[OO000oo]

I have noticed that people on HN tend to equate neoliberalism with classical liberalism, being clueless about the difference.

Classical liberalism was a naturalistic belief in market supremacy, understood to be a colossal failure by the middle of the 20th century. It was associated with the Gilded Age, which spawned the so-called Progressive Era, the ideological camps that followed, and the catastrophe that was the world wars.

Neoliberalism is what the capitalist class have insisted is a reformed liberalism, invincible to the problems that classical liberalism motivated. It is a far more centralized, 'managed' market supremacy without the naturalistic perspective. Neoliberalism claims to acknowledge that markets are not natural and must be tightly managed by experts.

[Aerroon]

I don't understand the classical liberalism part. How do a bunch of empires, that don't operate on market principles, going to war with each other show that classical liberalism is a 'colossal failure'?

[cbau]

Not an expert, but if you read any of Keynes, he's basically critiquing classical economics and pointing out some of the ways it fails to explain economic cycles, hence the invention of macroeconomics.

https://en.wikipedia.org/wiki/The_General_Theory_of_Employme...

[churchill]

Really? Classical liberal economics fails to explain business cycles? Then why is the Austrian School (dyed in the wool classical liberals) the only major economic faction that's developed the most comprehensive expose on how central banks cause malinvestment, booms and busts by fiddling with the money supply?

https://en.wikipedia.org/wiki/Austrian_business_cycle_theory

[asymmetric]

As far as I understand, Austrians are precisely not classical liberals, but neoliberals.

Cf. for example Hayek’s critique of the classical liberal notion of the perfectly informed, rational market actor.

[kriro]

I don't think most Austrian econmists would self-identify as neoliberals. Politically they tend to be Libertarians (in the U.S.) or free market anarchists or minarchists (or I suppose laissez faire). Basically free-market instead of stat interventions. I belive most neoliberals quite readily accept state interventions, central banking etc.

The core tenent is that the free market is the best allocator of factors of production and entrepreneurial profit is the guiding factor. The state tends to interfere with this. It's best summarized in the socialist calculation debate.

However, there's also basically a split (mostly reconciled these days) betwen a more Hayekian wing which is more accepting of the mainstream (and could possibly self-identify as neoliberals) and the state in general and a wing that is more in the spirit of von Mises.

Disclaimer: just interested in the history of economics, not an economist.

[churchill]

You're a bit mistaken. Austrians are basically anti-statists who believe in limited government and non-intervention in the market - even to the point of opposing legal tender laws.

[dantheman]

Keynes was always wrong, and is an excuse for governments to spend money. Stagflation...

[churchill]

Keynes has to be THE most confusing and self-contradictory personality in orthodox economics. He had no original insights and the only reason political elites took a liking to him was because he gave them a logical, complicated copout for money printer to go brrrrrrr. He frequently changed his theories and ideas for political expediency and the idea that modern 'economists' take his teaching as gospel truth is just sad.

Murray Rothbard wrote an entire profile on the man [0] and I'd suggest anybody taking a stab at heterodox economics to read it.

[0]: https://mises.org/library/keynes-man-1

[morelisp]

> frequently changed his theories and ideas for political expediency... Murray Rothbard

Man if there was ever a pot for a kettle...

[FrustratedMonky]

I'd rather have some Keynes than get pissed on with some 'trickle down' economics.

I would say, I'd bet nobody having an argument about economics here has actually read much Keynes, or anything about classical/neo-liberalism. It all just turns into "I recognize some word related to the right, so I'll virtue signal and keep hyping it." Or more, "I see a free market economy argument happening, I must jump in and comment because markets are from God and I must support".

[roenxi]

When dealing with Marxist or Keynsians (or modern monetary theorists for that matter) it is a safe bet that the people implementing the policies haven't read and don't intend to follow the theory.

So I am simultaneously shy of saying "Kaynes was wrong" and confident that anyone claiming "Kaynes was right and we must do suchandsuch!" is saying the wrong thing. Ditto the other theories.

[jowea]

I believe the case against classical liberal economics has more to do with the economic crises of the late 19th century and specially the Great Depression than with the wars.

[churchill]

Nope. The Great Depression doesn't indict classical liberal economics - the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%. When the bankers started calling in their loans, everyone went bust.

That'd be equivalent to grow America's M2 ($20 trillion) by 12 trillion in just 4 years. 2019 to 2022 wasn't even that intense and, well, we can see how ugly things have gotten.

[marcinzm]

Looking at charts the money supply mainly grew during WW1 and growth went back to the previous levels after WW1.

[AnimalMuppet]

Bankers don't usually start calling in loans when there's too much money, but rather when there's too little. So I think your explanation needs a few more causal steps.

[derstander]

> the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%.

I’m not an economist so I’m speaking from a position of ignorance here. But I thought the US was on gold standard during this time period.

How was the Fed able to increase money supply by such a large % without e.g. the country mining a lot more gold?

I tried a cursory search but was unable to find any answers.

[Geee]

That is exactly the problem. They issued more currency than there was gold in the reserve. I.e. they broke the gold standard.

[marcinzm]

Looking at charts of the US gold supply it seems to have grown fairly significantly in the early 1900s up to the great depression, and seems to have been more than the 60% cited for money supply growth.

[churchill]

The same reason Nixon had to take the U.S off the gold standard in 1971 - the government printed more dollars than it had gold to back. Just because you have a gold standard won't stop politicians from printing cash when they need it.

The only way to stop politicians meddling with money is to denationalize it and eliminate legal tender laws.

[jay_kyburz]

I assumed the OP was saying The Great Depression led to WW2

[dauertewigkeit]

Read on the rise of fascism in Italy. It had a lot to do with discontent with liberalism at the time.

[hef19898]

And we are reaching (?) a similar point all over the democratic countries right now again.

[red-iron-pine]

it was more than just a discontent with liberalism, it was also discontent with communism -- an attempt to find a 3rd way / fuse them.

the ruthless capitalist approach led to the development of communism as a reaction. but communism had its own faults and, to many, egregious failures as well.

Mussolini -- who was literally the editor of a socialist newspaper -- grew disillusioned with socialism, and proposed a 3rd way by mixing chunks of capitalism that he liked with the chunks of communism that he liked, as well as a good healthy dose of machismo and nationalism to paper over the gaps.

similar approaches were taken in Germany, and there was a Nationalist (right wing) Workers Party (left wing) called the NSDAP that tried to do the same thing. Instead of pure corporatism they made it ethnic, but had vaguely similar approaches to corporations and the state, which often meant whatever they felt like at the time.

[OO000oo]

Germany and Britain and France and Austria were all very much capitalist countries.

[NoZebra120vClip]

Sargon of Akkad has described himself as a "classical liberal": https://youtube.com/@SargonofAkkad

In fact, his channel profile now simply says "English liberal."

Wikipedia begs to differ with all that...

[pharmakom]

"classic liberal" was claimed by the alt right and doesn't mean what it used to mean in those contexts.

[roenxi]

Wasn't there a big move to tearing down [0] statues [1] because the classical liberals [2] were considered monsters from a different era? Classical liberalism does really poorly under the current progressive zeitgeist and would likely and ironically be labelled "racist white man logic". The strongest thing protecting the classic liberal thinkers from being tarred and feathered is nobody knows who they are.

I don't think the alt right can be said to have "claimed" it as much as the left is rejecting it and there is no other home in a 2-faction classification.

[0] https://www.politico.com/news/2020/08/17/statue-removed-fran... Note the name Voltaire

[1] https://en.wikipedia.org/wiki/Thomas_Jefferson#Memorials_and... Note the name Jefferson.

[2] https://en.wikipedia.org/wiki/Classical_liberalism#Notable_t... Note the names Jefferson, Voltaire.

[pineaux]

Also, we do not live in a progressive zeitgeist. That is only the narrative. If you look at what is happening instead of what is being said, then not much is progressive or leftist about it. There is some pushing of individualistic identity politics. But these are not used to emancipate a class. They are used to create a new elite, that is "empathic". They are not talking about righting wrongs of poor people.

[brvsft]

I always forget this, but yeah, I think you are right.

Prime example for me were those talks about rail worker strikes. They were completely disallowed from happening. I understand the reasons, but despite not being any sort of leftist, I find it quite unfair that rail workers can't strike.

Police, teachers, actors and writers, etc. all have that right. Rail workers? Nope. I don't know what to call the political economic system we live under, but it seems to just be that our leaders make it up as we go along and allow whatever happens to be convenient and not blatantly illegal. Nobody gives a shit about rail workers, so legally blocking a strike by them isn't going to cause any problems.

[namdnay]

a bunch of overzealous students putting paint on one statue of voltaire is hardly a "big move".. voltaire, his ideas and his works are still at the centre of french culture, politics and curricula

[roenxi]

If the fringe left are throwing paint on him and the fringe right are saying "we want to be like him!" then I put it to you that the situation is that the left fringe doesn't like classical liberalism.

It isn't that the meaning of the word is changing. There is a detectable (indeed, proud and vocal) anti-liberalism stripe in the people who most loudly disagree with Carl Benjamin. And a lot of his positions are classical liberal positions. The classical liberals wouldn't have been very impressed by the things he criticises (or him, one suspects, but ones character is different from ones political persuasion).

[FrustratedMonky]

People on the right might be picking these classical liberals for their 'team', but it is probably because they only have the same cursory knowledge of them as they have of the bible. They just believe in a veneer of some simple concepts that they have been spoon fed through commercial marketing. They don't really know what they believe, what is in the bible, and really not what some classical liberal might have said and how it applies to them.

[GloomyBoots]

> Wikipedia begs to differ with all that...

Not really. It says that journalists describe him as “far right” which by current journalistic standards is a superset of classical liberalism.

[astrange]

Neoliberalism doesn't exist and is just a word academics use to describe anything they don't like.

[antupis]

It actually exists some countries like Estonia https://www.cato.org/policy-report/july/august-2006/mart-laa... .