Good food for good thought

“Stedman Jones traces the rise of neoliberalism to the decision of left-leaning governments to adopt monetarist policies. His description of this decision is perhaps the most distinctive aspect of his account. To understand how his argument challenges what we think we know of neoliberalism, we need to take a step back, and take a closer look.

Discussions of neoliberalism, on both the left and the right, suffer from what Paul Krugman and others have called “zombie” ideas. These are economic concepts that have been long discredited, but continue to shamble on. On the right, a central zombie idea is that reduced state regulation of markets leads to sustainable economic growth. If you believe this, then the rise of neoliberalism is a no-brainer. Neoliberalism is simply the economic philosophy that works. But why should anyone believe this? The idea that unleashing free markets then leads to good economic times should never have survived the Great Depression, and should surely be killed for good by the Great Recession and its aftermath.

Meanwhile, a new generation of leftist economists has discovered that their progressive brethren suffer from a zombie idea of their own. Mike Beggs, for example, has recently argued that the Marxist economics many on the left continue to find attractive has a fatal flaw. Marx believed in the labor theory of value, the idea that a commodity’s value is equal to the labor that goes into it. Generations of Marxist thinkers have built on this foundation to form a picture of the way the world’s economy works. Thinkers like David Harvey have used this theory to create a sophisticated explanation of neoliberalism as the natural response of capital to changing conditions. If you subscribe to Harvey’s Marxist theory, then the rise of neoliberalism is, again, a no-brainer. But as Beggs points out, the concept underlying theories like Harvey’s was decisively disproved over a century ago, and no one has ever come up with a persuasive defense.”

When neoliberalism exploded


Oferta do nosso amigo José Raposo (via postal)

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