Saturday, January 23, 2016


More Bruce WIlder

Bruce Wilder 12.22.15 at 5:00 pm

engels @ 194

neo- means new, as Cranky observes. It is a common mistake to identify neoliberalism with conservative libertarianism, the more self-conscious heirs of “classical liberalism” (Milton Friedman liked to call himself a classical liberal. )

The neoliberals, though, were the successors of the New Deal liberals, those not-quite-social-democrats. The neoliberals were the next generation, who gave up in the simmering class war, that was the core of New Deal politics. That is Charles Peters’ theme: he declared himself tired of the stalemate in class warfare that characterized New Deal politics. Some were the successors to the “liberal Republicans”, a conservative wolves-in-sheeps-clothing faction that dissolved at that time. Brad Delong, with his supreme sense of historical context, has called himself an Eisenhower Republican. Some, like Clinton and Carter and Gore, occupied the space previously occupied by Southern populists, but without the racism. Clinton and Gore continued to use the rhetoric of “fighting” for the common man.

The Washington Consensus version of international neoliberalism occupies a similar position, in that it emerged as the competition with communism ended.

Rich is right to identify neoliberalism with the managerial class. It is the politics of dismantling the New Deal, from the perspective of those in charge of taking it apart while avoiding collapse and smoothing over crisis. Having unilaterally surrendered in class war, their job is keeping class war from breaking out again under one-sided assault from above, while continuing a very profitable program of controlled demolition and the construction of a new structure to manage and herd a growing precariat.

Their relation with the conservative libertarians is an interesting one to me, in part because it is so closely tied to the social structure of mainstream economics. To understand it, you need to understand that conservative libertarianism, as an ideology and economic philosophy, is not real, not organic — at least not in our era. It is a mask to wear in public for the most aggressive plutocrats. For pundits and intellectuals apologizing for plutocracy, it is a well-paid gig. Conservative libertarianism, backed by the elaborate but easily mastered structure of Econ 101, is nothing if not an impressive rhetorical engine, capable of turning out an endless flood of glib, content-free opinions.

For the neoliberals, it provides a useful foil, a way of arguing one’s own views in-contrast-to, that makes neoliberalism seem far less conservative and pro-plutocratic than it is. The back and forth creates the illusion of a debate and critical examination of ideas. And, most usefully, the conversation between neoliberals and the paid shills of libertarian conservatism can be treated as the serious adult conversation, that the children should not interrupt, so any answer given to real critics can be dismissive and condescending, the better to marginalize other points of view.

Paul Krugman rails against the strawmen of “freshwater” economics to burnish his own credentials as a political liberal of the old school (something he is not), then turns around and picks out certain economists for rituals of respect, policymakers like Bernanke or Blanchard, or allies like Simon Wren-Lewis of Oxford. Once in a while, some one further afield will be dismissed or his ideas presented as an impenetrable puzzle. But, mostly he stays within a narrow range of respected interlocutors, and within that range, criticism is very muted. Krugman did not appear to even understand how his own publicly expressed views differed from Bernanke’s, so Bernanke’s reactionary politics remained unexplored. Bernanke remained a trustworthy technocrat in Krugman’s telling.

Neoliberalism uses libertarian conservatism, but does not share its ideas. It does not favor laissez faire per se, as the classical liberals supposedly did. They always want a program, and a complex one that needs lots of credentialled administration is thought best. Oh, and tons of policy analysis, too. The neoliberals are the practical people, who supply a bailout, while libertarians express hostility toward the victims and the bailout simultaneously. Thus, our political stasis is maintained thru the time of the cholera.

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