Understanding Neoliberalism as a System of Power

IIPP Visiting Professor of Practice, Damon Silvers, explores the understanding of neoliberalism as a global system of political economy rather than as a set of politics within advanced countries, and the paradox of neoliberalism, that an ideology of freedom produces a reality of power.

[clumsytriangle]

I'm blown away by this lecture. It is not in my field of common knowledge, but what I have taken from it is that we the normal people living our normal lives have been duped by our leaders - leaders that have been iconized and made to appear as heroes, yet they were and still are - whether alive or dead - evil. I just hope that the new multipolar world order that is rising will bring some overall holistic changes for us all and we can move into a new era for humanity.

[stepmaster]

This is a masterclass in international political economy for those who don't have the chance to go to graduate school!

[garretttedeman]

This is exactly right. A truly fantastic talk updating & summarizing so many of the key parts of the narrative. ...Until we really understand these parts, we can't find more solutions.

[JN-kfkf]

These are some of the BEST lectures on these systems of power I have ever listened to. I was absolutely RIVETTED. UCL/IIPP, more more more please. Prof Silvers is just ..indomitable!

[danremenyi]

It is a crying shame that this video has been watched by so few people. It should be watched by at lease 1 Billion. But alas not many of them would want to understand it or maybe they couldn't even if they wanted to. Thank you Damon.

[WanderingExistence]

Wage labor is renting yourself via "self ownership". Employment is literally renting another human being as if they're property. The employer-employee relationship is a very insidious dynamic. Employment is a rental contract, like if you rented capital (say, a chainsaw from Home Depot), you pay rent for the "time preference" (basically the cost of time) for a piece of property. Capitalism is based on a principle of self ownership, which sounds empowering, until you realize that most people don't own capital goods other than themselves, and must rent out the authority over themselves as pieces of "human capital". This is a process of dehumanization where human beings are valued for their return on investment as capital goods. This is why, at the very least, capitalism needs unions and safety nets (or abolishment), or else the system won't value people for their human value. Importantly we must also think about our sick, elderly, and disabled people, as they can't provide competitive economic return for the investor class to value. We must figure out a way to change this economic system if we wish to value each other.

[Aratto]

As a Chilean i can say this is very accurate, excelent lecture!

[truthaboveall]

“J is for Junk economics” & everything by Michael Hudson who has been a decade ahead of our establishment

[norbertvanettinger]

Great teaching... Very clear articulation of what Neoliberalism is, and what the devastating consequences were/are for society...

[NathansHVAC]

This video explains why 1000 bankers were conviced in 1990 savings and loan crisis, but zero in the 2007 financial crisis. This video explains why half the country think the FDA is cappptured by pharma. This video explains why it is perfectly normal to earn $100 million working as a public servant.

[bobchannell]

I've heard Chris Hedges talk about Neoliberalism, but I never knew what that was before watching this lecture.

[cameronmclennan]

Great talk, some history that everyone should know. The answers from two questions at the end seemed really interesting to me.

At 1:17:13 a man asks about the nature of power arising from markets. Damon provides a really nice description of the development of 'political economy power':

"if you are able to gain enough market power in a business to accumulate some wealth, that that wealth can then buy political power and that that political power can then set your tax rate and that political power can disarm your anti-trust regulators and that political power if need be can put tanks in the street on your behalf and that the consequence is the ability of whomever has that level of political power that derives from economic power to then reproduce the economic power"

He then summarises:

"neoliberal policies do lead to higher incomes for wealthy people, but that's not what they're for, they're for the accumulation of power. Neoliberalism is not about freedom, it's about power and it's about the intersection and the reinforcing of economic and political power"

This is all great and a fantastic summary of the dynamics of neoliberalism and of the talk.

The very next question at 1:22:14 asks about the whether people like Friedman, Reagan and Thatcher knew what they were doing was Damon says he thinks they were acting in good faith.

Good faith about what exactly? Reproducing and reinforcing economic and political power for elites?

In the same response he also thinks it's terrible, but can't figure out how to square the fact that Thatcher was Pinochet's biggest fangirl. And he doesn't seem to connect it with her motives and ideology. No she was just acting in "good faith". And Friedman?!

This, unfortunately, appears to be the classic tale of academic and corporate center-leftists (Damon's a Havard trained lawyer) attributing motives to right-wing ideologues that they clearly don't/didn't have: in this case, he seems to be willing to take at face value political campaign speak that Thatcher and Reagan really really just wanted the best for everyone in the long run. It's absurd.

Die-hard conservatives fully believe that there are natural and unbreakable heirachies and that they naturally belong on top (hence the overt racism and pure hatred of the working classes and the denial of any possibility of larger societal structures - "there's no such thing as society"). It's this belief in unchangeable structred heirarchies, that is antithetical to the proper functioning of democracies, that drives the scramble for power. The absolute fear of being in any way accountable to 'the filthy masses'.

Damon frames it as a human tragedy story: "There's a terrible repetition to this, which Reagan and Thatcher as human as human beings should have known, particularly Reagan, but they chose to believe what they believed."
Quick tip, they absolutely knew what they were doing. Just like Rishi Sunak, Boris Johnson, Mitch McConnell, Kevin McCarthy, Emmanuel Macron, etc. do/did.
Just because you went to school and college with tons of people like this, doesn't make them honorable and good faith.

[laogong]

A truly holistic lecture, fascinating insight into twists and turns of influence and power, by design, accident, and/or willful ignorance. The long term consequences of which is never addressed in the short term electoral cycles, probably also by design, and denial that governance is now totally out of the hands of electorate.

[rebeccawoolfolk]

This is a really excellent lecture. Sorry to see it's only had 40, 000 views in its first three weeks. I hope more people find it.

[OurNewestMember]

"paradox" is a rather generous way to put it!

Ditto for the "logic that flows through it"

[GeopoliticalEconomyReport]

This is for the most part a good lecture, however it has a fatal flaw: China was decidedly *not* part of the neoliberal system. In fact, one of the reasons there was global economic growth (and poverty reduction) during the neoliberal era was precisely because of China's massive growth under its market socialist model.

Unfortunately, this lecture has clear anti-China bias, and obviously aims to advocate for a return to Keynesianism in the West, but within the context of the new cold war on China. The contradiction is between capital and labor, not between "democracy" and "authoritarianism".

For people who are interested in learning about China's role in opposition to the neoliberal system, I would recommend reading "How China Escaped Shock Therapy: The Market Reform Debate" by Isabella Weber.

[jtrealfunny]

Wow! This seems super insightful and to be coming from a unique perspective, at least for me. I grew up in the seventies and have watched these shifts in power and ideaology unfold before my eyes. The horrible thing is to think where we have come from and think where we are now today. If that doesn't sadden you we have different ideas of reality. Jaja. Take it from the man.

[MrMartyOh]

Very helpful and illuminating talk from Professor Silvers. Looking for part 2 now…

[js-at]

"Market Fundamentalism" is a much better phrase. I feel like people should start using that - it's more to the point and less confusing to the uninitiated than "neoliberalism".

[simonsmatthew]

People were critiquing neo-liberalism along time before Joe Stiglitz. One was Angus Maddison who warned in 1985 about capital market deregulation becoming "axiomatic".

I would also argue that neo-cliassical economists are not the right people to question neo-liberalism, even ones that claim to be left of centre. Why? Because they believe the appropriate manner to analyse an economy is from the basis that it is an aggregation of individual optimising agents - essentially this is the at the core of neo-liberalism itself. In this sense an economy is not a social construct; it is basically a giant market.

The reason neo-classical economists do this is so they can have a mathematical model. But essentially for achieving that they basically start from the assumption of perfect markets and rationality. This is very much the philosopny of Utilitarianism, particularly Bentham and Mill. They then add in frictions to allow for 'market failure". But this is forcing the theory of evolution into Genesis. This is not an appropriate means to understand capitalism, and its related human and social behaviour.

Really the most eloquent critics of this methodology of this are Adorno, Horkheimer and Habermas. Basically a fundamental critique of neo-liberalism becomes one also of neo-classical economics which in turn becomes a philosophical critique of many aspects of Modernism and Positivism.

Keynes is ambiguous, but increasingly he began to recognise radical uncerainty and condemned classical economists for their 'pretty and polite techniques'.

The implications for policy flow from this ideology and methodological practice. For example 'left wing' neo-classical economists believe that the market should allocate resources, but "winners compensate losers". Blair's Third Way was the quintessential expression of Neo-liberalism. Something like collective bargaining successfully seen in non-Anglo Saxon European social democracies are dismissed because they cannot conform to this model. Neo-classical economists argue that they are a failure in both theory and practice, pointing out their experience in Anglo-Saxon countries. Given the lack of critical reasoning in neo-classical economic training (which is almost entirely algebraic and is all about forcing things into a standard model, usually by creating something arbitrary and fictional in an attempt to get results outcomes that are actually seen in the real world) they do not even ask why they work in some countries and not in others.

You cannot have neo-classical economists critique neo-liberalism. Because stripped of arbitrarily imposed frictions, they are fundamentally the same thing.