Vitor Mello — The neoliberal tale

In brief, it was deemed acceptable the adoption of some form of authoritarian control over popular sovereignty in order to guarantee market sovereignty.…

As the shadows of neoliberalism grew ever mover intertwined with the current neoclassical economics and Friedman’s monetarism, it not only lost its name but also gave birth to a corporate type of laissez-faire; one in which social relations are downgraded to market mechanisms; politics, education, health, employment, it all could fit under the market process in which individuals maximize their own utility. There’s nothing that government can do that the market cannot do better and more efficiently. Monopolies, if anything, are to be blamed on government actions, while labor unions are disruptive to the economy’s wellbeing. Neoliberalism became a set of policies to be followed: privatization, deregulation, trade liberalization, tax cuts, etc. on a crusade to commoditize every single essential service – or every aspect of life itself. 

Hayek believed that ideas could spread and change the world. And they certainly did. What is worth bringing to attention is that there is no fatalistic understanding that neoliberalism was unavoidably a result of historical factors. The rise of neoliberalism was not spontaneous but rather orchestrated and planned; it was a collective transnational movement to counteract the mainstream of the time; it was originated out of delusion in a period marked by wars, authoritarianism and economic crisis; it was grounded on political affiliations and supported by the dominant ruling class that funded its endeavors and transformed public opinion. These are the roots of what is now the mainstream economic thought.

Short historical backgrounder on neoliberalism as a social and political theory developed by economists based on market fundamentalism, and how it became dominant economically and politically in the US and UK as the standard for policy formulation.

The Minskys
The neoliberal taleVitor Mello | Levy Institute educated Brazilian economist now at the Center for Economic Policy Research in Washington D.C