Your weekly excerpt from one of my books. This week: "The Hidden History of Neoliberalism: How Reaganism Gutted America and How to Restore Its Greatness"
Well that was the long answer to the question. I think that the “auto-correction” of efficiency has gone out the window because player in the markets have changed it so that only a few benefit and the less intervention the more that benefit is seen at the top of the curve. And this version has thrown consumers completely under the bus too. See the book “the Man who broke Capitalism” for some of this information. As best as I can see it is Vulture Capitalism and the only thing left is for governments to get involved to change the dynamics so that these markets work for more that just a limited few.
IMHO a few minor changes in the law would straighten things out....like making the protection of public interest the top criteria for corporations. If I were king, I'd federalize corporation law.
Not sure of this, but I believe that in the early years corporations were required on a routine basis to demonstrate their benefits to the community in order to be rechartered. Seems a good policy to for reinstatement.
Depended on stagte law. The last state that forbid political contributions to corporations was Montsna, but the law was struck in the wake of Citizens' United.
And back in the Gilded Age there was a certain amount of societal expectation that corporations "give back" and hence the creation of large foundations that support education, art and science that persist to this day (Rockefeller Foundation, etc.). Thanks to Milton Friedman, corporations are no longer hampered by this "moralistic" overlay.
In this country, the Chicago school of economics, which begat right wing politics. Key members of the Chicago School of Economics include early scholars like Frank Knight, Henry Simons, and Jacob Viner, and later prominent figures such as Milton Friedman, George Stigler, Gary Becker, Ronald Coase, Robert Lucas, and Eugene Fama. The school, known for its emphasis on free markets, individual rationality, and minimal government intervention, developed at the University of Chicago, with these economists contributing significantly to the field through their work on price theory, human capital, and efficient markets
Excerpt" In 2007, the University of Chicago Press estimated that more than 350,000 copies of The Road to Serfdom have been sold. It appears on Martin Seymour-Smith's list of the 100 Most Influential Books Ever Written, and it made number 1 on Human Events: Top Ten Books Every Republican Congressman Should Read in 2006. It was influential enough to warrant mention during the 1945 British general election, when according to Harold Macmillan, Winston Churchill was "fortified in his apprehensions [of a Labour government] by reading Professor Hayek's The Road to Serfdom] when he warned in an election broadcast in 1945 that a socialist system would "have to fall back on some form of Gestapo". The Labour leader Clement Attlee responded in his election broadcast by claiming that what Churchill had said was the "second-hand version of the academic views of an Austrian professor, Friedrich August von Hayek."
Hayek taught at the University of Chicago from 1950 to 1962, although he did not primarily teach economics within the Economics Department. Instead, he held a professorship in Social and Moral Science on the Committee on Social Thought, focusing more on political philosophy than economics.
Exerpt. "According to Orwell, Animal Farm reflects events leading up to the Russian Revolution of 1917 and then on into the Stalinist era of the Soviet Union, a period when Russia lived under the Marxist–Leninist ideology of Joseph Stalin. Orwell, a democratic socialist,[9] was a critic of Stalin and hostile to Moscow-directed Stalinism, an attitude that was critically shaped by his experiences during the Barcelona May Days conflicts between the POUM and Stalinist forces, during the Spanish Civil War.[10][a] In a letter to Yvonne Davet (a French writer), Orwell described Animal Farm as a satirical tale against Stalin ("un conte satirique contre Staline"), and in his essay, "Why I Write" (1946), wrote: "Animal Farm was the first book in which I tried, with full consciousness of what I was doing, to fuse political purpose and artistic purpose into one whole."
In the law AI The Chicago School's influence on American jurisprudence is based on several key tenets:
Emphasis on efficiency: The central argument, advanced by scholars like Richard Posner and Robert Bork, is that legal rules should be designed to maximize social wealth and overall economic efficiency. As Posner wrote in his seminal 1973 book, Economic Analysis of Law, the common law already tends toward efficiency, but economic analysis can push it further.
Neoclassical price theory: This methodology applies basic microeconomic principles, such as rational, profit-maximizing behavior, to predict the effects of legal rules on individuals and businesses. It encourages policymakers and judges to evaluate potential market interventions with skepticism, assuming that free markets are often self-correcting and more efficient than regulation.
Incentives over morals: The approach focuses on how laws alter incentives rather than on traditional moral or ethical judgments. For example, economist Gary Becker argued that criminal sentences primarily serve as an economic deterrent rather than as moral retribution.
Influence across legal fields
The law and economics movement has left its mark on many areas of American law:
Antitrust: This is the field most reshaped by the Chicago School. The school's emphasis on efficiency led to the relaxation of antitrust enforcement in the latter half of the 20th century.
Focus on consumer welfare: Chicago School advocates, including Judge Robert Bork in his influential book The Antitrust Paradox, argued that the sole purpose of antitrust law should be to maximize "consumer welfare" through efficiency, not to protect small competitors.
Shift in legal standards: This led courts to move away from per se rules that automatically prohibited certain business conduct, such as vertical non-price restraints. Instead, courts adopted the "rule of reason," which required a more extensive economic analysis of the conduct's actual effects.
Tort law: Richard Posner's work applied economic analysis to tort law, arguing that liability rules should minimize the combined costs of accidents and accident prevention. For example, the Hand formula for negligence, first articulated by Judge Learned Hand, can be seen as a precursor to this type of cost-benefit analysis.
Contracts and property law: Economic analysis has been used to justify existing common law doctrines, such as rules concerning lost and abandoned property, based on how they incentivize efficient behavior.
Criminal law: The school's focus on incentives extended to criminal justice, with scholars like Gary Becker exploring how sentences act as deterrents.
Broader impacts on the judiciary and legal thought
Beyond specific legal doctrines, the Chicago School's influence changed the legal landscape more broadly:
Judicial education: Programs funded by Chicago School adherents trained federal judges in economic principles, influencing their decision-making in economically complex cases.
Increased academic rigor: The movement forced the legal field to become more quantitative and rigorous, pushing legal scholarship to consider empirical evidence and the practical consequences of legal rules.
Ideological shift: By framing legal issues in terms of efficiency, the Chicago School promoted a more conservative, free-market-oriented judicial philosophy. Research shows that judges exposed to these ideas are more skeptical of regulation and may impose longer sentences.
I've discussed previously how Posner and Scalia, who BTW also once taught at UC, had a falling out and that Posner began to reevaluate his positions.
Critics argue that the Chicago economic movement inappropriately subordinates legal principles to economic theory and that its emphasis on efficiency neglects other important considerations, such as fairness, equity, and the protection of vulnerable groups.
Oversimplification of markets: Opponents contend that the Chicago School's models of rational actors in perfectly self-correcting markets are unrealistic and ignore market failures caused by imperfect information, cognitive biases, and political power.
Neo-Chicago and post-Chicago schools: The Chicago School's dominance gave rise to competing schools of thought. The "post-Chicago" school incorporates more modern and realistic economic theories, including strategic behavior and game theory, to argue for more robust regulation.
I. E.G. am an advocate for transactional analysis.
It is ironic that the 2016 popular book on household economics, "The Index Card" was written by my good friend Harold Pollack at the University of Chicago. By that time, I was already comfortably retired. I told Harold that everything he encouraged in that book had worked for me.
My personal opinion as to why Harold was getting rave reviews was that it was enlightened by what my friend Dean Baker at the DC Center for Economic Policy Research so beautifully described in his 2016 book, "Rigged: How Globalization and the Rules of the Modern Economy Were Structured To Make the Rich Richer." Like the lessons of Harold's book, I had to learn how the "system" was rigged at Hardknocks University before I could make it work for me. Getting rich was not my goal in life; avoiding a life in poverty was.
The rigged system basically thrives on people not understanding the difference between investing and spending. Investing enables thriving in the future. Spending enables thriving in the present. The end result of spending is living P2P to pay off credit card debt for stuff you did not need.
I look to commercials, and peer pressure (the need to keep up with the Jones) for this addiction to spending, on shit.. People buy shit, just to feel good or empowered. they get a hair up their ass and swipe the credit card.
Cell phones, streaming are a major waste of money, but are driven by fear and the need to keep up with the rest of society., take this stupid Lubabu phase, the dolls are fucking evil, but the kids have to have them, and feckless parents don't have the will to say no, because the kid for whom they sacrifice might say "I don't love you".
My MIL, a child of poverty and the depression, was conned into the Beanie Babies craze, she thought she would be rich, so she has thousands of dollars of beanie babies in her closet. Her son is going to throw them out, when she passes.
My poor mother, wasted her little social security widows check on worthless foreign paper money and "collectiable" plates, none of them worth anything.
A fool and their money are soon parted.
And then there are those given a choice between food or medicine and their addiction,chose the addiction every time.
The baseline is subsistence level. In regulatory parlance, "net earnings" or "substantial gainful activities" may not cover living off the land.
Once upon a time, I represented people who were land rich, cash poor. Think Amish. They pay virtually no income taxes, but in many cases live well. No modern amenities. But they "speculated" in stuff like livestock, expanding cash crops.
Social Security is the greatest anti-poverty program in US history.
If you are an advocate of transactional analysis, then why to do you engage in cross transactional exchange. Instead of adult to adult, you talk parent to child.
And you CONTINUALLY ridicule stuff that requires support. Stuff doesn'r work without support and you discourage persuasion for stuff that doesn't cost you anything. You have no stake.
I am not denying shit Daniel. It is just that the shit you are promoting is an exercise in futility. You refuse to get it, the institutions are kaput, even your precious judicial system.
I don't waste my time chasing snipes. I see all of the "victories" claimed by a lower court ruling, then I see that most are temporary holds, and then half ot more are overturned by the appeals court, and where not, SCTOUS overturns them with Shadow Docket or in a ruling from the bench.
And keep chasing your three republicans Daniel, Rots of ruck. Do you honestly think that three republicans will turn against Trump and MAGAt, if they do it is only for one instance, the Epstein Files, which have already been scrubbed of Republicans and mention of Trump.
I am waiting for Massie, to do as he promises, take advantage of the speech and debate clause and read aloud on the floor the names of the perps, those women have already compiled a list, but can't say an ything because the will be sued into oblivious.
Face it Daniel, the institutions that you treasure are kaput, this is a lawless regime and has it's boot on the neck of the institutions. This is not the America that you still live in,in your head, that America is kaput.
On the day of Reagan's first inauguration, my federal civil service colleagues and I were hard at work in our office on the 2nd floor of the New (in the 1930s) Post Office Building on the corner of Pennsylvania Ave. & 12th St., N.W. , right across 12th St. from the Old Post Office, AKA now a Trump Hotel. The merry-making crowd along Pennsylvania Ave. had spilled over into 12th St., beneath our windows. A down-to-earth colleague from Kansas took a break to go out and mingle with the populace. She returned in about 15 minutes, blenched. "I have just seen a woman," she announced, "wearing a mink coat, with a second mink coat over one arm, and a third mink coat over the other. I think I know all I need to know about this administration."
The Washington Post later reported that it took 3 days for all the inauguration attendees' private planes to depart Washington National Airport.
In 1980, I was a single issue conservative, an anti communist conservative, and although I didn't vote, I did contribute sorely needed money to Reagans campaign, because he swore that he would not appoint any members of the Trilateral Commission and Council on Foreign Relations to is cabinet. At that time I believed that they were commie fronts.
His first cabinet appointments were Casper Weinberger (Trilateral commission) and then appointed CFR members to the State Department.
He promised the Air Traffic Controllers he would meet their demands for equipment, hours and manpower, but one of his first acts was to fire all members of PATCO, leaving control towers and enroute traffic control centers manned by supervisors.
That was the straw that broke the back of this former conservative, I didn't full leave the dark side until 1989
A critical part of the neoliberal agenda has been to lower taxes on the rich. The measure of inequality, the Gini coefficient, shows that starting in 1941, when taxes were high-- above 70% on the upper bracket-- (the rich did not flee) and prosperity was more evenly shared. That sharing of prosperity began its slow decline with the Reagan tax cuts. The media never report this statistic because it shows that the benefit of tax cuts trickle up. https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts
Thank you Mr. Weir. I used the Gini coefficient in my classes for decades. It was always a glaring warning that it is never talked about publicly. If Americans saw the historical and cross-national comparisons of the Gini coefficient; we would become socialists overnight.
IMHO in the US, capital gains policy was the primary vehicle. Once upon a time R&D was the chief indication for growth. Reagan policy encouraged vulture capitalism. Companies sold their future -- instant gratification. We sold the goose that laid the golden egg -- the manufacture sector.
BTW Location, location. In my old home town can buy 10 -15 homes for the cost of 1 in major cities.
Many years ago—when Reagan became the Republican Messiah—I was saying that Capitalism was now our new form of government. I had no formal education in political science. I drew that opinion by paying attention. Some of my friends thought I was nuts, & some agreed with me. I never knew of these economists who decided to invent neoliberalism, so thanks Thom for finally giving me some history to finally backup what I thought was obvious at the time. I’m 86 yrs old, but it still feels good to be vindicated 😉😉
It is time to add to the fossil fuel industry's influence the remarkable tech industry takeover of EVERYTHING. We saw the fascist CEOs meeting with our pedo-protecting dick-tator last Thursday. If that didn't frighten and disgust you, nothing will. Apparently, they all studied his Cabinet of billionaires to know how to properly kiss his ass.
The stupidity on display is breath-taking. It too will be written in the history books, and the decisions being made concerning AI will be at the top of the list. Too much, too soon, and the damn stuff actually "hallucinates" and can answer simple questions wrong. We all watched Musk manipulate GROK so it praised Hitler.
Corporations are not people; neither are AI and robots. One could argue psychopaths are not either. Free markets are not free. Money is not speech. Time to show the psychos who is going to take over. See you in the streets.
Neoliberal Republicans and neoliberal Democrats agree that democracy sucks. They disagree on how much it sucks. Democrats, and the DNC, would do well to disengage from the leadership of the likes of Bill Clinton, Jim Clyburn, Chuck Schumer, Hakeem Jeffries, Kirsten Gillibrand, Cory Booker, the donor class, and sundry others who have strenuously and repeatedly failed to endorse the candidacy of Zorhan Mamdani, a fellow who joyfully embraces democracy. They would do equally well to avoid unyielding purity tests, letting perfection be the enemy of good. Mamdani’s candidacy is an inspiration and a measure. FDR, be it noted, was imperfect. He was also one of the three best presidents in American history.
Where, oh where, do you get that crap? Ans. from propaganda spread to you through MSM by psy ops and the same people who brought us "trickle down theory" and the southern strategy.
You castigate FDR, JFK, LBJ.
You might be right about Clinton, but he tripped over his appendage, sentencing us to GWB, for which we have been atoning since HRC.
t, 16 Senate Democrats voted with Republicans to advance a crypto-friendly bill that will enable Trump’s corruption. Instead of standing up to Trump, these 16 Democrats decided they’d rather do a big favor for the crypto industry and legitimize an avenue for Trump to collect bribes.
It’s okay to disagree about the best ways to expand healthcare coverage or make housing more affordable. Those disagreements are a healthy part of a big pro-democracy tent. But it shouldn’t be hard to get every Democrat to oppose helping Trump accept bribes from billionaires and foreign governments.
A vote like this feeds cynicism about the Democratic Party not being real and not being about what they purportedly stand for.
Here is the Democratic Senators that voted to confirm Tump's Cabinet
The Democrats who voted to advance the measure were: Senate Minority Leader Chuck Schumer (N.Y.), Senate Democratic Whip Dick Durbin (Ill.) and Sens. Catherine Cortez Masto (Nev.), Maggie Hassan (N.H.), John Fetterman (Pa.), Gary Peters (Mich.), Brian Schatz (Hawaii), Kirsten Gillibrand (N.Y.) and Jeanne Shaheen (N.H.). Angus King (Maine),
What the Democrat party needs is authentic left wing populists, that put the people first, not the donors.
I don't vilify Democrats Daniel. I do the same thing that Republicans do to theirs, try to put a rod in their spine and stop acting like pussies.
Name the heroic Democratic Congressmen, Those that stick their necks out and tell Trump to go fish. I've done the research there are about 17 that have, but not consistently
Yeh I was in a horror and misyped Democrat instead of Democratic, nail me to a cross and crucify me Daniel, alluding that I am Republican.
Yeh a Republican what wants a hardcore,authentic, left wing populist, because that is what it took to beat Trump. Wishy washy, business as usual, bipartanisan, won't change a thing is the message which 70 million Americans (who sat out the election) didn't want to hear.
America is actually hungry for a democratic socialist, not another ass kisser of the economic royalists.
Mr. Farrar. I could not agree with you more than I do. The time for tinkering is over. We need a new Democratic Party. It is disgraceful that party leaders ignore Zohran Mamdani.
As for Mr. Hartmann's writing about economists: the entire discipline is a yes-man for capitalism. Almost all of their theories are simply attempts to justify the way wealth and power are inequitably distributed ie.: ideology. Thomas Piketty and Richard Wolff are notable exceptions.
I have a recent introductory textbook titled BASIC ECONOMICS on my shelf [2015]. The apologia begins in the introduction and never lets up. This is typical.
If one views economics from the long view of cultural anthropology, it is easy to see that, as a profession or discipline, economics is ideological bullshit.
Off topic. I want to talk about the boat blown up by the Navy. First of all it shows that our military, especially the Navy, and I say the Air Farce, have been taken over by Christian Reconstructionist MAGAts, loyal to Trump and Christian theocracy.
That aside that boat was carrying 11 passengers, it was not running drugs, drug runners don't carry anymore than a driver, as people take up space for drugs.
And noone, not even Ali Velshi has called the administration claim into question.
More than likely these were people hoping to migrate from Venezuela, maybe Puerto Rico, but that was not a drug running boat.
Which makes the event that much more evil, it wasn't 11 drug runners blownup but 10 emigrants, plus a driver.
Deja vu from the 1980's. Colombian cigarette boats. In December 1980, the commandant of the U.S. Coast Guard, John B. Hayes, revealed that his cutters had for the first time since Prohibition fired directly into smuggler ships to get them to stop.
Later, we were accused of involvement in the "false positives" scandal, the extrajudicial murder of more than 6,400 civilians, most between 2002 and 2008, by the Colombian army. Soldiers murdered poor and mentally disabled civilians and presented them as guerrilla fighters killed in combat to inflate body counts and receive rewards.
Nice re-read, having read the book soon after it was published. A useful way that I teach about the issues of "market fundamentalism" is to focus on what are the core operating principles. For fascism, it's about control of wealth and rent seeking (i.e., profiteering and grifting). For communism, it was about control of society (avoiding revolutions).
Markets are a bit more complex. If one thinks of the local bazaar as the market, where the core operating principle is survival of the merchants, then there are plenty of self-correcting mechanisms.
When the market is about chasing the eternal growth of financial products like stocks and bonds, the operating core is the idea of growth fueled by compound interest. At some point, growth stalls and is exhausted. The exhaustion of growth almost always leads to an authoritarian regime, such as fascism, an absolute monarchy, or a dictatorship, as those in power seek to preserve it by taking resources from others.
The cycle then moves into a collapse and fragmentation. The anecdote is a generation that values community over wealth. We can hope that one of the rising generations can step into that role.
I'm not a day trader, and I'm not an expert, but I used to get some expert testimony in cases, and Poor Richard's Almanac is probably the bible for farmers who follow ecclesiates. For every thing there is a season. Buy out of season and sell in season.
1938...1981-1989 Rea"gone" regulations. 2024 electing felon 47 con man. Oligarchs have played us with propaganda. IMHO What took years to destroy democracy will take years to return to democracy...we must speak truth to the history of how we got here in 2025. Thank you Thom.
If by miracle, the fascists are overthrown, and the only way to get rid of them is to overthrow them, elections won't do the job, what was is gone, destroyed, and can't be put back together, we will have to do it all over again, this time hopefully better, get rid of the swamp, the real swamp where corporations, billionaires and special interests like religion , control the congress and the cabinets.
The real swamp, the real deep state, is the Republican cabal, built up over the last forty plus years, and which the Democratic crabs, happy in their slow-boiling pot, seldom (if ever) called-out...leaving it now to the denizens of Trumpty Dumptyville (who didn't vote, or who believed all of the misinformation) to dig themselves out of the morass.
....and unfortunately, all of this king's horses and all of this king's men are doing everything in their power to see that Trumpty Dumpty stays broken.
No Richard. The swamp has been regulatory capture, cabinets and departments headed by lobbyists and people associated with corporations. The revolving door is famous.
No more so than in the Military actually. Practically all generals and a lot of colonels, retired and become "advisors" for the defense industry. I know a Senior Sergeant that was recited by Motorola, simply because of his position in a major command headquarters,
The FDC, FDA, FEC, SEC etc have always been a revolving chair of for the industries they supposedly regulate.
Trumps definition of the deep state, was the professional civil service, which didn't kiss his ass, so he used Musk to get rid of them..
That's Trump's definition of the Deep State, but if that name denotes a degree of secrecy (as opposed to pre-Trump civil service,) I think I'll stick with it.
Interesting, that thought (Deep state and secrecy) never crossed my mind, because outside of the FBI , CIA the "deep state" leaks like a sieve, and even then it still leaks.
Sharing a saved excerpt from The Washington Post's obit of Phillip Roth, several years ago, quoting Roth:
"I wasn't exactly a stranger to disputation, but never in my life had I felt so enclosed by a world so contentious, where the argument is enormous and constant and everything turns out to be pro or con, positions taken, positions argued, and everything italicized by indignation and rage." Or: The Trump Era.
This good lesson in how we got here would be matched by another one, going back even further in our history, where two thousand years ago we went from being a matriarchal society of people who were of nature and of Earth and here to cherish her, to becoming patriarchal in putting God outside of humanity, where we were on Earth fighting with each other for how to use her -- actually, to use her up. Anne Baring is the great historian on this topic:
A good introduction to neoliberalism. Makes me want to read the book? But one thing that gets missed, "A thought is nothing more than a thought!" It does not matter if you get a commission of experts to get behind it. You must experiment, study history, and conduct analysis. Just getting a consensus for an idea does not make it correct ever!
Well, it hasn't been "tamed" or "caged" but rather just perpetuated and consequently we are already living in that "Hellscape" but like the frogs in a pot of water sitting on a burning stove we are oblivious to the facts all around us.
And it turned out to be wrong!! Isn’t this the Economics of Milton Friedman??? And this became the “Greed is Good” philosophy???
Well that was the long answer to the question. I think that the “auto-correction” of efficiency has gone out the window because player in the markets have changed it so that only a few benefit and the less intervention the more that benefit is seen at the top of the curve. And this version has thrown consumers completely under the bus too. See the book “the Man who broke Capitalism” for some of this information. As best as I can see it is Vulture Capitalism and the only thing left is for governments to get involved to change the dynamics so that these markets work for more that just a limited few.
I'm just reporting.
IMHO a few minor changes in the law would straighten things out....like making the protection of public interest the top criteria for corporations. If I were king, I'd federalize corporation law.
Not sure of this, but I believe that in the early years corporations were required on a routine basis to demonstrate their benefits to the community in order to be rechartered. Seems a good policy to for reinstatement.
Depended on stagte law. The last state that forbid political contributions to corporations was Montsna, but the law was struck in the wake of Citizens' United.
And back in the Gilded Age there was a certain amount of societal expectation that corporations "give back" and hence the creation of large foundations that support education, art and science that persist to this day (Rockefeller Foundation, etc.). Thanks to Milton Friedman, corporations are no longer hampered by this "moralistic" overlay.
In this country, the Chicago school of economics, which begat right wing politics. Key members of the Chicago School of Economics include early scholars like Frank Knight, Henry Simons, and Jacob Viner, and later prominent figures such as Milton Friedman, George Stigler, Gary Becker, Ronald Coase, Robert Lucas, and Eugene Fama. The school, known for its emphasis on free markets, individual rationality, and minimal government intervention, developed at the University of Chicago, with these economists contributing significantly to the field through their work on price theory, human capital, and efficient markets
When I was a kid in Pennsyltucky, we were forced to read The Road to Serfdom. https://en.wikipedia.org/wiki/The_Road_to_Serfdom. Frederick Hyek.
Excerpt" In 2007, the University of Chicago Press estimated that more than 350,000 copies of The Road to Serfdom have been sold. It appears on Martin Seymour-Smith's list of the 100 Most Influential Books Ever Written, and it made number 1 on Human Events: Top Ten Books Every Republican Congressman Should Read in 2006. It was influential enough to warrant mention during the 1945 British general election, when according to Harold Macmillan, Winston Churchill was "fortified in his apprehensions [of a Labour government] by reading Professor Hayek's The Road to Serfdom] when he warned in an election broadcast in 1945 that a socialist system would "have to fall back on some form of Gestapo". The Labour leader Clement Attlee responded in his election broadcast by claiming that what Churchill had said was the "second-hand version of the academic views of an Austrian professor, Friedrich August von Hayek."
Hayek taught at the University of Chicago from 1950 to 1962, although he did not primarily teach economics within the Economics Department. Instead, he held a professorship in Social and Moral Science on the Committee on Social Thought, focusing more on political philosophy than economics.
At the same time, we read Animal Farm. https://en.wikipedia.org/wiki/Animal_Farm
Exerpt. "According to Orwell, Animal Farm reflects events leading up to the Russian Revolution of 1917 and then on into the Stalinist era of the Soviet Union, a period when Russia lived under the Marxist–Leninist ideology of Joseph Stalin. Orwell, a democratic socialist,[9] was a critic of Stalin and hostile to Moscow-directed Stalinism, an attitude that was critically shaped by his experiences during the Barcelona May Days conflicts between the POUM and Stalinist forces, during the Spanish Civil War.[10][a] In a letter to Yvonne Davet (a French writer), Orwell described Animal Farm as a satirical tale against Stalin ("un conte satirique contre Staline"), and in his essay, "Why I Write" (1946), wrote: "Animal Farm was the first book in which I tried, with full consciousness of what I was doing, to fuse political purpose and artistic purpose into one whole."
In the law AI The Chicago School's influence on American jurisprudence is based on several key tenets:
Emphasis on efficiency: The central argument, advanced by scholars like Richard Posner and Robert Bork, is that legal rules should be designed to maximize social wealth and overall economic efficiency. As Posner wrote in his seminal 1973 book, Economic Analysis of Law, the common law already tends toward efficiency, but economic analysis can push it further.
Neoclassical price theory: This methodology applies basic microeconomic principles, such as rational, profit-maximizing behavior, to predict the effects of legal rules on individuals and businesses. It encourages policymakers and judges to evaluate potential market interventions with skepticism, assuming that free markets are often self-correcting and more efficient than regulation.
Incentives over morals: The approach focuses on how laws alter incentives rather than on traditional moral or ethical judgments. For example, economist Gary Becker argued that criminal sentences primarily serve as an economic deterrent rather than as moral retribution.
Influence across legal fields
The law and economics movement has left its mark on many areas of American law:
Antitrust: This is the field most reshaped by the Chicago School. The school's emphasis on efficiency led to the relaxation of antitrust enforcement in the latter half of the 20th century.
Focus on consumer welfare: Chicago School advocates, including Judge Robert Bork in his influential book The Antitrust Paradox, argued that the sole purpose of antitrust law should be to maximize "consumer welfare" through efficiency, not to protect small competitors.
Shift in legal standards: This led courts to move away from per se rules that automatically prohibited certain business conduct, such as vertical non-price restraints. Instead, courts adopted the "rule of reason," which required a more extensive economic analysis of the conduct's actual effects.
Tort law: Richard Posner's work applied economic analysis to tort law, arguing that liability rules should minimize the combined costs of accidents and accident prevention. For example, the Hand formula for negligence, first articulated by Judge Learned Hand, can be seen as a precursor to this type of cost-benefit analysis.
Contracts and property law: Economic analysis has been used to justify existing common law doctrines, such as rules concerning lost and abandoned property, based on how they incentivize efficient behavior.
Criminal law: The school's focus on incentives extended to criminal justice, with scholars like Gary Becker exploring how sentences act as deterrents.
Broader impacts on the judiciary and legal thought
Beyond specific legal doctrines, the Chicago School's influence changed the legal landscape more broadly:
Judicial education: Programs funded by Chicago School adherents trained federal judges in economic principles, influencing their decision-making in economically complex cases.
Increased academic rigor: The movement forced the legal field to become more quantitative and rigorous, pushing legal scholarship to consider empirical evidence and the practical consequences of legal rules.
Ideological shift: By framing legal issues in terms of efficiency, the Chicago School promoted a more conservative, free-market-oriented judicial philosophy. Research shows that judges exposed to these ideas are more skeptical of regulation and may impose longer sentences.
I've discussed previously how Posner and Scalia, who BTW also once taught at UC, had a falling out and that Posner began to reevaluate his positions.
Critics argue that the Chicago economic movement inappropriately subordinates legal principles to economic theory and that its emphasis on efficiency neglects other important considerations, such as fairness, equity, and the protection of vulnerable groups.
Oversimplification of markets: Opponents contend that the Chicago School's models of rational actors in perfectly self-correcting markets are unrealistic and ignore market failures caused by imperfect information, cognitive biases, and political power.
Neo-Chicago and post-Chicago schools: The Chicago School's dominance gave rise to competing schools of thought. The "post-Chicago" school incorporates more modern and realistic economic theories, including strategic behavior and game theory, to argue for more robust regulation.
I. E.G. am an advocate for transactional analysis.
It is ironic that the 2016 popular book on household economics, "The Index Card" was written by my good friend Harold Pollack at the University of Chicago. By that time, I was already comfortably retired. I told Harold that everything he encouraged in that book had worked for me.
My personal opinion as to why Harold was getting rave reviews was that it was enlightened by what my friend Dean Baker at the DC Center for Economic Policy Research so beautifully described in his 2016 book, "Rigged: How Globalization and the Rules of the Modern Economy Were Structured To Make the Rich Richer." Like the lessons of Harold's book, I had to learn how the "system" was rigged at Hardknocks University before I could make it work for me. Getting rich was not my goal in life; avoiding a life in poverty was.
Tom: " Getting rich was not my goal in life; avoiding a life in poverty was."
Bofus Tom. My grandmother, mother and aunts were traumatized by the depression, the early death of husband and father, and the depression.
And I saw how it made them suckers for schemes, scams and collectibles.
The rigged system basically thrives on people not understanding the difference between investing and spending. Investing enables thriving in the future. Spending enables thriving in the present. The end result of spending is living P2P to pay off credit card debt for stuff you did not need.
I look to commercials, and peer pressure (the need to keep up with the Jones) for this addiction to spending, on shit.. People buy shit, just to feel good or empowered. they get a hair up their ass and swipe the credit card.
Cell phones, streaming are a major waste of money, but are driven by fear and the need to keep up with the rest of society., take this stupid Lubabu phase, the dolls are fucking evil, but the kids have to have them, and feckless parents don't have the will to say no, because the kid for whom they sacrifice might say "I don't love you".
My MIL, a child of poverty and the depression, was conned into the Beanie Babies craze, she thought she would be rich, so she has thousands of dollars of beanie babies in her closet. Her son is going to throw them out, when she passes.
My poor mother, wasted her little social security widows check on worthless foreign paper money and "collectiable" plates, none of them worth anything.
A fool and their money are soon parted.
And then there are those given a choice between food or medicine and their addiction,chose the addiction every time.
The baseline is subsistence level. In regulatory parlance, "net earnings" or "substantial gainful activities" may not cover living off the land.
Once upon a time, I represented people who were land rich, cash poor. Think Amish. They pay virtually no income taxes, but in many cases live well. No modern amenities. But they "speculated" in stuff like livestock, expanding cash crops.
Social Security is the greatest anti-poverty program in US history.
If you are an advocate of transactional analysis, then why to do you engage in cross transactional exchange. Instead of adult to adult, you talk parent to child.
E.G. Denial
Becazuse you deny stuff that is as plain as your fucking nose. Stuff that worked for Gingrich, 1992-3, for example That worked for MAGA against Biden. The stuff that James Comer as house oversight chair did last term.https://oversightdemocrats.house.gov/facts-on-republicans-sham-impeachment
IT ONLY TALES 3 REPUBLICANS to do jujitsu.
And you CONTINUALLY ridicule stuff that requires support. Stuff doesn'r work without support and you discourage persuasion for stuff that doesn't cost you anything. You have no stake.
WTF.
I am not denying shit Daniel. It is just that the shit you are promoting is an exercise in futility. You refuse to get it, the institutions are kaput, even your precious judicial system.
I don't waste my time chasing snipes. I see all of the "victories" claimed by a lower court ruling, then I see that most are temporary holds, and then half ot more are overturned by the appeals court, and where not, SCTOUS overturns them with Shadow Docket or in a ruling from the bench.
And keep chasing your three republicans Daniel, Rots of ruck. Do you honestly think that three republicans will turn against Trump and MAGAt, if they do it is only for one instance, the Epstein Files, which have already been scrubbed of Republicans and mention of Trump.
I am waiting for Massie, to do as he promises, take advantage of the speech and debate clause and read aloud on the floor the names of the perps, those women have already compiled a list, but can't say an ything because the will be sued into oblivious.
Face it Daniel, the institutions that you treasure are kaput, this is a lawless regime and has it's boot on the neck of the institutions. This is not the America that you still live in,in your head, that America is kaput.
Now ti is time for a soft secssion https://medium.com/search?q=soft+secession
If you haven't noticed Trump has already declared a mixed war. It started in LA, refined in DC and coming now to Chicago (his Chicapocalypse)
I have plenty at stake Daniel, a lot more than you know.
So I ask you WTF.
Are you a secret agent of MAGA? Keep wasting time chasing snipes.
Clearly state your case, not a cut and paste from AI, or lengthy paragraphs.
Bullet points, How do we turn it around? How do we recover that which is lost? Can we?
On the day of Reagan's first inauguration, my federal civil service colleagues and I were hard at work in our office on the 2nd floor of the New (in the 1930s) Post Office Building on the corner of Pennsylvania Ave. & 12th St., N.W. , right across 12th St. from the Old Post Office, AKA now a Trump Hotel. The merry-making crowd along Pennsylvania Ave. had spilled over into 12th St., beneath our windows. A down-to-earth colleague from Kansas took a break to go out and mingle with the populace. She returned in about 15 minutes, blenched. "I have just seen a woman," she announced, "wearing a mink coat, with a second mink coat over one arm, and a third mink coat over the other. I think I know all I need to know about this administration."
The Washington Post later reported that it took 3 days for all the inauguration attendees' private planes to depart Washington National Airport.
In 1980, I was a single issue conservative, an anti communist conservative, and although I didn't vote, I did contribute sorely needed money to Reagans campaign, because he swore that he would not appoint any members of the Trilateral Commission and Council on Foreign Relations to is cabinet. At that time I believed that they were commie fronts.
His first cabinet appointments were Casper Weinberger (Trilateral commission) and then appointed CFR members to the State Department.
He promised the Air Traffic Controllers he would meet their demands for equipment, hours and manpower, but one of his first acts was to fire all members of PATCO, leaving control towers and enroute traffic control centers manned by supervisors.
That was the straw that broke the back of this former conservative, I didn't full leave the dark side until 1989
Not just CEO's but nation leaders are making their haj and aliyah to D.C. to kiss the emperors ring.
Money rules, The gold rule: He who as the gold rules.
A critical part of the neoliberal agenda has been to lower taxes on the rich. The measure of inequality, the Gini coefficient, shows that starting in 1941, when taxes were high-- above 70% on the upper bracket-- (the rich did not flee) and prosperity was more evenly shared. That sharing of prosperity began its slow decline with the Reagan tax cuts. The media never report this statistic because it shows that the benefit of tax cuts trickle up. https://www.newyorker.com/news/john-cassidy/pikettys-inequality-story-in-six-charts
Thank you Mr. Weir. I used the Gini coefficient in my classes for decades. It was always a glaring warning that it is never talked about publicly. If Americans saw the historical and cross-national comparisons of the Gini coefficient; we would become socialists overnight.
IMHO in the US, capital gains policy was the primary vehicle. Once upon a time R&D was the chief indication for growth. Reagan policy encouraged vulture capitalism. Companies sold their future -- instant gratification. We sold the goose that laid the golden egg -- the manufacture sector.
BTW Location, location. In my old home town can buy 10 -15 homes for the cost of 1 in major cities.
I agree the capital gains policy was also critical and have a post on it in 2 weeks.
Many years ago—when Reagan became the Republican Messiah—I was saying that Capitalism was now our new form of government. I had no formal education in political science. I drew that opinion by paying attention. Some of my friends thought I was nuts, & some agreed with me. I never knew of these economists who decided to invent neoliberalism, so thanks Thom for finally giving me some history to finally backup what I thought was obvious at the time. I’m 86 yrs old, but it still feels good to be vindicated 😉😉
The "Paris Group" Coming To A Corner Near You
It is time to add to the fossil fuel industry's influence the remarkable tech industry takeover of EVERYTHING. We saw the fascist CEOs meeting with our pedo-protecting dick-tator last Thursday. If that didn't frighten and disgust you, nothing will. Apparently, they all studied his Cabinet of billionaires to know how to properly kiss his ass.
The stupidity on display is breath-taking. It too will be written in the history books, and the decisions being made concerning AI will be at the top of the list. Too much, too soon, and the damn stuff actually "hallucinates" and can answer simple questions wrong. We all watched Musk manipulate GROK so it praised Hitler.
Corporations are not people; neither are AI and robots. One could argue psychopaths are not either. Free markets are not free. Money is not speech. Time to show the psychos who is going to take over. See you in the streets.
Neoliberal Republicans and neoliberal Democrats agree that democracy sucks. They disagree on how much it sucks. Democrats, and the DNC, would do well to disengage from the leadership of the likes of Bill Clinton, Jim Clyburn, Chuck Schumer, Hakeem Jeffries, Kirsten Gillibrand, Cory Booker, the donor class, and sundry others who have strenuously and repeatedly failed to endorse the candidacy of Zorhan Mamdani, a fellow who joyfully embraces democracy. They would do equally well to avoid unyielding purity tests, letting perfection be the enemy of good. Mamdani’s candidacy is an inspiration and a measure. FDR, be it noted, was imperfect. He was also one of the three best presidents in American history.
Where, oh where, do you get that crap? Ans. from propaganda spread to you through MSM by psy ops and the same people who brought us "trickle down theory" and the southern strategy.
You castigate FDR, JFK, LBJ.
You might be right about Clinton, but he tripped over his appendage, sentencing us to GWB, for which we have been atoning since HRC.
We all oppose MAGA.
t, 16 Senate Democrats voted with Republicans to advance a crypto-friendly bill that will enable Trump’s corruption. Instead of standing up to Trump, these 16 Democrats decided they’d rather do a big favor for the crypto industry and legitimize an avenue for Trump to collect bribes.
It’s okay to disagree about the best ways to expand healthcare coverage or make housing more affordable. Those disagreements are a healthy part of a big pro-democracy tent. But it shouldn’t be hard to get every Democrat to oppose helping Trump accept bribes from billionaires and foreign governments.
A vote like this feeds cynicism about the Democratic Party not being real and not being about what they purportedly stand for.
Here is the Democratic Senators that voted to confirm Tump's Cabinet
https://www.cbsnews.com/news/senate-vote-trump-cabinet-picks-top-nominees/
The Democrats who voted to advance the measure were: Senate Minority Leader Chuck Schumer (N.Y.), Senate Democratic Whip Dick Durbin (Ill.) and Sens. Catherine Cortez Masto (Nev.), Maggie Hassan (N.H.), John Fetterman (Pa.), Gary Peters (Mich.), Brian Schatz (Hawaii), Kirsten Gillibrand (N.Y.) and Jeanne Shaheen (N.H.). Angus King (Maine),
What the Democrat party needs is authentic left wing populists, that put the people first, not the donors.
Past time for a change.
You don't get more Congressional votes against MAGA by villifying Dems. (and one swallow doth not a summer make.)
E.G. All support the Trumepstein petition.
BTW only a Republican would call it the "Democrat Party".
I don't vilify Democrats Daniel. I do the same thing that Republicans do to theirs, try to put a rod in their spine and stop acting like pussies.
Name the heroic Democratic Congressmen, Those that stick their necks out and tell Trump to go fish. I've done the research there are about 17 that have, but not consistently
Yeh I was in a horror and misyped Democrat instead of Democratic, nail me to a cross and crucify me Daniel, alluding that I am Republican.
Yeh a Republican what wants a hardcore,authentic, left wing populist, because that is what it took to beat Trump. Wishy washy, business as usual, bipartanisan, won't change a thing is the message which 70 million Americans (who sat out the election) didn't want to hear.
America is actually hungry for a democratic socialist, not another ass kisser of the economic royalists.
Mr. Farrar. I could not agree with you more than I do. The time for tinkering is over. We need a new Democratic Party. It is disgraceful that party leaders ignore Zohran Mamdani.
As for Mr. Hartmann's writing about economists: the entire discipline is a yes-man for capitalism. Almost all of their theories are simply attempts to justify the way wealth and power are inequitably distributed ie.: ideology. Thomas Piketty and Richard Wolff are notable exceptions.
I have a recent introductory textbook titled BASIC ECONOMICS on my shelf [2015]. The apologia begins in the introduction and never lets up. This is typical.
If one views economics from the long view of cultural anthropology, it is easy to see that, as a profession or discipline, economics is ideological bullshit.
Off topic. I want to talk about the boat blown up by the Navy. First of all it shows that our military, especially the Navy, and I say the Air Farce, have been taken over by Christian Reconstructionist MAGAts, loyal to Trump and Christian theocracy.
That aside that boat was carrying 11 passengers, it was not running drugs, drug runners don't carry anymore than a driver, as people take up space for drugs.
And noone, not even Ali Velshi has called the administration claim into question.
More than likely these were people hoping to migrate from Venezuela, maybe Puerto Rico, but that was not a drug running boat.
Which makes the event that much more evil, it wasn't 11 drug runners blownup but 10 emigrants, plus a driver.
Deja vu from the 1980's. Colombian cigarette boats. In December 1980, the commandant of the U.S. Coast Guard, John B. Hayes, revealed that his cutters had for the first time since Prohibition fired directly into smuggler ships to get them to stop.
How about the death of Che Guevarra? https://www.theguardian.com/world/1967/oct/10/bolivia
https://nsarchive2.gwu.edu/NSAEBB/NSAEBB5/
Later, we were accused of involvement in the "false positives" scandal, the extrajudicial murder of more than 6,400 civilians, most between 2002 and 2008, by the Colombian army. Soldiers murdered poor and mentally disabled civilians and presented them as guerrilla fighters killed in combat to inflate body counts and receive rewards.
Drug smugglers would not take up valuable cargo space, with 10 passengers. That was not a narco boat, maybe a human smuggler, but not a narco boat..
Like i said yesterday, just looking for an excuse for war.
Similar to Nicaragua contras, Iran/Contra, so many other incidents.
With that I agree, however he has already declared war on his own citizens.
A Mixed war.
Nice re-read, having read the book soon after it was published. A useful way that I teach about the issues of "market fundamentalism" is to focus on what are the core operating principles. For fascism, it's about control of wealth and rent seeking (i.e., profiteering and grifting). For communism, it was about control of society (avoiding revolutions).
Markets are a bit more complex. If one thinks of the local bazaar as the market, where the core operating principle is survival of the merchants, then there are plenty of self-correcting mechanisms.
When the market is about chasing the eternal growth of financial products like stocks and bonds, the operating core is the idea of growth fueled by compound interest. At some point, growth stalls and is exhausted. The exhaustion of growth almost always leads to an authoritarian regime, such as fascism, an absolute monarchy, or a dictatorship, as those in power seek to preserve it by taking resources from others.
The cycle then moves into a collapse and fragmentation. The anecdote is a generation that values community over wealth. We can hope that one of the rising generations can step into that role.
Infinite growth is impossible. A tree that outgrows its roots dies. The feature of Round up that works is that it spurs rapid growth in plants.
The market is irrational, take Musks stocks, Tesla is losing sales, totally irrational, losing value, but he gets a trillion dollar bonus.
An irrational market will crash, it has to, the question is when?
Some stuff is cyclical and others aren't. https://www.investopedia.com/terms/c/cyclicalstock.asp
I'm not a day trader, and I'm not an expert, but I used to get some expert testimony in cases, and Poor Richard's Almanac is probably the bible for farmers who follow ecclesiates. For every thing there is a season. Buy out of season and sell in season.
What kind of fool? https://www.fool.com/investing/stock-market/types-of-stocks/cyclical-stocks/
from about 45 years ago with Reagan, the GOP showing us who they really are....which has lead us to today.
1938...1981-1989 Rea"gone" regulations. 2024 electing felon 47 con man. Oligarchs have played us with propaganda. IMHO What took years to destroy democracy will take years to return to democracy...we must speak truth to the history of how we got here in 2025. Thank you Thom.
If by miracle, the fascists are overthrown, and the only way to get rid of them is to overthrow them, elections won't do the job, what was is gone, destroyed, and can't be put back together, we will have to do it all over again, this time hopefully better, get rid of the swamp, the real swamp where corporations, billionaires and special interests like religion , control the congress and the cabinets.
The real swamp, the real deep state, is the Republican cabal, built up over the last forty plus years, and which the Democratic crabs, happy in their slow-boiling pot, seldom (if ever) called-out...leaving it now to the denizens of Trumpty Dumptyville (who didn't vote, or who believed all of the misinformation) to dig themselves out of the morass.
....and unfortunately, all of this king's horses and all of this king's men are doing everything in their power to see that Trumpty Dumpty stays broken.
No Richard. The swamp has been regulatory capture, cabinets and departments headed by lobbyists and people associated with corporations. The revolving door is famous.
No more so than in the Military actually. Practically all generals and a lot of colonels, retired and become "advisors" for the defense industry. I know a Senior Sergeant that was recited by Motorola, simply because of his position in a major command headquarters,
The FDC, FDA, FEC, SEC etc have always been a revolving chair of for the industries they supposedly regulate.
Trumps definition of the deep state, was the professional civil service, which didn't kiss his ass, so he used Musk to get rid of them..
That's Trump's definition of the Deep State, but if that name denotes a degree of secrecy (as opposed to pre-Trump civil service,) I think I'll stick with it.
Interesting, that thought (Deep state and secrecy) never crossed my mind, because outside of the FBI , CIA the "deep state" leaks like a sieve, and even then it still leaks.
Sharing a saved excerpt from The Washington Post's obit of Phillip Roth, several years ago, quoting Roth:
"I wasn't exactly a stranger to disputation, but never in my life had I felt so enclosed by a world so contentious, where the argument is enormous and constant and everything turns out to be pro or con, positions taken, positions argued, and everything italicized by indignation and rage." Or: The Trump Era.
This good lesson in how we got here would be matched by another one, going back even further in our history, where two thousand years ago we went from being a matriarchal society of people who were of nature and of Earth and here to cherish her, to becoming patriarchal in putting God outside of humanity, where we were on Earth fighting with each other for how to use her -- actually, to use her up. Anne Baring is the great historian on this topic:
We need a different conception of God
https://suzannetaylor.substack.com/p/if-at-first-or-at-second-comments
A good introduction to neoliberalism. Makes me want to read the book? But one thing that gets missed, "A thought is nothing more than a thought!" It does not matter if you get a commission of experts to get behind it. You must experiment, study history, and conduct analysis. Just getting a consensus for an idea does not make it correct ever!
Well, it hasn't been "tamed" or "caged" but rather just perpetuated and consequently we are already living in that "Hellscape" but like the frogs in a pot of water sitting on a burning stove we are oblivious to the facts all around us.
Nicely done! Thank you!
Right, Captain.