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Sunday, June 18, 2017

Tories, Neoliberalism, NeoKeynesianism versus Post Keynesianism

We Are Not Neoliberal

Friends of mine constantly accuse various Democrats of being "neoliberal". The term has some definite meaning to it, and so I find their use of it to be sloppy, broad-brushing and usually defamatory. What it isn't is anything to do with the actual Democratic Party and it's ideology. It is a defamation of Democrats to call us "neo-liberal." The term has a real meaning and is used wrongly by those trolling us, who use it. They can call themselves intellectuals, but they are defaming the party and what it stands for when they call us that.

Neoliberalism is a Con

The fact is that a combination of Reagan and post Reagan gaslighting and propaganda had most of us conditioned to believe that our ability to make improvements in the lives of ordinary people was dependent on working with conservative politicians and businessmen. Unfortunately the more we tried to work with them, both the Clinton's and Obama, the more they slapped our outstretched hands away. Worse, whenever GOP were in office all their bull stuff about balanced budgets and fiscal responsibility went out the window. The GOP spend like bloated pigs emptying in their pens and attack any target with their teeth that gets in their way. We had adapted to Ronald Reagan's propaganda revolution by self-suppression. The far left called that "neoliberalism" in disgust. Some of it was our cowardice. But it never was "who we were." It was always a strategy that was based on our democratic creed of majority rule and respect for everyone's opinion. We were buffaloed into going along with the Con Artist "Two Santa Strategy" without even realized were were being treated as Marks. We had come under the influence of neoliberalism, but we were never neoliberal. Groups like 3rd way and similar tried to compromise with the Right Wing. Sometimes out of well meaning misunderstanding of how the Right wing was conning them. Sometimes because Tory Ideas are optimized to create a hierarchy of wealth and for those who own it. And so are excellent vehicles for corruption.

But what are these things?

Neoliberalism is a set of defined ideology, everywhere but in the United States, where it is a deprecatory term for Democrats. Neo-Keynesianism is a term that is fought over by economists and pundits with very different beliefs. Post Keynesianism is similar except that post Keynesians seem to be clearer on what is Keynes and what isn't and to base their beliefs on critiques of both Keynes Ideas, Friedman's and pretty much the entire 20th century of economics.

What is Neoliberalism?

Investopedia has an article on neoliberalism:

"Neoliberalism has been used by various scholars, critics and analysts, mainly referring to an upspring of 19th century ideas connected to economic liberalism that began in the 1970s and 1980s. These ideals advocate for extensive economic liberalization and policies that extend the rights and abilities of the private sector over the public sector, specifically the shutting down of state and government power over the economy. Neoliberalism supports fiscal austerity, deregulation, free trade, privatization and greatly reduced government spending." [neoliberalism]

Corporate Watch Definition of Neoliberalism

The Corporate Watch site defines it with a list:

  3. DEREGULATION (privateering).
  4. PRIVATIZATION (privateering).
  5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY" and replacing it with "individual responsibility."

Neoliberalism is Tory Economics

In my voyage of discovery I discovered that these ideas are "Tory Economics." They date back, at least to the reign of James the First and the East India Company, and maybe further to Italian struggles between the Party of the Emperor and the Party of the Pope in medieval times (Guelphs and Ghibellines).

They are a modern means by which predatory pirates get a letter of marquee, to carry out government functions such as making war, collecting fees and taxes and then engage in legal piracy. Each of the above listed principles (Rule of Market to eliminating Public good) represent anti-principles designed to justify aristocratic economic piracy. Their salesmen, confidence men actuall, whenever the public vigilance is weakened, or the targets embrace an equally pernicious regime, begin selling these ideas as somehow in the good of their marks. And every-time the results are graft, oligarchy and looting (Piracy). GOP, "Conservatives" in some countries, "liberals" in others; all are carrying out schemes of creating regimes that create a hierarchy of looting. The people do get some temporary benefit when the looting is aimed at colonies or "friends" (neo-colonies) but everyone should beware of these pirates. They come in smiling, but as soon as they start getting power they enforce their power with snarls and guns.

For more in general on this subject read my previous essays on it:

This is a big subject so I come back to it frequently.


Neo-Keynesianism is the product of economists reacting to criticism of Keynes by emphasizing Keyne's most wrongheaded ideas, or by criticizing him within the framework and straw arguments of neo-liberals. In many cases neoliberalism and neo-keynesianism are identical. The term is vague so many folks who call themselves neo-keynesians are really post Keynesians.

Tory Schools

"Austrian Economics", "Libertarianism", "Monetarism", "Supply Side", are all variants of Tory Economics. They are all:

Zombie Ideas

These Tory, "classic liberal", ideas are really pernicious and I talked about them previously in a post called "Zombie Ideas that Won't Die."

"The popularity and support of neoliberalism is divided. This approach has most famously been connected to various economic policies introduced in the United Kingdom by Margaret Thatcher and in the United States by Ronald Reagan. Some academics and analysts, however, attribute the resurgence of neoliberal economic theories in the 1970s and 1980s to financialization and indicate that the financial crisis of 2008 and 2009 is ultimately a result of such an approach to the economy." [neoliberalism]

Neoliberalism in the 30s

Investopedia also claims:

"The exact meaning and usage of the term has changed throughout time. In its earliest sense, neoliberalism referred to an economic philosophy popular among 1930s European liberal scholars, a sort of middle road between classic liberalism and socialist planning. The use and popularity of the term "neoliberal" declined steadily, specifically in the 1960s. Neoliberalism gained popularity again in the 1980s, connected to Chilean economic reforms issued by Augusto Pinochet. During this time, the term gained a negatively slanted connotation and was used primarily by critics of market reform. The meaning of the term also shifted to indicate a more radical laissez-faire capitalist pool of ideas. Most scholars began to associate the term with Friedrich Hayek and Milton Friedman. This new meaning of neoliberalism, popular among Spanish-speaking scholars, diffused into the English-language study of the economy. However, the term is rarely heard in the United States." [neoliberalism]

It was mostly re-branding of classical ideas, pre and post war. The repeated failure of laissez-faire (freebooting) economics keeps producing opposite results from what the hucksters say will happen and so people like Friedman and Hayek would make grudging accommodations to reality.

Post Keynesianism

Keyne's, his "fellow travellors" in the United States, (some of whom anticipated his ideas), and his followers, were put under assault from the late 60s to recently by various schools of Tory Economics. Democrats are either post keynesians, who see a role for markets. Or Socialist lite, who see a role for markets. Americans, even our most ideologically rigid, share mostly the same post keynesian ideology. We may loathe "socialism" or they love it, but none of us are really for getting rid of them. That is why I'm so hard on folks trying to start a third party. It is just the usual behavior of ambitious con artists who want power.

Post Keynesianism ranges from almost neo-Keynesian folks like Krugman, to more radical folks. It includes debates over chartalist ideas, progressive taxation, the future of the Federal Reserve. We inherit the "whig" or Democratic Republican tradition and most people don't fit completely into either Whig or Tory categories, most aristocrats embrace some understanding of the need for common good. Tory politics emphasizes conflict and nationalism. And Whig politicians morph into Tories when there is a war or they get greedy.

Democratic Core Principles

None of these Tory/Neoliberal things are Democratic core principles.

On the contrary the right policy in both health care and job creation is to ensure that people have the resources to purchase goods and services. Putting monopoly goods and services; vital goods, or public goods into a "market" just provides opportunities for monopolists or other privateers to make a lot of money.

Our ideas are:

  • And one never on the Tory List:


Now at times individual Democrats may make war on the execution of these concepts, but no Democrat denies them. Our battles are often about how to get to where we want to go. And when the Tories dominate our country that is when we tend to get in trouble. Especially if it is our leaders succumbing to their very tempting ideas. Out politicians have sometimes been bedazzled and conned

Galbraith exaggerated the extent we were bulloxed but at the time he was writing he had a point when he said:

"Everyone in the system has a social role; there are not class enemies, no parasites, no leisure class, and not even everyone whose economic role is superfluous and unneeded." [Third Wave]

Some of that was the result of arguing with Cons who insisted that poor people were superfluous, parasites and so needed to be cut off from survival by government penury. Some of that was them trying to accommodate the rights of the cons they were arguing with and majority views.

But he admits we never gave up believing that: the optimal regulatory (governing) solution:

"requires limiting, restricting, disciplining, defeating or bypassing markets, or even shutting them down. This is not the same thing as making them work" [by forcing "market solutions" where they are impossible.] [Third Wave]

Respect for Markets is not the same as rule of market. Reducing over-regulation is a function of proper regulation not a tool for impunity and immunity for poisoners and resource extractors. Democrats have never been about "eliminating public good." No matter how much we've been seduced by Republican arguments our argument has been "how to accomplish the public good." Neoliberalism, just like classic liberalism, and its stalking horse ideology "libertarianism" are all "Tory" ideology. Us often whiggish Democrats, have always been at opposition to Toryism extremes. The problem is that sometimes our politicians, briefly or permanently morph into Tory Politicians. That was the real issue with third way.

Selling Invisible Cloth to the Masses

Toryism always is a con. James Galbraith demonstrates how those ideas were discredited thoroughly, once again, in 2008. But they'd also been thoroughly discredited in his fathers time. They were discredited at the Time of the American Revolution. They serve the purpose of the "pursuers of wealth", Tories. And so they've dominated whenever the greedy, con artist side of wealth dominates in the Anglo Saxon, and indeed modern, World. Tory economics broke Colonial India and corrupted late 19th & early 20th century China.

Core of Truth

That doesn't mean there wasn't an element of truth in the charges. Two years ago I quoted James Galbraith:

"Now we have a new liberalism, sometimes called the Third Way, which consists of hewing as closely as possible to market solutions. If the presumption of modern conservatives is simple -- that markets work best when left alone -- this new breed of domesticated liberals puts a simple gloss on it: government can help. But the well-brought up modern liberal cautiously insists that in making the omelette, no eggs need be broken." [Third Wave]

We were Conned

Galbraith was talking about an accommodationist strategy of liberals and democrats that were trying to work within the parameters of Capitalism and with Tory Ideologues.

So the Syllogism was:
Liberals need money to do good.
They need to do deals with conservative businessmen to get that money
They are constrained by law to balance budgets & so must tone down their expectations to work with others.
And we had bought several lies:
Too much spending on relief causes high budget deficits and:
Causes inflation, and is counterproductive in getting employment.
Requires taxation that harms people.
So Democratic Politicians toned down their rhetoric and tried to work with the other side:
"The government should work unobtrusively, distorting as little as possible the outcomes that markets would otherwise achieve."
and because of those economic constraints and Republican obstruction we'd come to believe that:
"Grand Schemes for employment, distribution, infrastructure or the environment are off the table; nothing is possible or permitted that would undermine the authority of the market in a fundamental way."
But that wasn't for ideology. It was due to circumstance. And we never believed that:
"The market system is not open to fundamental reform; power relations cannot be changed. The system is already engineered for the best; new architects and new planners are not required."

That was Aristocratic Republicanism not Democratic Republicanism. We did have a lot of people influenced by those ideas. And 2008 was a well deserved rebuke of them. But we'd never given up on FDR's dream, not even our most compromised youthful avatars. We did believe, as I noted in 2015:

"Unlike conservatives, [these] liberals permit themselves to admit that market mechanisms may fail from time to time. Price and wages may be rigid, information may be asymmetric, and the costs of doing business may be too high."

Our efforts to expand medicaid, extend healthcare to everyone, and moderate the effects of economic recession and put limits on wall street, all reflected some sound economic theory. The arguments against them are almost all guilty confidence schemes to take from the many and give to the few.

I have a lot to say on this subject but I started this post almost 2 years ago and wanted to finish it.

Further Reading
Corporate Watch:
Not so Innocent Fraud
My rather Savage Previous critiques of Third Way

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