[foamflower]

This article is mostly accurate about Smith (although the man himself was much more favorable to entrepreneurs and innovators than is presented), but fairly inaccurate that “Right-wing” politics is some perversion of Smith. At the end, we get a taste of what he means in that Thatcher privatized various state industries during her run as Prime Minister in the '80s.

Otherwise, an entire sub-field of economics (it would be a sub-field of "political economy" if that term were widespread today) is Public Choice, which demonstrates rather well that often state intervention is at the behest of the "merchant interests." Public Choice is a direct descendent of Adam Smith’s thinking. Indeed, the very term "state capture" that the author invokes frequently probably derived from "regulatory capture," a term Public Choice helped propagate.

There is also a misunderstanding that Smith’s "invisible hand" concept implies some sort of Utopian paradise, when in fact, Smith meant more that aspiring monopolists who are nonetheless in competition with each other (and often in cooperation with others) lead to an increase in social gains, which on its own seems paradoxical and is highly counterintuitive. Modern economics seems founded on maximizing or minimizing every possible variable of interest, so I suppose some people may actually argue that the invisible hand is a statement about maximization, which it definitely isn’t. In practice, the only people I see invoke the "Invisible Hand" in this manner are harsh critics of any sort of free enterprise regardless of the context, and always advocates of state intervention and thus regulatory capture ("[people] of the system", indeed).

I am most surprised that Smith's sympathies for labor do not appear in this essay, as they seem to be quite strong. Smith discusses the effects of specialization that happens during industrialization, and goes so far as to say it makes workers with repetitive tasks "stupid." In context, his sympathies are clearly with the worker.

I guess as someone with relatively Smithian-Hayekian views, I am missing the overall point of this article, other than to hand-wring that so-called Neoliberalism (I have never met a Neoliberal) is actually unrelated to Smith’s ideas and are a perversion. He is entirely unconvincing, even if one accepts for the sake of argument that "neoliberalism" exists as a coherent philosophy or even ideology (it doesn't).

[RobertoG]

>"I have never met a Neoliberal"

That's because neoliberalism is not an ideology, but a label used to try to understand a historic period.

Neoliberalism would be the bastard child of neoclassic economics and liberal ideology and it can be defined by events and people that definitely exist.

The intellectual parents would be the economist in the orbit of Milton Friedman and the 'Chicago school' and the political parents would be Reagan and Thatcher. The playground rules would be the Washington Consensus [1].

The foundational charter would be the Powell Manifesto [2], that I recommend to read to everybody that want to get and insight about the last forty years.

[1] https://en.wikipedia.org/wiki/Washington_Consensus [2] http://reclaimdemocracy.org/powell_memo_lewis/

[nickik]

> That's because neoliberalism is not an ideology, but a label used to try to understand a historic period.

No its not. Its a term that is used by pretty much anybody for whatever they felt like.

> The intellectual parents would be the economist in the orbit of Milton Friedman and the 'Chicago school' and the political parents would be Reagan and Thatcher.

That is just false. Friedman never called himself a neoliberal.

The actual word is derived from Post-WW2 German economists, but that term is not used today.

It was after the Pinochet coup that the political left has started to use the term 'neoliberal' as a politcal slur against anybody who they don't like. The use of the term has exploded since then and has be now become to mean about the same thing as 'evil'.

There is no actual 'neoliberal' philosophy or any neoliberals. Only people who leftists politics accuses of such, that includes everybody from some left supply-siders to crypto-anarchists.

The amount of different polices and ideas that are 'neoliberal' by some definition are so broad that the term is meaningless. This has been shown in research on the use of the term across many fields.

> > The playground rules would be the Washington Consensus [1].

The idea that the 'Washington Consensus' derive from the same basic ideas as the classical liberal ideas (such as Friedman) are also wrong. Classical liberals have been among the people who have very much opposed things like IMF and World Bank.

You make your live very easy by just throwing everything you don't like into some big evil 'neoliberal' bucket without an detailed understanding of the different people, schools of thought, historical events and so on that influenced and/or shaped any one or all of the things you don't like. This is not all part of some grand 'neoliberal' conspiracy.

[RobertoG]

Well, of course, now that the label it's fashionable, it's going to be used by everybody for everything. A little like using "nano" a few years ago, or "AI" nowadays. That doesn't mean that the term was originally void of meaning as you claim.

>"This is not all part of some grand 'neoliberal' conspiracy."

I beg to differ. Perhaps, conspiracy it's not the word, but very concrete policies have been imposed all around the world by very powerful actors. Those actors are clearly defined, and the times when this happened are also clear. So we can talk of a "neo-liberal" period. After all, we have to call it something.

>"The idea that the 'Washington Consensus' derive from the same basic ideas as the classical liberal ideas (such as Friedman) are also wrong"

Maybe they don't derive from the same basic ideas, but, for sure those ideas have been used to justify it.

[nickik]

> That doesn't mean that the term was originally void of meaning as you claim.

Historically it goes back to Post-WW2 German economist. You are also not using that definition.

The point is that the word 'neoliberalism' has gone threw a number of different definitions, and you are just focusing on one that was coined and almost exclusively used in a far left political movement, because they were unhappy with all classical liberals, everybody on the right and even the center left.

To be more exact the research shows pretty clearly that it was after the Coup in Chile where the left started criticizing that government any anything they saw related to it as 'neoliberal' and after that the term exploded and became ever broader in meaning.

There are a few papers that study the history and use of the word that you can search for.

> I beg to differ. Perhaps, conspiracy it's not the word, but very concrete policies have been imposed all around the world by very powerful actors.

Yes but if you look at those then you will notice that is was implemented by a wide variety of different parties with different ideologies. The reasons given were also different in different places with different goals.

The people who recommend the polices also came from different schools of economics and different backgrounds.

If you sum this all up as 'neoliberalism', is a waste oversimplification that mostly serves as a political 'its was better before neoliberalism' and has not much content otherwise.

> Maybe they don't derive from the same basic ideas, but, for sure those ideas have been used to justify it.

Again, sure, but if you just throw all into the same 'neoliberal' bucket then you will never understand the differences between the wide variety of opinion on these things. Development economics has a long an complex history with many different economists giving their input, the 'Washington Consensus' was one particular idea written down by one set of people with a wide variety of opinions inspired by lots of different ideas from the history of development economics and economics more broadly.

This of course includes Friedmans and many others. Many economists would agree with part of the WC and others would agree with the idea but not with the way it was implemented. Others disagree with the whole approach. All of them are often called 'neoliberal'. The opinions are very different, labaling it all 'neoliberal' is only helpful for politics, not for understand the how and why of individual polices.

[RobertoG]

>"Historically it goes back to Post-WW2 German economist. You are also not using that definition."

I don't know about other users of the word. Part of the wikipedia definition, that I agree with, and I think reflects the current consensus of the word is:

"These market-based ideas and the policies they inspired constitute a paradigm shift away from the post-war Keynesian consensus which lasted from 1945 to 1980."

So, what make neoliberalism, as a word, informative is that it represents a change from another period. That makes, in my opinion, the word useful and informative. If you recognize there was a change, how do you call this period if not 'neoliberal'?

>"Yes but if you look at those then you will notice that is was implemented by a wide variety of different parties with different ideologies. "

Maybe we are looking to different things, but when I look to it what I see, for instance, is the IMF and a few other "american and european" institutions imposing development paths, that they didn't follow in the past, as the 'obvious' solution. And keep insisting in it, never mind the results.

[nerfhammer]

though I otherwise agree with your points, a minor nitpick:

Lack of self-identification with the term doesn't necessarily matter. The terms "mercantilism" and "capitalism" were popularized by their critics (Smith, Marx) without anyone calling themselves a "mercantilist" etc.

Otherwise, yea "neoliberal" just seems to mean "the parts of more or less mainstream economics that I am feeling cranky about at the moment and would feel validated if it were reified into a bogeyman that we should all be outraged at."

[YPCrumble]

The article gives a good description of a major facet of Neoliberalism: "[a] movement that seeks (as Thatcher hoped) to ‘roll back the frontiers of the state". If you have heard someone whining about the nefarious "Big Government" and the need for deregulation, then you've met a Neoliberal.

The point of the article is summarized by the author in a paragraph:

""" The message that Smith conveys cuts across party and ideological lines, and applies to both Left and Right. It is about a pathological attitude that politicians of all stripes are prone to. If not kept in check, this can be the source not just of disruption and inefficiency but of cruelty and suffering, when those who find themselves on the wrong side of the plan’s consequences are forced by the powerful to suffer them regardless. Smith in turn urges us to recognise that real-world politics will always be too complex for any prepackaged ideology to cope with. What we need in our politicians is careful judgment and moral maturity, something that no ideology, nor any position on the political spectrum, holds a monopoly on. """

The dogma of today's right-wing "mercantile" politicians is a perversion of Adam Smith. These politicians state that the invisible hand requires complete government deregulation in order to function. They ignore Smith's point that the invisible hand requires both free markets and government regulation of monopoly to function. The article states that "According to Smith, the most pressing dangers came not from the state acting alone, but the state when captured by merchant elites." If you've followed US politics at all over the last year you could see how the article's point is extremely convincing.

[nickik]

> then you've met a Neoliberal.

By your definition. But the term has been used for a whole lot more in many different context and that makes it so useless.

> The dogma of today's right-wing "mercantile" politicians is a perversion of Adam Smith. These politicians state that the invisible hand requires complete government deregulation in order to function. They ignore Smith's point that the invisible hand requires both free markets and government regulation of monopoly to function.

No. That's not what they ignore. These "mercantile" politicians never had the slightest interest in Adam Smiths ideas or in limiting power of the state and or business in the first place.

The point of Smith and his fellows (like Hume) at the time was that business would try to capture the state and that was one reason they tried to limited the power of the state and strengthen individual freedoms. Sure they might have been in favor of some regulation but what we have now is so far beyond the wildest dreams of Smith that it is hard to argue that, this is what he meant.

The problem is that the state is forever growing and that no democratic procedures can prevent business (and voters) from competing to capture these rents, rather then the rents from the state.

I would recommend 'Public Choice' economics because they think threw these different intensives very systematically.

[dmix]

> If you have heard someone whining about the nefarious "Big Government" and the need for deregulation, then you've met a Neoliberal.

That is an very inaccurate generalization, liable to be wrong at least ~50-75% of the time these days, maybe not in the 1980s or 90s and earlier, but certainly today as it's become a catchall for everything the (new?) left doesn't like.

[thanatropism]

> never met a neoliberal

"Neoliberal" is typically a term of abuse, but I've seen a movement (from econ professors to /r/neoliberal) to appropriate as a term for centrist radical pragmatism. These self-proclaimed neoliberals are very progressive socially and (claim to, at least) support any policies that have actual firm evidence for it. Of course, this makes them pro-trade and pro-"globalism".

[YPCrumble]

> support any policies that have actual firm evidence for it

A Neoliberal candidate lost the last US election because people from states whose middle class has been hollowed out by free markets and deregulation voted against them. I haven't seen them take that as "firm evidence" that economic policies that ignore important indicators of social well-being into account, like the level of inequality.

Today's Neoliberal believes that if you take everything from a poor person except their (now cheaper) imported TV and iPhone, they will be happy...because the GDP and stock market are growing. "The pie is bigger, so even though your slice is a smaller percentage, you're still better off," they say. It's too bad that they seem to think there is firm evidence that people are robots who would believe that nonsense.

[nickik]

Perfect example of how to use 'neoliberal' as a term of abuse with a nice strawman layer on top.

[thanatropism]

This reads to me like: "globalization hasn't solved the problem of economic jealousy". That it sucks to see someone become 200X richer whereas you have only become 40% richer. (But richer nonetheless).

I mean, sure. It hasn't fixed sexual jealousy either. Witness the impressive phenomenon of "incel rage" on the internet: not rage at pressing personal need unmet, but at the relative sexual deprivation that results from the fact that attractive women will usually prefer attractive men.

This is what you find at the bottom of Pikettyism: economic incel rage.

[sprafa]

there's plenty of evidence that globalism has not worked out for substantial parts of the population in most developed countries.

[nickik]

Such an easy statement to make. The false assumption indeed is that if the US had not engaged in these polices people would now be better off.

Saying 'its not perfect' is easy, showing that your alternative path would have been better is hard, and there is little evidence for it. Thus most economist don't believe it.

[simonh]

There is overwhelming evidence that Globalisation has turned many undeveloped countries into developed ones. Do people in newly developed countries somehow not count as people in developed countries? Just look at China. That's over a billion people in a country transformed from a hopeless basket case in the 70s into a global superpower and economic powerhouse.

https://www.theguardian.com/society/2013/mar/17/aid-trade-re...

https://ourworldindata.org/wp-content/uploads/2013/05/World-...

[jbooth]

> globalism has not worked out for substantial parts of the population in most developed countries

Pardon my language, but that's crap. Every developed country has seen yuuuuge profits from globalism.

What, not all of it trickled down you say? That's a distribution problem. It's not a problem with globalization.

Shrinking the pie in order to pursue a more fair distribution is some ass-backwards, rube-goldberg-machine nonsense. Take the profits, fix the distribution. Invest in infrastructure while you're at it.

[ionised]

What gives you the impression the 'distribution problem' isn't inherently linked with the deregulation that enabled these massively increased profits that only find their way to a select few?

[jbooth]

'Inherently linked' is a misnomer. We're in the driver's seat here, we're not at the mercy of the weather. If we can set our trade policy, then we can set our tax policy and budget.

Raise taxes on the rich (short of making globalization a net loss to them), fund infra projects that put lots of blue-collar people to work, and in a generation we've got a bunch of cool shit on top of increased mobility and a better consumer economy. Everyone wins.

[briandear]

There is also substantial evidence that it has. The poor in America are richer and have higher living standards than the poor of less-globalized places. Absolute poverty in developed countries is far lower than at any possible by in history. In fact the same could be said for absolute poverty globally. And that, is a direct result of globalization.

[RobertoG]

>"Absolute poverty in developed countries is far lower than at any possible by in history. In fact the same could be said for absolute poverty globally. And that, is a direct result of globalization."

Actually that it's not true. Absolute poverty better global numbers are due mainly to China. A little also to India. For the rest, it could be argue that they are equal or, in some cases worst.

You could argue that China have benefited from globalization, and, in a way is true. Except that their strategy is almost the opposite of the strategy recommended by the champions of globalization (IMF, etc..)

[wu-ikkyu]

What do you mean by "absolute poverty"?

While the proportion of people living in poverty may have been getting lower, the absolute number of people living in poverty has never been higher.

3 billion people live in poverty. This is the same as the total global population in 1960.

https://www.dosomething.org/us/facts/11-facts-about-global-p...

[tonyedgecombe]

The UN defines "absolute poverty" as:

A condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services.

The percentage of people at this level has been falling for a long time and is now less than 10% of the global population, nowhere near 3 billion.

[mistermann]

Was it globalism that made them richer? They weren't already richer pre-globalism (say, 15 to 20 years ago)?