The horizon is not so far as we can see, but as far as we can imagine

How Neoliberalism Destroyed Capitalism

During the 2007/8 financial crisis, the Federal Reserve and other central banks printed trillions of dollars to support banks and big businesses. They prevented capitalism from working: While some firms that had nothing to do with the crisis should have been bailed out, those that caused the crisis by allocating money badly should have been allowed to go under.

This is supposed to be the virtue of capitalism: If people allocate resources (which we count with money) badly, they are supposed to lose the ability to allocate resources in the future. Those who allocate resources well are supposed to receive more resources. This has a lot of flaws (what makes money isn’t always what improves human welfare), but at least it’s a feedback loop.

It’s the GOOD thing about capitalism.

The Fed broke what was left of capitalism; there is very little that is good left when the allocation system doesn’t work– even under capitalism’s own terms.

It was clear that the central banks had decided that their primary purpose was to make sure that the rich stayed rich, no matter the cost to others. If they had let those firms go under, the economy would have fallen faster and recovered far better for over 90 percent of the population.

They patted themselves on the back for saving the world, and when Coronavirus hit they did the same thing.

At this point, the world economy–and especially the US economy–only works as long as you keep it hooked up to a ventilator, and it works badly.

I had been curious to see how this would be played out. As I have said many times, “there is a real economy.” There are people who make or grow things or provide actual necessary services (not your tax accountant, the people being labeled “essential workers” right now + farmers, factor workers, designers, and so on).

So, since the rich and powerful have decided that under no circumstances would they allow their class to lose money or power, no matter how badly they did their jobs, the question has been, “What are the effects of this?”

One of the effects is the complete bungling of Coronavirus in the US and the UK, the heartlands of neoliberalism. Another effect is suggested by this:

More than 40 percent of the U.S.’s 30 million small businesses could close permanently in the next six months because of the pandemic: Chamber of Commerce survey.

The stock market is doing fine, because it was bailed out. Small businesses aren’t, because they weren’t.

Covid-19 is no one’s fault, but how to deal with it is a policy decision. That policy decision reveals that the folks who run our economy will take care of the parts of the economy from which they directly benefit, and won’t help other parts of the economy.

Meanwhile, the US couldn’t make ventilators, couldn’t produce PPE, couldn’t track and trace infected people, and so on.

The effect of central bank and legislative policy is simple: There is a real economy, and the policies pursued by the elites will contract it. There’s a lot of bullshit around inflation stats, but the simple fact of the matter is that, for over 50 years, the cost of things people must actually have has risen faster than salaries. The BLS figures don’t show this, but you can’t run a middle class family with a 60s lifestyle on one middle class income today.

There is a real economy, which produces food and items people need or want. There is a financial economy, which produces financialized returns which are almost wholly disconnected from the health of the real economy. Billionaires pile up more billions as the economy gets sicker. The stock market is supported in the middle of a pandemic while actual businesses, comprising the real economy, are allowed to die.

So this is the future of neoliberal states: Elites will continue to produce “money” for themselves while damaging the real economy. At some point, a stressor will hit the economy which the actual production and logistics chains cannot handle. Elites, completely unable to do anything but manage financial numbers, will not be able to handle it, and there will be an actual economic collapse. Meanwhile, for most of the people in the US, the UK, and other neoliberal states, the long constriction of actual standards of living will continue.

If you want a good life, and you want to avoid, not disaster (like Coronavirus or huge wildfires) but absolute catastrophe, these elites and their entire supporting apparatus have to go.

If they don’t, they’re going to kill a lot of people–certainly including people you know.

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May 7th US Covid Data


May 8th US Covid Data


  1. Ian Welsh

    A primer on Fed money creation (it’s old and understates how much, but the mechanisms are there.)

  2. nihil obstet

    I’m not sure I’d call this neoliberalism, which I’d define as reliance on markets for everything. That’s evil enough, as an ideology. I’d call this corruption, the exercise of public power for private gain. It’s a network of legalized bribery, nepotism, mutual back scratching, and refusal to prosecute undeniable fraud, that doesn’t rise to the level of an ideological name.

  3. Stirling S Newberry

    Yes, COVID-19 is some’s fault: it is the disease we get by off-shoring everything to one place. It is an economic choice of preserving the power of the elites. Small businesses, unless they are making things for elites, do not matter. If you ship everything are the world, the diseases are part of “everything.”

  4. GlassHammer

    Look, capital mustered itself for a war against labor back in the 1970s-1980s and created a multi-decade political movement called “Neoliberalism”.

    Ultimately the goal is total claim on all inputs of capital creation at all times under all circumstances. They just passed a major milestone of maintaining claim under a capital driven market failure in 2008 and they are going to repeat that success again in 2020.

    Frankly I don’t think any labor movement is up to the task of stopping any of this. I think neoliberalism is self terminating as capital aggregates to itself to the point where it can’t replicate. The problem is that end point happens after its utterly bankrupted multiple countries.

  5. Mark Pontin

    nihil obstet: ‘I’m not sure I’d call this neoliberalism, which I’d define as reliance on markets for everything.’

    Neoliberalism — and its close cousin, the German version called ordoliberalism — is more subtle than that.

    Yes, it wants to introduce markets into everything under von Hayek’s central canonical thesis that the efficient exchange and use of resources can be maintained only through the price mechanism in free markets.

    No, it _doesn’t_ want governments out of the way.

    It wants them there — and to introduce transnational organizations and agreements, such as the IMF and the European Union — but to regulate or deregulate societies as is necessary to facilitate the fullest operation of markets and of capital.

    Therefore, from the neoliberal viewpoint, government has a role — and it is to suppress the operational resistance of democracies and societies wherever that is necessary for capital’s purposes.

    Quinn Slobodian’s book GLOBALISTS is good on all this and the history of the Mont Pelerin Society.

    To your point: given the above, neoliberalism is definitely a form of capitalism and you can see how its logic would lead its proponents to enact their ‘recovery’ program after the GFC in 2008.

    “In order to save the global market, we had to destroy it,” they might say, paraphrasing Lt. Calley, if they were that conscious.

  6. gnokgnoh

    Mark Pontin, not to split hairs, but you use Hayek’s definition of capitalism, “the efficient exchange and use of resources can be maintained only through the price mechanism in free markets.”

    Then, you describe neoliberalism as requiring governmental regulation to, “regulate or deregulate societies as is necessary to facilitate the fullest operation of markets and of capital.”

    A free market in the classic definition is free of regulation and determined by the price mechanism, whatever the hell that is. The two, capitalism and neoliberalism, are antithetical and are effectively at war with each other in the current iteration. Classical economics and capitalism theoretically aim at efficiency (a questionable goal at best). Neoliberalism is neither efficient nor free, certainly not across the entire economy.

    Nor am I sure what you mean by “society’s operational resistance,” for which we need regulation or deregulation? Operational resistance to usury, monopolies, monopsonies, exploitation, taxation….?

  7. Mark Pontin

    To Ian’s point: All absolutely correct.

    I would emphasize one further point. As Ian says, it’s all increasingly fragile — non-robust — in Taleb’s sense of the word.

    If one understood how things work — things like infrastructure, internet networks, energy supplies and distribution, supply chains, financial systems, command and control systems, the rapidly expanding possibilities in biogenetic technologies — one would know the available choke points to crash the global system.

    It might even be done by some suitably ruthless actor for a few million dollars or less.

    Look at the effect of COV19, for the obvious instance. Right now we might as well accept the argument of the experts that it’s not a designer pathogen. It doesn’t benefit any state actor. But that argument is not conclusive: absence of evidence is not evidence of absence.

    If you know any biology and about the present state of biotech, here’s a very detailed, impressive argument to that effect worked through —

    If anything he underrates the current state of the technology. The Swiss lab he cites as taking a month to create their own version of the bug? Moderna, the company that’s now entered Stage 2 trials with their vaccine, got the virus’s sequence from labs in China and used DNA synthesis to build their own version in a couple of days.

    And there are other things.

  8. Mark Pontin

    gnokgnoh wrote: “A free market in the classic definition …”

    Neoliberalism isn’t based on classical economics, but on neoclassical economics, the currently dominant paradigm in the economics schools —

    gnokgnoh: “Neoliberalism is neither efficient nor free, certainly not across the entire economy.”

    It’s efficient and free for capitalists. Certainly, the ones on top now. Look at the Fed printing money by the billions for them presently.

    gnokgnoh: “Nor am I sure what you mean by “society’s operational resistance,”…? Operational resistance to usury, monopolies, monopsonies, exploitation, taxation….?”

    Yes. Those things among others. One feature of actually-existing neoliberalism is the curious death of anti-trust regulation when it disfavors the aims of big capital.

    Look. Ultimately, all these things are labels. I am telling you how neoliberalism frames itself, how its proponents have doctrinally justified what it does.

    I am not suggesting that neoliberal doctrine has any more basis in reality than the doctrine of the divine right of kings. I don’t think it does.

  9. gnokgnoh

    Mark Pontin, really good responses. I especially like your last two paragraphs.

  10. Dale

    We need a new version of Andy Jackson to crush the Fed.

    The “Fed” is not a federal government agency. It is a privately owned organization taking care of its multinational Bank owners. Why is everyone always so shocked at its actions? Time to kill the beast once and for all and force Congress to fulfill its constitutionally mandated obligations.

  11. Stirling S Newberry


    The reason COVID-19 was not man-made is seen in the indicators which predicted a recession before the virus. Things like the yield curve.

  12. Z

    Look at the effect of COV19, for the obvious instance. Right now we might as well accept the argument of the experts that it’s not a designer pathogen. It doesn’t benefit any state actor.

    What about Israel? Before COVID-19 hit Netanyahu had been voted out and was about to face trial. Socialist Bernie Sanders was the front runner as the democratic party presidential nominee and he was an outspoken critic of AIPAC and Wall Street and probably going to redirect the Fed’s money pump in the working class’s direction to some extent if he got into office, at Wall Street’s expense. The ever precious stock markets, which I’d imagine are responsible for a lot of the money that gets fed into AIPAC and other pro-Israeli groups that help corrupt the hell out of the U.S. government in favor of all blessed Israel, were on major support with the Fed’s money spigot pumping in an unprecedented amount of supposedly non-crisis liquidity to prop them up and were kept on constant support all through the autumn of 2019, for over three months!

    And now where are we at? Israel has hardly been hit by the coronavirus and is also one of the front runners in developing a vaccine. Their biggest enemy Iran got hit hard and quick by it and has been weakened and their economy is also hurting due to the oil price crash. Netanyahu is not only NOT going to stand trial on corruption charges, but is still in power after losing an election! The coronavirus also gave the Fed huge cover to bail out Wall Street with trillions of dollars with a few strokes of their fingertips and the stock markets are booming once again, last month their greatest month ever. The firm the Fed is mostly feeding their money hose through, Blackrock, has the former Bank of Israel head (and former Federal Reserve vice chairman), Stanley Fischer, as one of their senior advisors and I’d imagine he’s got some say as to where that money is being invested … and probably also partly why they got that money from his pals at the Fed to begin with. And we damn well know that the DNC would have used the coronavirus as an excuse to shut down the primary voting if Sanders was still winning and bring the democratic party presidential nomination into the smokey backrooms of the superdelegates and be handed over to one of their vetted/corrupted politicians.

    Now I’m not saying that Israel did it. How would I know? I’m not going to pull a Mossad maneuver and claim some garbage like the chemical canisters found in Syria were definitively the responsibility of the Syrian government, who was winning their war at the time and had zero motivation to piss of the U.S. and cross Obama’s red line, or claim that I saw Mohammed Atta having tea and caramel croissants with an Iraqi official at a cafe in Prague* or anything such as that, but IMO it is unquestionable that Israel has not only benefited from the virus, but has benefited the most by far, as far as their current rulers are concerned.

    *Which I have never heard directly laid on Mossad, but I would hardly be surprised if they were responsible for.


  13. Zachary Smith

    From Reuters:

    Exclusive: U.S. companies got emergency government loans despite having months of cash

    All told, these relatively flush 41 companies were able to secure $104 million in government aid, at a time when legions of smaller companies with little in their coffers were being turned down. Seventeen of the 41 recipients had market capitalizations of at least $100 million.

    Very probably “tip of the iceberg” stuff. Keep giving money to those who don’t really need it, and stiff those who do.

  14. Stirling S Newberry

    This reminds me of one of the truisms: you people think that it leads have or can hire people who are much smarter than they are, and they presume that something nefarious was created to destroy the world’s economy. Now the people who are being hired by the elites are smarter than most people, but not that much smarter. They are more the sort of individual who does not want to waste a good crisis, when they can make it so much worse. This means that something like 19 was not created by them, but once they realized it was coming they could decide to make it become a crisis and, ergo, could be used to give more power to the elites and make things a great deal worse than they are. So that we were going to have a recession was not under the elites control, nor was COVID-19 in their cards, but when seeing that a global recession was going to be sometime in 2020, which was well known in economic circles, they could decide to let COVID-19 which was “nobody’s fault” create the session that they knew was going to be here regardless of what they did.

    So in other words, the elites and their minions would not and could not create a recession, not that they would want to, but they can create and excuse why they are not at fault. And being at fault is something that the elites care deeply about. Just watched the President and his tweets.

  15. Mark Pontin

    Stirling N. wrote: “The reason COVID-19 was not man-made is seen in the indicators which predicted a recession before the virus. Things like the yield curve.”

    A reasonable argument. As were your others in your post below that one.

  16. Hugh

    Neoliberalism is the revival of early 20th century Wilsonian liberalism. Wilsonian liberalism was elitist, pro-corporatist, capitalist, internationalist, paternalistic, and toxically anti-populist. It gave us the Fed, promoted Red Scare raids to attack broad social movements, and split unions off from them. Its goals and operation were both political and economic.

    Capitalism is a mythology to paper over the exploitation of the many by the few. Free markets have never existed. It has always been a question of who regulates them for whose benefit. And what invariably happens is that the owners of capital, because they can concentrate wealth, buy the regulators so that the markets and the regulations work for them. They are the real not so invisible hand that moves the decisions of markets. Efficiency, competition, price discovery, best goods at the lowest prices, best allocation of resources, all sound laudable and like they actually mean something, but they don’t. They are bafflegab. The real purpose of a a so-called free market is to eliminate competition, create monopolies, and sell the crappiest products at the highest prices.

  17. bruce wilder

    I think I would take some early 20th century Progressivism over this lot: they were building institutions back then, not liquidating them, solving problems, not profiting from failure.

    If Hayek is the Grandfather of neoliberalism, then the ur-model is not Wilsonian liberalism, but Hapsburg liberalism: the go-go years after Franz Josef gave in to the Hungarians, created the dual monarchy and set off the great cultural and economic frisson that was Vienna in the last great blossoming of Empire.

  18. Zachary Smith

    This site’s Blogroll includes Avedon’s Sideshow, but I doubt if many people visit the place. The resident blogger makes a new batch of posts at irregular intervals of 2 to 4 weeks, and many of them tend to rub me the wrong way. IMO the latest bunch are very, very good. Sample:

    Why do Democrats want to win Congress if they don’t want to use power? What is the entire point of Democrats raising money and ginning up activist energy to win control of the U.S. House, if when a crisis hits they just pass whatever Mitch McConnell sends them? Is there anything they’ll actually negotiate for? And why won’t they flip the script and force McConnell to vote yes or no on their own agenda? […] McConnell is using the same tactic he’s always used — he rams legislation through the Senate, and then shuts the Senate down, daring the House to reject it. At the same time, Trump airs an ad equating Nancy Pelosi to Marie Antoinette, effectively pressuring her to back down — which she already has. And so it goes. Pelosi depicts this all not as Democratic weakness or ineptitude, but as some genius game of 5-dimensional chess.

    Lots more at We won’t be at brunch

    Most everybody understands how awful the Trumpies have been. What I like about the posts at the link is the focus on the unending horror story of what the Democrats have been doing. And not doing.

  19. bruce wilder

    Neoliberalism is the mythos of capitalism, an elaborate fiction that nevertheless manages to coordinate the ideas and behavior of a large number of widely distributed politicians, pundits, businessmen and bureaucrats. Expressed qua myth, its core is necessarily a narrative: an hero’s journey with tragic variations, more or less as Ian tells it — that is, heroic risk-taking followed by survival of the fittest and reward for the virtuous and commitment to taking one’s losses. As a coordinating fiction, I think it more in the nature of a codebook of cliches, cant uttered banally and repetitively without critical evaluation: the burden of regulation, the need for wage flexibility, the frightfulness of public debt, the ideals of free markets and free trade. Undergirding the coordinating fiction is neoclassical economics, an academic doctrine and mode of thought that can be taught to millions and is indeed used to socialize the young and ambitious in thousands of colleges and hundreds of business schools. In short form and long, the arguments of neoliberalism are in the nature of hypnotic trance inductions: entrancements difficult to escape or even to recognize for their dream-like qualities.

    I have to say that I grit my teeth thru Ian’s pieces on economics as a theory. Misplaced metaphors like “printing money” and use of key neoclassical terms such as “resource allocation” leave me feeling a degree of despair, even though I am usually in agreement with the political sentiment expressed.

    I have a geeky interest in how the economy works as a system of institutions to organize and coordinate social cooperation. It is clearly a minority taste. I am not claiming I am good at it: I was a B+ student at best back in the day. What I am is honest and committed to realism.

    I do not think capitalism living up to the mythic idea of heroic and tragic loss-taking would be a good thing, even if it were possible. It is entering into the shared delusion even to take up such a rhetorical stance.

    I think economic relations are deeply problematic and neoclassical economics succeeded by changing the subject, talking relentlessly about features and qualities of a non-problematic economy that can scarcely be imagined to exist. If you speak “their” language, the language of “market economies”, you’ve lost not just the argument but the sovereignty of your own mind. Neoliberalism destroyed the U.S. as a country by contributing the illusion of expertise and authority to the general mindlessness of political discourse.

    Getting real about the actual economy seems to me the important takeaway of Ian’s essay. That is a large task.

  20. Rangoon78

    The Bolsheviks at the gate led FDR to implement the new deal. The Capitalism existed from that era through to the mid 70s was a holding action. Once the threat of Communism ceased to exist, capitalism made up for lost time. Neoliberalism is the elite MBA school version of Capitalism

  21. bruce wilder

    Went to see what Avedon had to say.

    Buried in amongst the rest was this from Jeremy Scahill: “What would happen if Trump wins the election in November? In practical terms, it would be a nightmare. Trump would emerge emboldened beyond imagination. What minuscule restraints that currently exist would be wiped out entirely. […] There is an abundance of justification to oppose a Biden presidency. And principled people are right to ring loud alarms over Biden’s record, policies, and some of his personal conduct. At the same time, it is not honest to imply there would be no difference between a Biden and Trump administration.”

    It never ends.

  22. rangoon78

    I wrote this back in 2012 “Look back to 2008 and recall the anger and fear that the public had for the republican policies the Republican president had squandered any “political capital” he ever had. A democrat would win. The problem was that the apparent Democratic nominee was mistrusted by Wall Street. She proposed New Deal solutions for housing and the economy.^ No Hillary was no Upton Sinclair, but neither was she the chosen candidate. The money flowed early to Obama, the media was enlisted to smash Hillary and puff Obama. The rest is history. No New Deal solutions have come. The financial preditors were made whole at taxpayer’s expense, and we are on the verge of Obama’s grand bargain with Republicans to cut holes in that New Deal/Great Society safety net.”

  23. Willy

    This tells us how neoliberalism destroyed capitalism, but it doesn’t say much about how neoliberalism was able to get to that point. It was more than a few economics geeks preaching their non-science from ivory towers. If it was that easy Jim Jones would’ve been our emperor by now. How do a few stuffed suit dweebs develop and maintain a culture of learned helplessness amongst the masses they’ve ruined? What’s the antidote?

  24. Willy

    Alright, I know some of the answer to this. My high school aptitude tests told me that advertising/marketing was my highest calling, though I choose the dry world of engineering instead. Thank God. I’d be hating myself right about now. Instead of looking back with some pride on products well designed and built, I could’ve been a snake oil salesman. The daughter of a friend of mine went into marketing, and in her first job she did something like “product reputation management”. She had to basically track down bad public reviews for bad products and make it all better. Or seem better, by apologizing, lying, gaslighting… whatever it took. There was apparently an even more dishonestly darker side to her job. She had to attack competitors.

  25. krake

    Don’t agree with the central premise, but because Bruce has lifted all the weight, it is best to defer to his long reply.

    Neoliberalism is a kluge of shibboleths, a litany of jargons.

    Capitalism – actually existing capitalism, not the radcapper Platonic Form adored by agorists – self-consumes. It is autophagic, and since it’s made largely of captive bodies, what this amounts to is a totalizing, self-replicating apparatus for cannibalism and human sacrifice.

    We are controlled by eaters, and we are the consumed.

    Neoliberalism is a liturgical form that acolytes and still-loyal apostates teach each other so they can pretend the European and Enlightennent project isn’t a grand-scale public works devoted wholly to human sacrifice.

  26. bruce wilder


    We know who some of the most persuasive actors were: Milton Friedman stands out for his influence. He told people what they wanted to hear. His arguments were light on logic and fact, but worked very well as hypnosis: full of subliminal suggestion. (A lot of economics is like that: the prof waving his hand out the window vaguely at the world, asserting but not proving that the world is like the theory)

    A key aspect of the story, though, was the response: for every Thatcher, there was a Blair, you might say.

    I think Adam Curtis is very good on the cultural shift that came with the rise of propaganda and cultural narcissism.

    There is nothing to do now but collapse.

  27. Ché Pasa

    And so the looting of the carcass of “The Economy” accelerates before our eyes and hardly anybody cares because it’s all a fraud in the first place and it has little or nothing to do with the shrinking lives of the many who can’t pay their rent and utilities, don’t have food in the kitchen, have no jobs or income, and see no future for themselves and their offspring if any.

    Congress has shown itself largely useless to the tasks at hand, the regime in power is forcing an anti-human agenda into being. Ordinary people are being consigned to the virus by the tens of millions because “The Economy” is more important than anything. Anything at all. Even if it isn’t real.

    Neoliberalism and its evil twin Neoconservatism justifies all this and more as nature’s way/the market’s way to cleanse the system and reboot when things settle down. Or something.

    The Onion ran a piece that is only partially in jest:

    “Look, One Third of the Human Race Has To Die In Order for Civilization to be Sustainable, So How Do We Want to Do This?”

    Our rulers are not just making the same pitch, they’re acting on it. Now. Clearing the decks for what’s to come.

    It’s ideology. It’s core belief. There are too many useless eaters. The virus is almost magical in its targeting of the disposable, unneeded, and useless members of the herd. Let the virus run. That’s what’s happening. The minor efforts at mitigation (ie: “stay-home”) slowed the progress of the virus too much, you see. And shut down 70-80% of economic activity. Must not allow either to continue. “Open up” and let the virus run.

    It is just one of many shocks in store. We know this, don’t we?

    The question is, what do we do about it?

  28. Willy

    They encourage the greed genes which almost everybody has in quantity. I’ve certainly been there.


    Humans didn’t evolve in mansion caves with a summer cave near the sea and multiple log rafts to waterski behind. They worked together in groups, usually needing to prove their worth to the clan to earn those bear claws.

    It has to be an anomaly, like alcoholism or nicotine addiction. How many times did Jesus tell us not to go there. Yet prosperity gospel is all the rage now.

    My in-law the physician… I looked up his various organizations: Mayo Clinic, AMA, his osteopath school and his HMO. All advertise cures for alcoholism. Yet he himself told me that my family member was going to have to hit bottom first. I sure hope it isn’t like that.

  29. bruce wilder

    @ krake

    I played around for a while in comments with the fanciful notion that human polities are at about the level of organization and collective intelligence of a slime mold. (There are YouTube videos where a slime mold draws a map of Tokyo, just to drive home the similarity.)

    I don’t think capitalism invented human sacrifice, it just exploits the psychological primitives of human social organization rhetorically. That people do not even think about the design of law or economies as entailing forms of human sacrifice is sad really, but not ultimately down to a reified capitalism.

    People are primed on a very base level to believe in magic, too. Otherwise, Elon Musk would be on his way to Mars, right? Capitalism uses that receptivity to magic to promise innovation of high promise and no delivery, with the result that millions await the “clean” “renewable” economy even as global warming continues unabated.

    I used to think “the truth” would set men free, but I realize that we really need a better fiction. No one knows “the truth” per se, because the real truth is uncertainty, the realization that we do not know much and we have to cope with not-knowing and finding out more only by making painful mistakes. We act on shared fictions, and that puts us at the tender mercy of conmen and storytellers. Capitalism is just a brand for that state of affairs.

  30. Mark Pontin

    Bruce Wilder wrote: “If Hayek is the Grandfather of neoliberalism, then the ur-model is not Wilsonian liberalism, but Hapsburg liberalism: the go-go years after Franz Josef gave in to the Hungarians, created the dual monarchy and set off the great cultural and economic frisson that was Vienna in the last great blossoming of Empire.”

    Yes. Absolutely.

    Two ideologies emerged after WWI from Austria and the traumatic experience of the Austro-Hungarian empire’s collapse — ideologies formulated by Austrians that then deeply damaged the rest of the world.

    Someone once asked Ernst Hanfstaengl aka Putzi, Hitler’s confidant, what caused Hitler’s antiSemitism.

    Hanfstaengl replied: ‘Anyone who did not know Vienna before 1914 cannot understand.’ Hanfstaengl then explained that before WWI Vienna was full of beautiful people, the soldiers in their uniforms, the Hapsburg Empire’s citizens in their local traditional clothes etc and ‘then these strange people came from the East all dressed in black and speaking a strange kind of German’. These were the Orthodox Jews who came to Vienna from Silesia, a part of the Austro-Hungarian Empire. Kaiser Franz Josef had done much to emancipate and help the Jews so many crossed over to Vienna to start a new life.

    Not incidentally, both neoliberalism and Nazism had the same set of socioeconomic and financial policies once they achieved power.

    In Germany, Bismarck had nationalized healthcare, making it available to all Germans in 1871, then provided old-age pensions as public social security. Under Bismarck, child labor was abolished and public schools were provided for all children. The Kaiser implemented worker protection laws in 1890. After WW I, the Social Democrats’ influence remained strong. Germany had an active union membership. An official “Decree on Collective Agreements, Worker and Employees Committees and the Settlement of Labor disputes” enabled collective bargaining, legal enforcement of labor contracts as well as social security for disabled veterans, widows, and dependents. In 1918, unemployment benefits were given to all workers in Germany.

    In the 1932 elections, the Nazi Party didn’t have an outright majority. According to the Nuremberg Trial transcripts, on January 4, 1933, German bankers and industrialists had a secret backroom deal with then-Chancellor Von Papen to make Hitler the Chancellor of Germany in a coalition.

    According to banker Kurt Baron von Schröder:

    “In February 1933, as Chancellor, Hitler met with the leading German industrialists at the home of Hermann Goring. There were representatives from IG Farben, AG Siemens, BMW, coal mining magnates, Theissen Corp, AG Krupp, and others bankers, investors, and other Germans belonging to the top 1%. In this meeting, Hitler said, “Private enterprise cannot be maintained in the age of democracy.'”

    In 1934 the Nazis outlined their plan to revitalize the German economy with the reprivatization of significant industries: railways, public works project, construction, steel, and banking. Hitler guaranteed profits for the private sector; many American industrialists and bankers flocked to Germany to invest.

    The Nazis had a thorough plan for deregulation. The Nazi’s economist stated,” The first thing German business needs is peace and quiet. It must have a feeling of absolute legal security and must know that work and its return are guaranteed.”

    The Nazis ensured businesses weren’t hampered by too much “regulation.” On May 2, 1933, Adolf Hitler sent his Brown Shirts to all union headquarters. Union leaders were beaten, and sent to prison or concentration camps. The Nazi party expropriated union funds — money workers paid for union membership — for itself.

    On January 20, 1934, the Nazis passed the Law Regulating National Labor, abrogating the power of the government to set minimum wages and working conditions. Employers lowered wages and benefits. Workers were banned from striking or engaging in other collective bargaining rights. Worker conditions so deteriorated that when the head of the AFL visited Nazi Germany in 1938, he compared an average worker’s life to that of a slave. Workers in Nazi Germany worked longer hours for lower wages.

    In 1934, the homeless were rounded-up en-masse and sent to concentration camps as a way of getting rid of “public nuisances.”

    See, forex, — Vagrants and Beggars in Hitler’s Reich, Wolfgang Ayas

    The Nazis also privatized medicine. One of Hitler’s economists was the head of a private insurance company. These private for-profit health insurance companies immediately started to profit from Anti-Semitism. In 1934, they eliminated reimbursements for Jewish physicians, which allowed them to profit further.

    And so on.

    Philip K. Dick once wrote a novel whose particular ontological riff — ontological riffing was Dick’s thing — was that the Roman empire never really ended and in the 20th century we lived in an imposed illusion under the same elite, or their heirs, that had headed the Roman empire and now continued to crush us.

    That sort of science-fictional novel could be written with far more basis based on our own reality, riffing on the theme: The Nazis won.

  31. dbk

    The version of capitalism we are now enduring – I won’t give it a sobriquet, each can call it what they prefer (I use “late stage”) – has been systematically and scientifically imposed on us over the course of the past 50 years by a relatively small group of mega-rich individuals (names that spring to mind are “Koch” and “DeVos” and “Bradley”) who set out to fund a wide but rather shadowy network of conservative organizations in all sectors of power, ranging from the think-tank business (American Enterprise Institute) to the legal profession (Federalist Society) to state legislatures (American Legislative Exchange Council) to academia (George Mason University and the creation of “Law & Economics”).

    Their project has progressed apace and is, I guess, now reaping what it has sown.

    I found Jane Mayer’s Dark Money extremely useful in understanding how what I had thought of as basically fringe-crazy ideas went mainstream.

  32. rangoon78

    Mark Pontin I like what you said. Sometimes the comments here are over my head; but, I still learn a lot. In case I’m not the Only one: “The first experimental Leica cameras are known as UR Leicas. UR is the Leitz code name for these experimental models and is a German prefix meaning ‘original or primitive’.”

  33. Hugh

    The word is neo-liberalism, not neo-libertarianism. Neoliberal economics are the dominant neo-classical economics with a dash of libertarianism mixed in. Not the other way around. A libertarian position would be anti-Fed and the creative destruction of letting “markets” sort out winners and losers without government involvement. Neoliberals are pro-Fed and are strong supporters of government picking winners (them) and losers (us). The Clintons, for example, are neoliberal to the bone, but not in any sense libertarian.

    Greenspan and Bernanke were both hands off regulation by the Fed. But if they had been real libertarians, they would never have been at the Fed. And as the Greenspan, later Bernanke, Put implies their central role was to limit the losses of the rich and thereby increase moral hazard/risk taking, anathema to libertarians. So just not seeing it. And yes, I know about Ayn Rand boinking Greenspan.

  34. Z

    Ayn Rand, the soulless goddess of libertarians, was so hopped up on speed and so wound up in Objectivism and all its perversities that she probably would have done it with the mouthpiece of Uncle Alan’s trombone if a live human wasn’t readily available.


  35. Z

    Let me slightly rephrase that …

    Ayn Rand, the soulless goddess of libertarians, was so hopped up on speed and so wound up in Objectivism and all its perversities that she probably would have done it with the mouthpiece of Uncle Alan’s trombone if its bubble blowing owner wasn’t readily available.


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