Schools Of Thought In Modern Politics: Part 2: Who are the Neoliberals?

Building off my last post which defended liberalism as opposed to socialism and fascism, I want to look at the economies of Europe and determine whether their economic policies are more liberal, socialist, or mercantilist. Before I post on that, I need to clearly define the different schools of thought within liberalism by looking at the writings of the authors themselves. Keynesians are fairly easy to define, but the school of thought most misrepresented in today's political arena is that of the neoliberals of von Mises, Hayek, and Friedman and their followers.

Most other issues are not wedge issues between Marxists and Liberals as competing ideologies in their policies.  When it comes to the regulation of monopolies classical liberals are unified about the necessity to prevent one company from having too much power. Even Friedrich Hayek (who is one of the most libertarian economists out there) agreed that social insurance and public health are important services of the government. (Road to Serfdom, chapter 9) Milton Friedman also saw a role for the government and envisioned the Earned Income Tax Credit, the largest transfer of wealth to the poor in America. ¹ Clearly, government intervention is not opposed by even the Austrian or Chicago Schools of thought. The Austrian and Chicago schools definitely supported less direct government intervention than Keynesians and are not the same, but their support of negative income taxes and transfers of wealth from the rich to the poor are antithetical to the modern conservative movement across the world. They advised the conservative parties in their respective countries as well, and deeply influenced the policies of their governments. The politicians then selectively listened to the parts of their arguments they liked and discarded the rest. To emphasize this point, Milton Friedman used Hong Kong, a territory with public education and single-payer health care, as a preeminent example of free market capitalism. Reading their writings and looking at the policies of the conservative parties across the world I see a lot of disconnect and selective listening.

The closest you get in 20th century thought to her radical nature is Ludwig von Mises who influenced politicians but has few true followers in economics who didn't distort what they actually said. Many people claim that Friedman and Hayek follow him, but reading their writings, Mises was more radical than these Austrian School thinkers for multiple reasons. First of all, Mises has little to no interest in fighting income inequality, contrary to Hayek and Friedman who wrote extensively on this point.

Then how do you categorize the current right-wing in America and Europe which has become radicalized over the last 30 years to the point of making Hayek look like an ardent Keynesian? If you look at who is behind the funding of the political campaigns of both parties on Open Secrets you find it is large businesses which are attempting to benefit themselves at the expense of others. Economic thought has never endorsed such an opinion, and is widely credited from economists ranging from Smith to Hayek to Mills to Keynes as being a gross misunderstanding of how the economy works. In economics we observe that the expenditure of one person is the income of another. This is about as close to an absolute truth as you can get within the field. The individuals who fund political campaigns behind this radical ideology are far more in line with Ayn Rand's view of the world which now dominates parties across the world, the Republican Party in America, Conservative Party in Britain, CDU in Germany, Liberal Party in Australia, and Conservatives in Canada. The denial of global warming and idea that we are not connected to one another is contrary to everything economics has ever learned and delusional. It is the ideology of Ayn Rand, who had little to no understanding of economics, and proposed that we are separate from everyone around us. This idea is opposed to all serious economic thought left or right in the world, and there is no evidence for it.

The leaders of this movement who are put forward by these monied interests took some ideas from Hayek and Friedman with little to no understanding of economic theory and then twisted their ideas to fit their own ends. We saw the erosion of the public sector in both Britain and the United States by politicians who do not understand the way the economy is connected into a radical form from popular books that were written by these laissez-faire economists. They took the parts which vindicated government intervention from their non-academic works and then ran with it to an extreme that none of them ever fully advocated in their scholarly works. We see the rise of people like the Koch brothers who fund these organizations to destroy all state intervention and are not liberal in their economic thought at all. These people are simply corrupt and do not closely fit in any modern Western philosophical tradition, unless if you counted objectivism as a philosophical tradition in which case they fit almost perfectly. The closest form of thought they are to is mercantilism because they support policies which improve their businesses but hurt others, support trade when beneficial to themselves in the short run while at all other times oppose trade through legal barriers such as extensively long copyright and patent periods. All of these policies have been demonstrated to be detrimental to the economy in the long run. This is why I am convinced the people these individuals listen to are not economists but the people who pay their campaign funds.

So, in conclusion, the modern Republican Party is not a neoliberal party but an objectivist party. One finds very selective following of the advice of Friedman and Hayek but the most influential individual in them who they did not selectively listen to is Ayn Rand, and the monied interests today who take her writings to heart.