Monday, October 24, 2016

Michael Hudson on Veblen

One of the persistent disappointments in my life has been the inability to interest more folks in the writings of Thorstein Veblen. Goodness knows I have tried—speeches, websites, multimedia CDs, letters, and boring everyone I could buttonhole.  I discovered TBV while searching for a believable explanation for what happened to trigger the global depression of 1981-82.  I didn't actually know what I was looking for and had the resources of the St. Paul library system so I did a bunch of reading—history, business magazines, trade journals, the heavy hitters on political economy from Marx to Hayek to Keynes, even philosophy.  Nothing seemed to be relevant to my search.

The death of my uncle in April 1984 got my mother talking about the insanely difficult struggle that faced the family as they tried to survive the 1920s and 30s in rural Minnesota (yes, they call them the Roaring 20s but for small farmers, it was catastrophic.)  Mom gave me enough clues so that with the skilled help of my favorite librarians, I was able to partially reconstruct my grandfather's reading list. Through the magic of inter-library loans, I began to read magazines like the 1920s Appeal to Reason / American Freeman that provided serious analysis of why farmers were starving in the age of the flappers.  What was so amazing was how economically similar the 1920s and the 1980s were—at least down on the farm.  It was stunning how politically sophisticated my grandfather's generation was in so many ways.

In the middle of this reading jag, I discovered The Theory of the Leisure Class (TOLC) by Thorstein Veblen.  My newfound exposure to the political writings of the 1920s was extremely helpful in making it through that very challenging tome. Because reading was the only method of communicating ideas in those days, people just read more and more difficult books (TOLC became a popular best-seller.) Here I was a university graduate and it took several years of reading the 1920s musings to become comfortable with the style and vocabulary of Veblen.  Even so, I believe that reading the first three pages of TOLC shed more light on how the world actually works than the approximately 250 books and 1000 magazine articles I had read up until that point.  It was breath-taking.

If you count Veblen's translation of the Lexdaela Saga, he wrote 10 books.  By now I have read all 10 at least twice.  In 1993, to celebrate the rebuilding of the Veblen farmhouse in Minnesota, I read all of them in the order in which they were published.  I highly recommend the experience.  However, I also know that for most, this would be impossible because of the heavy commitment of time and effort.  Therefore, it is always good when someone who really understands Veblen takes the time to explain what the fuss is all about in an easily digestible essay.  As the world's leading Institutionalist, Michael Hudson is superbly placed to explain Veblen and this weekend, he hit one out of the park (see below.)

What is so insightful is that he manages to include the highlights of Veblen's thinking (at least according to me) while explaining why Veblen is still relevant.  These include:
  1. “Veblen put forth a basic distinction between the productiveness of ‘industry’ run by skilled engineers, which manufactures real goods of utility, and the parasitism of ‘business,’ which exists only to make profits for a leisure class which engages in ‘conspicuous consumption’.
  2. Economic rent – the excess of price over this “real cost” – is unearned income.
  3. “Real estate is an enterprise in ‘futures,’ designed to get something for nothing from the unwary, of whom it is believed by experienced persons that ‘there is one born every minute.’”
  4. Veblen criticized academic economists for having fallen subject to “trained incapacity” as a result of being turned into factotums to defend rentier interests.
  5. His Theory of Business Enterprise (1904) emphasized the divergence between productive capacity, the book value of business assets and their stock-market price (what today is called the Q ratio of market price to book value). He saw the rising financial overhead as leading toward corporate bankruptcy and liquidation. Industry was becoming financialized, putting financial gains ahead of production.
Last Friday I went out to the Veblen farm to soak up some atmosphere to enhance the joy of reading Hudson's brilliant essay. The harvest is largely done. The trees have mostly lost their leaves.  We haven't had a hard freeze yet but that is certainly coming soon.

The Veblen farm sits on one of the highest points in the county.  This means it is often very windy as is readily apparent from the tree next to the old granary.

This has been one of those gorgeous autumns where even the oaks turn a wonderful russet color. These trees are near where the Veblens had a woodlot.  The farm was mostly grassland so they had to have a source of fuel.  Burr oaks make an especially welcoming fire and are not so good for construction.  The Veblen woodlot also had red and white oaks.  Much of the barn was framed with white oak.

The Return of the Repressed Critique of Rentiers: Veblen in the 21st century Rentier Capitalism


In 2012 a conference was held on Thorstein Veblen in Istanbul. It was sponsored by a socialist labor union, the Chamber of Electrical Engineers. We were asked why not focus on Marx? My answer was that Marx had died a generation earlier, and the major critique of finance capitalism had passed to Veblen. This book, Absentee Ownership and its Discontents: Critical Essays on the legacy of Thorstein Veblen, (from which my following remarks are excerpted) is a series of essays, including by myself and another NC friend, Michael Perelman.–MH

Simon Patten recalled in 1912 that his generation of American economists – most of whom studied in Germany in the 1870s – were taught that John Stuart Mill’s 1848 Principles of Political Economy was the high-water mark of classical thought, and nationalizing monopolies or regulating their prices to reflect actual production costs. However, Patten added, Mill’s reformist philosophy turned out to be “not a goal but a half-way house” toward the Progressive Era’s reforms, above all either nationalizing land or fully taxing it, and either nationalizing monopolies or at least regulating their prices to bring them in line with actual production costs. Mill was “a thinker becoming a socialist without seeing what the change really meant,” Patten concluded. “The Nineteenth Century epoch ends not with the theories of Mill but with the more logical systems of Karl Marx and Henry George.” But George was only a muckraking journalist and anti-academic, so the classical approach to political economy evolved above all through Thorstein Veblen.

Like Marx and the rising socialist agitation, Veblen’s ideas threatened what he called the “vested interests.” What made his analysis so disturbing was what he retained from the past. Classical political economy had used the labor theory of value to isolate the elements of price that had no counterpart in necessary costs of production. Economic rent – the excess of price over this “real cost” – is unearned income. It is an overhead charge for access to land, minerals or other natural resources, bank credit or other basic needs that are monopolized. This concept of unearned income as an unnecessary element of price led Veblen to focus on what now is called financial engineering, speculation and debt leveraging. The perception that a rising proportion of income and wealth is an unearned “free lunch” formed the take-off point for him to put real estate and financial scheming at the center of his analysis, at a time when mainstream economists were dropping these areas of concern. Veblen’s exclusion from today’s curriculum is part of the reaction against classical political economy’s program of social reform. By the time he began to publish in the 1890s, academic economics was in the throes of a counter-revolution sponsored by large landholders, bankers and monopolists denying that there was any such thing as unearned income. The new post-classical mainstream accepted existing property rights and privileges as a “given.” In contrast to Veblen’s argument that the economy was all about organizing predatory schemes, this approach culminated in Milton Friedman’s Chicago School defense the pro-rentier argument: “There is no such thing as a free lunch.” This blunt denial rejected the preceding three centuries of classical value and price theory, along with its policy conclusions promoting taxation of land and other natural endowments, and financial reform.

Dropped from view was rentier overhead in the form of predatory and unproductive forms of wealth seeking. The post-classical mainstream treats all income as “earned,” including that of rentiers. Lacking the classical concepts of unproductive labor, credit or investment, today’s textbooks describe income as a reward for one’s contribution to production, and wealth is being “saved up” as a result of someone’s productive investment effort, not as an unearned or predatory free lunch. This shift in theory has shaped the seemingly empirical National Income and Product Accounts to indulge in a circular reasoning that treats recipients of rent and interest as providing a service, an economic contribution equal to whatever rentiers receive as “earnings.” There are no categories for unearned income or speculative asset-price gains.

Veblen described the largest sectors of the economy where quick fortunes were made as being all about organizing rent-seeking opportunities to obtain income without real cost. He viewed psychological utility as social in character. In contrast to food or other satiable bodily needs characterized by diminishing marginal utility – e.g., from eating food and becoming satiated – his concept of conspicuous consumption emphasized the insatiable drives to raise one’s social status. The desire for consumer goods was characterized by fads for the most pricey goods as trophies of one’s wealth. The result was the mercenary vulgarity of wealthy Babbitts turning culture into an arena for shifting fashion, all to impress others with similar shallow sensitivities. The largest factor defining status was the neighborhood where one’s home was located. Housing was not simply a basic living space as “use value.” It established one’s position in society, duly enhanced by civic boosterism, public subsidy and infrastructure spending.

“The Great American Game”: Real Estate

Describing real estate as being “the great American game,” Veblen focused on how future prices were enhanced over present values by advertising and promotion. “Real estate is an enterprise in ‘futures,’ designed to get something for nothing from the unwary, of whom it is believed by experienced persons that ‘there is one born every minute.’” Farmers and other rural families from the surrounding lands look “forward to the time when the community’s advancing needs will enable them to realise on the inflated values of their real estate,” that is, find a sucker “to take them at their word and become their debtors in the amount which they say their real estate is worth.” The entire operation, from individual properties to the town as a whole, is “an enterprise in salesmanship,” with collusion being the rule.

Retailers in small towns collude to exploit farmers, a practice broken by the spread of mail order catalogues. But monopoly power is achieved most rigorously in local banking. Most loans are for mortgages to inflate land prices. “And the banker is under the necessity –‘inner necessity,’ as the Hegelians say – of getting all he can and securing himself against all risk, at the cost of any whom it may concern, by such charges and stipulations as will insure his net gain in any event.”

Land prices were rising in larger cities as a result of overall prosperity and the easier availability of mortgage financing, while public spending on roads, subway and bus systems, parks, museums and other prestigious activities were organized to enhance neighborhood values. Such practices prompted Veblen to criticize Clark and also Marshall for ignoring the “pecuniary” financial dimension of life. This was a glaring error of omission in the new mainstream, along with monopolies and large real estate frauds started in colonial times, highlighted by the Yahoo land fraud early in the Republic, and capped by the railroad land grants. As Henry Liu describes how Veblen emphasized the predatory role of high finance: “Veblen put forth a basic distinction between the productiveness of ‘industry’ run by skilled engineers, which manufactures real goods of utility, and the parasitism of ‘business,’ which exists only to make profits for a leisure class which engages in ‘conspicuous consumption’. The only economic contribution by the leisure class is ‘economic waste’, activities that contribute negatively to productivity. By implication, Veblen saw the US economy as being made inefficient and corrupt by men of ‘business’ who deviously put themselves in an indispensable position in society.”

Veblen against academia turned business

Veblen criticized academic economists for having fallen subject to “trained incapacity” as a result of being turned into factotums to defend rentier interests. Business schools were painting an unrealistic happy-face picture of the economy, teaching financial techniques but leaving out of account the need to reform the economy’s practices and institutions. In a conclusion recalling Veblen’s Higher Education in America, Herman Kahn describes how peer pressure leads experts to accept explanations that deviate from accepted concepts: Educated incapacity often refers to an acquired or learned inability to understand or even perceive a problem, much less a solution. The original phrase, “trained incapacity,” comes from the economist Thorstein Veblen, who used it to refer, among other things, to the inability of those with engineeringor sociology training to understand certain issues which they would have been able to understand if they had not had this training.

Kahn adds that this phenomenon occurs especially “at leading universities in the United States – particularly in the departments of psychology, sociology, and history, and to a degree in the humanities generally. Individuals raised in this milieu often have difficulty with relatively simple degrees of reality testing.” The problem is greatest in economics, of course.

From Marx to Veblen

Early (and most non-Marxist) socialism aimed to achieve greater equality mainly by taxing away unearned rentier income and keeping natural resources and monopolies in the public domain. The Marxist focus on class conflict between industrial employers and workers relegated criticism of rentiers to a secondary position, leaving that fight to more bourgeois reformers. Financial savings were treated as an accumulation of industrial profits, not as the autonomous phenomenon that Marx himself emphasized in Volume 3 of Capital. Headed by Lenin, Marx’s followers discussed finance capital mainly in reference to the drives of imperialism. The ruin of Persia and Egypt was notorious, and creditors installed collectors in the customs houses in Europe’s former Latin American colonies. The major problem anticipated was war spurred by commercial rivalries as the world was being carved up. It was left to Veblen to deal with the rentiers’ increasingly dominant yet corrosive role, extracting their wealth by imposing overhead charges on the rest of society. The campaign for land taxation and even financial reform faded from popular discussion as socialists and other reformers became increasingly Marxist and focused on the industrial exploitation of labor. Veblen described how the rentier classes were on the ascendant rather than being reformed, taxed out of existence or socialized. His Theory of Business Enterprise (1904) emphasized the divergence between productive capacity, the book value of business assets and their stock-market price (what today is called the Q ratio of market price to book value). He saw the rising financial overhead as leading toward corporate bankruptcy and liquidation. Industry was becoming financialized, putting financial gains ahead of production. Today’s financial managers use profits not to invest but to buy up their company’s stock (thus raising the value of their stock options) and pay out as dividends, and even borrow to pay themselves. Hedge funds have become notorious for stripping assets and loading companies down with debt, leaving bankrupt shells in their wake in what George Ackerlof and Paul Romer have characterized as looting. In emphasizing how financial “predation” was hijacking the economy’s technological potential, Veblen’s vision was as materialist and culturally broad as that of Marxists, and as rejecting of the status quo. Technological innovation was reducing costs but breeding monopolies as the Finance, Insurance and Real Estate (FIRE) sectors joined forces to create a financial symbiosis cemented by political insider dealings – and a trivialization of economic theory as it seeks to avoid dealing with society’s failure to achieve its technological potential. The fruits of rising productivity were used to finance robber barons who had no better use of their wealth than to reduce great artworks to the status of ownership trophies and achieve leisure class status by funding business schools and colleges to promote a self-congratulatory but deceptive portrayal of their wealth-grabbing behavior.

Significance of Veblen for Today

As the heirs to classical political economy and the German historical school, the American institutionalists retained rent theory and its corollary idea of unearned income. More than any other institutionalist, Veblen emphasized the dynamics of banks financing real estate speculation and Wall Street maneuvering to organize monopolies and trusts. Yet despite the popularity of his writings with the reading public, his contribution has remained isolated from the academic mainstream, and he did not leave a “school.” The rentier strategy has been to make rent extraction invisible, not the center of attention it occupied in classical political economy. One barely sees today a quantification of the degree to which overhead charges for rent, insurance and interest are rising above the cost of production, even as this prices financialized economies out of world markets.

The narrowing of Chicago-style monetarism and neoliberalism has left the economics discipline in much the state that Max Planck applied to physics from Maxwell to Einstein: Progress occurs one funeral at a time. The old conservatives die off, freeing the way for more progressive successors to take the steering wheel. But what makes today’s economics different is that it actually would help to look backward, to the epoch before the financial sector and its allied rentier interests hijacked the discipline. The most systematic analysis of this process was that of Veblen nearly a century ago. It remains sufficiently relevant that Marxists and more heterodox critics have incorporated his theorizing into their worldview. more

Thursday, October 20, 2016

Carbon taxes and their discontents

Regular readers of this blog know that I am most certainly NOT a fan of carbon taxes.  As a public policy prescription for climate change, they fail on two obvious and disqualifying levels:
  1. Carbon taxes assume that if you just make it more painful to use carbon, folks are just naturally going to figure out how to do with less.  And while this idea works when the subject is discretionary use of energy (water skiing, for example), the overwhelming use of energy is for activities that relate to survival—cooking, growing food, keeping warm, work-related travel, etc.  For the necessary activities, the only solution is to replace the energy consumption with new tools and methods that don't require fire to operate.  Unless carbon taxes are strictly used for infrastructure replacement, they are worse than worthless because they lead to problem #2.
  2. Carbon taxes are the theological equivalent to the extremely controversial doctrine of indulgences. They allow the rich sinner to pay for the forgiveness of his sins.  While indulgences are mostly a cynical fund-raising ploy, they actually do structural damage to the social contract.  For example, Al Gore believes in carbon taxes.  As a very rich man, they would have minimal effect on his lifestyle in any case.  So after he made a small pile on his movie that was supposed to be a warning about climate change, he spent part of the proceedings jetting around in a very nice bizjet—perhaps the most lavish user of carbon fuels ever invented.  And how does he sell this hypocrisy?  He bought some indulgences—some carbon "offsets" and some political speeches about carbon taxes.
And so in the all-so-enlightened state of Washington, some folks have been agitating for carbon taxes because they have convinced themselves that to pass carbon taxes is to be on the bleeding edge of carbon awareness. And because this is mostly a lefty project, it has to pass all sorts of hurdles of political correctness—which is really a bad idea in the case of climate change because the problem is mostly a physics / engineering matter.  Energy matters are not especially enlightened by pre-industrial ideologies.

The following is a long and complex essay and if you want to find out what happens when stale ideas (like indulgences which were around to trigger the Protestant Reformation in 1517) meets a global society run by fuels that simply can no longer be burned, read it all.  I look at it as just another cautionary tale of what happens when folks try to apply Predator Class thinking to a Producer Class problem.

Monday, October 17, 2016

Iceland and USA vs banksters

Of all the forms of human behavior I have paid attention to in life, the one that continues to baffle me is the "soft power" of the creditor classes.  Yes, they provide essential services, but that is a trivial fraction of their activities.  The rest of what they do is just plain naked money-grabbing.  But to hear them describe themselves, they are paragons of financial, political, and moral virtue.  Then, they surround themselves with the trappings of power—bank architecture is so predictable as to be a cliché.  And it works.  They keep their power and no one of significance goes to jail no matter the outrage.

So far, the only place that has managed to rise above the soft power of international finance is Iceland.  It requires a uniquely egalitarian society to rise above the bankster bullshit and they have one. Part of this come from the fact that it is a country small enough so it is possible to actually know who runs the significant elements.  But part is probably the Viking heritage—during a storm in a longboat, no one escaped the dousing when waves broke over the gunwales.  In such conditions, people who didn't understand the concept of "we are all in this together" didn't last all that long.

And so Iceland has thrown their banksters in jail while in USA, they have been returned to their power to loot and given handsome bonuses for keeping the specter of meaningful regulation and enforcement at bay. Not surprisingly, I much prefer the Icelandic approach.

One of the more recent Wikileaks dumps shows how Citigroup managed to surround young Obama with layers of advisors whose job it was to argue that their naked criminality should not have been a crime in the first place.  Notice how accurate Citigroup's list of cabinet appointees turned out to be and this was written well before the election even happened.  To show how successful this operation was, compare it with the Icelandic outcome.  And so the global economy remains in the hands of criminals who can only destroy.  This simply cannot continue.  Turns out the banksters are so destructive, they are about to destroy life on earth as we know it.  It's possible someone will organize resistance to this madness.

Saturday, October 15, 2016

Hillary's "deplorables" and other fun things about 2016

The presidential election of 2016 is SO damn ugly, I mostly just want to look away.  When I worked as a surgical orderly as ordered by my draft board for the "crime" of refusing to participate in their war crimes against the Vietnamese people, I got to see a lot of mindbendingly ugly stuff. My personal "favorite" involved a young motorcyclist who had managed to dribble his head along the pavement without a helmet for a hundred yards.  I got an especially long look because when I arrived to transport him to surgery, the folks from neurology were still debating whether his brain waves had been flat for the required 24 hours.  Meanwhile transplant was screaming a wide assortment of doctor-level curses at them because they had already prepped recipients who were NOT going to be happy if the brain jocks lost the donor. (Which is exactly what happened.  The rules and technologies have changed since then. For example, improved preservation techniques have extended the time available between harvesting and transplant. In 1971 they still needed a "live" donor.)

In my mind, this election is THAT ugly.

And because politics has strayed SO far from its intended objective of presenting alternative solutions to the problems of the day, it has become actually worse than simply useless.  I believe the absurdity of this contest can be summed up when the party of the Kennedys and Bill Clinton resorts to calling out a known womanizer for his sexual appetites.  At least Donald Trump hasn't driven anyone off a bridge yet.  But let's not quibble.  Discussing sex is what politics has come to.  And here I am wondering when the adults will start insisting on how we are ever going to confront the serious matters like climate change and the other environmental disasters.  Our schools are a disaster and serve no function other than to deliver the young into debt slavery.  Our main channels of communication have been seized by skilled liars who stupefy the public with insane propaganda.  But we can still talk about sex so we aren't quite the brain-dead donor material we should be by rights.

My world is especially conflicted because I have to assume that the vast majority of my pet Producing Classes are Trump supporters.  They are the ones who have been on wrong end of neoliberalism for over a generation and are looking for someone, anyone, who will speak for their economic and social interests.  Trump may have his flaws, goes their reasoning, but he is the closest thing to what they are looking for in MANY election cycles.  At least he has built something.  It may be as useless as another golf course, as ugly as an Atlantic City casino, and as socially destructive as overpriced housing for New York's mega-Predators, but it is something!  We can fill in the blanks later, say the Producers who are hoping for somebody to represent their world-view.

And so the party of the so-called working class is represented by a woman who utterly loathes the Producing Classes.  She actually has called them "deplorables."  And Hillary, I hate to tell you this, but you ARE going to need these people to succeed.  And while the great success of neoliberalism has been to lower the life expectancies of the Producers, they probably are not all going to go gently into that good night.  If you manage to win this election, your problems will have only begun.  Which is an amazing thing to contemplate considering you are already the most hated woman in the history of the planet. And we know this for a certainty because you have surrounded yourself with some of the most deplorable people to have ever set out to "serve" the public.

Paul Street provides a short list of some of Ms. Clinton's most deplorable advisors.  Read it and weep.

Monday, October 10, 2016

About that "recovery" since 2008

Of all the dangerous beliefs in magic / the miraculous, the belief that debt will lead to prosperity is arguably the most wrongheaded.  But it persists for a simple reason—for the creditor classes debt is a very good idea indeed.  Turns out it is still better to own slaves than to be one.  So to keep the idea alive that debt is a good idea, the creditor classes have bought up almost the whole economics world.  The escapees from this ideological prison are very few indeed.  I have been following this issue for most of my adult life and would hard-pressed to name 20.  Two of my favorites are Ellen Brown who concentrates on the question "Why should the simple act of issuing money automatically lead to debt?" and Michael Hudson who wonders why the creditor classes get to write all the economic rules.  This concentration on debt is extremely important now that debt has soared to levels never seen before in history.

Once, while in Florida, I met a man who had relocated from Buffalo New York—a place notorious for its huge lake effects snow storms.  "Couldn't handle the snow?" I kidded.  "Snow?" he responded, "I LIKE snow.  What I couldn't get around was the fact that Buffalo never recovered from the recession of 1957" (this was 1989.)  I remember this crack often because without some major economic course corrections, societies don't really recover from the big recessions.  I am occasionally prone to this sort of thinking myself—I remain convinced that USA has never really recovered from the recession of 1981-82 and can speak to that point for several hours without notes.

So here we have Mr. Hudson making a pretty strong case that the world hasn't really recovered from the recession of 2007-2008 and that even the most establishment / reactionary organizations like the IMF are finally admitting that nothing has been fixed to prevent almost exactly the same thing from happening again only this time with Deutsche Bank acting in the role of Lehman Brothers.  In fairness to Hudson, he is probably the king of the long-term perspective and will often recall something the Sumerians did in 3000 BCE.  So of course he is correct about not having done anything about the structural problems that made the collapse of the let's-pretend economy in 2007-08 mathematically inevitable.  I am pretty sure he uses this example because more people remember that economic disaster a lot better than anything the Sumerians did.

Monday, October 3, 2016

WW II style mobilization on climate change?

World War II levels of mobilization to combat the problems of climate change seems to a be goal mentioned once again in a country that has been ignoring the problem for far too long.  I confess, I use the comparison myself.  When one looks at the incredible accomplishments of the WW II generation in terms of producing new things in a very short time, this is the model whether the project was nuclear power or the mass production of antibiotics (penicillin.) Unfortunately nothing, but nothing gets accomplished so fast these days.

Of course, this speed points to the big problem facing those who who propose we just do that again.  For example, arguably the best fighter plane of WW II was the P-51 Mustang.  From the time the contract was signed to build this plane until it first flew was 151 days.  By contrast, the F-35, the lastest fighter plane to be built for the USA military had its first development contract signed 16 NOV 1996 and it isn't ready for service yet in 2016.

Jimmy Carter addressed the massive problems caused by the crises in fossil fuel in a speech given 18 April 1977.  Like the ex-Navel officer he was, he called those problems "the moral equivalent of war."  We are using more petroluem now than in 1977—so much for war-time problem solving. Sounds more like a F-35 boondoggle.

So here we have Stan Cox talking about a WW II-style mobilization to counter the effects of climate change.  I mostly agree with this analysis.  What I wonder is—do we still know how to mobilize for big projects?  I got to meet some of those giants of WW II production.  I don't meet people like that anymore.

Friday, September 30, 2016

That damn Riksbank Prize

Even though I almost never read fiction, I got talked into the Stieg Larsson crime thrillers starring a grown-up Pippi Longstocking Goth hacker (Lisbeth Salander) and her link to the outside world—an investigative journalist for a lefty rag (Mikael Blomqvist).  Part of the attraction was the notion that a man named Larsson could write so well.  But mostly these stories partly answered a question that has gnawed at me since I first visited Olaf Palme's Sweden in 1970 "When the Social Democrats were in power for over 40 years, what was the Swedish right wing up to?"  Larsson includes a whole bunch of examples—like the brother who became a Nazi in the 1930s and lost his life helping Finland fight the USSR—a totally believable scenario.

But nothing, but nothing, tops the triumph of the Nordic right wing than their misnamed "Nobel" in economic sciences.  By giving their prize to a wide assortment of crackpots, charlatans, and fools, the Swedes managed to undo almost every bit of progress ever made by the Social Democrats.  The triumph is so total that now even the Social Democratic Party regularly endorses the principles of neoliberalism.

I watched this process but I never really got a handle on how the economics profession got taken over by religious nuts.  But knowing how Scandinavians organize their small groups, I always suspected that there was probably one person with the combination of charm and browbeating who managed to set the agenda.  Well there is now a new book out—The Nobel factor: the prize in economics, social democracy, and the market turn—that describes the process of prizewinner selection and the one guy has a name—Assar Lindbeck.  The neoliberals have had a wide assortment of bad guys from Pinochet's thugs guided by the Chicago boys to Gaidar who helped loot the USSR with the advice of Jeffrey Sachs and the wünderkind from Harvard.  But the real bad guy is Assar Lindbeck because he poisoned the intellectual well.  The neoliberal madness he elevated to international fame will lie around in libraries like so much toxic waste ready to seduce gullible young minds for a very long time.

Monday, September 26, 2016

Moneylenders and their illusory social utility (update)

One of the more popular posts recently was Tony' epic takedown of those who believe that money-lending is an unalloyed good.  That this is not true should be blindingly obvious to anyone who can count.  Tony made sure everyone could understand.

The biggest problem, by far, is the excessive size of the financial sector.  The society simply cannot support such a huge parasitic / Predatory population.

Of course, since the real economy needs nowhere near such a large financial sector, there is almost no way for them to generate enough income from legitimate business to keep the doors open—much less provide for the pay scales the banksters seem to think is their due.  So not surprisingly, eventually all of them resort to fraud. Bernie Sanders made the claim “the business model of Wall Street is fraud.” That was the statement Tony was defending, after all. In fact, as William Black argues below starting at the 17:30 mark, fraud has become the organizing principle of banking—without it, most large banks are unprofitable.

Wednesday, September 21, 2016

Volkswagen the best?

When Volkswagen was caught cheating on its emissions tests in USA, the vilification was widespread, not to mention expensive.  At the time, I was sure that VW was not the only one cheating.  What I didn't predict was that VW was building the cleanest diesels being sold.  Well, according to the Europeans, that is exactly the case.  Which doesn't surprise me at all.  Nor does it surprise me that Fiat and Suzuki are the worst.

Monday, September 19, 2016

Does Trump have a chance of winning?

That Donald Trump believes windmills are ugly is enough to eliminate him from serious consideration in my mind. Especially considering the ugly structures he has put up. And that's just the beginning.  Even so, he has a decent chance of actually winning this election.  He is running against a woman who has carried a LOT of water for the neoliberal / neocon establishment and most people are FURIOUS at that crowd these days.  So even though he has never held any elected office, makes a political "gaffe" per hour, holds positions that are, at best, partially thought out, and is getting beat up by the cultural elites on a 24/7 basis, he still stands a reasonable chance of winning.

Not surprisingly, two of my favorite writers on political matters have weighed in on this paradox. Pepe Escobar actually believes that there is an establishment faction that doesn't believe that globalization has been good for the country.  And that this group is secretly greasing the skids for Trump.  Now I am sure that there are groups that are uncomfortable with the idea that China now makes parts for the defense industry, and other reasons for economic nationalism, but they have had precious few victories since 1973.  The neoliberals have been on a serious roll so if there is a secret wing of the establishment supporting Trump's economic nationalism, they have been deep underground for the better part of two generations. Losing.  But this essay is by Escobar so it is an interesting idea.

Raimondo concentrates on the reasons to believe the global elites are in a full-blown panic.  It is not just Trump, it's Brexit, Marie LePen, and AfD winning more votes than Angela Merkel in her home district in Germany.  I am not so sure the elites have all that much to worry about.  Yes the proles are angry enough to dust off the guillotine but their problem is that they have no alternative plans.  The fact that there are folks actually talking seriously about Marx again only proves there isn't much out there yet to summon the troops to arms (or whatever.)

Monday, September 12, 2016

Tales of conversion—electric cars

Germany has set a goal to have 1-1.5 million electric cars on the road by 2020.  DW sets out to discover just how realistic such a goal is.
  • Part One: DW crew of two leaves Berlin in a VW electric car. Discovers the problems of using recharging stations.  Meets up with a convention of hard-core electric-car enthusiasts in Leipzig.
  • Part Two: Getting around 100 km per charge, the crew make a four-stop drive to Munich where they swap their ride for a BMW i3.  BMW has sold 25,000 of these—20,000 in USA.  33 kWh configuration starting at $44k.
  • Part Three: The possibility is explored that progress towards an electric fleet may hinge on outside actors.  The DW crew visits a promising but flawed effort by the technology students in Munich, a conversion shop swapping electric drivetrains for original IC power-plants, and perhaps amusingly, a shop that electrifies old Citroen 2CVs (last produced in 1990) for around 16,000 Euros.
  • Part Four: Stuttgart has a shared fleet of 500 electric Smart cars.  The experience is sampled before a visit to the Bosch battery works.  90% of lithium batteries are already made in Asia.  Bosch isn't going to change much—a typical German auto supplier tied to long-cycle development times.  Daimler has promised to convert their entire line to optional electric.  Actually, they don't have much hardware yet.
  • Part Five: The electric Mercedes b-type proves amazingly frustrating.  Short range combined with crazy recharge times made this leg an ordeal.
  • Part Six: The DW crew discovers the recharging problems are being caused by the undersized cable provided by the Benz PR department.  One final car swap brings another VW—an electric Golf.
  • Discussion of why German efforts at e-mobility are so lame.
Watching this series of short video clips was great fun but it highlights all sorts of problems associated with any serious effort to convert the transportation system to electric power.
  • The German automobile industry is not taking the problem seriously.  When your company has been building Bahn-Burners for over 100 years, it requires a huge intellectual leap to start building e-cars.  It shows.  With the possible exception of the BMW i3, all the e-cars provided by the big producers were battery powered conversions of their current IC lines (i.e. the VW e-Golf.) None had a ground up design.
  • The charging infrastructure is completely disorganized—to use all 6500 charging stations in Germany requires over 250 different smart cards.  Electric cars are considered urban runabouts—intercity travel has barely registered on anyone's radar.
  • The Germans still consider electric cars a low-grade torture device—certainly the trip by the DW crew qualifies as an ordeal.  Cars are a big expense—no one wants theirs to make them miserable.
On the other hand, Tesla...

If it were not for Elon Musk and Tesla, those pathetic German efforts would probably seem like progress.  But they don't because Tesla is:
  • Building imaginative and superbly engineered cars that were designed from the ground up to be electric cars.  Before Tesla, no one knew that electric cars could have all sorts of meaningful advantages.  Now anyone interested knows what they are.
  • Not building hairshirt cars.  The S and X models can be configured to have supercar performance.  And when not driven at license-losing speeds, this available energy translates into respectable range. 
  • Building its own recharging infrastructure.
Like all true Producer Class superstars, Musk is a man of vision.  He clearly sees a possible future where his efforts actually result in a better world.  Below are his comments on the occasion of the opening of phase one of his giga-battery factory.  What is so charming about his remarks is that he has discovered that the facilities to make spectacular products are more difficult to design and execute than the products themselves.  He understands the rationale for vertical integration on the molecular level.  At one point (13:00) he actually babbles about his love for manufacturing.  It's very cute!

If you have watched part five above and cowered with our intrepid DW crew as they toddle along at 80 kph in the right lane of the autobahn in order to conserve battery range, you might enjoy this Tesla's blast down an unrestricted stretch of autobahn in Northern Germany.  As the driver touches 250 kph he is heard to say, "please don't blow a tire—I love my wife."

Just remember, 250 kph is 155 mph.  This is faster than I have ever driven.  Because of Musk, we know that electric cars are the future.  We also know that any meaningful effort to change the atmospheric CO2 levels will only be accomplished with the efforts of such Producer Class superstars.

Monday, September 5, 2016

Business Insider lowballs the costs to fight climate change

That a serious program for combatting climate change will cost at LEAST $100 trillion is a bedrock principle around here.  Even so, I always look at anyone who is willing to put a number on such a project—even if it hopelessly underestimates the magnitude of the problem.

Rafi Letzter is one of the new young writers for Business Insider—I have never noticed anything by this person before.  And the writing and perspective is pretty damn good—climate change is already well under way and we as a nation have signed on to coming up with a solution.  So now the question is, what will this cost.  And the person chosen to provide this cost estimate is a business economist from Columbia.

Geoffrey Heal has a very impressive academic CV—18 books and 200 academic articles.  He is a member of Columbia's Earth Institute—the very same place where Jeffrey Sachs hangs his hat.  But keep in mind we are talking about an econ professor at an institution at least as reactionary as Stanford or the University of Chicago.  So we expect some routine errors to be baked into his assumptions including:
  • It is possible to take the total energy consumption and figure out how much it would cost to build that capacity with windmills and solar cells.  Of course, this is insane because while it (almost) applies to applications like stationary power plants, it doesn't apply to aircraft, agricultural machinery, or ships at sea.  The costs of electrifying the whole infrastructure seems to have been left out of his thinking.
  • Corruption! Any project this big will attract the Leisure Class charlatans in their masses.  We are not only talking contracting graft here—we are also talking about the soft core corruption of the endless bureaucracies of the pretty regulators.  Remember, over 90% of Superfund money went for office rents, etc. and less than 10% was spent on remediation.
  • Privatized!  Heal cannot imagine any big building project being anything but a private venture.  A big WPA project was not even considered.  I cannot even imagine something this complex without massive public investment.
  • There is a virtue in trying to save the climate on the cheap.  Well, Heal, since operating the public spaces on the cheap is what has led to the problem in the first place, suggesting that this could be done for something between $1-5 trillion shows how little you think of a livable planet.
The very next day, Letzter posts another article pointing out the problems with Heal's analysis (also included below).  I will probably read Letzter again.  Heal, probably not.

Friday, September 2, 2016

Historical context for the economics of this blog

Possibly the most stupid, embarrassing, social faux pas I have ever made came when I was in Finland trying to promote a book.  I was introduced by an earnest grad student who claimed I was most like the American Sociologist C. Wright Mills.  Now I happen to be a big fan of Mills.  I am pretty sure that I read no book at the university that was more interesting and important as his Power Elite.  I have read more interesting books since but at 21, Mills hit me like a lightening bolt.  So being compared to Mills was enough to trigger a major humility mode.  I'm surprised I didn't try to dig my toe into the floor.  "Oh no no," I actually heard myself say aloud, "I am not like Mills at all."

The kid who introduced me looked baffled.  As well he should have been.  After all, by merely reading my book he had deduced the Mills comparison.  He had no idea the role the Power Elite had had on my very survival as a student.  In fact, he should have been given an A+ for insight.  Besides, he was merely trying to locate me in the intellectual universe and this reference was a LONG way from misleading.

One of the more interesting intellectual exercises that fascinate the Veblen scholars is the question, "Where DID he get his ideas?"  He didn't learn much from his (very reactionary) economics professors like John Bates Clark and in fact spent the rest of his life refuting their beliefs.   His Ph.D. was on Kant.  So there isn't much there.  The attempts to link Veblen to Marx border on ridiculous.  So we are left with the obvious possibility that Veblen was a genuine original.  Of course, we cannot discount the fact that his original exposure to economics was the struggle by his family and neighbors organizing an economy at the very edge of civilization using the tools that could be hauled in a small wagon.

Veblen would become impatient with "scholars" who did nothing but categorize schools of thought.  One of his more withering criticisms was to call some intellectual pursuit "mere taxonomy."  Of course the people who do organize intellectual pursuits into roots and branches perform a useful service (if done well) but merely naming something explains almost nothing about the thing being named.

With those disclaimers, I must admit I found the following explanation for the various schools of economic thought very interesting.  It was produced by a group (or person) who wrote: SOCIAL DEMOCRACY FOR THE 21ST CENTURY: AN ALTERNATIVE TO THE MODERN LEFT

I have highlighted where I find myself.  This may be mere taxonomy but it is damn good!

Monday, August 29, 2016

Humans have caused climate change for at least 180 years

As part of my video project, I have created a graph that compares the big changes triggered by the ingenuity of the Industrial Revolution and the increase in atmospheric CO2.  This graph will be animated and the central focus surrounds the first mathematical description of the relationship between CO2 and changes in climate first postulated by Svante Arhennius in 1896.  If we date the start of the Industrial Revolution at 1750, the changes had been happening for 146 years before a Nobel winning chemist noticed them.  Interestingly, those 146 years had only increased atmospheric CO2 by about 20 ppm.  That is roughly the same amount as the increase since 2004.  No wonder it required a world-class chemist to figure it out back then.

The CO2 levels are indicated by the yellow line with the light blue fill underneath.  Click to enlarge.

As research methods and instrumentation have gotten better, it now seems pretty obvious that the climate started to change almost as soon as humans got serious about burning coal.  Which makes perfect sense when you think about it.  After all, coal is a form of carbon that had been put into long-term storage before humans discovered all the useful things that could be done with those dirty rocks.

Monday, August 22, 2016

Climate change and air conditioning

Perhaps the least surprising news about economic "development" and climate change is that soon after a family in China (or similar) gets a TV, thoughts turn to the one device that helps them cope with their increasingly hot and miserable lives—air conditioning.  And it doesn't take long for people to view their artificially cooled lives as a necessity ranking right up there with a roof that keeps out the rain.

While it IS possible to build very comfortable structures that don't require tons of cooling, the easiest and most reliable way is to plunk down the money for that humming compressor that spits out cool air.  Those who try it tend to really like it,  Suddenly, miserable places are transformed into the Sun Belt.

The problem is that air conditioning is a notorious energy hog.  And when the electricity to run these things come from burning coal, massive cooling leads to hotter climates.  Of course, it doesn't have to be that way.  Cooling loads tend to be highest whenever the sun shines brightest.  Bingo.  Solar-powered cooling is physically possible so in theory, this should become one of the next big marketing opportunities.  We will see if that happens because right now, the boom in air conditioning is being supplied with technologies that assume electricity from a reliable power grid.

Monday, August 15, 2016

Is Russia really going to throw Neoliberalism overboard?

Those of us who hail from the heterodox economic traditions keep wondering in some amazement at the persistence of neoliberal thought.  I mean, how much evidence of failure will it take to discredit these people?  We have had major meltdowns and corruption on a scale so vast that it boggles the mind in just the last 25 years and yet the persistence of belief marches on.  It's not that I have not had experience with this sort of behavior before.  My mother once got a letter from a 95-year-old friend who was very sick.  In spite of his age and health, he closed with a paragraph stating that he was still convinced that the Lord Jesus Christ was coming back during his lifetime to take him home to heaven.  He had believed that he would be Raptured since he was a teenager—why stop now?  He died in less than two weeks.

This is what I think of when I read that some neoliberal believes that high interest rates are good for the economy or that privatizing a public good leads to greater prosperity.  Makes a belief in the Rapture look positively enlightened by comparison.  In the case of Russia, we find the toxic waste of neoliberalism crippling an economy already under stress from organized economic sanctions and a dramatic fall in the price for oil—Russia's big deal export.  Russia's economy should logically be on a wartime footing given the external threat.  And yes, there have been some remarkably successful war economies organized in traditionally capitalist havens (see USA 1941-45).  If you look at these successful war economies, they look almost nothing like neoliberalism.  So why has V. Putin chosen to keep the Yeltsin-era neoliberals around to mismanage his economy when almost anything else would make his country stronger and more able to cope with external threats?  Good. Damn. Question.

It turns out Mr. Putin has been asking this very question.  And he looks like he is about to throw some neoliberals overboard.  If he thinks the western press has been hostile, wait until his tries ridding himself of the official economic religion.  Insane Tyrant will be the kindest description by the folks at the Guardian.

Of course, this conversion to a more rational economics may still be wishful thinking.  The writers below who argue that Russia is going to try something else, Engdahl, Hudson, and Roberts, are known critics of the neoliberal madness.  They want someone (with a reasonable chance of success) to try the heterodox methods.  There is a lot of pride on the line here.  I know how that feels.  It has been nearly 30 years now since I first reassembled the most successful ideas of the USA Progressives from 1873-1973—the effort that led to Elegant Technology.  With every bump and crash that demonstrates once again how neoliberalism tends towards Gilded Age Neofeudalism I ask myself—will anyone with the necessary clout ever stand up to this crazy thinking?  It's only the survival of the species that's at stake, after all.

Monday, August 8, 2016

Ellen Brown on Green Party economics

Ellen Brown probably knows more about the history of the various monetary debates that have swept USA since before it was a nation than anyone I can think of.  So we can reasonably assume that she has some grasp of just how difficult it is to mount a meaningful assault on the conventional "wisdom" of the "sound money" crowd.  The fiat currency folks have all the good arguments on their side and have been supported by such luminaries as Franklin, Peter Cooper, and Edison.  Yet even today, someone like Hillary Clinton is at least as big a monetary reactionary as William McKinley.  I honestly have no idea why the sound money crowd never seems to go away no matter how many economic disasters can be laid at their door.  But my best guess is that the simplicity of their argument must connect with the public's inner moron.

And so our dear Ellen keeps on trucking.  Like most people of her worldview, she seems to think that some day people will tire of the non-stop disaster that is neoliberalism and want an alternative.  And by gawd, she has found several.  So today she dissects the economic arguments of Jill Stein, the head of the Green Party ticket, and finds quite a lot to recommend it.

Saturday, August 6, 2016

You simply must see this—Assange on the state of USA elections

Julian Assange special: Do Wikileaks have the email that will put Hillary Clinton in prison? (E376)6 Aug, 2016

Afshin Rattansi goes underground with Julian Assange. We talk to the founder of Wikileaks about how the recent DNC leaks have no connection to Russia. Plus what are Hillary Clinton's connections to Islamic State, Saudi Arabia and Russia?

It must be odd to be Julian Assange.  He is trapped in the Ecuadorean embassy which is far from the worst place to sit out official persecution—think Martin Luther in the Wittenberg Castle.  Except that Assange is hooked into the global intelligence in ways that Luther couldn't even imagine.  And because of his ability to view documents that are meant to be hidden, he is arguably the most informed human to have ever lived.

Not surprisingly, since his mission in life seems to be exposing liars, his focus tends to be on the Leisure / Predator classes—because that is where liars tend to congregate.  From a Producer POV, for once I am not insulted by being ignored.  After all, a passionate devotion to honesty is the top drawer of the Producer toolset.  So GO Julian!

Wednesday, August 3, 2016

Environmental records shattered

Well, the scientists have once again delivered the very bad news—climate change is now definitely underway and these crazy-hot summers are the new normal.  People are getting very frightened and are becoming very impatient that the brains that can measure this change are not proposing genuine strategies for how to cope.  And time is running out.

I have been beavering away at producing my version of a serious strategy but it is a ton of work and I have the ambition of a 67-year-old man who sometimes gets beaten down by the magnitude of the problem.  On the other hand, getting back up to speed with Adobe After Effects has been fun.  I am pretty sure the last time I used it it was version 4.x and now it's up to 13.8.  So because it's Adobe, every button has been moved (gaaah).  The good news is that it is much more versatile.

I want to use every tool I can find to make things VERY clear.  After all, climate change is easily the biggest problem that has ever faced the human species.  However, the methods to solve this massive problem are well within the range of human possibilities.  The goal is to convey these two messages as understandably as possible.

And so I am actually working on an extremely positive story.  I only hope I have the energy to finish this monster.

Monday, August 1, 2016

Essays on the Democratic National Convention

As a young political junkie, I used to watch the political conventions with an almost religious fervor.  I stayed up to watch Barry Goldwater deliver his "extremism in the defense of liberty is no vice, moderation in the pursuit of justice is no virtue" speech from the Cow Palace in 1964.  I watched George McGovern deliver his "Come Home America" acceptance speech delivered at 3:00 am in 1972.  I sputtered in helpless rage as the Chicago police rioted in 1968 essentially beating anyone they could reach.  But as political conventions became more scripted, they became a whole lot less interesting.  This year I made a conscious effort to not watch these circuses.  I am just too old to survive such intense lying.

Of course, this doesn't mean I wasn't curious about the proceedings.  So I watched Colbert's coverage and read dispatches on sites I trusted.  And if these reports are to be believed—and there is no reason not to—these gatherings were even worse than I had imagined they would be.  Here are three of the best dispatches from the front.

First up we have an angry and heartfelt blast from Margot Kidder who was raised outside the bubble of "American Exceptionalism."  Swaggering arrogance is never welcome but when it comes dressed in the garb of the best the MIC has to offer, it becomes positively revolting and there is probably no way Ms. Kidder could be talked down from her righteous rage—even by someone like me who detests "exceptionalism" as much as she does.  So I'll just say, "You Go Girl."

Next we find Jeffrey St. Claire pointing out some of the absurdities of the Democratic Convention. (He even quotes Hunter Thompson.) It's quite a list and he still probably missed a few.  The problem the Democrats have is they claim to represent the interests of the average Joe—the same average Joe who hasn't had a raise since 1973—while in fact they have become an arm of global predatory lending.  Then there is the problem of promoting an "It Takes a Village" concern for humanity while at the same time promoting a belligerent militarism that would make Dr. Strangelove cringe.

Finally we get a report about the Wikileaks disclosure of the shenanigans practiced at the DNC against Bernie Sanders. Writer Patrick Lawrence marvels at the speed which this story of political corruption became a story about the evils of Putin and Russian intelligence.  Now I have NO idea if this is Putin's handiwork—Lord knows he has plenty of reasons to loathe Hillary Clinton.  But those of us who believe in fair elections must celebrate whoever posted the evidence that the Democratic nominating process was rigged.  My guess is that this point will be lost because after all, fair elections are not nearly so profitable and amusing as a new Cold War will be.

Sunday, July 24, 2016

The Historical Context of Mercantilism, Republicanism, Liberalism and Neoliberalism

After the financial crash of 2007-2008 caused an economic collapse, and after it became clear that the Bush and Obama administrations were unwilling to actually investigate, prosecute and incarcerate financial and banking executives for the crimes committed, many politically active people in USA and other countries began to dig deep into the philosophy of political economy that had allowed the financial industry to occupy such an overwhelming position of dominance over the rest of the economy.

The philosophical wreckage they have been excavating has generally come to be called "neoliberalism." It is a word which confuses many people, because it serves as a name for a set of economic beliefs and policies which are more easily recognized as being associated with political conservatism and libertarianism: the opening of the Wikipedia entry on "neoliberalism" is accurate enough on these economic beliefs and policies, which "include extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy." Generally, neoliberals believe that markets with untrammeled pricing mechanisms are a much fairer and more efficient means of allocating society's resources than any level of government oversight and intervention.

Neoliberals themselves actively seek to add to the confusion by denying they have a shared, coherent philosophy. A good, recent example—and from someone who is a self-professed "liberal" not a conservative—was this comment on DailyKos this past week: “Neoliberalism is not actually a thing.” It is exactly what neo-liberals themselves say. It is a smokescreen, intended to confuse and stymie inquiry. Philip Mirowski, a historian of economic thought at Notre Dame, and co-editor of one of the best expositions of neo-liberalism (The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, Harvard University Press, 2009; now available in paperback), took on this deception earlier this year in a paper entitled, The Political Movement that Dared not Speak its own Name.

Mirowski’s response to the severe reaction of neoliberals to his paper was posted to Naked Capitalism in April 2016: Philip Mirowski: This is Water, or Is It the Neoliberal Thought Collective?
I do not recommend anyone go read the above links right now, unless you are already familiar with the debate over neoliberalism and are prepared for some hefty intellectual lifting. For those people unfamiliar with the term “neoliberalism” and seeking to understand how it differs from liberalism, I recommend this excellent review of another book, including many of the comments in the thread, on
Naked Capitalism in March 2015: Comments on David Harvey’s “A Brief History of Neoliberalism”.

These are all excellent discussions and expositions of neoliberalism. Also excellent is the work of Corey Robin. See, for example, When Neoliberalism Was Young: A Lookback on Clintonism before Clinton, from April 2016, and Robin's response to critics. Robin puts his finger on a diseased main artery in our political discourse today, when he writes neoliberals, even those, such as Barack Obama and the Clintons, who refuse to call themselves neoliberals,
would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.”
My own conclusion thus far is that much confusion will persist until neoliberalism is understood in the historical context of USA political economy, along with three other terms crucial to understanding this history: