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Ideology Precedes Policy Which Determines Outcomes

2017 March 23

Ok, so…

The results are rather worse than that, actually, and anyone who reads this blog regularly is aware that, for example, working class white male wages peaked in 1968, in real terms. It’s not as if every other demographic has gotten off, either. Slowly the scourge has worked its way thru the demographic and socioeconomic classes, till practically everyone but the top 5% or so is being hit to some extent or another, even if they haven’t lost lifespan—yet.

Marcy Wheeler asks:

Which got me wondering: to the extent this is driven by a failure in ideology — by the failure of the American dream — which comes first, the failed ideology or the rising mortality rates?

. But as we try to figure it out, we ought to be focusing at least as much on how to roll out life and meaning that can sustain Americans again as we are on blaming Putin for our recent failures to do that.

Ideology tells tells you how the world works, what to do, how to do it and why you’re doing it. For example, NeoLiberal ideology has an axiom that “jobs are created by those who have money.”  On the face of it, this seems obvious: nobody without the ability to pay you has ever given you a job, I’d bet.

The corollary of this is “the more money that rich people have, the more jobs there will be”. So, under Neoliberal ideology, you funnel money to the rich and corporations and they create jobs.

Doesn’t actually work, mind you, but that’s what the ideology says.

The ideology also says “money is earned by people because they fill the needs indicated by the market, which represent what people and society want.”

Which means “if you have a lot of money, you deserve to have it because you got it filling other people’s needs”.  It also then follows that people with a lot of money are the sort of people who are good at providing what other people want, so therefore they should have more money so they can provide even more.

Poor people, by this ideology, do not deserve to have much money, because if they were doing something that other people wanted a lot of they’d have a lot of money.

Etc, etc…

Ideology tells people what policies to pursue. Those policies then create results.  With different ideologies, you get very different results.  FDR’s New Deal and the Keynesian consensus after WWII had as its thesis “the more money ordinary people have, the more they will buy, creating demand for products, which will create more jobs.” It also had “money in the hands of rich people doesn’t create demand and does create political problems which damage markets, therefore we should keep them from having too much money.”

The result of those propositions was the best economy in American (and European history), with growth rates higher in the middle and lower classes than in the upper and the rich classes (rich is not upper class, it is beyond.)

Ideology Determines Policy.

Policy Determines Outcomes.

(One might ask “what determines ideology”. Part of the answer will be in the upcoming “Creation of Inequality booklet” I’m about three-quarters finished.)


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27 Responses
  1. brian permalink
    March 23, 2017

    I’ve been pondering if it’s a fallacy that people find strength in groups. People give up power to the leaders of the group to represent them, but the group rarely represents them well. The power truly resides in a couple leaders at top. I’ve been wondering if the following maxim, or truth
    – Believe in your own personal power. It makes no difference who thinks they are in control of you, they aren’t. –
    would lead to a better world. Personal empowerment. But you would have to truly believe in it. No one can do anything but you, for you, for the future, when it comes down to it all we have is ourselves. We join groups because we enjoy people who think like us but it may be a fallacy to think that this empowers us. If all power is truly personal this free’s people to do what they really desire and create without being held back by others their vision. I’m not sure the world is ready to realize this, or to take full responsibility for their lives.

  2. realitychecker permalink
    March 23, 2017

    @ Brian

    Get thee to a safe space! LOL

  3. Bill Hicks permalink
    March 23, 2017

    Arguably, the American Dream itself is an ideology–the idea that every generation should live a better life than their parents did. It’s also the biggest failed ideology of all, for even if neoliberalism hadn’t come along in the late 1970s to begin sabotaging the New Deal, there are not nearly enough natural resources in the world for billions of people to live it, nor is it obtainable without completely destroying the natural environment.

  4. March 23, 2017

    One might ask “what determines ideology”.

    Indeed. Political psychology has a great deal to say about that. Parenting, cognitive wiring, socio-cultural factors and education are among the biggest contributors to ideology. Ideologies are packaged to look rational but are mostly the fruits of non-rational social conditioning.

    And yeah, neoliberalism is a horrible and spectacularly destructive ideology. Psychologically, it is rooted in a combination of high social dominance orientation and average-to-low right wing authoritarianism. To use an analogy, neoliberalism is to nations (roughly) what elitist-narcissism is to individuals.

  5. Billikin permalink
    March 23, 2017

    “NeoLiberal ideology has an axiom that “jobs are created by those who have money.” On the face of it, this seems obvious: nobody without the ability to pay you has ever given you a job, I’d bet.

    “The corollary of this is “the more money that rich people have, the more jobs there will be”. So, under Neoliberal ideology, you funnel money to the rich and corporations and they create jobs.

    “Doesn’t actually work, mind you, but that’s what the ideology says.”

    NeoLiberalism is a squishy term, but that characterization seems to get the gist right, as it is popularly understood, namely as Thatcher-Reaganism. But I think that it is worth pointing out that the so-called corollary is not really a corollary. Another possibility for rich people creating jobs is not for the rich people to get richer, but for there to be more rich people. Something that is closer to a corollary is that the more money a society has, the more jobs there will be, because more money overall allows for both kinds of possibilities for job creation; the more money there is overall, the more money there is to create jobs. (Not that that is true, either.)

  6. VietnamVet permalink
    March 23, 2017

    If the deepening despair and corruption in the heartland is ignored, the wealthy few in the coastal cities will be end up encircled by huge manned defensive walls. Rural society will break down into eternally warring tribes in which humans first evolved. Water, food and electricity will cease to flow if climate change, plague and modern weapons don’t reduce the cities into flooded concrete rubble first. The Middle East is again the harbinger for the rest of the world unless mankind learns to live within its means in peace and with cooperation.

  7. Ian Welsh permalink*
    March 23, 2017

    No, Billikin. You need rich people to create jobs is neoliberalism’s specific thesis. You could have more rich people, yes, but simply having more money is not what neoliberalism says.

    Where neoliberalism and post-war Keynesianism disagree is on WHO needs to have the money. That’s the point of disagreement. Middle class people, in neoliberalism, do not directly create more jobs: they don’t have enough money as individuals to hire people. Corporations and rich people do, they are the “job creators”.

    Confusion on this point is conflating two different ideologies. It is common, because we have the remnants of New Deal Keynesianism hanging around, and it gets bows, but it’s not primarily how we run our economy or society, and hasn’t been now for over 3 1/2 decades.

  8. EmilianoZ permalink
    March 23, 2017

    This might be related to the question of ideology. The CIA used to be very interested in the French philosophers in the 80ies. They read them and reported on them:

    http://thephilosophicalsalon.com/the-cia-reads-french-theory-on-the-intellectual-labor-of-dismantling-the-cultural-left/

    They were very pleased with new anti-Marxist “thinkers” like Bernard-Henri Levy, André Glucksmann or Jean-François Revel and even more pleased with “reformed Marxists” such as Michel Foucault or Claude Lévi-Strauss.

  9. MojaveWolf permalink
    March 23, 2017

    @EmilianaZ–that is an excellent article. Thank you.

    Still reading, but even before I got to this part the Agency went behind the back of the McCarthy-driven Congress in the postwar era in order to directly support and promote leftist projects that steered cultural producers and consumers away from the resolutely egalitarian left. In severing and discrediting the latter, it also aspired to fragment the left in general I was thinking of a discussion in one of the threads here a while back, wherein I said something about the left having collectively lost its mind in recent years, and someone (or more than 1 someones, I think XFR and Different Clue?) suggested that this had the hallmarks of deliberate manipulation and not an organic instance of sanity loss.

    Very relevant to this post and a lot of Ian’s work. ::goes back to reading::

  10. March 23, 2017

    Neoliberalism in operation is essentially laissez-faire economic libertarianism but without necessarily making the libertarian assumption that a market outcome is ipso facto just. Libertarianism essentially permits no moral claim in economics other than market outcomes, which are not only presumed to be materially optimal, but that any attempt to interfere with them on moral grounds must backfire — lead eventually to the opposite of the intended effect. Poverty unjust? Too bad, fixing poverty leads to even worse poverty, in this view.

    Neoliberals step back from this and admit moral aims outside of market outcomes, and where the market does not actually match those moral aims, neoliberalism admits the notion of the “market failure”. Market failures are a special form of mismatch to desired moral outcomes (yeah yeah pareto-whatever) where either information asymmetry or an exterior force leaves a more moral outcome on the table. Unlike libertarians, who reject government intervention per se, the neoliberal is willing to admit, under some skepticism, that there are places where the government is required to compensate for the failure of the market to serve moral ends.

    The problem is that neoliberalism is specifically designed, given the above, to defend the “real” castle — the idea that democratic means should not accessible to adjust the prior distribution of wealth, merely to correct for market failures. So it works until there is a crisis that stems unavoidably from a prior misallocation of wealth and cannot be papered over by post hoc corrections to market behaviour.

    The problem is that we have reached that crisis of prior misallocation and have institutions that are too fully colonized by neoliberalism to do anything about it. Ooops.

  11. March 23, 2017

    Linked.

  12. March 23, 2017

    The problem with neo-liberalism is – no one knows what they are talking about. When Churchill and FDR proposed a new order for the universe, it included a major plank for neo-liberalism. and FDR is more liberal than you could get elected now. the problem is, the amount of neoliberalism that Churchill and FDR wanted is less than the current amount – that is relevant to current levels, they wanted less. The result is, you can be a neoliberal economist, and still think that the treaties we have signed have been bad neoliberalism. The problem is not that people do not want neoliberalism – they want less than we have now. One should rather say that while one wants neoliberalism, one does not care to have bad neoliberals in charge, or bad treaties to enforce it, or have 2 much of a good thing.

    This is an example of how economics works on a curve – one can only have as much neoliberalism as one has opportunities to use it wisely. One can only have as much neoliberalism as there are sectors of the economy which are corrupt. The problem is not neoliberalism – per se – it is that everyone wants to be in on the corruption. For example, the defense department – which is not neo-liberal, nor needed in the present amounts that are present.

    The is no neo-liberalism that will reduce our tax expenditure – “your answer lies elsewhere Spock.”

  13. Billikin permalink
    March 23, 2017

    Ian: “You need rich people to create jobs is neoliberalism’s specific thesis. You could have more rich people, yes, but simply having more money is not what neoliberalism says.”

    That’s not exactly what I said, either. What I said was that it was closer to a corollary than simply making the already rich richer. My unstated assumption was that more money in the economy tends to be concentrated at the top, anyway, so the result would be more rich people. (Assuming the same or similar amount of money needed to be considered rich, which is why I said that simply adding money to the economy does not necessarily work, either.)

    My point was that though neoliberals use the idea that rich people are job creators to justify making the rich richer, that argument is not logical. (Besides, as you point out, it has been empirically refuted.)

  14. Hugh permalink
    March 23, 2017

    The economy, government, money are just tools to help you get to the society you want and to maintain it. Either ignorantly or malevolently, all modern economics substitute other goals and makes false equations. Society becomes a simple collection of consumers or rational actors. Or it is removed altogether from the discussion. Aristotle noted correctly 23 centuries ago that the greatest good was happiness. Now economics passes this off as being a good consumer, maximizing utility, or pursuing wealth.

    Basically, what we have now is that the rich hire the elites to come up with ideologies that promote and justify the wealth and privilege of these two groups. They believe these ideologies because it is convenient and very profitable for them to do so. And even though these ideologies are cons which they commissioned and executed, they take on a quasi religious aspect. So we get all these mantras like the invisible hand, the genius of markets (from those whose principal occupation is the rigging and manipulation of markets) or maximizing profit (even when this has disastrous social consequences). But it isn’t just that the rich and elites act in ways detrimental to the rest of us, all the while invoking their cover ideologies. They continue to invoke them even when they defy common sense and are against their long term interests. The con has become a religion that can not fail. It can only be failed.

  15. Billikin permalink
    March 23, 2017

    The question of trickle down economics vs. bottom up prosperity antedates both the New Deal and neoliberalism.

    “There are two ideas of government. There are those who believe that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them.”
    — William Jennings Bryan, 1896

    🙂

  16. John permalink
    March 23, 2017

    Term neoliberalism is confusing because it really sums up basic conservative ideology referred to by J K Galveston as ” one of mans oldest exercise in moral philosophy; that is, the search for a superior moral justification for selfishness..” Greed is good has always been with the man ape despite all the warnings. Neo liberal is just the latest self serving justification of the greedy. Oh, and it traditionally ends with torches and pitchforks if not self correcting.

  17. John permalink
    March 23, 2017

    J K Galbraith quoted on selfishness…darn auto correct.

  18. Tom W Harris permalink
    March 24, 2017

    This calls for a musical diversion (not to be confused with a musical interlude):
    https://www.youtube.com/watch?v=qBLboy3aXA0

  19. Mallam permalink
    March 24, 2017

    “Neoliberalism” doesn’t explain this. The trends were US specific — mortality continued trending down in Europe. Seems more likely to coincide with US prescriptions of opioids, which has also been out of sync with Europe (Europe prescribing far fewer pain meds).

  20. Willy permalink
    March 24, 2017

    I’d create an economics version of SimCity if I knew it would sell. And if I could keep my programmers from squabbling over various economic ideologies. One of the more extreme scenarios might involve the 5% choosing to invest in sure things instead of being job creators for a 95% who’d lost their ability to create much of a demand.

  21. Tom permalink
    March 24, 2017

    http://www.thedailybeast.com/articles/2017/03/24/how-trumpcare-will-kill-me-before-cystic-fibrosis-can.html

    $300K a year for a pill taken twice a day…

    Still I’m not getting aboard Obamacare. Its worthless for me due to the deductibles. Universal Healthcare must be the goal and any efforts spent on Obamacare or Ryancare is a waste of time.

    If millions of Americans dying as result of our dysfunctional healthcare debate in Congress, then so be it, the blood is on the hands of Congress, not me. Maybe this thinning of the US population might be enough to generate a revolt that brings the House of Cards down.

  22. The Stephen Miller Band permalink
    March 24, 2017

    Hugh has it exactly right. Ideology is the pretext to justify the looting. It’s always been thus since the dawn of Civilization. Civilization, more than anything, is about looting. Some psychopaths got together and decided if they cooperated with one another they could quite literally rule the world. Sure, the first iteration may have been the commandeering of a watering hole and charging people an exorbitant fee for its life-sustaining H2O, like say their first born son or daughter, in return for what was formerly free, but the basic mechanism was set in motion and once in motion it’s turned into an avalanche that threatens not only humankind but the entirety of the life-supporting biosphere as well.

    Yes, it’s constructive to discuss what we need to be and how we need to behave towards one another in a world of quickly diminishing resources and massive habitat destruction, but if we don’t concomitantly discuss how to get from here to there, it’s kind of a useless exercise if we want true, progressive, evolutionary societal change.

    Deport The Rich and all their sycophantic courtiers and technocratic enablers & enforcers/protectors to include the sleazy lawyers.

    I laugh out loud when people proselytize about being a Nation of Laws and the Rule of Law. As though we should be impressed or as though that’s something admirable. It’s nothing more than a call to fashion your own chains because you can rest assured that the creeps who fashioned those laws and those who contracted them to fashion those laws and enforce them, as a necessary part of that process, have made it clear those laws don’t apply to those who asked that they be fashioned.

    Wake the hell up PEOPLE and see this SHIT for what it IS. What it IS is what the System says it isn’t and what it isn’t is what the System says it IS. A Nation of Laws and The Rule of Law mean nothing, and in fact, can actually be worth Less Than Zero (meaning it is actually quite destructive & deleterious) if The Law is Unjust. Nazi Germany was a Nation of Laws that operated by The Rule of Law and look what it accomplished — its rather hastened demise, thankfully. Now collectively look in the mirror America and try to recognize the resemblance to Nazi Germany. If The Law is not Just, a Nation cannot and will not survive. It will devour and destroy itself. Consequently, America is in precipitous decline and Lawyers In Love have a significant hand in its demise. Spit on one today if you get a chance just as you would spit on a Nazi because they’re pretty much one and the same.

  23. darms permalink
    March 25, 2017

    I am by no means a wealthy person but I have a patio cover that needs repairs which I am not able to do myself. I do have enough money to pay someone to do that for me if the price is right. Looks like I’m a ‘job creator’, eh?

  24. StewartM permalink
    March 25, 2017

    Mallam

    Seems more likely to coincide with US prescriptions of opioids, which has also been out of sync with Europe (Europe prescribing far fewer pain meds)

    That’s because European countries are more apt to have real, universal, healthcare, and thus actually allow poorer patients to get treatments that actually fix their problems, instead of prescribing pain pills to cover up the symptoms. Fixing the problem is in the short-term more expensive, and pain pills are in the short-term cheap, though the opposite is true in the long term (but hey, capitalism looks no further ahead than the next quarter’s earnings).

  25. Sheff permalink
    March 26, 2017

    I disagree with the headline of this one. I believe that the desired outcome (give more money to the super-rich) was determined first. From there those now called neo-liberals determined the policies that would be needed to achieve that goal and developed an ideology that could be used to justify those policies.

    Outcomes Determine Policy.

    Policy Determines Ideology.

  26. Tom W Harris permalink
    March 26, 2017

    Actually, Sheff:

    Intended Outcomes Determine Policy.

    Policy Determines Ideology and Actual Outcomes.

    So you and Ian are both right.

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