2005 speech on “Risk and the State.” Black covers both the rhetoric and the policy substance and shows how they are related.

Neoliberalism really is a matter of taking on the mantle of technocratic doing good by way of good policy — the well-intentioned ethos of New Deal liberals and Social Democrats and Ordoliberals — and then adapting it to fostering corruption and malfeasance.

If neoliberalism is the ideology of the managerial class, it is a bought-and-paid-for ideology, the neoliberals a group of hirelings trotted out as spokesmodels to apologize for sociopathy. The sociopathy itself isn’t an ideology, its just a use of power by those with the opportunity to do so. But, the ideology facilitates that by confusing the rest of us and substituting reactionary conservatives dressed up in neoliberal clothing to play the part of leftish pundits (Krugman, DeLong) and politicians (Clinton, Obama) or technocrats of integrity (Bernanke, Blanchard).

Neoclassical economics contributes mightily with its insistence on offering a dogmatic analysis of a non-existent “market economy”, ignoring the actual economy of hierarchies in which control frauds are practiced.

34

Lee A. Arnold 04.28.16 at 1:54 pm

It’s another “-ism”, signifying “half-witted”.

We need a group term for “knuckleheads”, after a pack of dogs, a herd of buffalo, a school of fish, an exaltation of larks.

Perhaps, a “cracking of knuckleheads”?

To be used in phrases like, “as inadequate and execrable, as the whole cracking of neoliberal knuckleheads”

35

bruce wilder 04.28.16 at 1:56 pm

Under neoliberal TINA, any alternative is inconceivable.

36

lemmy caution 04.28.16 at 1:59 pm

wikipedia was pretty useful to me on this:

https://en.wikipedia.org/wiki/Neoliberalism

37

bob mcmanus 04.28.16 at 2:17 pm

I don’t know saying Charlie Peters invented neoliberalism is like saying Adam Smith created capitalism, kinda a Carlylean history of ideas. If the concept is to be useful it must a) reflect objective material conditions rather than delimit a discourse, and so also b) be international in scope of applicability. No intellectual history in one country, I say.

Wendy Brown is pretty good but much better and recommended is Virno & Hardt, Radical Thought in Italy 1996. For a start.

One big difference between 18th century liberalism and 21st century neoliberalism is, like capitalism, the history and ubiquity of liberalism and democracy determined that neoliberalism could not be imposed or forced by elites or government but had to be willing and enthusiastically adopted created invented from the bottom up as essentially a worker’s liberation (in the west) from Fordism and Taylorism and unionism, an empowerment and accumulation and expression of individual capital, social, intellectual, etc.

38

MPAVictoria 04.28.16 at 2:23 pm

Just a great, great piece Corey.

39

Rich Puchalsky 04.28.16 at 2:24 pm

BW: “One of the better dissections of neoliberalism as a set of ideas was Bill Black’s review last year of Tony Blair’s May 26, 2005 speech on “Risk and the State.””

It contains this bit:
“Blair ended on a note that would cause any independent industrial safety engineer to jump out of his or her seat and scream “No!””

[in response to Blair saying]:
“We cannot respond to every accident by trying to guarantee ever more tiny margins of safety. We cannot eliminate risk. We have to live with it, manage it. Sometimes we have to accept: no-one is to blame.”

Oh good God. This is why, as an environmental activist, I’ve always found it better to talk to the actual engineers at polluting facilities than the people higher up. The people at the plant understand that there are actual physical processes going on and that they have to be figured out or people (maybe even themselves) will die. And strangely enough the command-and-control approach is acceptable when it comes to “You’re going to implement these safety procedures or we’re going to die.” Part of that is, yes, figuring out exactly who is to blame for what so that it can be done differently.

I don’t think I agree with this though:
Bruce Wilder: “If neoliberalism is the ideology of the managerial class, it is a bought-and-paid-for ideology, the neoliberals a group of hirelings […]”

Hired by whom? The influential neoliberals are just as wealthy as any other member of the elite. People of great wealth who are not themselves managers have, as far as I can see, been quietly shunted off to a well-decorated room somewhere where they can live it up however they like, but I don’t see how they are in actual control of anything. Sure, society is rigidly controlled to defend their interest, but that’s also the managers’ interest. And they don’t seem to really make any of the decisions unless they have a dual role as managers.

Neoliberal ideology is also meritocratic. “Merit” generally requires that you had the right parents, but it also does involve neoliberal marker skills. I don’t see how wealthy people without those markers are really in control of anything: their wealth empowers neoliberal control, but for the purposes of neoliberals. And if sociopathy is what’s going on, neoliberals are perfectly capable of that in their own right.

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bob mcmanus 04.28.16 at 2:29 pm

I find the idea of various forms (social, intellectual, etc) of “capital” to be useful in understanding neoliberalism, how it is an extension of liberalism. If liberalism was about the encouragement protection of earned or acquired personal and private property and the rights attaining (including for instance the Constitutional and political rights as property), then the extension of the idea of property in neoliberalism (cf Foucault) to education, skills, character, history, associations viewed as accumulation of capitals makes the immanence of neoliberalism more comprehensible.

Are there large categorical differences between Carnegie’s factory, Disney’s mouse, a union card, and your Ivy League degree?

41

David 04.28.16 at 2:57 pm

It’s interesting to think of capitalism as a hiatus, or a stage of development, if you prefer, in liberalism. Wealth in Locke’s day meant land, buildings, money (and of course slaves – liberals were generally supportive of slavery). It was something that could be physically protected, hence the need for a state to do this job – just about the only state function liberals regarded as justified. Not all individual capitals were liberals in the classic sense – Owen was a pioneer socialist, of course, Rowntree, like several others, was a Quaker. But later bureaucratic managerial capitalism at its industrial height was hard to reconcile with Liberalism, not least because much of it depended on public contracts, and some of it had to be nationalised for strategic reasons, or just because its owners were incompetent. Insofar as neoliberalism is different from classic liberalism it is perhaps that the wealth it believes needs protecting is increasingly ethereal and virtual: software, intellectual property, complicated financial products or internet companies that don’t make anything (including profits in some cases). Neoliberals demand state action to protect this kind of wealth, as their liberal predecessors wanted their physical possessions protected.

42

William Timberman 04.28.16 at 2:58 pm

Hired by whom? Hired by the Zeitgeist, you might say. As Bruce Wilder has always taken great pains to point out, there’s never been any shortage, post WWII, of Zeitgeist engineers, both talented and grossly inept. And since we seem not to love Chomskyan theories of coordination, I’d say that this metaphorical attempt to encapsulate overdetermined consequences may be the best we can do to explain how the US’s post-War assumption of the mantle of economic and political hegemony turned into a mafia-run casino with a global staff of leg-breakers.

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bruce wilder 04.28.16 at 3:14 pm

RP: Hired by whom? The influential neoliberals are just as wealthy as any other member of the elite.

The OP had some information.

I don’t have any sense of just how wealthy Jonathan Chait might be. Or, Ezra Klein. But, they grub around for jobs — their journalistic careers depend on getting people with Media platforms to hire them. The same with technocrats. Olivier Blanchard is important because of a career made in a series of jobs. Paul Krugman has become a modestly wealthy man I guess, but he’s important because he has a job writing columns for the New York Times and before that academic appointments at prestigious institutions.

None of them, as far as I know, are billionaires. Tom Friedman is married to a woman, who might have qualified as an almost billionaire — don’t know the current status of her shopping mall fortune.

The chattering classes are not identical with their masters in the corporate suites or among billionaires and I dare guess they rarely mingle outside fairly controlled circumstances.

44

Plume 04.28.16 at 3:23 pm

Excellent article, Corey.

Thomas Frank, in a talk about his new book, adds to key thoughts to this.

http://www.c-span.org/video/?406308-1/book-discussion-listen-liberal

My deduction from his C-Span discussion — about the change in the Democratic party to a kind of “meritocratic” consensus among technocrats — was that there really isn’t much difference between liberals and conservatives now, when it comes to economics and rising up through the ranks. Just the vehicles for that rise are different. Democratic neoliberals — to be overly general — see education and professionalism as the pathway. Conservatives see “free enterprise” as that pathway. So their ethos is all too much the same, in that they both want to protect the pathway itself, the hierarchies themselves, the haves (winners) themselves. They just have different ideas about who is “most deserving” of that rise.

Leftists, OTOH, believe there shouldn’t be any need for that pathway because we shouldn’t have those neck-breaking hierarchies to traverse in the first place. That the vehicles would become irrelevant — business or education — because the endlessly steep, endlessly long and harsh climb would no longer exist. Perhaps small varieties of topography, but nothing to write home about and certainly nothing worth waging war for.

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Rich Puchalsky 04.28.16 at 3:25 pm

BW: “I don’t have any sense of just how wealthy Jonathan Chait might be. Or, Ezra Klein.”

Well, I wasn’t intending them to be considered as influential neoliberals. Neither one is actually in charge of anything.

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Ted K 04.28.16 at 3:38 pm

“We still see that kind of talk among today’s Democrats, particularly in debates around free trade, where it is always the unionized worker—never the well paid journalist or economist or corporate CEO—who is expected to make sacrifices on behalf of the global poor.”

Are there any trade restrictions protecting well paid journalists, economists, or corporate CEO’s from foreign competition for their jobs? In the case of economists, it seems pretty clear from glancing at the names of students and professors in American economics departments that there is in fact a great deal of foreign competition for these positions. Could somebody please give me an example of a neoliberal arguing to restrict this foreign competition? If there are no examples, the above characterization of supporters of free trade as hypocritically advocating for protections for high-skilled workers is false.

The irony of the leftist liberal position for protectionist trade barriers for the American middle class is that these sorts of barriers are literally “rigging” the world economy in favor of the comparatively rich at the expense of the comparatively poor. If you doubt that trade liberalization really helps the global poor you should take a look at this: https://en.wikipedia.org/wiki/Poverty_in_China

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bruce wilder 04.28.16 at 3:43 pm

RP: I wasn’t intending them to be considered as influential neoliberals. Neither one is actually in charge of anything.

“influential neoliberal” and “actually in charge of anything” might not have an intersection

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AcademicLurker 04.28.16 at 3:55 pm

Are there any trade restrictions protecting well paid journalists, economists, or corporate CEO’s from foreign competition for their jobs?

No formal trade restrictions are needed for such jobs as long as the old boy network continues to function.

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Ed 04.28.16 at 3:57 pm

Its possible to get too wrapped up in the meaning of words. “Liberal” originally meant, and still means in backwards countries, something close to what Americans mean by “libertarian”. In the US it came to mean using the government to improve the status of Blacks.

As far as I can tell, “neoliberal” means more oligarchy, and I wish someone to explain to me the difference between “neoliberal” and “neoconservative’.

50

Rich Puchalsky 04.28.16 at 3:59 pm

““influential neoliberal” and “actually in charge of anything” might not have an intersection”

Clinton, Obama, and HRC were/are in charge of quite important things. Central bankers, important Eurocrats, CEOs of multinationals, etc. Aren’t people like, say, Robert Rubin archetypal neoliberals? If those people don’t count as neoliberals, then neoliberalism really is a pretty empty category. Of course not every neoliberal is a big shot.

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Lupita 04.28.16 at 4:00 pm

Maybe English-speakers could use “neoliberalismo” to free the term from the localized meaning “neoliberal” has among a small band of parochial intellectuals. It would be like the difference between “americano” and “American”, false cognates that cause much trouble among the self-centered.

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efcdons 04.28.16 at 4:04 pm

@52 “The irony of the leftist liberal position for protectionist trade barriers for the American middle class is that these sorts of barriers are literally “rigging” the world economy in favor of the comparatively rich at the expense of the comparatively poor. “

That is literally exactly what Corey describes in his post as a feature of neoliberal rhetoric.

“In the hands of neoliberalism, it became fashionable to pit the interests of the poor not against the power of the wealthy but against the working class that had been made into a middle class by America’s unions.”

With academics the barrier is tenure. You can’t threaten to fire them wholesale and replace them with adjuncts or professors from India. With the others it isn’t so much about barriers rather than the ideology surrounding the position makes it immune to offshoring. For CEOs there is this idea that unlike, say an interchangeable factory worker, there is some intangible quality that makes it impossible to replace the CEO with a generic CEO from India. There doesn’t seem to be any evidence to support this contention there is something special about CEOs that doesn’t apply to factory workers, but the idea seems to be deeply ingrained in our society.

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Ed 04.28.16 at 4:05 pm

Novekant @18, its important to remember that a higher percentage of Americans attend higher education than is the case just about in every other country. This is precisely because higher education in the US is big business. People are encouraged to go to college, and the non-dischargable loans are part of the scam, because it means more profits.

Having the government pay for everyone to go to college, without changing anything else about the system, would immediately end most of the propaganda and pressure to attend college directed at high school students and their parents. But to do it properly it should probably be accompanied by things like shutting down many marginal higher educational institutions, and not just Trump University, ending the concept of the bachelor’s degree as something separate from a professional degree, and much more selectivity in admissions, essentially making higher education in the US more like it is in other countries. Btw, I am completely in favor of this but I don’t think everyone is and I get the impression people saying “make college free’ have thought through the implications.

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Lupita 04.28.16 at 4:07 pm

@Ed

“Liberal” originally meant, and still means in backwards countries, something close to what Americans mean by “libertarian”.

Are you calling the US a backwards country?

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Ted K 04.28.16 at 4:09 pm

AcademicLurker @53

Looks like we need to protect the poor American CEO’s who are losing their jobs to Indians:
http://foreignpolicy.com/2015/08/18/why-are-so-many-of-the-worlds-best-companies-run-by-indians-google-sundar-pichai/

Or maybe we should protect all the American economists losing their jobs to foreigners at MIT and every other American economics department: http://economics.mit.edu/faculty

Are there any examples of neoliberals arguing for protectionism for these groups?

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Brett Dunbar 04.28.16 at 4:10 pm

Totalitarianism has a specific meaning and it is more or less the antithesis of liberalism. A totalitarian state fundamentally rejects the right of any independent organisations to exist. Suppressing or controlling not just political parties but churches, sports clubs, youth organisations basically anything. Basically it rejects both the concept of an apolitical body or the legitimate existence of any political body outside the state. Economically it tended to favour either a socialist command economy where the state directly ran everything or a corporatist economy where the state directly intervened to pick winners and success was determined by political connections not competence.

Most dictatorships are authoritarian, actual effective political opposition is suppressed while apolitical and ineffective organisations are tolerated to some extent. Putin’s regime is authoritarian, there are opposition parties and a somewhat independent press but various quasi-legal means are used to prevent them being effective.

TINA occurred not due to other political and economic views being suppressed more due to both actual existing alternative models (socialism (command economy) and corporatism (crony economy)) having performed worse than capitalism.

Capitalist economics requires that the state largely leave the market to operate. Businesses are free to compete without the state attempting to rig the market in favour of the politically well connected. This works badly in both totalitarian and authoritarian systems. The idea that the state’s best economic policy is to step back and not interfere generalises to a more general view that the state should mostly keep out of people’s personal lives as well.

The economy we actually have is basically a free market, as a consumer I have a choice between a wide range of competing products and services from a range of different retailers and suppliers.

For example when Britain privatised the airports most went to BAA which ended up with an effective monopoly in many areas. In the north west the two main airports Manchester and Liverpool were both independently owned and fairly close. As they had to compete for airline’s custom they both kept prices low and service good (customers of the airlines prefer good service and low prices). While BAA developed a reputation for high prices arrogance, poor service and incompetence. Which is exactly what you would expect from a competitive free market compared to a politically privileged monopolist.

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L2P 04.28.16 at 4:19 pm

“t means that these politics are meaningful to a numerically very small group of people: the elite technocrats. They never really bothered to get a mass following because they didn’t need to.”

Didn’t they try to create their mass following by picking up racists? It’s not their fault the racists were more interested in the racist part, not so much in the free market part.

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engels 04.28.16 at 4:31 pm

Maybe English-speakers could use “neoliberalismo” to free the term from the localized meaning “neoliberal” has among a small band of parochial intellectuals. It would be like the difference between “americano” and “American”, false cognates that cause much trouble among the self-centered.

Yup, and ditto “liberal”, “populist”, ” libertarian”, “progressive” (and possibly “conservative” and ” socialist “) – pretty much every important political term there is has an anal US-centred alternative meaning that is only current in US (don’t get me started on “football” )

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Rich Puchalsky 04.28.16 at 4:33 pm

L2P: “Didn’t they try to create their mass following by picking up racists?”

Neoliberalism is expressed differently in different places, but in the U.S. at least, no, I don’t think so. I favor a model of contemporary U.S. politics as having three basic groups (the left, neoliberals, and the right) instead of just two, or instead of the right being just an extended kind of right neoliberalism. Trump isn’t a neoliberal, Bush Jr wasn’t, etc. The current leading neoliberal politician in the U.S. is HRC, and she routinely deploys concern about racism as something that is supposed to distinguish herself from both Sanders on the left and Trump on the right. (Note that I’m not saying that the left isn’t concerned about racism. BLM, for instance, I think is best understood as being on the left.)

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David 04.28.16 at 4:35 pm

Ze K – yes, today, of course, protecting wealth has a much wider and more complex meaning, as I was trying to suggest. IP is a good example – if you own copyright to a software program, for example, you insist that the government pass laws to safeguard your rights, pursue people in court, make supportive statements about how valuable you are to the economy etc.
Brett Dunbar – about an opposition between totalitarianism and liberalism, we can debate endlessly, and have done before (see the whole Pinochet/Hayek controversy). Economic liberalism (the sort which is fundamentally important) can and does coexist quite happily with authoritarian regimes. Indeed, even in the Third Reich (let me claim the prize for first mention) there was a flourishing market economy. Social liberalism (in the sense of old-age pensions for example) is generally accepted to have been first implemented on a large scale in Bismarck’s Prussia. Other things trading under the name of “liberal” ideas, as I and others have suggested, are largely imported from other ideologies and beliefs.

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engels 04.28.16 at 4:35 pm

Cf. One of Terry Eagleton’s great openings:

It is one of the minor symptoms of the mental decline of the United States that Stanley Fish is thought to be on the Left. By some of his compatriots, anyway, and no doubt by himself. In a nation so politically addled that ‘liberal’ can mean ‘state interventionist’ and ‘libertarianism’ letting the poor die on the streets, this is perhaps not wholly unpredictable. …

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Plume 04.28.16 at 4:42 pm

Ed,

In general, neocons are about projecting American empire via military power, behind a very thin veneer/excuse of “spreading democracy.” They’re really spreading capitalism and American empire. The first generation of neocons came primarily from the so-called “New York Intellectuals” and were generally old leftists who moved radically to the right. Commentary was their chief rag. The second generation is already getting a bit long in the tooth and includes the Kristol and the PNAC crowd who pushed for regime change in Iraq. There seems to be a kind of dynastic flow for many that I don’t see among neoliberals.

Neoliberals, as Corey notes above, were/are primarily about (relatively conservative) economics, focused on the domestic sphere, but loving them some globalization as well.

Neocons can, of course, serve neoliberalism, and vice versa. Boiled down to its most basic: foreign (military) affairs versus domestic economic policy, which work in tandem to broaden capitalist power and empire.

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Brett Dunbar 04.28.16 at 5:04 pm

Nazi Germany went to considerable effort to suppress markets in pursuit of a corporatist economic policy. Forcing mergers and cartels on much of the economy with pervasive price controls. Success was determined by having strong political links to the regime not by how effective you are at your business. Nazi Germany quite explicitly rejected capitalism and the use of the market as the primary economic mechanism.

For an actual attempt to run a capitalist economy with a totalitarian political system China is probably the best attempt. It’s hard form a dictatorship to avoid favouring the regimes cronies.

A competitive free market exists as long as for example the barriers to entry are fairly low and certain other conditions are met. If Easyjet are actually extracting monopoly rent then other airlines, Ryanair for example might start operating on those routes or close equivalents using nearby airports. If Easyjet were to attempt to sit on slots they weren’t using in order to retain a monopoly then a complaint to the competition authorities would be likely to succeed. It is also possible that the previous prices were exceptionally low either there was a price war or some of their costs were lower than they now are.

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Daragh 04.28.16 at 5:04 pm

Peter T @16 – My point was that I think Corey and other leftist critics of neoliberalism confuse ‘criticising aspects of trade unionism’ with ‘hostility to trade unionism itself’. So… thanks for proving my point!

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LFC 04.28.16 at 5:06 pm

b mcmanus @42
I don’t know saying Charlie Peters invented neoliberalism is like saying Adam Smith created capitalism, kinda a Carlylean history of ideas.

Nonsense. Neoliberalism (as used in the OP or otherwise) is a worldview, an ideology, a discourse. Capitalism is an economic system. Two different things. One can speak of worldviews that support or oppose capitalism, of course. But “Peters’s manifesto is a founding document of [U.S.] neoliberalism” is a reasonable sentence. Whereas the sentence “Smith’s ‘Wealth of Nations’ is a founding text of capitalism” does not make much sense; a founding text of classical political economy, yes.

And “no intellectual history in one country” is also *very* debatable. But no pt opening that up here. I will just say that thinking in terms of ‘national’ tendencies in thought is not a bonkers, or even nec. a conservative, way to do intellectual history. Cf. for example Donald Levine’s Visions of the Sociological Tradition.

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Suzanne 04.28.16 at 5:07 pm

@6: Agree in full. Sanders has been effective in forcing Clinton to mind her left flank, but personalities aside, the political scene is different from the 90s, the Democratic Party is different, and Clinton has adjusted accordingly. (Whether she is trimming or expressing natural inclinations, or a bit of both, is one of those YMMV things.)

I don’t think she’ll have much tacking to the center to do in the general election. She hasn’t had to concede too much risky ground to Sanders in order to win. I would not like to see her emphasize identity politics too much over economic issues, one place where Trump is strong — but “strong” only if you don’t look too hard, there’s plenty to attack there.

Trump has thoughtfully played the “woman card” and in a highly beneficial way (for her), thus saving HRC the trouble. I think the “voice of reason” tactic could also work well against Cruz, should it be necessary, which is unlikely.

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cassander 04.28.16 at 5:09 pm

> That was the intellectual daring, apparently.

In left wing circles? in the 70s and 80s? That’s just about the definition of daring.

> (“We want a government that can fire people who can’t or won’t do the job.”)

Do you disagree with this sentiment? Because it strikes me as quite reasonable.

>(Sadly, within two decades, Weirton Steel was dead, and with it, those future profits and wages for which those workers had sacrificed in the early 1980s.)

I love this line, because it demonstrates so much missing the point. First, would the workers have been better off with Weirton Steel folding immediately? And second, two decades is a long time. People came to wierton steel, had long careers there, and retired in the period in question. did none of those people benefit? The inability of those on the left to understand that the economy is a dynamic and changing not a rigid cast system never ceases to amaze and dispirit me. But then, it’s difficult to get people to understand a thing when their salary depends on them not understanding it.

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The Temporary Name 04.28.16 at 5:18 pm

> (“We want a government that can fire people who can’t or won’t do the job.”)Do you disagree with this sentiment? Because it strikes me as quite reasonable.

This is neither here nor there in a union though: people still get fired.

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David 04.28.16 at 5:44 pm

The Nazis wanted a war economy, and did what the British and Americans did, though less successfully. There was a genuine populist anti-capitalist tendency in the Party, but the leadership rapidly made peace with the existing economic order. (There’s a difference between “free” markets and capitalism, but that’s another issue. My point is that a totalitarian system is about ideas rather than practices,to the extent that those practices don’t undermine the system itself. The Nazis were still inviting competing tenders for military equipment in the last months of the war).

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Robert 04.28.16 at 5:55 pm

As I understand it, many neoliberals understand markets must be constructed through and with continual government intrusion. For example, consider intellectual property. Or consider markets in which carbon permits can be traded. On the other hand, classical liberals thought of markets as natural, as emerging with a night-watchman state.

Anther distinction is that neoliberalism has a view of the self. One must be ever ready to think of oneself as an entrepreneur managing risk in all one’s choices. Collection institutions that workers might participate in should shuffle risk back onto the individual. Think of pensions versus 401Ks, for example. (In my daily life, I grumble about all the web sites that I might be expected to have an account on, including for work-related purposes.)

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engels 04.28.16 at 6:03 pm

As I understand it, many neoliberals understand markets must be constructed through and with continual government intrusion

Imho calling it self-conscious classical liberalism would be a better definition than most.

(I sort of agree with your second para too but I was taught that all political ideologies have a view of the self. I’d say there’s a utopian orientation that’s new.)

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ifthethunderdontgetya™³²®© 04.28.16 at 6:32 pm

The inability of those on the left to understand that the economy is a dynamic and changing not a rigid cast system never ceases to amaze and dispirit me. But then, it’s difficult to get people to understand a thing when their salary depends on them not understanding it.
===============

Is that you, Jonah Goldberg?
~

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Plume 04.28.16 at 6:46 pm

” The inability of those on the left to understand that the economy is a dynamic and changing not a rigid cast system never ceases to amaze and dispirit me. But then, it’s difficult to get people to understand a thing when their salary depends on them not understanding it.”

I think a much more accurate way to phrase this would be: The inability of those in the mainstream center and right to understand that the “dynamism” of the economy will always favor the haves and never the have-nots is incredibly depressing. And while there are rare cases of “dynamic” social mobility, the center-left, center and the right refuse to accept the inordinate power and domination of our class system — at all levels. They would much rather believe in fairy tales of “hard work and perseverance” lifting all who go that route, with the various vehicles of choice being the only differentiation along those lines. They would much rather believe that systems and environments are no match for intrepid, relentless individuals, despite the mountains of evidence to the contrary.

And, yes, their salaries really do depend upon their continued complicity with those systems of dominance, oppression and propaganda.

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Brett Dunbar 04.28.16 at 6:58 pm

The Nazis began the process of establishing state direction of the economy and consolidation of industries into a small number of businesses and cartels in 1933. The economic policy was very different to the pro-competition capitalist policy of the Weimar republic. It wasn’t simply a temporary expedient adopted in an emergency. Over time the pricing data that a market economy generates becomes increasingly outlasted, command economies become less efficient over time.

Corporatism largely retained private ownership but has state direction of the economy. This had an attraction to the politically favoured businesses who can obtain monopoly rents.

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Plume 04.28.16 at 7:23 pm

Brett,

Nazi Germany was a capitalist regime. It had private ownership of the means of production. Businesses operated for profit and kept their profits. They were a part of the global capitalist market, and continued doing business even during WWII — with America and the rest of Europe, included. Businesses under the Nazi regime operated under classic capitalist, M-C-M and exchange-value forms. Social relations were capitalist. Capitalists controlled surplus value generated by workers.

It has never been the case that capitalism escapes government controls, as you seem to believe it must or it is not capitalist. In fact, capitalism can not possibly operate at all without stringent government controls, protections, support and bailouts. Take that away, establish your mythic “free markets” and it collapses in days. It would be nothing but “anarchy” in the sense most people use that word.

Though it’s not about Nazi Germany, I think this recent article by Erik Olin Wright is helpful in thinking about economic ecologies . . . and the way economic, state and social power interact:

How to Think
About (And Win) Socialism

In Envisioning Real Utopias, I argue that three different kinds of power are deployed in all economic structures: economic power, based on the control over economic resources; state power, rooted in control over rule-making and rule-enforcing over territory; and social power, which I define as power rooted in the capacity to mobilize people for cooperative, voluntary collective actions.

Different kinds of economic structures (or modes of production) can then be distinguished on the basis of which of these three forms of power is most important in determining control of the process of production and the extraction and use of the social surplus generated through production. More specifically, capitalism can be distinguished in these terms from two post-capitalist alternatives:

Capitalism is an economic structure within which the means of production are privately owned and the allocation and use of resources for different social purposes is accomplished through the exercise of economic power. Investments and the control of production are the result of the exercise of economic power by owners of capital.

Statism is an economic structure within which the means of production are owned by the state and the allocation and use of resources for different social purposes is accomplished through the exercise of state power. State officials control the investment process and production through some sort of state-administrative mechanism.

Socialism is an economic structure within which the means of production are socially owned and the allocation and use of resources for different social purposes is accomplished through the exercise of “social power.”

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Brett Dunbar 04.28.16 at 8:51 pm

Thatcher was broadly correct here and Heffer wrong.

Spain and Portugal were corporatist in any event not capitalist.

Plume @82

Statism in that quote covers corporatism and socialism. Corporatist systems often have a largely state controlled economy even if much is still privately owned.

Nazi Germany was not a free market and was largely outside the structures of international trade. It was very hard for example to expatriate profits from German subsidiaries to a foreign owned parent. Hollywood studios mostly boycotted Germany. They did so due to a mixture of political antipathy and that they were largely unable to extract the profits from showing films in Germany to the parent group in the USA. So boycotting cost the parent company very little.

Little of Germany’s foreign trade took place via the international markets instead it was mostly via specific deals often involving trade in kind and barter rather than cash. Converting the deals to cash terms doesn’t produce a consistent exchange rate Germany had become largely decoupled from the capitalist international trading system. in persuit of a nationalist autarkic corporatist economic policy.

Socialism in that quote is a unicorn. Not anything that actually shows any evidence of ever existing.

Capitalism requires that resources be privately owned and controlled and that they be allocated by operation of a market. The state acting in a manner analogous to the referee in a sports competition ensuring that rules are followed and that the competition is fair.

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Collin Street 04.28.16 at 9:03 pm

Corporatism largely retained private ownership but has state direction of the economy. This had an attraction to the politically favoured businesses who can obtain monopoly rents.

More to the point, I think, is the psychological benefit to the monopoly holder, who can convince themselves that their secure rent position is derived from their own virtue rather than corruptly. At that end of the market the money per se isn’t a huge deal, it’s all about the power, the social cachet, and the ego reinforcement.

[fascist-run businesses are badly-run businesses; the attitudes to the opinions of others that you need to think that fascism is a good idea aren’t conducive to an agile customer-responsive business or good relationships with your suppliers.]

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Collin Street 04.28.16 at 9:09 pm

> No true Scotsman would do such a thing, eh?

There are useful practical distinctions here. But we run into the problem that the corporatist states themselves tried to obfuscate the distinction; there’s no universally-accepted set-of-definitions, so you need to define exactly what you’re using the words to mean before you can use them.

[arguing about what’s the “proper” definition is utterly pointless, btw: words are symbols and symbols are arbitrary. Use whatever meaning you like, and accept whatever meaning others like to use; as long as everyone articulates the meanings they’re using there’s no communications gain or loss over everyone using the same meanings. “Semantic argument”, argument about the “proper” semantics. But saying “I use this to mean this” is OK, obviously, and as a practical matter you might need to ask clarifying questions [that might reveal a category error; another can of worms] or work out what a person-not-present is using the words to mean.]

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Brett Dunbar 04.28.16 at 9:28 pm

Spain and Portugal in that period were fascist. Like most fascist regimes they tended to favour a broadly corporatist economic model. So they are not examples of a free market in a dictatorship.

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William Berry 04.28.16 at 10:01 pm

@Ed: ” I wish someone to explain to me the difference between ‘neoliberal’ and ‘neoconservative’.”

Plume, just above is correct, but a quick abstract of the difference would be to drop the “neo-” and consider the differences in what is commonly understood to be the contents of the categories “liberal” and “conservative”.

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William Berry 04.28.16 at 10:08 pm

Well, maybe that didn’t come out so good. Let me try this:

There was a “neo” that happened to some “liberals”, and there was a “neo” that happened to some “conservatives”.

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Plume 04.28.16 at 10:46 pm

Brett @84,

“Capitalism requires that resources be privately owned and controlled and that they be allocated by operation of a market. The state acting in a manner analogous to the referee in a sports competition ensuring that rules are followed and that the competition is fair.”

This, of course, is not remotely the definition of capitalism — except for the privately owned part — and we’ve been through this before. You confuse the fairy tale of some ideal Smithian vision with the nuts and bolts thing itself. Remember, Smith wrote about something that was ongoing in Britain, and had started — in its agrarian form — prior to his birth. He did not invent it. He did not alter previous capitalist forms. He was merely a theorist and he wrote about a “wouldn’t it be lovely if” kind of economic romance, from the position of relative privilege. All of his books should be in the fiction section of the bookstore.

Beyond all of that: Your definition, quoted above, is the true unicorn. It’s never existed anywhere on earth. No “state” has ever, ever acted as a neutral referee or made sure that competition was fair. There is no example of this anywhere on earth, at any time during capitalism’s existence. And this is true for both the intent side of things, as well as the results.

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engels 04.28.16 at 10:51 pm

People of great wealth who are not themselves managers have, as far as I can see, been quietly shunted off to a well-decorated room somewhere where they can live it up however they like, but I don’t see how they are in actual control of anything.

I know, I know, I shouldn’t but this is really monumentally dumb in so many ways it’s hard to know where to begin.

(Braces for new barrage of red-baiting, tone-policing, character attacks, comment mining, suppositions about offline life, etc)

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js. 04.28.16 at 11:00 pm

The Dem Party’s center-of-gravity is now somewhat to the left of what it was in the ’90s during the Bill Clinton era. ISTM HRC, whatever her ‘real’ inner propensities, has not run, and will not run in the general election, as a Bill Clinton-style DLC Democrat.

LFC, this kind of sanity is not appreciated around these parts.

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LFC 04.28.16 at 11:37 pm

@js.
this kind of sanity is not appreciated around these parts.

Well, Suzanne @73 agreed with me, but yes, I take the point. OTOH, there may be a silent majority (irony here is intentional) of U.S. CT readers who will vote for HRC in Nov. — not nec. happily, but they will.

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Rich Puchalsky 04.28.16 at 11:49 pm

engels: “I know, I know, I shouldn’t but this is really monumentally dumb in so many ways it’s hard to know where to begin.”

engels, you keep saying that you don’t want me to respond to your comments, yet you keep unprovokedly responding to mine. In a highly insulting way, as above. And then you sound surprised when I’m rude back, and you play the victim. Not only that, your comments are, as this one is, not really arguments — you haven’t said anything about why my views are wrong. You’re just incredulous.

Well, OK, I’ll play along. Yes, I think that you’re a doofus who has never had an original thought. You hold on blindly to a failed ideology, you’re an abusive writer who doesn’t have the guts to recognize that about himself, and as far as I can tell you’re a complete failure at life. I wish that you wouldn’t respond to my comments, but since you evidently just love these exchanges, I guess I’ll enjoy them too. So I’ll add that your comments on the thread about migration were manipulative and stupid — you attempted to mobilize moral indignation about the plight of Syrian refugees as if that was an answer to why people should treat migration as an income balancing program. You can’t think, you can’t write, and you’re a fool.

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engels 04.28.16 at 11:57 pm

Like clockwork!

88

Rich Puchalsky 04.29.16 at 12:02 am

Wasn’t that the response that you wanted? You pretty much stated your requirements.

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Rich Puchalsky 04.29.16 at 1:48 am

There’s one thing about the linked Chait article that I didn’t catch when I first glanced through it that ties in to the recent discussion of social movements and mass support:

“But Obama did organize passionate volunteers on a massive scale — far broader than anything Sanders has done — and tried to keep his volunteers engaged throughout his presidency. Why would Sanders’s grassroots campaign succeed where Obama’s far larger one failed?”

Chat is talking about OFA here. And as usual, what he’s writing is deceptive although it skirts the line of being provably false. Obama did indeed organize passionate volunteers on a massive scale when he was supposedly an anti-war candidate who might take power from the Bush who created the Iraq War. Or really, there were a lot of reasons why people were passionate about any end to the GOP term. He “tried to keep his volunteers involved throughout his presidency” in a very nominal sense. Quoting wiki for convenience: “Except for some work on health care reform, the Obama administration has not made extensive use of OFA. This choice has been criticized by some veterans of the 2008 campaign, who believe that Obama has erred by being too ready to compromise with conservatives instead of mobilizing the OFA volunteer base.” Obama didn’t do any real party-building or attempt to build mass support with his well-put-together campaign organization. It was designed to win his election and then pretty much go away before the people in it got ideas that they might be more than just Obama’s support system.

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cassander 04.29.16 at 2:24 am

@The Temporary Name

>This is neither here nor there in a union though: people still get fired.

Government employees have the combination of civil service laws on top of the standard array of union protections. At most one of these levels of protection is sufficient. Both is simply graft.

@Brett

There’s no point in engaging with plume. You are absolutely correct that fascist countries were not anything like capitalist, that they were loudly and explicitly anti-capitalist, particularly once re-armament started in earnest. But you’re talking to someone who refuses to admit that Stalin’s USSR was socialist, it’s a lost cause. Plume is one of those for cannot imagine anything other than socialism being failed and capitalism being succeeded.

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J-D 04.29.16 at 2:29 am

Brett Dunbar @62 writes ‘Capitalist economics requires that the state largely leave the market to operate. … the state’s best economic policy is to step back and not interfere …’

Reading that makes me wonder whether a capitalist economy has ever come into existence in the absence of state activity, because I’m inclined to suspect that the answer is ‘No’; and also to wonder what happens to capitalist economies in situations where the state has largely or entirely ceased to function, because I’m inclined to suspect that whenever there’s a major interruption to the performance of state functions there’s also a major interruption to the performance of market functions.

I don’t rate those more highly than strong suspicions, but if they are correct they point towards the conclusion that capitalist/market economies are dependent on the state for their existence, and that if the state genuinely left the market alone the market would cease to exist. My observations suggest to me that people who call for the state to stop intervening the market are interested in stopping only some kinds of state intervention.

The activities of corporations play a large role in shaping modern capitalist economies; the corporate form is not a creation of the market. Modern contract law plays a large role in shaping modern capitalist economies; contract law is not a creation of the market.

Brett Dunbar @70 writes further: ‘A competitive free market exists as long as for example the barriers to entry are fairly low and certain other conditions are met. … If Easyjet were to attempt to sit on slots they weren’t using in order to retain a monopoly then a complaint to the competition authorities would be likely to succeed. …’

If I was trying to think of examples where the barriers to entry are fairly low, I don’t think the airlines industry would come to mind; I don’t think of setting up an airline as cheap and easy. But much more important is the reference to ‘certain other conditions’, evidently including the existence of the possibility of (results from) complaints to competition authorities. Competition authorities are agencies of the state, so this appears to support my earlier conclusion that market functioning is dependent on a substantial level of state action.

Brett Dunbar @84 writes further: ‘The state acting in a manner analogous to the referee in a sports competition ensuring that rules are followed and that the competition is fair.’

This suggests questions not only about how far states actually do act to ensure that competition is fair but also, I want to emphasise, about how much state involvement would be needed in order to ensure that competition is fair. If somebody wants to argue that the only way to ensure that competition is fair is to make prior inspection and approval by the state a condition of all transactions, can that position be shown to be wrong?

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js. 04.29.16 at 2:33 am

LFC @95 — Ha! I see I’d missed Suzanne’s comment. In any case, I was mostly joking (I am really loath to put smiley faces in my comments, but it would have fit @95).

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Plume 04.29.16 at 3:00 am

J-D,

Your suspicions are correct. There can be no capitalist economy without the state — and without heavily involved, protective and supportive states. Who would pay (for instance) for, manage, allocate and support currency, the very medium of exchange required for business transactions? Individual business persons or companies, each with their own agenda? Who would protect property and the validity of contracts and business transactions in general? Who would forge agreements across state and national lines? Who would protect business owners when they steal the production of their workers as if it were their own — which is the essence of capitalist itself? Who would maintain the laws and regulations between capitalist and labor, capitalist and consumer, capitalist and supply chain, etc. etc.?

Who would pay for and manage the infrastructure needed to move product and consumers? Who would pay for and manage the education and training of workers and consumer bots, so that people actual remain in the thrall of capitalist relations, propaganda and hype?

Who would pay for and manage all the wars and coups and regime changing needed to bust open new markets or protect old ones when capitalists give the green light?

And who would shower capitalists with the trillions in bailout monies they’ve required just since 1970, with the more than 100 international bailouts we’ve seen since that date?

Etc. etc.

There is no capitalism without the state.

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Asteele 04.29.16 at 3:22 am

I see Brett is doing his not knowing what words mean thing.

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J-D 04.29.16 at 4:17 am

cassander @74

‘> (“We want a government that can fire people who can’t or won’t do the job.”)
‘Do you disagree with this sentiment? Because it strikes me as quite reasonable. ‘

I’m not sure how much it has to do with the topic here, so I apologise if this is a derail, but there is a category of jobs for which I say that it would be a major improvement to have an effective mechanism for prompt dismissal for unsatisfactory performance.

As examples of this category for the US I might start with positions like President, Speaker of the House, Chief Justice, and Federal Reserve Chair, and go on to other positions of similar or somewhat lower seniority; for other countries, positions of similar significance.

If it’s reasonable for people to be subject to dismissal from their jobs for unsatisfactory performance, why shouldn’t that principle go all the way to the top?

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J-D 04.29.16 at 7:25 am

cassander @74

‘The inability of those on the left to understand that the economy is a dynamic and changing not a rigid cast system never ceases to amaze and dispirit me. But then, it’s difficult to get people to understand a thing when their salary depends on them not understanding it.’

This reference puzzles me. I know that my own salary is in no way dependent on my failing to understand that economies change. Perhaps I am not an example of ‘those on the left’ that you refer to. But then, who are? I can’t think of anybody whose salary would be dependent on not understanding that economies change.

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engels 04.29.16 at 11:45 am

The response I wanted was some tiny flicker of self-doubt or defensiveness re your ridiculous ‘Jeeves and Wooster’ view of contemporary managerial capitalism. The response I expectedwas the one I got.

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David 04.29.16 at 12:21 pm

I think there’s a degree of talking past each other here.
It’s accepted that there have been many authoritarian and totalitarian states where the economy has remained very largely in private hands. It’s also accepted that there are cases where significant central direction of the economy has been introduced, for strategic reasons (Korea in the 1960s) or in time of crisis (South Africa in the 1980s) or in times of war and preparation for war (Britain after 1935) in states that we don not think of as anti-capitalist.
But the real issue is whether the alleged “freedom” that neo-liberals demand in the economic area is compatible with a state which is authoritarian or even totalitarian as regards society and politics, and the answer is unambiguously that it is and always has been.

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Rich Puchalsky 04.29.16 at 12:55 pm

engels: “The response I wanted was some tiny flicker of self-doubt or defensiveness re your ridiculous ‘Jeeves and Wooster’ view of contemporary managerial capitalism. The response I expectedwas the one I got.”

Maybe some kind of evidence might be good? Something about CEOs not successfully boosting their “compensation” to elite levels, etc.

But really, engels, come on. On the last thread you told me that you had no desire to argue with me and you told me to take a long walk off a short pier. Why should I want to argue with you? You’re a nasty clown and complete fool, and I don’t respect you or your opinions at all.

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Brett Dunbar 04.29.16 at 2:33 pm

Well as a matter of historical observation the states that have had the most success at running a capitalist economy have been democracies. Dictators can rarely resist the temptation to rig the market to help their cronies which makes being the dictator’s pal more useful than actually being competent.

Democracies are peculiarly intolerant of corruption; it turns out electorates hate corruption. If you look at Transparency International’s corruption perception index the top of the table is dominated by democracies.

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engels 04.29.16 at 2:48 pm

I’m not interested in arguing but I reserve the right to object to egregious bullshit, which the claim* that super managers have altogether displaced owners of capital as a ruling class is

(* nice try at goalpost shifting in #114 though)

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Cassander 04.29.16 at 3:00 pm

@jd

>If it’s reasonable for people to be subject to dismissal from their jobs for unsatisfactory performance, why shouldn’t that principle go all the way to the top?

It absolutely should, though in practice it rarely does. That is why presidents have, and should have, the right to dismiss cabinet secretaries on a whim, and why they shouldn’t have a union to protect them from arbitrary presidents. As for presidents themselves, well, we might have done better if the radical republicans had managed to impeach Johnson.

Judges are somewhat of an exception because they are intended to be unaccountable on purpose.

As for the Fed chair, I would love a system where congress sets an achievable monetary target and the chair is automatically fired if he misses it by too much. Scott sumner has some good ideas on that front.

>This reference puzzles me. I know that my own salary is in no way dependent on my failing to understand that economies change. Perhaps I am not an example of ‘those on the left’ that you refer to. But then, who are? I can’t think of anybody whose salary would be dependent on not understanding that economies change.

I was thinking specifically of academics, and there are several around here, whose wheelhouse is “critiquing” capitalism and advocating alternatives. I don’t think you would disagree that radical intellectual change would be highly disruptive to their careers.

I’m not sure if you’re in that group or not. But the principal applies just as much to people who criticise for fun, though in their case the quote would more accurately read “it’s difficult to get a man to understand something when his entire view of the world depends on him not understanding it.”

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Collin Street 04.29.16 at 3:31 pm

I’m not interested in arguing but I reserve the right to object to egregious bullshit, which the claim* that super managers have altogether displaced owners of capital as a ruling class is

How does our knowing you object benefit us? Come to that, how does our knowing you object benefit you?

See. What-you-think is implicit in why-you-think-it. But! If you’re wrong — if what-you-think is an error — then stating what-you-think is no damned use, we actively don’t want to hear… but why-you-think-it might contain some underconsidered wisdom.

And if you’re right… well, your correctness would be implicit in your reasons, obviously. That’s what it means to be correct. And that being the case, if your reasons embody your conclusion, then we don’t need to be told the conclusion; we can work it out from your reasons alone.

So. There is never any need to tell someone your conclusions. Your conclusions are implicit in your evidence, and don’t need to be stated separately.

So why tell us? It’s not something we can build on, and there are better choices.

Like saying, “I think X because”. the because and everything after it is the important part, here. Not the “I think”; that barely matters, if at all.

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Rich Puchalsky 04.29.16 at 3:51 pm

On the off chance that anyone who gives actual reasons for their opinions wants to discuss this, here are the reasons why I think neoliberalism is the ideology of a global managerial class:

* The shift from CEOs as hired managers to CEOs as wealthy capitalists via stock compensation. Source: you can find any number of sources on this if you care to look;

* The way in which Eurocrats, despite supposedly coming from a much more social democratic set of societies than the U.S., support austerity even more;

* The general trend towards actual handoff of technocratic power to e.g. central banks;

* The way in which state capitalist managers from China have no difficulty in working with members of the global managerial class elsewhere even though they are formally opposed;

* The way in which members of this class move easily from governmental/ regulatory jobs to business ones to nonprofit ones, making all sectors of society basically under their control or at least considered by them to be populated by similar class members;

* The indistinguishability of their class interests from classical capitalist class interests;

* Their ideological distaste for non-meritocratic, inherited wealth, and for people who control great wealth without the skills to manage it. See e.g. here.

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Brett Dunbar 04.29.16 at 3:57 pm

They are all examples of catch-up growth in middle income countries, they are improving their position but they aren’t winning. The rich high income countries are the long term winners, they are mostly democracies.

Note that most of those countries are now solidly democratic. Capitalist success empowered the populace to take political power forcing the dictator and their corrupt cronies from power.

Japan was a strange case where the political competition was intra party rather than inter party. It seems to have functioned in a fairly democratic way overall with the various party factions being de facto parties.

The exceptions are China and Singapore. China is both still relatively poor and is starting to have economic problems linked to its autocratic and corrupt political system. Singapore is weird, it seems to have had peculiar luck in the dictator.

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casssander 04.29.16 at 4:41 pm

@Rich Puchalsky

>* The way in which Eurocrats, despite supposedly coming from a much more social democratic set of societies than the U.S., support austerity even more;

Other than greece, has there been a single european country in which government spending has declined in real terms, or even in terms of share of GDP, since 2008? Hiking taxes to pay for your expanding welfare state is not austerity.

>* The general trend towards actual handoff of technocratic power to e.g. central banks;

I fail to see how this speaks to neo-liberalism. Technocratic central planning was always the dream of the old school socialists.

>* The way in which state capitalist managers from China have no difficulty in working with members of the global managerial class elsewhere even though they are formally opposed;

How are state capitalist manages formally opposed to non-state capitalists?

>* The way in which members of this class move easily from governmental/ regulatory jobs to business ones to nonprofit ones, making all sectors of society basically under their control or at least considered by them to be populated by similar class members;

So the elite dominates society? Of course they do, that’s the definition of what it means to be an elite. that says nothing about their ideology.

>* The indistinguishability of their class interests from classical capitalist class interests;

I thought you just said they were the same as the capitalist class. Of course, speaking of the interests of a capitalist class as a whole is absurd because the whole point of capitalism is that it is competitive, and nothing is good for every capitalist.

>* Their ideological distaste for non-meritocratic, inherited wealth, and for people who control great wealth without the skills to manage it. See e.g. here.

Again, I would say that speaks at least as much to to other ideologies as it does to ne0-liberalism.

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Plume 04.29.16 at 6:10 pm

Cassander,

“Other than greece, has there been a single european country in which government spending has declined in real terms, or even in terms of share of GDP, since 2008? Hiking taxes to pay for your expanding welfare state is not austerity.”

As with most of the people in the mainstream center and on the right, you seem to believe increased government spending means an increase in the size of government — especially the “welfare state.” Not necessarily. In fact, with the rise of neoliberalism, it pretty much never does.

Governments that bailout capitalism, for instance, must spend more, by definition, and there have been well over 100 massive bailouts (worldwide) just since 1970. Not a penny of that went to “increase the welfare state,” unless we include billionaires, Wall Street and corporations in general in that definition.

Also, the radical increase in privatization forces government to spend more, exponentially, for goods and services it formerly managed in house. A great example of that — but just the tip of the iceberg — is when our military privatized logistics, security, food prep, cafeteria, KP, etc. etc. . . . thus forcing taxpayers to supplement for-profit companies, when soldiers once did all of that as a normal part of their (already paid for) duties.

Ironically, one of the best ways to radically reduce government spending is to (reverse privatization and) radically increase the size of the Commons, stay in house, stay 100% non-profit and public with as many goods and services as possible. That along with an end to corporate welfare would slash overall spending significantly.

Btw: The American Federal government now has more than one million fewer employees than it had in 1962. So, both in real numbers and (especially) as a percentage of the workforce, government has been shrinking for decades. I haven’t looked into how this has played out in Europe, but given its embrace of neoliberalism at roughly the same time as America’s, I’d be shocked if something similar had not happened.

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The Temporary Name 04.29.16 at 6:29 pm

Government employees have the combination of civil service laws on top of the standard array of union protections. At most one of these levels of protection is sufficient. Both is simply graft.

Graft is not the same as wanting to be paid for a job, but in any case civil service workers still lose jobs: the complaint about unions is just a standard fetish item for authoritarians.

109

Igor Belanov 04.29.16 at 6:32 pm

Damned unions, restricting the freedom of people to starve to death!

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casssander 04.29.16 at 6:37 pm

>As with most of the people in the mainstream center and on the right, you seem to believe increased government spending means an increase in the size of government

yes, how dare we consider that the size of government has something to do with the quantity of resources the government control. Math is, after all, an insidious bourgeois delusion, is it not?

>Not necessarily. In fact, with the rise of neoliberalism, it pretty much never does.

Yes, the Naomi Klein thesis remains as foolish and unpinned from actual evidence as ever. There are people in the world more blatantly wrong than her, but not many. We’re talking about a woman who thinks that military use of the word “shock” was an invention of the mid 90s.

>Also, the radical increase in privatization forces government to spend more, exponentially, for goods and services it formerly managed in house.

That might be true, but that does not change the fact that the US government is still controlling the resources needed to pay those people, does pay them, and by paying them controls how they spend their time. A government that spends more less efficiently is still a government that is larger, even if it accomplishes less in some objective sense.

>The American Federal government now has more than one million fewer employees than it had in 1962.

No, it has fewer civil servants. It has millions more contract employees, the number of which it is official OPM policy not to keep track of. Again, the government doing its job badly is not evidence of smaller government.

https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49931-FederalContracts.pdf

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Plume 04.29.16 at 6:51 pm

Cassander,

It’s not “controlling assets” when it hands them off to for-profit corporations. Obviously. When it showers them with tax dollars, it’s just “redistributing the wealth” upwards, as usual, to the already wealthy. When it formerly did the work itself, and now outsources it, it’s giving up control. Not sure why you don’t get that.

And your last comment makes my point for me, though the second part doesn’t necessarily follow from the first:

“No, it has fewer civil servants. It has millions more contract employees, the number of which it is official OPM policy not to keep track of. Again, the government doing its job badly is not evidence of smaller government.”

Again, this is a huge reason for the increase in government spending. Contract out (formerly non-profit, in-house goods and services) to for-profit companies, and you guarantee higher costs than if you keep it in house and non-profit. It is also the case that by relinquishing control over goods and services, privatizing them, the government actually does shrink. Spending goes up. Government shrinks. The public sector shrinks. The private sector grows.

I thought that was what you propertarians wanted. Trouble is, what you refuse to see is how this radically increases costs to taxpayers and consumers. They get hit on both ends of the deal, while a tiny percentage of the population makes out like bandits.

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Brett Dunbar 04.29.16 at 7:34 pm

The corruption perception index at transparency international is, while crude, a fairly good measure of levels of corruption. Almost all of the least corrupt countries are democratic. The only autocratic states in the top twenty are Singapore at 8 and Hong Kong at 18. While at the bottom of the table is a mixture of despotism and chaos.

The liberal democracies cannot have catch up growth as they are already at the front, they are the countries being caught up with. They are the winners as they are in front.

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Rich Puchalsky 04.29.16 at 7:57 pm

cassander: “So the elite dominates society? Of course they do […]”

“Which elite” is the question. I’m arguing that neoliberalism is connected to a specific elite.

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Plume 04.29.16 at 8:00 pm

Brett,

“Corruption” in liberal democracies, with capitalist economic engines, is built in. It’s normalized, naturalized, and something those indexes are always going to miss. Capitalist states are all set up to do the bidding of capitalists, not workers, average citizens and consumers (as in, the majority) and this is baked in. That is corruption, by definition, without the big neon sign indicating it’s so. Political systems do the bidding of their donor/benefactor class/elites, and this happens whether or not anyone is looking.

The recent Princeton study of America as oligarchy shows this.

As always, I think you’re looking at both capitalism and “liberal democracy” through rose-colored glasses.

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casssander 04.29.16 at 8:03 pm

>It’s not “controlling assets” when it hands them off to for-profit corporations. Obviously.

Obviously, it is. Deciding to reward some companies over others is controlling assets. When the Feds decide to give lockheed martin a trillion dollars for some new planes, they’re unquestionably controlling what lockheed does.

>When it formerly did the work itself, and now outsources it, it’s giving up control. Not sure why you don’t get that.

Because it’s inaccurate. They aren’t giving up control any more than my company is “giving up control” when it pays me to do a job instead of having someone else do it.

>Again, this is a huge reason for the increase in government spending.

Even if this were true, and it isn’t, it’s irrelevant. what part of “the government doing it’s job badly is not evidence that it’s smaller” did you not get?

>The public sector shrinks. The private sector grows.

A contract employee on loan to a government agency is not less government than a GS employee doing the same job. He might cost more, or less. He might do a better job, or worse, but he’s not private sector by any meaningful definition of the term.

>I thought that was what you propertarians wanted.

Nope, we’re pretty happy just kicking puppies to death.

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Plume 04.29.16 at 8:18 pm

Cassander,

Your idea of “government doing its job badly” is wildly different from my own. I see it doing a horrible job when it does what you want it to do — which is to let predators (capitalists) do as they please. It should (as currently configured), instead, focus entirely on doing what it can to improve quality of life for all citizens — which you would see as gross intrusion, no doubt.

And, sorry, if the government, for example, turns security, logistics, KP, etc. etc. over to a private company like Halliburton, the private sector grows, the public sector shrinks. In no meaningful definition of those terms could that shift from public to private control be considered anything else. And, yes, it is a shift in control.

And . . . your example of an internal company shift doesn’t work. At all. Changing the person doing the job within the company is radically different from a shift from a public good/service to a private one. Obviously.

As for your last comment. Come on. Be honest. You’re leaving an essential part of the story out of your post. It’s not just that propertarians like to kick puppies to death, but you charge admission fees too. The point is to make money in the bargain, right?

;>)

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casssander 04.29.16 at 8:35 pm

@Rich

>“Which elite” is the question. I’m arguing that neoliberalism is connected to a specific elite.

Is there more than one? I mean this question sincerely. I thought you were asking why neo-liberalism appealed so strongly to “them”, meaning the people in charge, whoever they were, and most countries don’t have more than one group in charge unless they’re in the middle of, of perhaps about to be in the middle of, a civil war.

As to why neo-liberalism appealed, here I must stake a claim to american exceptionalism, because the effect of the neo-liberal wave was different, and generally much milder, in the US than elsewhere because american politics and political systems were very different. In Europe went through much bigger changes. In the US, the change was more one of style than substance.

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Brett Dunbar 04.29.16 at 9:11 pm

Usually there are multiple elite groups who have a range of interests, some common some differing. Part of politics is getting a deal that the various groups can live with.

Plume you are an idiot. You have absolutely no understanding of how capitalism or a market actually works. The reason I am not interested in reading any of the books you claim have a good analysis of capitalism is that you don’t understand even trivial microeconomic models. I repeat my previous recommendation of Tim Harford’s books. Notably The Undercover Economist. You might then at least understand how the market is a consumer dominated structure.

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Brett Dunbar 04.29.16 at 9:41 pm

Airlines have moderate barriers to entry, airliners cost several million each. That is a level of capital actually available to a fair number of businesses. After most of the artificial barriers to entry were dismantled new entrants took a lot of the market.

In relation to the Wizz Air example, that airline seems to have sustained heavily losses in its first few years, the low prices being a price war between two low cost airlines. Easyjet and Wizz Air.

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Plume 04.29.16 at 9:57 pm

Brett @135,

Yes, I understand how capitalism and markets work. All too well. You, OTOH, see them through the most ridiculous rose-colored glasses I’ve encountered online, which has led you to created your own little udopian fairy tale. Everything to you, when it comes to capitalism, is as if you had dreamed it all up, after spending your waking moments reading the most rank, rah rah capitalist propaganda imaginable. As if, Adam Smith were re-imagined by Disney, by way of Von Mises and Ayn Rand, for incredibly gullible tweens.

I honestly feel sorry for you.

Oh, and the books I’ve recommended have been recommended by others here as well. Ellen Meiksins Wood and David Harvey’s, especially.

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Brett Dunbar 04.29.16 at 10:32 pm

No you really don’t understand markets at all.

You really need to at least understand the basics of microeconomics in order to make a valid argument. It is painfully obvious that you need a basic layman’s introduction, which is why I have recommended Harford’s book.

Two Marxists. Marxist economics is the left’s equivalent of Austrianism on the right. Fundamentally unscientific. Marxism is pseudo-science while the Austrians were more explicitly anti-scientific. I’m not inclined to give either much credence.

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Plume 04.30.16 at 12:02 am

Brett @138,

Yes, Brett. I do understand it. Very clearly. Including micro and macroeconomics. You don’t. At all. You may know enough capitalist theory to succumb to its propaganda. But not enough to be able to see the difference between theory and reality, or to know you’ve drunk the koolaid. You’ve obviously imposed the little bit of theory you think you understand on that reality, replaced reality with theory, which is why your view is so distorted, naive and childish.

I know capitalist economic theory as well, but it doesn’t confuse me. I actually realize theory is quite different from the real world. It’s quite different from the way things really are. You, on the other hand, seem to actually believe that the theories of capitalism’s cheerleaders live, exist as they were written in the real world. Again, this has led to your most pollyannish of worldviews.

And we can keep going back and forth about this. But it won’t change the fact that your vision of capitalism is, at best, child-like and sadly gullible — if not actually dangerous. Primarily because you see it as bountiful for all, beneficent to all, innocent of all charges and perfectly wonderful in every way. As in, you have the fanatic’s view of capitalism.

Btw, if you can’t handle Marxian economists — the best in the world, when it comes to capitalism — perhaps you’d be okay with John Quiggin’s Zombie Economics? I read that as soon as it came out and got a great deal from it. It’s as if he were writing it for your sake, Brett.

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J-D 04.30.16 at 4:00 am

It seems to me that if a government spends more but does less then it’s got bigger in one sense and smaller in another sense, and the interesting question then becomes one of which is more important to you and why; arguing about which is the one true measure of size, on the other hand, seems boring.

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J-D 04.30.16 at 4:22 am

Cassander @118

>>If it’s reasonable for people to be subject to dismissal from their jobs for unsatisfactory performance, why shouldn’t that principle go all the way to the top?

>It absolutely should, though in practice it rarely does.

Exactly. Why doesn’t it?

>That is why presidents have, and should have, the right to dismiss cabinet secretaries on a whim, and why they shouldn’t have a union to protect them from arbitrary presidents.

The ability of US Presidents to dismiss Cabinet members at will looks like the kind of mechanism I’m talking about; I’m not sufficiently well informed to know how effective it is in practice. I suspect, also, that there are other countries where it’s not as easy to dismiss Cabinet members. But in any case the US mechanism doesn’t go right to the top …

>As for presidents themselves, well, we might have done better if the radical republicans had managed to impeach Johnson.

… and it’s evident that the impeachment mechanism (incidentally, Johnson was impeached, and so was Clinton later; but neither of them was convicted and removed) does not, in practice, make it easy to remove Presidents, which is what I’m favouring. What’s more, the Constitutional language does not suggest that the mechanism should be available to remove a President for unsatisfactory performance, only for ‘high crimes and misdemeanours’; I suppose it might be within the power of a majority of the House and two-thirds of the Senate to decide that unsatisfactory performance is a ‘high misdemeanour’, but in practice that seems unlikely in the extreme.

I am not persuaded that the conviction and removal from office of President Johnson would have made the existing mechanism easier to operate in general.

>Judges are somewhat of an exception because they are intended to be unaccountable on purpose.

There are mechanisms for removing judges from office, but (at least in countries I know about) it’s not easy. I stand by my stated view that it should be easier. (And for Congressional officeholders, too, and their equivalents in other countries, whom I see you skipped over.)

>As for the Fed chair, I would love a system where congress sets an achievable monetary target and the chair is automatically fired if he misses it by too much. Scott sumner has some good ideas on that front.

What you describe would not be a general mechanism for the easy removal from office for any kind of unsatisfactory performance of any official of similar or near seniority.

>>This reference puzzles me. I know that my own salary is in no way dependent on my failing to understand that economies change. Perhaps I am not an example of ‘those on the left’ that you refer to. But then, who are? I can’t think of anybody whose salary would be dependent on not understanding that economies change.

>I was thinking specifically of academics, and there are several around here, whose wheelhouse is “critiquing” capitalism and advocating alternatives. I don’t think you would disagree that radical intellectual change would be highly disruptive to their careers.

Then you think wrong. I disagree. Academics are not generally in danger of losing their jobs if they learn to understand things they didn’t understand before, or if they change their views on issues in their fields.

>I’m not sure if you’re in that group or not. But the principal [sic] applies just as much to people who criticise for fun, though in their case the quote would more accurately read “it’s difficult to get a man to understand something when his entire view of the world depends on him not understanding it.”

I have, over the course of my life, learned to understand things I did not previously understood, and I have changed my view on topics important to me. Obviously I can’t say how many of the commenters here that might be true of. I don’t know whether it’s true of you.

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Peter T 04.30.16 at 10:57 am

Follow up on Rich’s point, and earlier remarks (too lazy to reference) that neo-liberalism is a continuation of liberalism.

Classical liberalism was the doctrine of those who wished to assert their professional autonomy against the arbitrary (and often irrational) whims of the powerful. So it was the doctrine of the professional groups. Academics, a good part of the legal profession, administrators were the key groups – rich in prestige, weak in political power. In Britain, with its powerful state firmly in the hands of a landed/commercial oligarchy, the state was the major threat, so British liberalism stressed restraint of the state. Tenure, security in office, security of property were all major themes (in Europe, the magnates were the major threat, so these groups tended to favour absolutism – the state as their ally/bulwark against the magnates). These groups are still where liberalism has most strength.

Neo-liberalism does not assert the value of autonomy. It is active in undermining it. It is hostile to tenure, security in office, the autonomy of professional judgement. If Bill Gates says this is how education should be, his neo-liberal flunkies spring into action to make it so. The liberal vision of a university is of a professional group secure in its domain, seeking knowledge for personal and social advancement. The neo-liberal vision of a university is a bunch of MOOCs developed under contract, delivered by temp labour, paid for by government-guaranteed debt. It’s not the administrative class planting a flag on rational professionalism, it’s a bunch of bailiffs, agents and in-house lawyers following the wishes of the magnates. Who want a state that will collect their rents and suppress unrest, but not dictate to them.

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Rich Puchalsky 04.30.16 at 11:10 am

Peter T: “It is hostile to tenure, security in office, the autonomy of professional judgement.”

In academia, neoliberalism expresses itself as adjuntification, but it also expresses itself as ever more positions for highly paid academic managers. Professionals are not managers, and neoliberalism is not the ideology of professionals, but rather of the managers who want to reduce professionals to temp labor status.

“These groups are still where liberalism has most strength.”

Left-liberalism is a different thing than neoliberalism.

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Peter T 04.30.16 at 11:29 am

Rich

I’m in full agreement. that’s my point – that neo-liberalism has a different social base to liberalism, a social base much more connected to the magnate class.

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David 04.30.16 at 12:27 pm

I entirely agree about managers in universities. But they didn’t develop neoliberalism as a doctrine, they benefited from it and to some extent were created by it. It’s also worth noting that “academics” in the modern sense didn’t exist during the formative period of liberalism, and the “autonomy” that Peter is describing was pretty much limited to financial affairs. Academic autonomy, on the other hand, is only very dubiously linked to liberalism, except as that term is understood in the US.

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Rich Puchalsky 04.30.16 at 12:49 pm

We are sort of agreeing, except that I think “the magnate class” is becoming more and more of an anachronistic phrase. And “they didn’t develop neoliberalism as a doctrine”… how about Larry Summers? He’s the son of two economists, but not a magnate, and he’s an academic, but he also had top positions in actually powerful institutions such as the World Bank and the National Economic Council. The classic left statement on this kind of thing is that people like this are merely tools of magnates, hirelings, or that somewhat more subtly that they have internalized the values of capitalism. But I see people like this in actual positions of power, making actual decisions.

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Peter T 04.30.16 at 12:57 pm

David

What period are you talking about? I’d start with Locke (died 1704) through to JS Mill. In Locke’s time the autonomy of the universities was a real issue; the rise of a cadre of professional administrators in the UK starts around 1700, and they become a solid corps from 1750 on; JS Mill was a civil servant who was handsomely compensated when the East India Company was nationalised. For the middle classes of the C18/early C19 most property was non-financial (the gentry owned all the land, and there was not much else one could safely invest in). One main form was office – rights to income from fees or (from c 1790 on) salary.

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Brett Dunbar 04.30.16 at 1:17 pm

Plum,e you are a classic Dunning–Kruger, utterly ignorant of even basic microeconomics the the point you simply don’t understand enough to realise how inadequate your understanding is. From your previous comments it is fairly clear that you lack an understanding of even those parts of microeconomics that are essentially universally accepted.

Marxism is pesudo-science it made a number of predictions about the economy which were incorrect. Some of the basic assumptions were wrong. Basically either you reject those assumptions in which case you aren’t a Marxist or reject reality in which case you are in the same position as a creationist. Marxist and Austrian economics can mostly be ignored.

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Brett Dunbar 04.30.16 at 1:41 pm

Ze K @142

Transparency international isn’t comparing prosecution rates, if it were your criticism would be valid, it is asking businesses and individuals questions about whether they have had to pay bribes for example. They are well aware of the biased nature of evidence such as prosecution rates.

The corruption index correlates strongly with black market activity and overabundance of regulation, both proxies for corruption. All three correlate strongly with Real Gross Domestic Product per Capita.

You keep conflating catch up growth with long term success. The long term success is in the political stable democracies. The claim that they are rich due to exploiting the poor countries is false, they do most of their trade with each other; poor countries barely participate in world trade.

The Weimar republic failed in part due to IG Farben funding the Nazis due to the Nazis promising to impose a huge tariff on oil imports so that the company’s ill-judged investment in synthetic oil wouldn’t make a huge loss (IG Farben had belived peak moil had arrived in the mid 1920s and then huge discoveries were made in the middle east causing the price to plummet). The Weimar regime refused to do favours in that way.

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Plume 04.30.16 at 1:53 pm

Brett @151,

Capitalist economics is easy. It’s not difficult to understand at all. Business, in general, is easy to understand. Very, very easy. The dumbest kids on campus tend to go into it, rather than something that actually requires creativity and critical thinking skills. Business doesn’t. Understanding how capitalism and capitalist markets work doesn’t.

What you’re really complaining about, when it comes to my supposed “lack of understanding” is this: I don’t buy your silly, childish, pablum-filled, koolaid-drinking vision of capitalism. I won’t drink the koolaid, so you think I don’t understand it all. You want people to agree with you that your cartoonish, Disneyesque vision, designed for gullible tweens, is actually the way things really work in the real world. And since I know better, you say I “don’t understand it.”

(Of course, you never even provide examples of my supposed lack of understanding, no quotes, no actual evidence. Because you can’t, of course. And because it would further expose the abject silliness of your views.)

You’re nothing but a sad cheerleading clown, Brett. Capitalism has never, ever worked the way you think it does. And the relentless way you cling to your false vision of it is nothing short of fanaticism.

Now, please, if you feel the need for the last word, at least have the decency to supply actual evidence to support your absurd claims — about me or capitalism. For once.

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bruce wilder 04.30.16 at 2:25 pm

I presume Peter T intended “the magnate class” to be heard for its anachronistic echoes — the great Whig magnates of 18th century and 19th century Britain, gambling at Brooks’s, sponsoring radical voices and ideas and protecting the Dissenting gentry and commercial classes in order to discomfit the reactionary Tory nobility and gentry and constrain their own hand-picked German monarch.

“Magnates” of a more modern kind continue to be such a prominent feature of our politics, with renewed visibility of late, that I am puzzled by your insistence at their obsolescence. I agree, certainly, that the transformation of the CEO from a kind of technically competent professional at mid-20th-century into whatever label we might want to put on the grasping brigandage of Neutron Jack Welch or Jamie Dimon after 1980 — that’s a novelty that’s driving important dynamics and attention must be paid.

You speak of neoliberalism as the ideology of a class of elite technocrats who have taken control of the political economy, without mass support. But, I don’t think they’ve done it without patronage from above, the support of the mega-wealthy, a new magnate class. They’ve had sponsors and patrons and the patron relationship between the technocrat, who may hold executive office or play a leadership role, public or private, and the Big Money individual or cabal hasn’t gone away. If anything, it has become ritualized as networks have elaborated.

Bill Clinton, as a callow youth, took advantage of Winthrop Rockefeller’s determination to break the grip of Arkansas’ superannuated planter class. If there was ever a Whig Magnate in modern America, Rockefeller was that in Arkansas. Now, post-Presidential Bill goes around the world collecting for his Foundation, the epitome of Davos Man, but still with his hand out as supplicant to the super-wealthy. Hillary Clinton is financing her political ambitions rather conspicuously with money from Big Banks — it is a patron-client relationship, and I don’t think Hillary is the patron, and even if her patrons are a diffuse class they are not that diffuse that their common interests cannot be identified and distinguished from a mass or common interest.

When we speak of neoliberalism as a discourse, I tend to think first of the talkers and writers, the pundits and policy entrepreneurs who manufacture the endless torrent of words and ideas. Those people are forced to seek patrons. Circa 1960, major Big City newspapers tended to be owned by wealthy families, typically with real estate development interests in their city and the newspaper as an enterprise was economically dependent on department store display advertising and classifieds, the latter an extremely diffuse source of funds. A earlier generation of partisan identification was fading away, though many cities had a Republican (usually evening) paper and a Democratic (usually morning) paper. Younger journalists fancied themselves professionals and older ones, working class hacks. Neutrality and objective were theoretically virtues. Even the arch-reactionary propagandist Henry R Luce preached a “separation of Church and State” claiming that advertisers could not buy the opinions of his editorial staff.

Today, the material bases of journalism have been transformed. The click-bait of Gawker is the future I guess. Older platforms — and some newer ones — are more conspicuously hobbyshops than ever. Pierre Omidyar, Bezos at Washington Post. Robert Allbritton, heir to one of LBJ’s patrons and cronies, picked Clinton antagonists John F. Harris and Jim VandeHei to head Politico.com, and then Politico adopted a networking strategy to create a “market” in which they supply talking heads to a variety of cable news venues, dominating the discourse in that channel.

I know this comment may seem a bit disjointed — I am thinking aloud a bit, considering how to make sense of your thesis of managers as independent of wealth as well as mass support and I am not seeing it.

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engels 04.30.16 at 3:26 pm

I’d start with Locke (died 1704) through to JS Mill.

As far as I’m aware normal usage would call Locke a ‘classical liberal’ but definitely not Mill.

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David 04.30.16 at 3:49 pm

I was thinking of “autonomy” in a rather different sense, I admit. In Locke’s day, there were only two universities, and not much of what we now call research. Most lecturers were clergymen. Autonomy was more of a religious/political institutional issue, and not really a question of individual conscience or indeed careers. Yes, there were some administrators, and indeed the East India Company was a good example, but my argument was that, insofar as neoliberalism is the ideology of any identifiable group in the public sector, it’s one that permitted the rise of a whole parasitic class of managers, auditors, consultants etc. They are the NCOs of the neo-liberals, and they enforce the ideas that everything can be reduced to money, that people should compete with each other as part of their jobs, that no careers should be safe in the long-term, that there is no end to “innovation” and so on. Such people have always existed, perhaps, but its only very recently that they have become powerful, and have seriously distorted and corrupted much of the public sector in different countries. But they didn’t invent neoliberalism, of consciously choose to adopt its ideology, they are just employed to enforce the concept of the public sector as one big business opportunity.

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Rich Puchalsky 04.30.16 at 6:09 pm

BW: “I am thinking aloud a bit, considering how to make sense of your thesis of managers as independent of wealth as well as mass support and I am not seeing it.”

Not *independent* of wealth — “their wealth empowers neoliberal control, but for the purposes of neoliberals” as I wrote above.

Is it possible to disentangle the interests of the super-wealthy from the interests of those who exercise power in the name of the super-wealthy? To some extent. Take inheritance as a particular case. Capitalists who have amassed control over huge amounts of wealth generally want to pass it on to their families and want the ownership and value of their assets to be defended forever. So in the U.S. you get things like the initiative to repeal “death taxes” under Bush Jr. But that was a straightforward right-wing initiative, not a neoliberal one — again, people like BDL consistently opposed it, and in 2013 Congress permanently set the estate tax on estates over $5 million to 40%.

If neoliberals are merely talking up the points fed to them, why didn’t they suddenly discover that “death taxes” were bad and discouraged innovation, as they similarly discovered that minimum wages were bad and that unions were bad? My short answer is that the self-image of neoliberals is bound up with meritocracy and that their class has some independent control based on the inability of the super-wealthy to still be unmediated bosses.

Of course, meritocracy itself is a big way of passing down inherited “wealth” or capital of the sort that bob mcmanus talks about, and the ideology of neoliberals is quite consistent with a practice that does not discomfit actual magnates at all. But to see neoliberals only as clients is increasingly not a complete picture, and increasingly less accurate outside of America.

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Cranky Observer 04.30.16 at 6:15 pm

= = = In Locke’s day, there were only two universities, and not much of what we now call research. = = =

In Locke’s prime there were 7 major universities in the British Isles and somewhere between 100-200 notable universities recognizable as such today around the world. The structured publication of “research” we think of as academic today, probably not so much.

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Brett Dunbar 04.30.16 at 7:43 pm

Plume your arguments reach the level of not even wrong. They are mostly so ill defined that no one can even work out what you are saying, such as what you actually mean by socialism.

One basic example is you seem unable to understand that the market penalises over production or that workers tend to be paid at a rate reflecting their marginal productivity. In a competitive market with reasonably low barriers to entry making excessive profits simply leads to competitors willing to take a smaller profit margin undercutting you.

You cannot even understand that corporatism is not capitalism. It is a distinct economic model. A natural experiment comparing them occurred in post war Europe, many countries, such as the UK had a largely managed economy with extensive rationing and pervasive price controls. In Bizone Germany Erhard abruptly abolished almost all of them. Germany had a rapid economic recovery despite having generally worse overall circumstances.

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Brett Dunbar 04.30.16 at 8:45 pm

A democratic system seems to lead to a policy set close to the optimal policy set for a capitalist system. Dictators can, in theory, impose a more optimal policy set. In practice they rarely do. Normally they give political favours to cronies.

In a democratic system political power is fairly widely distributed and the while various interest groups would like monopoly rents for themselves they really don’t want them for their suppliers. Having a competitive market generally is a second best policy for all parties while being the best overall policy.

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Plume 04.30.16 at 9:44 pm

Brett @161,

“One basic example is you seem unable to understand that the market penalises over production or that workers tend to be paid at a rate reflecting their marginal productivity. In a competitive market with reasonably low barriers to entry making excessive profits simply leads to competitors willing to take a smaller profit margin undercutting you.”

We’ve never discussed the above here — you and I — so I’m not sure where you’re getting any of that from. This is just you pulling nonsense out of the air. It’s pure straw-man nonsense.

Though, now that you mention it, your belief that workers are paid in accord with their marginal productivity is further proof that you have no clue about the real world. For example, worker productivity has skyrocketed in the last several decades. But pay for rank and file workers has either flattened or declined since roughly 1973. There are virtually no economists of note who would agree with you on that issue.

I’ve linked to a summary of findings from a non-Marxian source, since you can’t handle them:

Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay

A leftist economist, of course, would (correctly) note that wages have never reflected actual workers’ productivity. Not just that things have gotten much worse since 1973, which they have. They can’t match that productivity with pay, if the capitalist boss(es) seek profits and high personal compensation for themselves. It’s mathematically impossible to pay workers value for value and still come away with profits and high executive compensation. But I gave you more than enough proof that your thesis is absolute nonsense even without inserting a leftist, common sense perspective.

As for corporatism and capitalism. It’s not a matter of my not understanding your opinion on the matter. And that’s all it is. Your opinion, which very few share. It’s me disagreeing with it, and you having no evidence, logic or history to support your view in return. It’s just you taking your usual stance that capitalism is perfect, wondrous, spectacularly successful and virtuous and can do no wrong. If there is something wrong as a result of some economic model in the world, to you it can never, ever be capitalism.

You’ve drunk the koolaid, Brett. You should stop.

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Plume 04.30.16 at 10:46 pm

Brett B,

The stats are for worker productivity. It’s not me “attributing” anything to them that isn’t already there. And who builds and operates the machinery? Workers. Not CEOs, executive teams or ownership.

Workers.

Again, it’s nonsense to claim that rank and file wages reflect productivity. They never have, and by definition they don’t if productivity goes up and wages go down. And this hits them from several angles at once.

For instance: In the 1950s, the average CEO made roughly 20 times his rank and file. It was 25 times in the 1960s. Today, she makes 300 times more on average. No one person produces 300 times more than average workers in any business. When it was 20 times the pay, it was ridiculous. But 300 times? And in Fortune 100 companies, it’s 1000 times on average. Larry Ellison, for example, has in recent years made well over 10,000 times his average rank and file. In no known universe has he or any other CEO ever, ever produced that much more work than the rank and file.

In general, they produce far, far less. They don’t come close to doing as much work as their rank and file workers. They just get to steal the production of their workers, because the capitalist system makes this theft legal.

If pay reflected actual productivity, workers would make more than ownership/executives, who generally delegate/ hand off the vast majority of work and “produce” very little themselves. Capitalism, in essence, functions as a reversal machine, an opposite-day machine, redistributing wealth upwards, radically, from the producers (workers) to the takers (capitalists, execs, etc.).

No capitalist could possibly accrue millions, much less billions, if he or she paid workers a value for value match. It is physically and mathematically impossible.

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Asteele 04.30.16 at 10:52 pm

If you think about it isn’t it the money that pays for the machine that really has all the productivity.

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Brett Dunbar 04.30.16 at 11:01 pm

Plume you have repeatedly claimed that capitalism leads to massive over production and waste. This is trivially false. Waste is a cost and reducing it allows for increased profits. Competitors will also cut their costs and give themselves the opportunity to reduce prices and increase market share. Competition tends to equalise profits.

Since the financial crisis the average productivity of the UK workforce has dropped dramatically. This is almost entirely due to the loss of generally high paid high productivity financial services jobs.

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Plume 04.30.16 at 11:03 pm

Brett B,

Also: until we get to the point where robots build the robots that build the goods, etc. etc. . . . . it’s still going to be about increased worker productivity due to human workers — directly or indirectly. And, yes, it is quite likely to be the future. Human workers may some day become irrelevant. It does look like we’re heading in that direction.

Very good movie on the subject, from 2015: Advantageous.

http://www.imdb.com/title/tt3090670/

But once we hit a certain kind of “peak robot,” it’s pretty obvious that the consumer base will die as well, which means capitalism will die. It, too, will be replaced. Cuz, well, who will purchase the goods and services made by robots alone, when there are so few humans actually able to earn a paycheck? And just what do you think the billions of displaced human beings will do when that happens? It’s not going to be safe to be a capitalist piggie, rolling around in his or her bed, awash in money because they no longer have to pay any workers anymore. Awash in even more obscene amounts of profits and comp than they are currently. You’re going to see violence in the streets and in the penthouses that will make recent revolutions seem like a walk in the park. It’s that and climate change, etc.. Not a pretty picture for the future.

As in, be careful what you wish for.

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Plume 04.30.16 at 11:10 pm

Brett Dunbar @170,

Yes. Capitalism does lead to over-production and massive waste. That is simply factual. Again, you seem to believe that what “ought” to be the case, under your hopelessly naive vision/version of capitalism, “is” the case. As if it all worked beautifully, without a single glitch ever, always according to Hoyle, always, always perfectly logical in effect, at all points along the way.

If capitalism worked even a tiny fraction as well as you believe it does, we’d never have recessions and depressions, which are constant in capitalism. Capitalism, in fact, moves from one crisis to the next, endlessly, usually followed by trillions of dollars in taxpayer bailouts to keep it afloat. We’ve had more than 100 such massive bailouts, in fact, just since 1970. See David Harvey’s The Enigma of Capital for the full play by play.

147

Brett Dunbar 04.30.16 at 11:13 pm

It is possible for some individuals to be thousands of times more productive than the average in their company, the star players on a sports team are vastly more responsible for the team’s success than the cleaning staff at the stadium or the catering staff. They are employees who are paid not only thousands of times what the menial staff are paid they are paid many times what the managers are paid. This is generally true as the small difference in absolute ability results in a huge difference in overall outcome. For example world number 1 Novak Djokovic is only very slightly better than world number 2 Andy Murry at tennis and that results in a 22-9 winning margin.

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Plume 04.30.16 at 11:16 pm

Brett B,

“But you’re exaggerating the extent of this due to your insane theory of how responsibility for production should be credited. Attributing it all to the guy doing the grunt work, and nobody else. Like he could do anything without the machine somebody else designed and bought, without the work being scheduled efficiently, materials arranged to show up at the right time and place.”

Wrong. Again, I don’t attribute it all to shop floor workers, and nothing else. I’m talking about the surplus value they create, which already factors in inputs from ownership, execs, supplies, tools, physical plant, etc. etc. That’s already factored in — which is why it’s called “surplus” value.

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Plume 04.30.16 at 11:28 pm

Brett B @1976,

Strawman nonsense.

I note the existence of endless recessions and depressions, and you come back with this:

“But the economy, and only the economy, should be unvarying, or else you’re screwing up badly. It’s the one exception to the chaotic nature of the universe.”???

Come on.

150

Brett Dunbar 04.30.16 at 11:57 pm

Another example of multiple order of magnitude differences in productivity is in publishing. J K Rowling is vastly more productive than anyone else involved in the publication of Harry Potter, much of Bloomsbury’s profitability is directly and uniquely due to her.

I believe Brett Bellmore’s argument is that the economy is a dynamic system, as are ecosystems weather and many others you shouldn’t expect such a system not to be constantly changing. Some simple dynamic ecosystem models produce a cyclical pattern in population numbers, as is observed with lemmings in the real world. Tweaking the numbers can produce cycles of various lengths and chaotic variation with no real pattern.

Most of those bailouts were financial sector and on average had a negative final cost, i.e. made a profit. The AIG bailout for example made the US taxpayer about $25 Billion. Acting as a lender of last resort is somewhat profitable Emergency loans made at a penalty rate can be pretty lucrative; if they work. Indeed in 2008 Barclays was offered loans from both the UK treasury and by the Royal Families of Abu Dahbi and Qatar. They took the gulf money as the treasury would have limited executive bonuses as part of the bailout deal.

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Plume 05.01.16 at 12:08 am

Brett B,

Yes. We get them because capitalism forms unified markets (and eats its own), connected to one another like dominoes. No previous economic system was set up that way. It’s uniquely designed to do this, to move from crisis to crisis, and is unlike any previous economic system in that regard. It routinely goes into systemic crisis because no previous economic system was ever this tightly wound, this tightly integrated, or remotely this dependent on market gains across the board.

Beyond that, because it hoovers up wealth from the base to the top, redistributes wealth from the base to the top, and that base is necessary as consumer pool to maintain the system, it constantly goes into crisis. Again, this is unique to capitalism. No previous system was ever so dependent upon the buying power of the masses — while at the same time suppressing the wages of said masses. One of its classic contradictions, etc.

Slavery, which capitalism is based upon, refines, tweaks, wasn’t set up to rely on the buying power of slaves, obviously. Capitalism, however, emulates the master/slave dynamic but depends upon the purchasing power of the worker-slaves. There is an obvious conflict between the desire of the capitalist to maximize his personal hoard, which means he must radically suppress the wages of his employees, and the overall systemic health of capitalism itself, which requires at least adequate purchasing power from the largest possible numbers. As in, if the capitalist gets what he or she wants, the system falters.

There are exceptions, of course, the vast majority of recessions and depressions are just the natural result of this concentration of wealth and income at the top. It can’t be sustained, the system collapses, governments bail it out, and we start the whole round again.

It won’t be too long before the bailouts either fail to materialize at all or fail to work. Capitalism is simply not sustainable, primarily because of its massive internal contradictions — and the fact that it’s polluting us to death and changing the climate.

152

Collin Street 05.01.16 at 12:20 am

> Complex phenomenon involving multiple feedbacks are inherently chaotic.

> That capitalism fails to be the only exception doesn’t make it broken.

See, we can stabilise a chaotic system, with damping or active management.

But “damping” means heavy taxes, transfer payments, and anti-trust enforcement, which you seem to be against. And “active management” means direct government control, which you seem to be against.

You’re an engineer, you tell us? You work with industrial processes, right? If someone said, “let the machine set its own pace; it’ll run faster” you’d say “but it’ll run too fast and blow up and then it won’t run any more”, right?

I mean, what you’re saying is the same in form as, “Any machine can run out of control and explode. I stripped all the governors and control panels away, but that didn’t make the machine explode, it just exposed a potential that any other control system could have had; my process-control philosophy isn’t perfect, but what is?”

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Plume 05.01.16 at 12:37 am

Collin @183,

Well done. Kinda an updated Socratic thing, hoisting Brett B on his own engineer’s petard.

;>)

Brett @184,

Marxian economists have easily been the most astute and accurate economists over the course of the last several generations, and it’s not close. Not being rank cheerleaders for the system under critique definitely helps, as does their rigorous focus on substance instead of myth. Dismiss them if you care to, but they get capitalism and capitalist cheerleaders don’t. Evah. They don’t even get Marxian economists, because they never read them. They just read right-wingers who read other right-wingers who read other right-wingers who say they once heard someone mention something “Marxist.”

That makes you guys think you’re experts on the subject and can then ignore leftist perspectives, without regret. It also, strangely enough, makes you think those economists you hear about (via hundreds of degrees of separation) must always uphold the highest standards your own right-wing economists can never remotely approach. As in, they never get any predictions correct, and are constantly getting pretty much everything wrong, but you still take their word for it all.

In short, you need to break out of your bubble and actually read Marxians and other leftists yourself. Relying on second and third-hand accounts of second and third-hand accounts really won’t get you anywhere.

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Collin Street 05.01.16 at 1:10 am

If you don’t understand the system in its entirety, Brett… wouldn’t it be sensible to manage its behaviour so that it stays in the parts of the envelope you do understand?

“I don’t understand how this machine works, so set the numbers whatever!” would get you sacked, maybe get people killed. “We don’t have shrinkage figures for this copolymer, so sure let’s make the this foot-long connecting tie 3mm across”. “Does nickel dissolve in zinc? I don’t know, but I found a chunk of it just the right size for the mould part. I’m sure we’ll get decent tool life!!”.

[Also: you can’t argue autonomy-over-all if you’re in favour of property rights, because laws against theft are inherently a limit on my possible choices. I mean, sure, you can weigh and judge it, and you can weigh it heavilly… but if it’s not absolute, then other concerns like “let’s not blow up the economy this week shall we” come into play.]

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J-D 05.01.16 at 1:43 am

I wrote (@101)

‘If I was trying to think of examples where the barriers to entry are fairly low, I don’t think the airlines industry would come to mind; I don’t think of setting up an airline as cheap and easy. But much more important is the reference to ‘certain other conditions’, evidently including the existence of the possibility of (results from) complaints to competition authorities. Competition authorities are agencies of the state, so this appears to support my earlier conclusion that market functioning is dependent on a substantial level of state action.’

Brett Dunbar wrote (@136)

‘Airlines have moderate barriers to entry, airliners cost several million each. That is a level of capital actually available to a fair number of businesses. After most of the artificial barriers to entry were dismantled new entrants took a lot of the market.’

Several millions of dollars is a large sum compared to several tens of thousands but a small sum compared to several hundreds of millions. Possibly there are examples of industries where the barriers to entry are higher than they are for the airline industry; I’m sure there are examples of industries where the barriers to entry are lower. Just where the airline industry would rank in a comprehensive tabulation I don’t know, although I still suspect it would be far from the bottom.

But, all that aside, Brett Dunbar’s observation responds only to the first sentence of my paragraph quoted above, and (as I wrote at the time) the second and third are more important.

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Layman 05.01.16 at 1:48 am

Brett Dunbar @ 174 “It is possible for some individuals to be thousands of times more productive than the average in their company, the star players on a sports team are vastly more responsible for the team’s success than the cleaning staff at the stadium or the catering staff.”

Can you, personally, name any such super-productive person who is not an athlete, performer, or artist; and then defend that example with specifics about how they ‘merit’ their extraordinary compensation in the way you can with an athlete, performer, or artist? I can’t think of one, and I’ve spent a lot of career time with a lot of business people who make a lot of money.

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bruce wilder 05.01.16 at 2:11 am

Marginal product is not a personal virtue. An extraordinary performer can earn a fantastic income because the technologies of communication amplify the number in the audience who can enjoy the performance. The ability of an actor or an athlete, no matter how impressive, produces nothing but motion in the absence of theatrical technologies that allow the performance to be seen and enjoyed by hundreds, thousands, millions.

The organization of technically sophisticated systems of infrastructure make possible the careers of star performers.

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J-D 05.01.16 at 2:19 am

Brett Bellmore @145

‘Well, spending is cost, and so pretty uniformly a bad way to be bigger. Doing can be benefit and/or cost, you have to actually look at what’s being done.

‘So doing less while spending more is pretty unambiguously bad, since you’ve got less of the mixed bag, and more of the uniformly bad.’

If one business has higher outlays than another, or if the outlays of a business increase over time, that’s not (by itself) evidence to justify a conclusion that something is wrong. If one household has higher outlays than another, or if the outlays of a household increase over time, that’s not (by itself) evidence to justify a conclusion that something is wrong. If one government has higher outlays than another, or if the outlays of a government increase over time, that’s not (by itself) evidence to justify a conclusion that something is wrong.

Spending more and getting less for it is a sign that something is wrong; therefore, if it’s correct to say (as some people do indeed say) that outsourcing results in spending more and getting less for it, that’s a sign that outsourcing is the wrong way to go.

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Plume 05.01.16 at 2:33 am

Bruce @192,

“The organization of technically sophisticated systems of infrastructure make possible the careers of star performers.”

Excellent point, and well said. And a good way to prove this is to remember relative salaries for NFL starters prior to, roughly, 1969 give or take, or the beginnings of the golden age of televised sports for the NFL.

A starting NFL corner made roughly 20 – 30K back then. He now makes several million, easily. What changed? Not his skill set, his efforts, his knowledge of the game, his time spent on his craft. The medium of display changed radically, exponentially. TV changed the size of the audience, which changed the dollars advertisers were willing to spend and so on. But it also and obviously meant that an exponential increase occurred in the numbers of workers involved in that cornerback’s monetary “success”. Workers who, for the most part, earn a fraction of a fraction as much as he does now. He gets to make as much as he does, in part, because those other workers make so little, relatively speaking.

Personally, if I have to choose, I’d much rather the athlete, artist, actor, singer, etc. etc. get the money than the corporate suits. They (the athletes, the performers) have far more direct input in the deal, and people actually tune in to watch them. It’s incredibly rare that a CEO or owner of a company is the reason why a consumer tunes in/buys the product. So if there has to be obscene inequality in income, I’d rather it go to the performer, not the suits. But it’s still immorally unequal.

If we zoom out, and really think about value to society, there is no rational rationale for paying a Kobe Bryant, for instance, 25 million a year to play a kid’s game, while we pay teachers (to shape young minds) and nurses (to save lives) roughly 50K. Is what Kobe did — he retired after this season — really 500 times more “valuable” than a teacher, a nurse, an EMT worker, a social worker, etc. etc.?

Capitalism just escalates the madness of arbitrary monetary values, which have no basis outside of fiction and are fundamentally ludicrous.

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Collin Street 05.01.16 at 2:57 am

Possibly there are examples of industries where the barriers to entry are higher than they are for the airline industry; I’m sure there are examples of industries where the barriers to entry are lower. Just where the airline industry would rank in a comprehensive tabulation I don’t know, although I still suspect it would be far from the bottom.

Sure.

But the money isn’t the barrier. It can be borrowed, which means the barrier is raising the money: something you don’t need any real money to do, just a business plan that investors like. Same with any business, but it means that the ticket price of the equipment isn’t where you look for barriers.

[which means that the actual barrier you face is partially shaped by the public perception of how big the barrier is: the higher the perceived barrier, the easier to borrow money and the lower the barrier becomes. I mean, there’s other effects, too, but the net effect is that the barriers to entry to starting an airline used to be fairly low until people wised up about… fifteen? years back.]

161

cassander 05.01.16 at 4:31 am

@jd

>There are mechanisms for removing judges from office, but (at least in countries I know about) it’s not easy. I stand by my stated view that it should be easier. (And for Congressional officeholders, too, and their equivalents in other countries, whom I see you skipped over.)

congressmen face election every two years. that’s a very high standard of for public office. All else being equal I’d probably prefer a system with longer terms and making them subject to recall at any time, but I doubt in practice that would make the system that much more accountable.

In general, though, I don’t understand where you’re heading with all this. I agree those at the top should be more accountable. They aren’t because power, to a significant degree, always insulates people from accountability. If some private in the Army had done what Hillary Clinton did with classified emails, he’d be looking forward to a long career of breaking large rocks into smaller rocks at Leavenworth. Clinton might, if things go very badly for her, have to plead guilty to a misdemeanor. I obviously don’t think this is a good thing.

>Then you think wrong. I disagree. Academics are not generally in danger of losing their jobs if they learn to understand things they didn’t understand before, or if they change their views on issues in their fields.

They are not in danger of getting fired. They are in danger of losing professional standing, reputation, and their good parking space if they adopt positions their colleges don’t like. And the more famous they are, the more they stand to lose.

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cassander 05.01.16 at 4:51 am

@Layman

>Can you, personally, name any such super-productive person who is not an athlete, performer, or artist; and then defend that example with specifics about how they ‘merit’ their extraordinary compensation in the way you can with an athlete, performer, or artist

People who build successful organizations. Ford, Sloan, Gates, Jobs, all people who were in developed industries competing against far more established players whose actions generated vastly more wealth for others than even the considerable fortunes they made for themselves.

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Plume 05.01.16 at 5:10 am

Cassander @197,

No one person builds a “successful” organization, or any kind of organization at all. It takes thousands, directly, and millions, indirectly. When it comes to tech corporations, especially, it takes the work of generations long dead, and the intellectual legacies they establish, plus generations of public sector workers, past and current physical and intellectual infrastructure, etc. etc.

(The government, for instance, created the Internet, the protocols that support it, the infrastructure to expand and maintain it, plus satellite tech, touch screen tech, computer tech, GPS and so on. And without centuries of public sector work in the sciences, especially maths, there is no computer, no software, no networking, no Internet.)

Which is one of the biggest reasons why it’s absurd and obscene for any one person, including a Bill Gates, to make thousands or tens of thousands more than his or her rank and file. Without them, without that legacy from the past, right up to the present, and without the public sector, he or she is dead in the water. They, OTOH, can work just fine with another head honcho, or organize and manage themselves as they do in places like Mondragon.

Gates needs and needed thousands of workers, plus the public sector, plus the generations of intellectual contributers, far more than they need or needed him. It’s pure nonsense to believe the Gates and Jobs of this world could do what they do without massive help from millions of others and from the public sector.

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J-D 05.01.16 at 5:51 am

Brett Dunbar writes (@161):
‘One basic example is you seem unable to understand that the market penalises over production or that workers tend to be paid at a rate reflecting their marginal productivity.’

Plume writes (@164):
‘Though, now that you mention it, your belief that workers are paid in accord with their marginal productivity is further proof that you have no clue about the real world. For example, worker productivity has skyrocketed in the last several decades. But pay for rank and file workers has either flattened or declined since roughly 1973.’

Brett Bellmore writes (@165):
‘I’m a tooling engineer, I design machinery that manufacturers things. If tomorrow we replace a stamping press that produces 50 parts a minute, with 12 attributes that have to be hand inspected, (Not on every part, of course, just a representative sample of them.) with an improved setup that produces 100 parts a minute, and auto-inspects 6 of those attributes, is it reasonable to say that the worker has become twice as productive? And attribute none of the increased production to the machinery, aka “capital”?’

Taking the example that’s been mentioned, how is it possible to measure the marginal productivity of a tooling engineer, designing machinery that manufactures things? If it’s not possible to measure a worker’s marginal productivity, that tends to undermine the thesis that workers tend to be paid at a rate reflecting their marginal productivity.

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J-D 05.01.16 at 6:19 am

cassander @196

1. Reference was made to the principle that it should be possible to dismiss people from their jobs for unsatisfactory performance.

Easy dismissal for unsatisfactory performance is most important for the people in positions where performance matters most, but they are precisely the positions where dismissal for unsatisfactory performance is hardest.

You are of course correct to point out that this is because they are the positions with the most power, status, and prestige; that’s at the same time the reason why dismissal for unsatisfactory performance is hardest but should be easiest.

So it’s a very difficult problem to do anything about. What I do know is that the first step is naming it.

2. Academics are not generally in danger of losing professional standing, reputation, and their good parking space if they learn to understand things they didn’t understand before, or if they change their views on issues in their fields.

166

jake the antisoshul sohulist 05.01.16 at 3:37 pm

Brett B., the problem with your world is that only those who own a lot of capital are free.
(Unless you are talking about the Me And Bobbie McGhee form) I think you are actually aware of this, even if you wouldn’t admit it. And more to the point, you prefer it that way.
Not that there aren’t many, many people who agree with you.

167

Plume 05.01.16 at 4:01 pm

Brett B @201,

“He’s convinced that his moral theory describes the universe, when all it describes is him.”

It’s funny that you don’t get any of this, even though you use the correct word above: “ought.” I don’t think moral theory describes the universe. I see it as describing what “ought” to be but clearly isn’t. That should be pretty obvious when you read the inequality stats I’ve cited. That capitalism has created the most obscene levels of inequality in human history, and that it does so automatically, as a natural part of its own internal dynamics. If left to its own devices, it creates even more than exist right now with very modest checks on its powers. And there is a one to one correlation between the level of those democratic checks on its powers and its ability to increase inequality.

In short, I fully realize the massive difference between “ought” and “is.” Thing is, even though I despise capitalism and want it replaced, I also realize that it would perform much better as an economic system — while still needing to be replaced — if it did not create such grotesque levels of mass inequality . . . . of income, wealth, access and power. And that the only way to reduce this is through democratic checks and balances. And the reason it would perform better is that when it does what it was set up to do — concentrate wealth, income, access and power at the top — this causes its own collapse. Guaranteed. It is only ever able to return from the grave after those self-generated collapses due to government intervention and massive bailouts.

You want government to shrink? Replace capitalism. Because no previous economic system has ever required more government, and more integration between governments.

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Plume 05.01.16 at 4:17 pm

J-D,

Excellent point:

“If it’s not possible to measure a worker’s marginal productivity, that tends to undermine the thesis that workers tend to be paid at a rate reflecting their marginal productivity.”

I think Brett D and Brett B should try to work this contradiction out, together. Brett B has asserted that it can’t be measured. Brett D assumes that everyone is paid correctly, according to “market forces” or some such Deux ex Machina fiction. Neither poster, of course, has a clue about how things actually work, though I’d say Brett B is a bit less clueless.

But the real way out of this conundrum is this, if we’re still under capitalism:

Take total revenues, subtract ongoing costs excluding labor — which would mean all personnel, management, rank and file, etc. in this particular case. It’s not generally how “labor” is categorized, of course. But in this case, count all people in X firm.

Set a hard and fast ratio for top to bottom pay. Orwell thought 10 to 1 fair. I think that’s still too high and would prefer 4 to 1. But we can go with either, or something close, etc.

Create a point system for things like years on the job, education, overall work experience, voluntary skill-set training, job dangers, etc. Come up with a truly neutral algorithm for a software program to set wages based on those points — again, keeping within the parameters of that max ratio of top to bottom pay.

Given that no capitalist firm would ever do this on its own — their entire point is to maximize their own personal hoard of wealth at the top — these would all have to be democratic checks imposed from the outside. I would much prefer an economic system that didn’t require external coercion like the above. One that was already democratized, organically, so this kind of thing would be internal, natural, organically derived and chosen by workers themselves. But that isn’t the case. So, right now, we work with what we have, etc. etc.

169

Cranky Observer 05.01.16 at 5:02 pm

This is an academic blog and I’ve probably been a bit unhelpful in recent years discussing implementation/practice rather than theory. One reason why I’ve been posting a lot less lately.

But having held responsibility for managing business data and extracting information (we hoped!) at a variety of firms I always find these discussion about the precise economic decisions made by real firms amusing. (and of course the 2/3 of the MBA curriculum is spent learning how to deliberately undermine the economic theory learned in the first 1/3). As I’ve noted here before I was for a good length of time with a small/medium-ish firm that was for historical reasons viewed by customers and competitors as both a product trend leader and pricing leader although by that point it was only a small corner of the industry. Despite a 5 year effort to improve business data at all steps of the process we could not have accurately told you what our total costs per product line were, much less our average cost. Marginal cost? Not per product line or even product but per employee? Ha ha ha! And in guarded discussions with our competitors including one tightly buttoned-down megacorp they didn’t have much more information than we did. Assume a can opener…

Of course, it is all supposed to be aggregated, come out in the wash, and work by invisible hand, right? Then you need to get to work explaining why firms larger than the basic unit of implementation ($2-3 million and a nice office for a software firm, $3 billion and one mill for a steel producer) exist AT ALL when Brett D’s beloved Microeconomics 101 says they should not.

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Layman 05.01.16 at 5:26 pm

“Ford, Sloan, Gates, Jobs, all people who were in developed industries competing against far more established players whose actions generated vastly more wealth for others than even the considerable fortunes they made for themselves.”

These are not the examples, you think they are, but never mind. For every one you name, we can name another – Carly Fiorina, or Dennis Koslowski, for instance. Were these people massively more productive than their peers? If not, why did they command the same kind of megacompensation?

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Plume 05.01.16 at 5:26 pm

Cranky Observer,

Thanks for your observations. I think it’s a major problem for anyone to put so much store in capitalist theory, and Brett D is an example of someone who assumes it ALL translates, as is, without alteration, to reality. At least as he perceives Econ 101 theories. At least his perception of a certain kind of Econ 101 theory, etc.

In a sense, he and those like him are “true believers.” Capitalism is a religion to them. Capitalist theory is like the bible to creationists. It all really happened as written, apparently. And it keeps happening as written, supposedly. And those who don’t accept these fictions as factual apparently “don’t understand microeconomics.”

Um, no. We just realize the stories told by capitalist zealots are just that, stories. Not reality. Not the way things actually work in real life. Not the way things evah worked in real life, or ever will.

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Plume 05.01.16 at 5:31 pm

@206

And many of them, like Larry Ellison (and Fiorina), are massively compensated for the destruction of companies, firing tens of thousands of workers, selling companies for scrap — like Romney’s Bain capital, as well. So even if we grant them the bizarre premise that it was all the work of a single person — it never, ever is — their pay is often radically increased for crushing the life out of American workers and exploiting those overseas to an even greater degree.

That any society allows this kind of perverse concentration of income, wealth, access and power is clearly insane.

173

Brett Dunbar 05.01.16 at 6:55 pm

The increase in executive salaries after they started being set by shareholders seems to be partly due to signaling, You pay a superstar a superstar salary if you don’t pay a superstar salary then you signal to competitors that you have a mediocrity. You don’t want to do that as it makes you look vulnerable so you pay superstar salaries even if you have appointed a mediocrity.

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Plume 05.01.16 at 9:34 pm

Brett @209,

So, you are admitting that pay doesn’t track with performance or productivity, at the top or the rank and file, right?

The biggest factor at the top is maximizing compensation (and profits) for the top, to the degree possible. This requires minimizing pay everywhere else, to the degree possible. It’s just math. It’s complete nonsense to assert or believe that pay is set (under capitalism) according to actual production — that it actually corresponds to work done in a fair way, in an even remotely fair way.

In reality for the rank and file, it has always been the case, and will always be the case, as long as we are cursed with capitalism, that it is set as low as possible to maximize compensation at the top and increase profits. Workers are just means to that end, and the more unpaid labor those at the top can generate, the more they make for themselves — which is the entire point of having a business. They make the vast majority of their money via that unpaid labor.

175

cassander 05.01.16 at 10:10 pm

@layman

>These are not the examples, you think they are, but never mind. For every one you name, we can name another – Carly Fiorina, or Dennis Koslowski, for instance. Were these people massively more productive than their peers? If not, why did they command the same kind of megacompensation?

Well, Tyco grew massively under Koslowski, the fact that he was a crook doesn’t really change that. And I dare say even Carly Fiorina did better than, say, the janitor would have. That CEO pay can be corrupted by lots of mutual back scratching is, of course, undeniable. but that doesn’t change the fact that some people really are hundreds, even thousands, of times more productive than others in the right circumstances.

176

Brett Dunbar 05.02.16 at 12:03 am

Kobe Bryant actually provides entertainment to millions of people so the net value of the work he does is enormous. While the benefit to each individual spectator is fairly small, the aggregate benefit is immense. Teachers may produce a larger benefit to the individual student but can benefit only a small number of students so the total value generated is relatively small.

Capitalism was not built on slavery, indeed early capitalism had a strong association with abolitionism. Slavery was much more closely associated with mercantilism and other pre-capitalist economic theories. Early capitalist Britain spent a good deal of the nineteenth century suppressing the slave trade. The philosophical underpinning of capitalism include an assumption that the person best placed to determine their interests is themselves. Slavery requires the assumption that some people are naturally inferior and must be forced to do things by their superiors. This paternalist idea is present in most non-capitalist economic systems. The idea that the King the Aristocrat or the Party knows best.

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Layman 05.02.16 at 12:16 am

“You don’t want to do that as it makes you look vulnerable so you pay superstar salaries even if you have appointed a mediocrity.”

Why does the market permit that? Isn’t it a failure?

“but that doesn’t change the fact that some people really are hundreds, even thousands, of times more productive than others in the right circumstances.”

That ‘right circumstances’ qualifier does a lot of work!

178

Layman 05.02.16 at 12:17 am

“The idea that the King the Aristocrat or the Party knows best.”

…this has been supplanted by the dictum that the CEO knows best. And how is that different?

179

Plume 05.02.16 at 12:50 am

Brett @212,

As BW notes, Kobe was only able to reach millions because of radical changes in technology, none of which he or his bosses created. All of those changes also included the work of literally millions of people through time, and to maintain them, to maintain necessary adjacent infrastructure, they still do.

So the only way a Kobe is able to make his 25 million a year is for the vast majority of those people to be ignored, unpaid, forgotten. This is also the case when it comes to anyone like a Bill Gates, when they put together a company dependent upon the previous work of millions and the ongoing work of millions. Capitalists would go bankrupt if they actually had to pay all the people who made or make their businesses possible.

On the slavery issue: We’ve been through that a thousand times. Yes, capitalism is based on the slave model. Clearly. Obviously. And, yes, it fits in quite well with ongoing slavery, as we saw in the second life capitalism gave slavery in the American South, and the fact that slavery rears its ugly head again in capitalist nations devoid of democratic checks and balances. When no one is looking, it reverts back to its primal, enslaving self.

And, for the thousandth time, you can’t credit “capitalism” with everything done to counter its ill-effects. Britain’s and America’s abolitionists had to fight against capitalists in order to fight against slavery. Capitalists themselves were never, ever at the forefront, primarily because so many of them benefited so much from the slave trade — directly, indirectly, via manufacturing, finance and so on.

Please, Brett, put down the koolaid.

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Plume 05.02.16 at 12:57 am

A coupla more good links on the slavery issue:

Capitalism and Slavery

How Slavery led to Modern Capitalism

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Brett Dunbar 05.02.16 at 2:56 am

The epithet “dismal science” was thrown at J S Mill by Carlyle in an argument they were having about slavery. Mill was opposed while Carlyle was in favour. It is a matter of historical fact that early capitalism was associated with abolitionism. The Commons, much more influenced by the new money of the industrialists was abolitionist earlier and more strongly than the mostly old money aristocratic Lords.

The abolitionist Republican party had its power base in the capitalist north, the slave lobby in the aristocratic planter class in the less developed south. The basic liberal philosophical assumptions that capitalism has fit poorly with the ideas of treating people as property. The capitalist northerners had reached the point where they could not abide a political alliance with the slave owners, hence the collapse of the Whig party.

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J-D 05.02.16 at 3:07 am

Brett Bellmore @201

I didn’t ask whether it’s possible to measure the marginal productivity of a tooling engineer, but how it’s possible, so your assertion that it is possible doesn’t answer the question. Something like your observation that measuring productivity gets harder the further you get from a simple, repetitive task was in my mind when I framed my question; I latched on the example of a tooling engineer because it was the one you mentioned, but without difficulty I could come up with a list of a dozen different jobs where I imagine it would be so difficult to measure productivity that it’s not a practical possibility. I’ll refrain from adding any examples of my own at this point because you’ve offered another couple, the janitor and the CEO, for both of which I’d pose the same question: how is it possible to measure the marginal productivity of somebody in one of those jobs, or even to get close enough to doing so to give meaning to the concept?

I did imagine that it was probably feasible to come up with a way of measuring productivity that would give roughly valid answers for at least some kinds of jobs, so I’m particularly interested to read the comment by Cranky Observer (@205) suggesting, on the basis of practical experience, that it’s not feasible for any of them.

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J-D 05.02.16 at 3:12 am

Plume @194

‘Create a point system for things like years on the job, education, overall work experience, voluntary skill-set training, job dangers, etc.’

I can’t believe in this without a worked example.

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Plume 05.02.16 at 4:30 am

Brett @198,

You continue to repost the same zombie nonsense, and never even attempt to back it up. You just make silly assertions without evidence, over and over and over.

I’ve supplied links repeatedly to support my refutations of your nonsense. I’m guessing you don’t bother to read them. So this is hopeless. But, no, Brett, it is not a matter of historical record that early capitalism was associated with the abolitionist movement. I’ve never encountered a single historian who believes that. That’s just you inside your childish bubble talking. You have zero proof to support that ridiculous statement.

Or this one:

“The basic liberal philosophical assumptions that capitalism has fit poorly with the ideas of treating people as property.”

There is no such basic liberal, philosophical assumption about capitalism. In fact, capitalism does treat people as property. It can’t operate without that assumption, without assuming that the production of other humans beings can be owned by capitalists. That capitalists get to own the work of others, and basically own their bodies for at least eight hours a day. Prior to democratic checks on their powers, which capitalist fought against violently, viciously, those hours were generally ten to twelve a day, with only one day off a week.

Again, please put down the koolaid.

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Brett Dunbar 05.02.16 at 5:24 am

Plume you are talking utter bollocks.

Capitalism started around the end of the eighteenth century as Pitt began the process of dismantling the elaborate regulatory systems that made up the mercantilist economy. The abolitionist movement was also in the process of succeeding in the same place and time, The slave trade was prohibited in 1807 (the Slave Trade Act 1807 passed the Commons 283 Ayes, 16 Noes) and in 1808 Britain established the West Africa Squadron to enforce that ban. Between 1808 and 1860 it captured 1,600 slave ships and freed 150,000 africans. Slavery itself was abolished in 1833, it was to be phased out by 1843 in the Act as passed, the deadline was brought forward to 1838.

The Anti-Corn Law league, who’s political campaign was a key part of early capitalist political activism had many members who had started out in the earlier anti slavery campaign.

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Plume 05.02.16 at 2:50 pm

Brett @202,

Again, read both The Origin of Capitalism, by Ellen Meiksins Wood, and The Invention of Capitalism, by Michael Perelman. I’d also highly recommend The Making of Global Capitalism, by Sam Gindin and Leo Panitch. Those three books will give you a very solid grounding in subjects you know absolutely nothing about:

Capitalist history and how it actually functions in the real world.

Beyond that: All you’re doing is asserting correlation as causation, a basic logical error. That there were abolitionists in a capitalist nation — Britain being the first capitalist nation — in no ways demonstrates capitalists had anything to do with the abolitionist movement. I’ve demonstrated that they actually got filthy rich off of slavery, and that they prolonged it. They benefited from the slave trade, directly and indirectly, ginormously. I supplied proof of that. You, OTOH, just keep repeating your usual cheerleader’s nonsense, without one iota of supporting evidence.

You also should read Crooked Timber’s own John Quiggin on the subject of John Locke and slavery:

John Locke Against Freedom

And his followup article:

John Locke’s Road to Serfdom

There’s your philosophical connection between capitalism and the exploitation of slavery.

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Brett Dunbar 05.02.16 at 11:06 pm

I am not interested in Marxist pseudo-science., I have better things to do with my time. for much the same reason I’m not interested in theology. Both involve dogmatically asserting a number of premises that are not actually true. I feel perfectly justified in rejecting the work of anyone who still holds to Marxist dogma as fundamentally logically flawed.

You are letting your fanatical hatred of capitalism blind you. Capitalism and Liberalism were very strongly linked. The anti slavery cause was strongly associated with the pro-free trade campaigns and had a large overlap in personnel. The slave trade promotes war, as that is a source of captives, war disrupts trade generally so if you want a wide range of trade then you want to suppress the slave trade.

The claim that capitalism promoted slavery is a straight lie. The most capitalist state at the time was also the most militantly anti-slavery. The capitalist industrialist class were pretty solidly anti slavery and were actually prepared to spend a good deal of money buying off the mostly landed aristocratic slave owners in 1833.

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Plume 05.03.16 at 2:49 am

Brett @204,

I’m not interested in pseudo-science, either, which is why I read a broad range of economists and historians, including Marxians. Marxians don’t deal in pseudo-science. They’re actually consistently among the most astute, accurate and rigorous analysts of the capitalist system and its history, and the most honest and independent. You’d know that if you weren’t so thoroughly brainwashed by capitalist propaganda, which tells you to hide under the bed at the mere mention of Marx.

Beyond that, I posted all kinds of links written by people who aren’t Marxians, or associated with any Marxist tradition, to support what I’ve posted. You, on the other hand, never post supporting evidence of any kind. You just drone on and on with your silly fanboy fictions, totally oblivious of historical realities and the present day. Until I read you, I had never encountered such a thoroughly naive and blind cheerleader for the capitalist system, and I’ve been on the forums scene for more than twenty years.

Please, Brett, if you’re going to keep up this rah rah nonsense, at least have the decency to present evidence to go along with it.

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